[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 898 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 898

To achieve a balanced Federal budget by fiscal year 2002 and each year 
 thereafter, achieve significant deficit reduction in fiscal year 1998 
and each year through 2002, establish a Board of Estimates, require the 
    President's budget and the congressional budget process to meet 
  specified deficit reduction and balance requirements, enforce those 
 requirements through a multiyear congressional budget process and, if 
           necessary, sequestration, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 27, 1997

 Mr. Visclosky (for himself and Mr. Stenholm) introduced the following 
    bill; which was referred to the Committee on the Budget, and in 
addition to the Committees on Ways and Means and 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 achieve a balanced Federal budget by fiscal year 2002 and each year 
 thereafter, achieve significant deficit reduction in fiscal year 1998 
and each year through 2002, establish a Board of Estimates, require the 
    President's budget and the congressional budget process to meet 
  specified deficit reduction and balance requirements, enforce those 
 requirements through a multiyear congressional budget process and, if 
           necessary, sequestration, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

                     TITLE I--BALANCING THE BUDGET

                            PART A--PURPOSE

SECTION 1. SHORT TITLES; REPEALERS.

    (a) Short Title of This Act.--This Act may be cited as the 
``Balanced Budget Enforcement Act of 1997''.
    (b) Short Title of Part B.--Part B of this Act may be cited as the 
``Deficit Elimination Act of 1997''.
    (c) Repealer.--Parts C, D, and E of the Balanced Budget and 
Emergency Deficit Control Act of 1985 are repealed.

SEC. 2. PURPOSE.

    The purpose of this Act is--
            (1) to mandate and achieve enough deficit reduction in each 
        year through fiscal year 2002 to eliminate the deficit by that 
        year;
            (2) from fiscal year 2003 onward, to mandate whatever 
        deficit reduction may be needed to eliminate any deficit that 
        may be projected;
            (3) to achieve a portion of the mandated deficit reduction 
        by limiting the total level of discretionary funding and the 
        remainder by requiring a fixed amount of deficit reduction from 
        some combination of entitlement and receipts changes;
            (4) to establish a Board of Estimates to arbitrate between 
        OMB and CBO;
            (5) to require the figures in the President's budget and 
        the budget resolution to meet the provisions of this Act;
            (6) to enforce each year's discretionary funding limits and 
        entitlement/receipts requirements through the Congressional 
        Budget Act, including multiyear allocations and reconciliation 
        directives;
            (7) to supplement Congressional Budget Act enforcement with 
        across-the-board cuts or sequestration whenever the 
        discretionary funding limits or entitlement/receipts 
        requirements of this Act are not met;
            (8) to provide a targeted sequestration that enforces the 
        committee targets for entitlement reductions and receipts 
        increases set forth in budget resolutions;
            (9) to create a backup comprehensive sequestration 
        applicable in any fiscal year in which the committee targets in 
        a budget resolution are not enforceable; and
            (10) to provide that reconciliation savings and 
        sequestration savings shall be permanent.

SEC. 3. TABLE OF CONTENTS.

                     TITLE I--BALANCING THE BUDGET

                            Part A--Purpose

Sec. 1. Short titles; repealers.
Sec. 2. Purpose.
Sec. 3. Table of contents.
Sec. 4. Effective dates.
              Part B--The Deficit Elimination Act of 1997

Sec. 100. Definitions and treatments.
Sec. 101. Direct spending and receipts: deficit reduction requirements.
Sec. 102. Discretionary funding limits.
Sec. 103. Balancing the budget in 2002.
Sec. 104. Preventing deficits after 2002.
Sec. 105. Spin-off law.
Sec. 106. Direct spending and receipts scorecard.
Sec. 107. Discretionary scorecard.
Sec. 108. Targeted sequestration.
Sec. 109. Comprehensive sequestration.
Sec. 110. Across-the-board reduction of discretionary programs.
Sec. 111. Exempt programs and activities.
Sec. 112. General and special sequestration rules.
Sec. 113. Sequestration through tax changes.
Sec. 114. Estimating assumptions, reports, and orders.
Sec. 115. The current policy baseline.
Sec. 116. Baseline assuming deficit reduction.
Sec. 117. Stabilization Reserve Fund.
Sec. 118. Modifications if war or low growth.
Sec. 119. Board of estimates.
Sec. 120. Judicial review.
             TITLE II--TECHNICAL AND CONFORMING AMENDMENTS

Sec. 201. Amendments to the Congressional Budget and Impoundment 
                            Control Act of 1974.
Sec. 202. Amendments to the Federal Credit Reform Act of 1990.
Sec. 203. Amendments to the Rules of the House of Representatives.
Sec. 204. Amendments to the Standing Rules of the Senate.
Sec. 205. President's budget and supplemental budget estimates.
Sec. 206. Amendments to other laws.

SEC. 4. EFFECTIVE DATES.

    Except as otherwise specified, this Act and the amendments made by 
it shall take effect on its date of enactment and shall apply to fiscal 
year 1998 and subsequent fiscal years.

              PART B--THE DEFICIT ELIMINATION ACT OF 1997

SEC. 100. DEFINITIONS AND TREATMENTS.

