I 114th CONGRESS 2d Session H. R. 5637 IN THE HOUSE OF REPRESENTATIVES July 6, 2016 Mr. Sanford (for himself, Mr. Palmer , Mr. Duncan of South Carolina , Mr. Mulvaney , Mr. Meadows , Mr. DesJarlais , Mr. Labrador , Mr. Gosar , Mr. Ribble , and Mr. Gohmert ) introduced the following bill; which was referred to the Committee on the Budget , and in addition to the Committee on Rules , 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 prevent a fiscal crisis by enacting legislation to balance the Federal budget through reductions of discretionary and mandatory spending.

1. Short title This Act may be cited as the One Percent Spending Reduction Act of 2016 . 2. Congressional findings and purpose (a) Findings Congress finds the following: (1) The fiscal crisis faced by the Federal Government demands immediate action. (2) The dramatic growth in spending and debt in recent years threatens the economic and national security of the United States: (A) Federal spending has grown from 18 percent of gross domestic product in 2001 to nearly 21 percent of gross domestic product in 2015. (B) Total Federal debt exceeds $19,000,000,000,000 and is projected to increase each year over the next 10 years. (C) Without action, the Federal Government will continue to run massive deficits in the next decade and total Federal debt will rise to $29,000,000,000,000 by 2026. (D) Interest payments on this debt will soon rise to the point where balancing the budget as a matter of policy is beyond the reach of Congress. (3) Absent reform, the growth of Social Security, Medicare, Medicaid, and other health-related spending will overwhelm all other Federal programs and consume all projected tax revenues. (b) Purpose The purpose of this Act is to address the fiscal crisis by— (1) acting quickly to balance the Federal budget and eliminate the parade of deficits and ballooning interest payments; (2) achieving balance by reducing spending 1 percent per year until spending equals projected long-term revenues; and (3) reforming entitlement programs to ensure long-term fiscal stability and balance. 3. Establishment and enforcement of spending caps (a) Outlay caps The Balanced Budget and Emergency Deficit Control Act of 1985 ( 2 U.S.C. 900 et seq. ) is amended by inserting after section 253 the following: 253A. Establishing outlay caps (a) Outlay caps In this section, the term outlay cap means: (1) Fiscal year 2017 For fiscal year 2017, total outlays (less net interest payments) shall be not more than $3,645,000,000,000, less 1 percent. (2) Fiscal year 2018 For fiscal year 2018, total outlays (less net interest payments) shall be not more than the amount computed under paragraph (1), less 1 percent. (3) Fiscal year 2019 For fiscal year 2019, total outlays (less net interest payments) shall be not more than the amount computed under paragraph (2), less 1 percent. (4) Fiscal year 2020 For fiscal year 2020, total outlays (less net interest payments) shall be not more than the amount computed under paragraph (3), less 1 percent. (5) Fiscal year 2021 For fiscal year 2021, total outlays (less net interest payments) shall be not more than the amount computed under paragraph (4), less 1 percent. (6) Fiscal year 2022 and subsequent fiscal years (A) In general For fiscal year 2022 and each fiscal year thereafter, total outlays shall be not more than 18 percent of the gross domestic product for that fiscal year, as estimated by the Office of Management and Budget prior to March of the previous fiscal year. (B) Limitation Notwithstanding subparagraph (A), for any fiscal year beginning with fiscal year 2023, total projected outlays may not be less than total projected outlays for the preceding fiscal year. (b) Sequestration (1) In general (A) Excess spending Not later than 45 calendar days after the beginning of a fiscal year, the Office of Management and Budget shall prepare and the President shall order a sequestration to eliminate any excess outlay amount. (B) Definitions (i) Fiscal years 2017 through 2021 For each of fiscal years 2017 through 2021 and for purposes of this subsection, the term excess outlay amount means the amount by which total projected Federal outlays (less net interest payments) for a fiscal year exceeds the outlay cap for that fiscal year. (ii) Fiscal year 2022 and subsequent fiscal years For fiscal year 2022 and each fiscal year thereafter and for purposes of this subsection, the term excess outlay amount means the amount by which total projected Federal outlays for a fiscal year exceeds the outlay cap for that fiscal year. (2) Sequestration (A) CBO preview report On August 15 of each year, the Congressional Budget Office shall issue a sequestration preview report as described in section 254(c)(4). (B) OMB preview report On August 20 of each year, the Office of Management and Budget shall