I 113th CONGRESS 1st Session H. R. 3639 IN THE HOUSE OF REPRESENTATIVES December 3, 2013 Mr. Bridenstine introduced the following bill; which was referred to the Committee on the Budget , and in addition to the Committees on Ways and Means , Energy and Commerce , Agriculture , Oversight and Government Reform , and House Administration , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To eliminate sequestration for the security-related functions, to be offset through reductions in payments under Medicare, agricultural subsidies, federal retirement, and the application of chained CPI, and for other purposes.

1. Short title; table of contents (a) Short title This Act may be cited as the Provide for the Common Defense Act of 2013 . (b) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. Title I—Elimination of sequestration for revised security category Sec. 101. Elimination of 251A reductions for revised security category in fiscal years 2014 and 2015. Title II—Offsetting Payment Changes Subtitle A—Medicare Sec. 201. Adjustments to calculation of Medicare part B and part D premiums for high-income beneficiaries. Sec. 202. Increase in part B deductible for new enrollees. Subtitle B—Agriculture Sec. 211. Cap on overall rate of return for crop insurance providers. Sec. 212. Cap on reimbursements for administrative and operating expenses of crop insurance providers. Sec. 213. Reduction in share of crop insurance premium paid by Federal Crop Insurance Corporation. Subtitle C—Federal Retirement Sec. 221. Retirement contributions. Sec. 222. Annuity supplement. Sec. 223. Use of Chained Consumer Price Index. Subtitle D—Chained CPI Sec. 231. Change in index used to calculate Social Security cost-of-living adjustments. I Elimination of sequestration for revised security category 101. Elimination of 251A reductions for revised security category in fiscal years 2014 and 2015 (a) Elimination of the adjustment under section 251A for fiscal years 2014 and 2015 Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 ( 2 U.S.C. 901a ) is amended— (1) in paragraphs (7)(B) and (8), by striking On the date in each instance and inserting Subject to paragraph (12), on the date ; and (2) by adding at the end the following new paragraph: (12) No reductions for revised security category in fiscal years 2014 and 2015 Paragraphs (7)(B) and (8) shall have no force or effect for fiscal years 2014 and 2015 with respect to the revised security category. . (b) Discretionary spending limits for the revised security category in fiscal years 2014 and 2015 For purposes of section 251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 (as modified by section 251A(2) of such Act), for fiscal years 2014 and 2015, the discretionary spending limit for the revised security category in each such fiscal year shall be $552,000,000,000 and $566,000,000,000, respectively. II Offsetting Payment Changes A Medicare 201. Adjustments to calculation of Medicare part B and part D premiums for high-income beneficiaries (a) Increase in applicable percentage used To calculate premiums Section 1839(i)(3)(C)(i) of the Social Security Act ( 42 U.S.C. 1395r(i)(3)(C)(i) ) is amended— (1) by inserting after In general.— the following: (I) Years before 2017 For calendar years prior to 2017: ; and (2) by adding at the end the following new subclause: (II) 2017 and subsequent years For calendar year 2017 and each subsequent calendar year: If the modified adjusted The applicable   gross income is: percentage is: More than $85,000 but not more than $107,000 40 More than $107,000 but not more than $160,000 55 More than $160,000 but not more than $214,000 70 More than $214,000 90. . (b) Temporary adjustment to income thresholds used To calculate premiums (1) In general Section 1839(i)(6) of the Social Security Act ( 42 U.S.C. 1395r(i)(6) ) is amended in the matter preceding subparagraph (A) by striking December 31, 2019 and inserting December 31 of the year after 2019 that is the first year after the year in which at least 25 percent of individuals enrolled under this part are subject to a reduction under this subsection to the monthly amount of the premium subsidy applicable to the premium under this section. . (2) Application of inflation adjustment Section 1839(i)(5) of the Social Security Act ( 42 U.S.C. 1395r(i)(5) ) is amended— (A) in subparagraph (A), by striking In the case and inserting Subject to subparagraph (C), in the case ; and (B) by adding at the end the following new subparagraph: (C) Treatment of years after temporary adjustment period In applying subparagraph (A) for the first year beginning after the period described in paragraph (6) and for each subsequent year, the 12-month period ending with August 2006 described in clause (ii) of such subparagraph shall be deemed to be the 12-month period ending with August of the last year of such period described in paragraph (6). . 