    As used in this part:
            (1) The terms ``budget authority'', ``new budget 
        authority'', ``entitlement authority'', ``outlays'', and 
        ``deficit'' have the meanings given to such terms in section 3 
        of the Congressional Budget and Impoundment Control Act of 
        1974, and the term ``receipts'' shall be treated as a synonym 
        for the term ``revenues'' as it is used in that Act.
            (2) The term ``account'' means an item for which 
        appropriations are made in any appropriation Act and, for items 
        not provided for in appropriation Acts, such term means an item 
        for which there is a designated budget account identification 
        code number in the President's budget.
            (3) The term ``aggregate first-year spendout rate'' means 
        the percent of new budget authority that is expended in the 
        fiscal year for which the budget authority is provided.
            (4) The term ``Board of Estimates'' or ``Board'' refers to 
        the entity established by section 119.
            (5) The term ``budget year'' means, with respect to a 
        session of Congress, the fiscal year of the Government that 
        starts on October 1 of the calendar year in which that session 
        begins.
            (6) The term ``budget-year session'' means any session of 
        Congress that starts in the calendar year in which that budget 
        year starts.
            (7) The term ``category'' refers to all direct spending 
        within the jurisdiction of a standing committee of the House of 
        Representatives as so designated in the joint statement of 
        managers accompanying the conference report on this Act, as 
        modified from time to time by the Board of Estimates upon the 
        written recommendation of the Speaker of the House of 
        Representatives.
            (8) The term ``CBO'' means the Director of the 
        Congressional Budget Office.
            (9) The term ``current policy baseline'' means the 
        projection (described in section 115) of current-year levels of 
        new budget authority, outlays, receipts, and the surplus or 
        deficit into the budget year and the outyears.
            (10) The term ``current year'' means the fiscal year that 
        immediately precedes a budget year.
            (11) The term ``deposit insurance'' refers to the expenses 
        of the Federal Deposit Insurance Corporation and the funds it 
        incorporates, the Resolution Trust Corporation, the National 
        Credit Union Administration and the funds it incorporates, the 
        Office of Thrift Supervision; the Comptroller of the Currency 
        Assessment Funds, and the RTC Office of the Inspector General.
            (12) The term ``direct spending'' means--
                    (A) budget authority provided by law other than 
                appropriation Acts;
                    (B) entitlement authority; and
                    (C) the food stamp program.
        If a law other than an appropriation Act alters the level of 
        discretionary appropriations, that effect shall be treated as 
        direct spending. Budget authority provided from a 
        transportation trust fund in any Act shall not be considered to 
        be provided by a law other than an appropriation Act.
            (13) The term ``discretionary appropriations'' means new 
        budget authority (except to fund entitlement authority) 
        provided by appropriation Acts and the term ``discretionary 
        programs'' refers to programs so financed. New budget authority 
        provided from transportation trust funds by any Act shall be 
        considered to be provided by an appropriation Act. If an 
        appropriation Act alters the level of direct spending, that 
        effect shall be treated as a discretionary appropriation.
            (14) The term ``discretionary funding limit'' means the 
        total amount of discretionary new budget authority that, under 
        section 102 or 104, may be enacted in any fiscal year.
            (15) The term ``discretionary regulations'' refers to 
        regulations issued by the executive branch for which Congress 
        delegates the authority to vary amounts, levels, rates, 
        effective dates, or other factors.
            (16) The term ``major estimating assumptions'' refers to 
        the list of items set forth under that heading in the joint 
        explanatory statement of managers accompanying the conference 
        report on this Act as modified by the Board under section 119.
            (17) The term ``OMB'' means the Director of the Office of 
        Management and Budget.
            (18) The term ``outyear'' means any of the 4 fiscal years 
        that follow a budget year.
            (19) The term ``real economic growth'' means the growth in 
        the gross domestic product, adjusted for inflation, consistent 
        with Department of Commerce definitions.
            (20) The terms ``sequester'' and ``sequestration'' refer to 
        or mean the cancellation under section 110 of budget authority 
        provided by discretionary appropriations, the cancellation 
        under section 108 or 109 of direct spending authority, or the 
        change in taxes under section 113.
            (21) The term ``sequestrable budget authority'' means, for 
        non-exempt accounts or activities within major functional 
        category 050 (national defense), all budget authority, and for 
        all other non-exempt accounts or activities, new budget 
        authority.
            (22) The term ``Stabilization Reserve Fund'' refers to the 
        deposit fund established by section 117.
            (23)(A) The following shall be treated as positive numbers:
                    (i) A deficit.
                    (ii) A deficit increase or surplus decrease.
                    (iii) A deficit or surplus change and a deficit or 
                surplus change target when the deficit is increased by, 
                or the surplus is reduced by, the change.
                    (iv) A deficit reduction shortfall.
                    (v) An amount to be sequestered.
            (B) The following shall be treated as negative numbers:
                    (i) A surplus.
                    (ii) A deficit reduction or surplus increase.
                    (iii) A deficit or surplus change and a deficit or 
                surplus change target when the deficit is reduced by, 
                or the surplus is increased by, the change.

SEC. 101. DIRECT SPENDING AND RECEIPTS: DEFICIT REDUCTION REQUIREMENTS.

    The deficit reduction targets for direct spending and receipts 
legislation are as follows:
      

----------------------------------------------------------------------------------------------------------------
              Fiscal Year                              Deficit Reduction (in billions of dollars)               
----------------------------------------------------------------------------------------------------------------
1998..................................                                   -19.903                                
1999..................................                                   -40.491                                
2000..................................                                   -55.685                                
2001..................................                                   -69.731                                
2002..................................                                   -85.227                                
----------------------------------------------------------------------------------------------------------------

The deficit reduction target for fiscal year 2002 shall be adjusted, if 
necessary, as provided by section 103.

SEC. 102. DISCRETIONARY FUNDING LIMITS.

    (a) Initial Amounts.--Subject to modifications under subsection 
(b), discretionary funding limits, measured in terms of new budget 
authority, are as follows:


----------------------------------------------------------------------------------------------------------------
                  Fiscal Year                                    Limits (in billions of dollars)                
----------------------------------------------------------------------------------------------------------------
1998..........................................                                540.0                             
1999..........................................                                545.4                             
2000..........................................                               540.854                            
2001..........................................                               556.363                            
2002..........................................                               561.926                            
----------------------------------------------------------------------------------------------------------------