issue a sequestration preview report as described in section 254(c)(4). (C) Final report On October 31 of each year, the Office of Management and Budget shall issue a final sequestration report as described in section 254(f)(3), which shall be accompanied by a Presidential order detailing uniform spending reductions equal to the excess outlay amount. (D) Process The reductions shall generally follow the process set forth in sections 253 and 254, except as provided in this section. (3) Congressional action If the August 20 report by the Office of Management and Budget projects a sequestration, the Committee on the Budget of the Senate and the Committee on the Budget of the House of Representatives may report a resolution directing committees of their House to change the existing law to achieve the spending reductions outlined in the August 20 report necessary to meet the outlay limits. (c) No exempt programs Section 255 and section 256 shall not apply to this section or any sequestration order issued under this section, except that payments for net interest (budget function 900) shall be exempt from the spending reductions under sequestration. (d) Look back If, after November 14, a bill resulting in outlays for the fiscal year in progress is enacted that causes excess outlays, the excess outlay amount for the next fiscal year shall be increased by the amount or amounts of that breach. . (b) Conforming amendments to BBEDCA (1) Sequestration preview reports Section 254(c)(4) of the Balanced Budget and Emergency Deficit Control Act of 1985 ( 2 U.S.C. 904(c)(4) ) is amended to read as follows: (4) Outlay cap sequestration reports The preview reports shall set forth for the budget year estimates for the following: (A) (i) For each of budget years 2017 through 2021, total projected outlays (less net interest payments), less one percent. (ii) For budget year 2022 and each subsequent budget year, the estimated gross domestic product for that budget year. (B) The amount of reductions required under section 253A. (C) The sequestration percentage necessary to achieve the required reduction under section 253A. . (2) Final sequestration reports Section 254(f)(3) of the Balanced Budget and Emergency Deficit Control Act of 1985 ( 2 U.S.C. 904(f)(3) ) is amended to read as follows: (3) Outlay caps sequestration reports The final reports shall contain all the information required in the outlay cap sequestration preview reports. In addition, these reports shall contain, for the budget year, for each account to be sequestered, estimates of the baseline level of sequestrable budgetary resources and resulting outlays and the amount of budgetary sources to be sequestered and result in outlay reductions. The reports shall also contain estimates of the effects on outlays on the sequestration of each outyear for direct spending programs. . (c) Enforcement Title III of the Congressional Budget Act of 1974 ( 2 U.S.C. 631 et seq. ) is amended by adding after section 315 the following: 316. Enforcement procedures (a) Outlay caps It shall not be in order in the House of Representatives or the Senate to consider any bill, joint resolution, amendment, amendment between the Houses, or conference report that includes any provision that would cause the most recently reported, current outlay cap set forth in section 253A of the Balanced Budget and Emergency Deficit Control Act of 1985 to be breached or increased. (b) Waiver or suspension (1) In the Senate The provisions of this section may be waived or suspended in the Senate only by the affirmative vote of two-thirds of the Members, duly chosen and sworn. (2) In the House The provisions of this section may be waived or suspended in the House of Representatives only by a rule or order proposing only to waive such provisions by an affirmative vote of two-thirds of the Members, duly chosen and sworn. (c) Point of order protection In the House, it shall not be in order to consider a rule or order that waives the application of paragraph (2) of subsection (b). (d) Motion To suspend It shall not be in order for the Speaker to entertain a motion to suspend the application of this section under clause 1 of rule XV. . 4. Conforming amendments The table of contents set forth in— (1) section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 is amended by inserting after the item relating to section 315 the following new item: Sec. 316. Enforcement procedures. ; and (2) section 250(a) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by inserting after the item relating to section 253 the following new item: Sec. 253A. Establishing outlay caps. . 5. Effective date This Act and the amendments made by this Act shall apply to fiscal year 2017 and each fiscal year thereafter, including any reports and calculations required for implementation in fiscal year 2017.