202. Increase in part B deductible for new enrollees Section 1833 of the Social Security Act ( 42 U.S.C. 1395l ) is amended— (1) in the first sentence of subsection (b), by inserting (subject to subsection (z)) after for a subsequent year ; and (2) by adding at the end the following: (z) Higher deductible for new enrollees In the case of an individual who is not enrolled under this part before January 1, 2017, the amount of the deductible under subsection (b)— (1) for 2017 shall be the amount otherwise determined under such subsection for 2017 increased by $25; (2) for 2018 shall be the amount otherwise determined under such subsection for 2018, taking into account the application of the previous paragraph; (3) for 2019 shall be the amount otherwise determined under such subsection for 2019, taking into the application of the previous paragraphs, , increased by $25; (4) for 2020 shall be the amount otherwise determined under such subsection for 2020, taking into account the application of the previous paragraphs, increased by $25; (5) for 2021 shall be the amount otherwise determined under such subsection for 2021, taking into account the application of the previous paragraphs, increased by $25; and (6) for any subsequent year shall be the amount otherwise determined under such subsection for such year, taking into account the application of the previous paragraphs and this paragraph for previous years. . B Agriculture 211. Cap on overall rate of return for crop insurance providers Section 508(k) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(k) ) is amended— (1) by designating paragraph (3) as subparagraph (A) (and adjusting the margin two ems to the right); (2) by inserting before subparagraph (A) (as so designated) the following: (3) Risk ; and (3) by adding at the end the following new subparagraph: (B) Cap on overall rate of return The target rate of return for all the companies combined for the 2014 and subsequent reinsurance years shall be 12.8 percent of retained premium. . 212. Cap on reimbursements for administrative and operating expenses of crop insurance providers Section 508(k)(4) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(k)(4) ) is amended by adding at the end the following new subparagraph: (G) Additional cap on reimbursements Notwithstanding subparagraphs (A) through (F), total reimbursements for administrative and operating costs for the 2014 insurance year for all types of policies and plans of insurance shall not exceed $935,000,000. For each subsequent insurance year, the dollar amount in effect pursuant to the preceding sentence shall be increased by the same inflation factor as established for the administrative and operating costs cap in the 2011 Standard Reinsurance Agreement. . 213. Reduction in share of crop insurance premium paid by Federal Crop Insurance Corporation (a) Catastrophic risk protection Section 508(d)(2)(A) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(d)(2)(A) ) is amended by striking sufficient to cover anticipated losses and a reasonable reserve and inserting for all crops for which catastrophic risk protection coverage is available shall be reduced by the percentage equal to the difference between the average loss ratio for such crop and 100 percent, plus a reasonable reserve . (b) Additional coverage Section 508(e)(2) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(e)(2) ) is amended— (1) in subparagraph (B)(i), by striking 67 and inserting 64 ; (2) in subparagraph (C)(i), by striking 64 and inserting 61 ; (3) in subparagraph (D)(i), by striking 59 and inserting 56 ; and (4) in subparagraph (E)(i), by striking 55 and inserting 52 . (c) Enterprise and whole farm units Section 508(e)(5)(C) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(e)(5)(C) ) is amended by striking 80 and inserting 77 . (d) Area revenue plans Section 508(e)(6) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(e)(6) ) is amended— (1) in subparagraph (A)(i), by striking 59 and inserting 56 ; and (2) in subparagraph (B)(i), by striking 55 and inserting 52 . (e) Area yield plans Section 508(e)(7) of the Federal Crop Insurance Act ( 7 U.S.C. 1508 ) is amended— (1) in subparagraph (A)(i), by striking 59 and inserting 56 ; (2) in subparagraph (B)(i), by striking 55 and inserting 52 ; and (3) in subparagraph (C)(i), by striking 51 and inserting 48 . (f) Effective date The amendments made by this section shall apply with respect to the first contract change date for a contract under the Federal Crop Insurance Act occurring after the date of the enactment of this Act. C Federal Retirement 221. Retirement contributions (a) Civil Service Retirement System (1) Individual contributions Section 8334(c) of title 5, United States Code, is amended— (A) by striking (c) Each and inserting (c)(1) Each ; and (B) by adding at the end the following: (2) Notwithstanding any other provision of this subsection, the applicable percentage of basic pay under this subsection for civilian service by an employee or Member shall, for purposes of computing an amount— (A) for a period in calendar year 2014, be equal to the applicable percentage under this subsection for calendar year 2013 plus an additional 0.4 percentage point; (B) for a period in calendar year 2015, be equal to the applicable percentage under this subsection for calendar year 2014 (as determined under subparagraph (A)) plus an additional 0.4 percentage point; (C) for a period in calendar year 2016, be equal to the applicable percentage under this subsection for calendar year 2015 (as determined under subparagraph (B)) plus an additional 0.4 percentage point; and (D) for a period in any calendar year after 2016, be equal to the applicable percentage under this subsection for calendar year 2015 (as determined under subparagraph (C)). (3) (A) Notwithstanding