    (b) Adjustments to Funding Limits.--Whenever appropriate, 
adjustments to the discretionary funding limits (and to those limits as 
cumulatively adjusted) for one or more fiscal years shall be made to 
reflect the following:
            (1) Changes in concepts.--For any fiscal year, the 
        adjustments produced by any change in budget accounting 
        concepts (including scorekeeping conventions, budget 
        classifications, and definitions) shall equal the current-year 
        levels of new budget authority using up-to-date concepts minus 
        those levels using the concepts in effect before the change. 
        Such changes in concepts may only be made in consultation with 
        the Committees on Appropriations and the Budget of the House of 
        Representatives and Senate, CBO, and OMB. A change in budget 
        classifications includes any change from the assumption that 
        all amounts provided in appropriation Acts are classified as 
        discretionary except those included under the heading 
        ``Mandatory Appropriations'' in the joint explanatory statement 
        of managers accompanying the conference report on this Act.
            (2) Changes in inflation.--(A) For the budget year and each 
        outyear through 2002, the adjustments produced by changes in 
        inflation shall equal the discretionary funding limit for each 
        such year multiplied by the inflation adjustment factor (for 
the fiscal year immediately preceding the current year) computed under 
subparagraph (B).
            (B) The inflation adjustment factor shall be calculated by 
        subtracting 1 from the ratio of (i) the level of year-over-year 
        inflation measured for the fiscal year immediately preceding 
        the current year, and (ii) the applicable estimated level for 
        that year set forth below:
                    For 1997, 1.029
                    For 1998, 1.029
                    For 1999, 1.030
                    For 2000, 1.030
                    For 2001, 1.030
                    For 2002, 1.030
        Inflation shall be measured by the average of the estimated 
        consumer price index for all urban consumers for a fiscal year 
        divided by the average index for the prior fiscal year.
            (3) Expiring housing contracts.--For each budget year 
        through 2002, the adjustment shall be the amount of new budget 
        authority needed to renew expiring multiyear subsidized housing 
        contracts or provide contracts to replace units lost due to 
        prepayments, with the per-contract renewal/replacement cost 
        equal to the average current-year cost of renewal or 
        replacement contracts.
            (4) Emergencies.--If for any fiscal year appropriations for 
        discretionary accounts are enacted that are designated as 
        emergency requirements by statute, the adjustment shall be the 
        amount of those appropriations that the President also 
        designates, in writing, as emergency requirements within 5 days 
        of the enactment of those appropriations. If any amount 
        previously designated as an emergency requirement is rescinded, 
        the adjustment shall be the amount of that rescission.
            (5) New limits for 2002 and thereafter.--The adjustment for 
        fiscal year 2002 shall be the adjustment (if any) under section 
        103, and the limit for any succeeding fiscal year shall be the 
        limit established under section 104.
            (6) Transportation trust funds.--For any fiscal year, the 
        adjustment produced by the enactment of any law that raises 
        excise taxes dedicated to a transportation trust fund shall be 
        the amount of the net receipts produced by that tax increase 
        which that law specifically appropriates for that purpose.

SEC. 103. BALANCING THE BUDGET IN 2002.

    If at the start of the 2002 budget-year session the baseline 
assuming deficit reduction (set forth in section 116) projects a 
deficit (or surplus) for that year, then the direct spending and 
receipts deficit reduction requirement for that year under section 101 
and the discretionary funding limit for that year under section 102 
shall each be changed by amounts that, when debt service effects are 
added, will produce a balanced budget. These changes shall be 
accomplished by the enactment of a spin-off law described in section 
105; or if no spin-off law is enacted, then the direct spending and 
receipts deficit reduction requirement for fiscal year 2002 under 
section 101 shall be adjusted by two-thirds of the total required 
change (excluding debt service effects) and the discretionary funding 
limit for fiscal year 2002 under section 102 shall be adjusted to 
produce an outlay change equal to one-third of the total required 
change (excluding debt service effects). Any adjustment in the 
discretionary funding limit (whether in a spin-off law or by 
application of the above formula) shall be assumed to produce an outlay 
change equal to the change in new budget authority times the aggregate 
first-year spendout rate for fiscal year 2002 chosen by the Board of 
Estimates.

SEC. 104. PREVENTING DEFICITS AFTER 2002.

    Starting with the 2003 budget-year session, the required change in 
the level of direct spending and receipts (relative to the current 
policy baseline described in section 115) for the budget year and a 
discretionary funding limit for that year shall be established. That 
change in direct spending and receipts and that discretionary funding 
limit (plus the associated effect on debt service) shall produce a 
balanced budget. That change and that limit shall be specified in a 
spin-off law described in section 105; or if no spin-off law is 
enacted, then the change in direct spending and receipts for the budget 
year shall be two-thirds of the baseline level of deficit or surplus 
(excluding debt service effects) and the discretionary funding limit 
for the budget year shall be the baseline level of discretionary new 
budget authority adjusted to produce an outlay change equal to one-
third of the baseline level of deficit or surplus (excluding debt 
service changes). Any adjustment in the discretionary funding limit 
relative to the baseline level of discretionary new budget authority 
(whether in a spin-off law or by application of the above formula) 
shall be assumed to produce an outlay change equal to the change in new 
budget authority times the aggregate first-year spendout rate for 
budget year chosen by the Board of Estimates.

SEC. 105. SPIN-OFF LAW.

    (a) Through the use of the procedures described in section 
301(b)(5) or 310(c) of the Congressional Budget Act of 1974 or by other 
means, a law to carry out section 103 or 104 may be enacted. If 
required by section 103 or 104, that law shall specify a discretionary 
funding limit for the budget year. That law shall specify the budget-
year amount of direct spending change required of or allowed by each 
committee of the House of Representatives in laws within that 
committee's jurisdiction and the budget-year amount of receipts change 
required of or allowed by the Committee on Ways and Means of the House 
of Representatives in laws within that committee's jurisdiction. A law 
shall not be considered a spin-off law under this section unless--
            (1) for each of fiscal years 1998 through 2001, the total 
        of those amounts for the budget year equals the amount 
        specified in section 101 less the amount of deficit reduction 
        achieved for that year measured under section 106; or
            (2) for fiscal year 2002 and each year thereafter, the 
        targets set by the spin-off bill for the budget year will 
        produce a balanced budget in that year under the estimates and 
        assumptions chosen by the Board of Estimates for that year.

SEC. 106. DIRECT SPENDING AND RECEIPTS SCORECARD.

    (a) Establishment of Scorecard: 1998-2002.--There shall be a 
scorecard for each fiscal year through 2002 upon which shall be entered 
the estimated increase or decrease in the deficit (relative to the 
start-of-session current policy baseline described in section 115) for 
the current year, the budget year, and each fiscal year through 2002 
due to--
            (1) the enactment, after August 15, 1997, of any law,
            (2) the imposition of any sequestration under section 108 
        or 109, or
            (3) the change in the baseline from the application of 
        section 115(b)(3), which relates to certain expiring provisions 
        of law and to veterans' compensation,
affecting the level of direct spending or the level of receipts. 
Entries under the preceding sentence shall not include resulting debt 
service changes or any incidental changes in intragovernmental receipts 
of Federal trust funds. Amounts shall be entered on the scorecard 
within 10 days after the enactment of each such law or the imposition 
of any sequestration, and may not thereafter be altered except to 
reflect decisions made by the Board of Estimates or to correct clerical 
errors or errors in the application of this Act.
    (b) Establishment of Scorecard: 2003 and Thereafter.--There shall 
be a scorecard, created anew for each budget year starting with 2003, 
upon which shall be entered the estimated increase or decrease in the 
deficit or surplus (relative to the start-of-session current policy 
baseline described in section 115) for the budget year, in any amount 
that would have been entered if subsection (a) applied to budget years 
after 2002.
    (c) Deficit Reduction Requirements.--For each fiscal year, the 
scorecard shall also include, as applicable, the amount of the direct 
spending and receipts deficit reduction target for that year under 
section 101 or the amount (if any) of the direct spending and receipts 
deficit change target under section 104. Each such deficit reduction 
amount shall be entered as though it were a deficit increase, so that 
an equal amount of deficit reduction will have to be achieved to 
forestall a sequestration, and each such surplus decrease amount (if 
any) shall be entered as though it were a surplus increase, so that the 
amount of later surplus decreases will be limited.
    (d) Lookback.--If in any budget-year session a law is enacted 
affecting the current-year level of direct spending or receipts, the 
amount of that current-year effect shall be entered on the scorecard 
under the column for the budget year. To mandate year-after savings of 
amounts that would have been saved but for the lower sequestration rule 
in that section, entries shall also be made as specified in paragraphs 
(2) and (3) of section 114(j).
    (e) Division Between Direct Spending and Receipts.--The scorecard 
shall be divided between changes in the deficit resulting from direct 
spending changes and changes in the deficit resulting from changes in 
receipts. Solely for purposes of this section, any change in the 
deficit resulting from an alteration of the Federal tax treatment of a 
direct spending benefit shall be treated as a change in direct 
spending.
    (f) Emergencies.--If after the enactment of this Act a provision of 
direct spending or receipts legislation is enacted that is designated 
as an emergency requirement by statute and that the President also 
designates, in writing, as an emergency requirement within 5 days of 
the enactment of that legislation, then no entries resulting from that 
provision shall be made on the scorecard.
    (g) Treatment of Certain Dedicated Excise Taxes.--For each fiscal 
year, the scorecard shall also include only that part of the net 
increase in receipts resulting from an increase in an excise tax 
dedicated to a transportation trust fund that--
            (1) was not specifically appropriated (as provided in 
        section 102(b)(6)); or
            (2) to the extent specifically appropriated (as provided in 
        section 102(b)(6)), is not estimated to be expended in that 
        fiscal year.

SEC. 107. DISCRETIONARY SCORECARD.

    (a) Establishment of Scorecard.--There shall be a scorecard for 
each fiscal year starting with 1998 upon which shall be entered the 
amount of discretionary appropriations for that fiscal year due to--
            (1) the enactment of any law in the budget-year session,
            (2) the enactment of any law in any previous session of 
        Congress, or
            (3) the imposition of any sequestration under section 110.
Amounts shall be entered on the scorecard within 10 days after the 
enactment of each such law or the imposition of any sequestration, and 
may not thereafter be altered except to reflect decisions made by the 
Board of Estimates or to correct clerical errors or errors in the 
application of this Act.
    (b) Lookback.--(1) If in any current-year session any discretionary 
appropriation is enacted that would cause the discretionary funding 
limit for the current year to be exceeded, then the amount of that 
excess shall be entered on the scorecard under the column for the 
budget year. To mandate year-after savings of amounts that would have 
been saved but for the lower sequestration rule in that section, 
entries shall also be made as specified in paragraphs (2) and (3) of 
section 114(j).
    (2) If any discretionary appropriation is enacted after June 30, 
1997, and before October 1, 1997, that would have caused a look-back 
sequester under section 251(a)(5) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 as in effect immediately before the date of 
enactment of this Act, then the amount that would have been sequestered 
shall be entered on the scorecard as a cost under the column for the 
budget year.

SEC. 108. TARGETED SEQUESTRATION.

    (a) Application.--This section shall apply for any budget year only 
if a spin-off law as described in section 105 is in effect for that 
year on the date of the final sequestration report described in section 
114.
    (b) Sequestration in Each Category Based on Budget-Year 
Shortfall.--(1) The purpose of this subsection is to ensure that the 
changes achieved during a session in direct spending for each category 
and in receipts are at least as great as those required, or are no more 
than those allowed, for the budget year.
    (2) The amount to be sequestered for the budget year from direct 
spending programs in each category is the amount by which changes in 
direct spending achieved during the budget-year session are estimated 
under section 106 to result in a greater amount of direct spending than 
allowed in that category in the spin-off law.
    (3) The amount that receipts are to be increased for the budget 
year by the imposition of surtaxes is the amount by which changes in 
receipts achieved during that budget-year session are estimated under 
section 106 to result in lower total receipts for that year than 
allowed in the spin-off law.
    (c) Sequestration in Each Category Based on Outyear Shortfall.--(1) 
The purpose of this subsection is to ensure that the outyear changes in 
direct spending for each category and the outyear changes in receipts 
achieved during a session are, on average, at least as great as those 
required, or are no more than those allowed, for the budget year.
    (2) The amount to be sequestered for the budget year in any 
category under subsection (b)(2), if any, shall be increased whenever 
the average outyear change in direct spending in that category achieved 
during that budget-year session estimated under section 106 or 
paragraph (4) would produce higher deficits during the outyears than if 
that average change had equaled the budget-year target for changes in 
direct spending in that category. That increased amount to be 
sequestered (if applicable) shall be--
            (A) one-quarter of the sum of those changes in direct 
        spending for the 4 outyears; minus
            (B) the budget-year target for changes in direct spending.
    (3) The amount that receipts are to be increased for the budget 
year under subsection (b)(3), if any, shall be increased whenever the 
average outyear change in receipts achieved during that budget-year 
session estimated under section 106 or paragraph (4) would produce 
higher deficits during the outyears than if that average change had 
equaled the budget-year target for changes in receipts. That additional 
amount that receipts are to be increased (if applicable) shall be--
            (A) one-quarter of the sum of those changes in receipts for 
        the four outyears achieved; minus
            (B) the budget-year target for changes in receipts.
    (4) For any outyear after 2002, CBO and OMB shall make cost 
estimates within 10 days after the enactment of any direct spending or 
receipts legislation of the outyear effects of that legislation that 
would have gone on the direct spending and receipts scorecard under 
section 106(a) if the scorecard had covered that outyear.
    (d) Fingerprint Rule.--For purposes of this section, the category 
to which a change in direct spending is attributed shall be the 
category of the committee that authored the change or reported the 
legislation to which the change was offered as an amendment. If it is 
impossible to tell which committee authored a change, the category to 
which such a change is attributed shall be the category of the 
committee with jurisdiction over the program that was changed, as 
defined under section 100(9).
    (e) Sequestration.--Within 15 days after Congress adjourns to end a 
session and on the same day as a sequestration, if any, under section 
110, there shall be a sequestration--
            (1) to reduce the amount of direct spending in the current 
        policy baseline in any category by the sum of the amounts 
        specified in subsections (b)(2) and (c)(2) unless that sum is 
        less than $50,000,000; and
            (2) to increase the amount of receipts in the current 
        policy baseline by the sum of the amounts specified in 
        subsections (b)(3) and (c)(3) unless that sum is less than 
        $250,000,000.
The amount required to be sequestered from direct spending in a 
category shall be achieved by reducing each non-exempt direct spending 
account (or activity within an account) within that category by the 
uniform percentage necessary to achieve 80 percent of that amount, and 
increasing receipts to achieve the other 20 percent of that amount as 
specified in sections 59B, 59C, and 59D of the Internal Revenue Code of 
1986, necessary to achieve that amount.