subsection (a)(2), any excess contributions under subsection (a)(1)(A) (including the portion of any deposit under this subsection allocable to excess contributions) shall, if made by an employee of the United States Postal Service or the Postal Regulatory Commission, be deposited to the credit of the Postal Service Fund under section 2003 of title 39, rather than the Civil Service Retirement and Disability Fund. (B) For purposes of this paragraph, the term excess contributions , as used with respect to contributions made under subsection (a)(1)(A) by an employee of the United States Postal Service or the Postal Regulatory Commission, means the amount by which— (i) deductions from basic pay of such employee which are made under subsection (a)(1)(A), exceed (ii) deductions from basic pay of such employee which would have been so made if paragraph (2) had not been enacted. . (2) Government contributions Section 8334(a)(1)(B) of title 5, United States Code, is amended— (A) in clause (i), by striking Except as provided in clause (ii), and inserting Except as provided in clause (ii) or (iii), ; and (B) by adding at the end the following: (iii) The amount to be contributed under clause (i) shall, with respect to a period in any year beginning after December 31, 2013, be equal to— (I) the amount which would otherwise apply under clause (i) with respect to such period, reduced by (II) the amount by which, with respect to such period, the withholding under subparagraph (A) exceeds the amount which would otherwise have been withheld from the basic pay of the employee or elected official involved under subparagraph (A) based on the percentage applicable under subsection (c) for calendar year 2013. . (b) Individual contributions under the Federal Employees’ Retirement System Section 8422(a)(3) of title 5, United States Code, is amended— (1) by redesignating subparagraph (B) as subparagraph (C); and (2) by inserting after subparagraph (A) the following: (B) Notwithstanding any other provision of this paragraph, the applicable percentage under this paragraph for civilian service by employees or Members other than revised annuity employees shall— (i) for a period in calendar year 2014, be equal to the applicable percentage under this paragraph for calendar year 2013 plus an additional 0.4 percentage point; (ii) for a period in calendar year 2015, be equal to the applicable percentage under this paragraph for calendar year 2014 (as determined under clause (i)) plus an additional 0.4 percentage point; (iii) for a period in calendar year 2016, be equal to the applicable percentage under this paragraph for calendar year 2015 (as determined under clause (ii)) plus an additional 0.4 percentage point; and (iv) for a period in any calendar year after 2016, be equal to the applicable percentage under this paragraph for calendar year 2016 (as determined under clause (iii)). . 222. Annuity supplement Section 8421(a) of title 5, United States Code, is amended— (1) in paragraph (1), by striking paragraph (3) and inserting paragraphs (3) and (4) ; (2) in paragraph (2), by striking paragraph (3) and inserting paragraphs (3) and (4) ; and (3) by adding at the end the following: (4) No annuity supplement under this section shall be payable in the case of an individual who first becomes subject to this chapter after December 31, 2013. . 223. Use of Chained Consumer Price Index (a) In general Paragraph (15) of section 8331 of title 5, United States Code, is amended to read as follows: (15) the term price index means the Chained Consumer Price Index (all items-all urban consumers) published monthly by the Bureau of Labor Statistics; . (b) Effective date The amendment made by subsection (a) shall take effect on January 1, 2015, and shall apply with respect to any cost-of-living adjustment taking effect under section 8340 or 8462 of title 5, United States Code, on or after that date. D Chained CPI 231. Change in index used to calculate Social Security cost-of-living adjustments (a) In general Section 215(i)(1) of the Social Security Act ( 42 U.S.C. 415(i)(1) ) is amended— (1) in subparagraph (G), by striking the period at the end and inserting ; and ; and (2) by adding at the end the following new subparagraph: (H) the term Consumer Price Index means the Chained Consumer Price Index for All Urban Consumers (C–CPI–U, as published in its initial version by the Bureau of Labor Statistics of the Department of Labor). . (b) Application to pre-1979 law (1) In general Section 215(i)(1) of the Social Security Act as in effect in December 1978, and as applied in certain cases under the provisions of such Act as in effect after December 1978, is amended— (A) in subparagraph (C), by striking the period at the end and inserting ; and ; and (B) by adding at the end the following new subparagraph: (D) the term Consumer Price Index means the Chained Consumer Price Index for All Urban Consumers (C–CPI–U, as published in its initial version by the Bureau of Labor Statistics of the Department of Labor). . (2) Conforming change Section 215(i)(4) of the Social Security Act ( 42 U.S.C. 415(i)(4) ) is amended by inserting and by section 231 of the Provide for the Common Defense Act of 2013 after 1986 . (c) Effective date The amendments made by this section shall apply with respect to adjustments effective with or after December 2014.