SEC. 109. COMPREHENSIVE SEQUESTRATION.

    (a) Application.--This section shall apply for any budget year 
unless a spin-off law as described in section 105 is in effect for that 
year on the date of the final sequestration report described in section 
114.
    (b) Sequestration Based on Budget-Year Shortfall.--The amount to be 
sequestered for the budget year is the amount (if any) by which the sum 
of all budget-year entries on the direct spending and receipts 
scorecard under section 106 is greater than zero.
    (c) Sequestration Based on Outyear Shortfall.--(1) The purpose of 
this subsection is to ensure that the outyear changes in direct 
spending and in receipts achieved during a session are, on average, at 
least as great as those required, or are no more than those allowed, 
for the budget year.
    (2) The amount to be sequestered under subsection (b), if any, 
shall be increased whenever the average outyear change in direct 
spending and receipts, combined, achieved during that budget-year 
session would result in higher deficits than if that average change had 
equaled the amount targeted for the budget year, with that budget-year 
target being the amount that the sequestration preview report for the 
budget year shows was needed to bring the budget-year entries on the 
direct spending and receipts scorecard to zero. That increased amount 
to be sequestered shall be--
            (A) one-quarter of the sum of those achieved changes in 
        direct spending and receipts, combined, for the 4 outyears; 
        minus
            (B) the budget-year target for changes in direct spending 
        and receipts, combined.
    (d) Sequestration.--Within 15 days after Congress adjourns to end a 
session and on the same day as a sequestration, if any, under section 
110, there shall be a sequestration to reduce the amount of direct 
spending and increase the amount of receipts in the current policy 
baseline by the sum of the amounts specified in subsections (b) and (c) 
unless that sum is less than $500,000,000. The amount required to be 
sequestered shall be achieved by reducing each non-exempt direct 
spending account (or activity within an account) by the uniform 
percentage necessary to achieve 80 percent of that sum, and increasing 
receipts to achieve the other 20 percent of that sum as specified in 
sections 59B, 59C, and 59D of the Internal Revenue Code of 1986, 
necessary to achieve that amount.

SEC. 110. ACROSS-THE-BOARD REDUCTION OF DISCRETIONARY PROGRAMS.

    (a) Sequestration.--Within 15 days after Congress adjourns to end a 
session, and on the same day as a sequestration (if any) under section 
108 or 109, there shall be a sequestration to reduce the amount of 
discretionary sequestrable budget authority in the current policy 
baseline for the budget year by the amount (if any) needed to eliminate 
any excess of new budget authority for that year over the discretionary 
funding limit for that year as measured under section 107, unless that 
excess is less than $250,000,000.
    (b) Uniform Reduction.--Each nonexempt account (or activity within 
an account) shall be reduced by a dollar amount calculated by 
multiplying the level of sequestrable budget authority in the baseline 
for that account or activity by the uniform percentage necessary to 
reduce new budget authority by the amount in subsection (a).
    (c) Federal Personnel.--If the President uses the authority under 
section 111(b) to exempt any amounts appropriated for military 
personnel from sequestration, all remaining sequestrable budget 
authority within subfunction 051 shall be further reduced by the 
uniform percentage needed to fully offset the reduction in the amount 
sequestered resulting from that exemption.
    (d) Part-Year Appropriations.--If, on the date specified in 
subsection (a), there is in effect an Act making or continuing 
appropriations for part of a fiscal year for any budget account, then 
the dollar reduction calculated for that account under subsections (b) 
and (c) shall be applied to--
            (1) the annualized amount otherwise available by law in 
        that account under that or a subsequent part-year 
        appropriation; and
            (2) when a full-year appropriation for that account is 
        enacted, from the amount otherwise provided by that 
        appropriation.

SEC. 111. EXEMPT PROGRAMS AND ACTIVITIES.

    (a) Descriptions and Lists.--Except as provided in subsection (c), 
the following budget accounts, activities within accounts, or income 
shall be exempt from sequestration--
            (1) net interest;
            (2) deposit insurance and pension benefit guarantees;
            (3) all payments to trust funds from excise taxes or other 
        receipts or collections properly creditable to those trust 
        funds;
            (4) offsetting receipts and collections;
            (5) all payments from one Federal direct spending budget 
        account to another Federal budget account; all 
        intragovernmental funds including those from which funding is 
        derived primarily from other Government accounts, except to the 
        extent that such funds are augmented by direct appropriations 
        for the fiscal year for which the order is in effect; and those 
        obligations of discretionary accounts or activities that are 
        financed by intragovernmental payments from another 
        discretionary account or activity;
            (6) expenses to the extent they result from private 
        donations, bequests, or voluntary contributions to the 
        Government;
            (7) nonbudgetary activities, including but not limited to--
                    (A) credit liquidating and financing accounts;
                    (B) the Pension Benefit Guarantee Corporation Trust 
                Funds;
                    (C) the Thrift Savings Fund;
                    (D) the Federal Reserve System; and
                    (E) appropriations for the District of Columbia to 
                the extent they are appropriations of locally raised 
                funds;
            (8) payments resulting from Government insurance, 
        Government guarantees, or any other form of contingent 
        liability, to the extent those payments result from contractual 
        or other legally binding commitments of the Government at the 
        time of any sequestration;
            (9) the following accounts, which largely fulfill 
        requirements of the Constitution or otherwise make payments to 
        which the Government is committed--
                    Administration of Territories, Northern Mariana 
                Islands Covenant grants (14-0412-0-1-806);
                    Bureau of Indian Affairs, miscellaneous payments to 
                Indians (14-2303-0-1-452);
                    Bureau of Indian Affairs, miscellaneous trust 
                funds, tribal trust funds (14-9973-0-7-999);
                    Claims, defense;
                    Claims, judgments, and relief act (20-1895-0-1-
                806);
                    Compact of Free Association, economic assistance 
                pursuant to Public Law 99-658 (14-0415-0-1-806);
                    Compensation of the President (11-0001-0-1-802);
                    Customs Service, miscellaneous permanent 
                appropriations (20-9992-0-2-852);
                    Eastern Indian land claims settlement fund (14-
                2202-0-1-806)
                    Farm Credit System Financial Assistance 
                Corporation, interest payments (20-1850-0-1-351);
                    Internal Revenue collections of Puerto Rico (20-
                5737-0-2-852);
                    Panama Canal Commission, operating expenses and 
                capital outlay (95-5190-0-2-403);
                    Payments of Vietnam and USS Pueblo prisoner-of-war 
                claims (15-0104-0-1-153);
                    Payments to copyright owners (03-5175-0-2-376);
                    Payments to the United States territories, fiscal 
                assistance (14-0418-0-1-801);
                    Salaries of Article III judges;
                    Soldier's and Airmen's Home, payment of claims (84-
                8930-0-7-705);
                    Washington Metropolitan Area Transit Authority, 
                interest payments (46-0300-0-1-401).
            (10) the following noncredit special, revolving, or trust-
        revolving funds--
                    Coinage profit fund (20-5811-0-2-803);
                    Exchange Stabilization Fund (20-4444-0-3-155);
                    Foreign Military Sales trust fund (11-82232-0-7-
                155);
            (11)(A) any amount paid as regular unemployment 
        compensation by a State from its account in the Unemployment 
        Trust Fund (established by section 904(a) of the Social 
        Security Act);
            (B) any advance made to a State from the Federal 
        unemployment account (established by section 904(g) of such 
        Act) under title XII of such Act and any advance appropriated 
        to the Federal unemployment account pursuant to section 1203 of 
        such Act; and
            (C) any payment made from the Federal Employees 
        Compensation Account (as established under section 909 of such 
        Act) for the purpose of carrying out chapter 85 of title 5, 
        United States Code, and funds appropriated or transferred to or 
        otherwise deposited in such Account;
            (12) the earned income tax credit (payments to individuals 
        pursuant to section 32 of the Internal Revenue Code of 1986).
    (b) Optional Exemptions of Military Personnel.--(1) The President 
may exempt some or all of the budgetary resources of any military 
personnel account from sequestration under section 109.
    (2) The President may not use the authority under paragraph (1) 
unless he notifies the Congress of the extent to which such authority 
will be exercised for the budget year on or before the preceding August 
29.
    (c) Federal Administrative Expenses.--
            (1) Notwithstanding any provision of law other than 
        paragraph (3), administrative expenses incurred by the 
        departments and agencies, including independent agencies, of 
        the Federal Government in connection with any program, project, 
        activity, or account shall be subject to reduction pursuant to 
        any sequestration order, without regard to the exemptions under 
        subsection (a) and regardless of whether the program, project, 
        activity, or account is self-supporting and does not receive 
        appropriations.
            (2) Payments made by the Federal Government to reimburse or 
        match administrative costs incurred by a State or political 
        subdivision under or in connection with any program, project, 
        activity, or account shall not be considered administrative 
        expenses of the Federal Government for purposes of this 
        section, and shall be subject to sequestration to the extent 
        (and only to the extent) that other payments made by the 
        Federal Government under or in connection with that program, 
        project, activity, or account are subject to that reduction or 
        sequestration; except that Federal payments made to a State as 
        reimbursement of administrative costs incurred by that State 
        under or in connection with the unemployment compensation 
        programs specified in subsection (a)(11) shall be subject to 
        reduction or sequestration under this part notwithstanding the 
        exemption otherwise granted to such programs under that 
        subsection.
            (3) Notwithstanding any other provision of law, the 
        administrative expenses of the following programs shall be 
        exempt from sequestration:
                    (A) Deposit insurance.
                    (B) The Federal Retirement Thrift Investment Board.
                    (C) The Federal Reserve System.

SEC. 112. GENERAL AND SPECIAL SEQUESTRATION RULES.

    (a) Permanent Sequestration of Direct Spending and Receipts.--
            (1) The purpose of any direct spending or receipts 
        sequestration under this Act is to ensure deficit reduction in 
        the budget year and all subsequent fiscal years, so that the 
        budget-year deficit reduction target in section 101 is met and 
        so that it will be feasible to meet the increasingly ambitious 
        targets for the subsequent years.
            (2) Obligations in sequestered direct spending accounts 
        shall be reduced in the fiscal year in which a sequestration 
        occurs and in all succeeding fiscal years. Notwithstanding any 
        other provision of this section, after the first direct 
        spending sequestration or receipts sequestration, any later 
        sequestration shall reduce direct spending or increase receipts 
        (as the case may be) by an amount in addition to, rather than 
        in lieu of, the reduction in direct spending or the increase in 
        receipts in place under the existing sequestration or 
        sequestrations.
    (b) Uniform Percentages.--
            (1) In calculating the uniform percentage applicable to the 
        sequestration of all nonexempt direct spending programs or 
        activities and receipts under section 109, or the uniform 
        percentage applicable to the sequestration of nonexempt direct 
        spending programs or activities within a category under section 
        108, the sequestrable base for direct spending rules and 
        activities is the total budget-year level of outlays for those 
programs or activities in the current policy baseline minus--
                    (A) those budget-year outlays resulting from 
                obligations incurred in the current or prior fiscal 
                years, and
                    (B) those budget-year outlays resulting from 
                exemptions under section 111.
            (2) For any direct spending program in which--
                    (A) outlays pay for entitlement benefits,
                    (B) a budget-year sequestration takes effect after 
                the 1st day of the budget year, and
                    (C) that delay reduces the amount of entitlement 
                authority that is subject to sequestration in the 
                budget year,
        the uniform percentage otherwise applicable to the 
        sequestration of that program in the budget year shall be 
        increased as necessary to achieve the same budget-year outlay 
        reduction in that program as would have been achieved had there 
        been no delay.
            (3) If the uniform percentage otherwise applicable to the 
        budget-year sequestration of a program or activity is increased 
        under paragraph (2), then it shall revert to the uniform 
        percentage calculated under paragraph (1) when the budget year 
        is completed.
    (c) General Rules for Sequestration.--
            (1) Indefinite authority.--Except as otherwise provided, 
        sequestration in accounts for which obligations are indefinite 
        shall be taken in a manner to ensure that obligations in the 
        fiscal year of a sequestration and succeeding fiscal years are 
        reduced, from the level that would actually have occurred, by 
        the applicable sequestration percentage or percentages.
            (2) Cancellation of budgetary resources.--Budgetary 
        resources sequestered from any account other than an 
        entitlement trust, special, or revolving fund account shall 
        revert to the Treasury and be permanently canceled or repealed.
            (3) Indexed benefit payments.--If, under any entitlement 
        program--
                    (A) benefit payments are made to persons or 
                governments more frequently than once a year, and
                    (B) the amount of entitlement authority is 
                periodically adjusted under existing law to reflect 
                changes in a price index,
        then for the first fiscal year to which a sequestration order 
        applies, the benefit reductions in that program accomplished by 
        the order shall take effect starting with the payment made at 
        the beginning of January or 7 weeks after the order is issued, 
        whichever is later. For the purposes of this subsection, 
        Veterans Compensation shall be considered a program that meets 
        the conditions of the preceding sentence.
            (4) Programs, projects, or activities.--Except as otherwise 
        provided, the same percentage sequestration shall apply to all 
        programs, projects, and activities within a budget account 
        (with programs, projects, and activities as delineated in the 
        appropriation Act or accompanying report for the relevant 
        fiscal year covering that account, or for accounts not included 
        in appropriation Acts, as delineated in the most recently 
        submitted President's budget).
            (5) Implementing regulations.--Administrative regulations 
        or similar actions implementing the sequestration of a program 
        or activity shall be made within 120 days of the effective date 
        of the sequestration of that program or activity.
            (6) Distribution formulas.--To the extent that distribution 
        or allocation formulas differ at different levels of budgetary 
        resources within an account, program, project, or activity, a 
        sequestration shall be interpreted as producing a lower total 
        appropriation, with that lower appropriation being obligated as 
        though it had been the pre-sequestration appropriation and no 
        sequestration had occurred.
            (7) Contingent fees.--In any account for which fees charged 
        to the public are legally determined by the level of 
        appropriations, fees shall be charged on the basis of the 
        presequestration level of appropriations.
    (d) Block Grants to States for Temporary Assistance for Needy 
Families.--Any sequestration order shall accomplish the full amount of 
any required reduction in payments under sections 403 and 418 of the 
Social Security Act by reducing the amount otherwise payable to each 
State (within the meaning of part A of title IV of such Act) under the 
section involved for the fiscal year involved by the uniform percentage 
applicable to the sequestration of nonexempt direct spending programs 
or activities.
    (e) Child Support Enforcement Program.--Any sequestration order 
shall accomplish the full amount of any required reduction in payments 
under sections 455 and 458 of the Social Security Act by reducing the 
Federal matching rate for State administrative costs under the program, 
as specified (for the fiscal year involved) in section 455(a) of such 
Act, to the extent necessary to reduce such expenditures by that 
amount.
    (f) Commodity Credit Corporation.--
            (1) General effective date.--Except as provided in 
        paragraph (2), for the Commodity Credit Corporation, a 
        sequestration order shall take effect on the date on which the 
        order is issued.
            (2) Special effective date for certain ccc contracts.--For 
        each crop of a commodity for which 1-year contracts are issued 
        as an entitlement, a sequestration order shall take effect with 
        the start of the sign-up period for that crop that begins after 
        the sequestration order is issued. In the case of a commodity 
        for which a production flexibility contract is in effect under 
        section 111 of the Agricultural Market Transition Act (7 U.S.C. 
        7211), a sequestration order shall take effect on October 1 of 
        the fiscal year that begins after the sequestration order is 
        issued. Payments for each contract shall be reduced under the 
        same terms and conditions.
            (3) Dairy program.--As the sole means of achieving any 
        reduction in outlays under the milk price support program, the 
        Secretary of Agriculture shall provide for a reduction to be 
made in the price received by producers for all milk produced in the 
United States and marketed by producers for commercial use. The price 
reduction shall be measured in cents per hundredweight of milk 
marketed. The reduction in outlays as a result of the price reduction 
shall not exceed the aggregate amount of the reduction in outlays under 
the milk price support program that otherwise would have been achieved 
by reducing payments made for the purchase of milk or the products of 
milk under section 141 of the Agricultural Market Transition Act (7 
U.S.C. 7251) during the fiscal year involved.
            (4) Effect of delay.--For purposes of subsection (b)(1), 
        the sequestrable base for the Commodity Credit Corporation is 
        the budget-year level of gross outlays resulting from new 
        budget authority that is subject to reduction under paragraphs 
        (2) and (3), and subsection (b)(2) shall not apply.
            (5) Certain authority not to be limited.--Nothing in this 
        Act shall restrict the Corporation in the discharge of its 
        authority and responsibility as a corporation to buy and sell 
        commodities in world trade, or limit or reduce in any way any 
        appropriation that provides the Corporation with funds to cover 
        its net realized losses.
    (g) Conservation Reserve Program.--Multiyear contracts under the 
conservation reserve program shall be considered binding and not 
subject to sequestration, but any contract entered into after a 
sequestration applicable to that program takes effect shall provide for 
payments reduced by the uniform percentage or percentages applicable to 
that sequestration.
    (h) Extended Unemployment Compensation.--(1) A State may reduce 
each weekly benefit payment made under the Federal-State Extended 
Unemployment Compensation Act of 1970 for any week of unemployment 
occurring during any period with respect to which payments are reduced 
under any sequestration order by a percentage not to exceed the 
percentage by which the Federal payment to the State under section 204 
of such Act is to be reduced for such week as a result of such order.
    (2) A reduction by a State in accordance with subparagraph (A) 
shall not be considered as a failure to fulfill the requirements of 
section 3304(a)(11) of the Internal Revenue Code of 1986.
    (i) Federal Employees Health Benefits Fund.--For the Federal 
Employees Health Benefits Fund, a sequestration order shall take effect 
with the next open season. The sequestration shall be accomplished by 
annual payments from that Fund to the General Fund of the Treasury. 
Those annual payments shall be financed solely by charging higher 
premiums. For purposes of subsection (b)(1), the sequestrable base for 
the Fund is the budget-year level of gross outlays resulting from 
claims paid after the sequestration order takes effect, and subsection 
(b)(2) shall not apply.
    (j) Federal Housing Finance Board.--Any sequestration of the 
Federal Housing Finance Board shall be accomplished by annual payments 
(by the end of each fiscal year) from that Board to the general fund of 
the Treasury, in amounts equal to the uniform sequestration percentage 
for that year times the gross obligations of the Board in that year.
    (k) Federal Pay.--
            (1) In general.--Except as provided in section 111(b)(3), 
        new budget authority to pay Federal personnel shall be reduced 
        by the uniform percentage calculated under section 108, 109, or 
        110, as applicable, but no sequestration order may reduce or 
        have the effect of reducing the rate of pay to which any 
        individual is entitled under any statutory pay system (as 
        increased by any amount payable under section 5304 of title 5, 
        United States Code, or section 302 of the Federal Employees Pay 
        Comparability Act of 1990) or the rate of any element of 
        military pay to which any individual is entitled under title 
        37, United States Code, or any increase in rates of pay which 
        is scheduled to take effect under section 5303 of title 5, 
        United States Code, section 1009 of title 37, United States 
        Code, or any other provision of law.
            (2) Definitions.--For purposes of this subsection:
                    (A) The term ``statutory pay system'' shall have 
                the meaning given that term in section 5302(1) of title 
                5, United States Code.
                    (B) The term ``elements of military pay'' means--
                            (i) the elements of compensation of members 
                        of the uniformed services specified in section 
                        1009 of title 37, United States Code,
                            (ii) allowances provided members of the 
                        uniformed services under sections 403a and 405 
                        of such title, and
                            (iii) cadet pay and midshipman pay under 
                        section 203(c) of such title.
                    (C) The term ``uniformed services'' shall have the 
                meaning given that term in section 101(3) of title 37, 
                United States Code.
    (l) Guaranteed Student Loans.--(A) For all student loans under 
parts B and D of title IV of the Higher Education Act of 1965 made on 
or after the date of a sequestration, the origination fees shall be 
increased by a uniform percentage sufficient to produce the dollar 
savings in student loan programs for the fiscal year of the 
sequestration required by section 108 or 109, and all subsequent 
origination fees shall be increased by the same percentage, 
notwithstanding any other provision of law.
    (B) The origination fees to which paragraph (A) applies are those 
specified in sections 428H(f)(1), 438(c), and 455(c) of that Act.
    (m) Insurance Programs.--Any sequestration in a Federal program 
that sells insurance contracts to the public (including the Federal 
Crop Insurance Fund, the National Insurance Development Fund, the 
National Flood Insurance Fund, insurance activities of the Overseas 
Private Insurance Corporation, and Veterans' life insurance programs) 
shall be accomplished by annual payments from the insurance fund or 
account to the general fund of the Treasury. The amount of each annual 
payment by each such fund or account shall be the amount received by 
the fund or account by increasing premiums on contracts entered into 
after the date a sequestration order takes effect by the uniform 
sequestration percentage, and premiums shall be increased accordingly.
    (n) Medicaid.--The November 15th estimate of medicaid spending by 
States shall be the base estimate from which the uniform percentage 
reduction under any sequestration, applied across-the-board by State, 
shall be made. Succeeding Federal payments to States shall reflect that 
reduction. The Health Care Financing Administration shall reconcile 
actual medicaid spending for each fiscal year with the base estimate as 
reduced by the uniform percentage, and adjust each State's grants as 
soon as practicable, but no later than 100 days after the end of the 
fiscal year to which the base estimate applied, to comply with the 
sequestration order.
    (o) Medicare.--
            (1) Timing of application of reductions.--
                    (A) In general.--Except as provided in subparagraph 
                (B), if a reduction is made in payment amounts pursuant 
                to a sequestration order, the reduction shall be 
                applied to payment for services furnished after the 
                effective date of the order. For purposes of the 
                previous sentence, in the case of inpatient services 
                furnished for an individual, the services shall be 
                considered to be furnished on the date of the 
                individual's discharge from the inpatient facility.
                    (B) Payment on the basis of cost reporting 
                periods.--In the case in which payment for services of 
                a provider of services is made under title XVIII of the 
                Social Security Act on a basis relating to the 
                reasonable cost incurred for the services during a cost 
                reporting period of the provider, if a reduction is 
                made in payment amounts pursuant to a sequestration 
                order, the reduction shall be applied to payment for 
                costs for such services incurred at any time during 
                each cost reporting period of the provider any part of 
                which occurs after the effective date of the order, but 
                only (for each such cost reporting period) in the same 
                proportion as the fraction of the cost reporting period 
                that occurs after the effective date of the order.
            (2) No increase in beneficiary charges in assignment-
        related cases.--If a reduction in payment amounts is made 
        pursuant to a sequestration order for services for which 
        payment under part B of title XVIII of the Social Security Act 
        is made on the basis of an assignment described in section 
1842(b)(3)(B)(ii), in accordance with section 1842(b)(6)(B), or under 
the procedure described in section 1870(f)(1) of such Act, the person 
furnishing the services shall be considered to have accepted payment of 
the reasonable charge for the services, less any reduction in payment 
amount made pursuant to a sequestration order, as payment in full.
            (3) No effect on computation of aapcc.--In computing the 
        adjusted average per capita cost for purposes of section 
        1876(a)(4) of the Social Security Act, the Secretary of Health 
        and Human Services shall not take into account any reductions 
        in payment amounts which have been or may be effected under 
        this part.
    (p) Postal Service Fund.--Any sequestration of the Postal Service 
Fund shall be accomplished by annual payments from that Fund to the 
General Fund of the Treasury, and the Postmaster General of the United 
States shall have the duty to make those payments during the fiscal 
year to which the sequestration order applies and each succeeding 
fiscal year. The amount of each annual payment shall be--
            (1) the uniform sequestration percentage, times
            (2) the estimated gross obligations of the Postal Service 
        Fund in that year other than those obligations financed with an 
        appropriation for revenue foregone for that year.
Any such payment for a fiscal year shall be made as soon as possible 
during the fiscal year, except that it may be made in installments 
within that year if the payment schedule is approved by the Secretary 
of the Treasury. Within 30 days after the sequestration order is 
issued, the Postmaster General shall submit to the Postal Rate 
Commission a plan for financing the annual payment for that fiscal year 
and publish that plan in the Federal Register. The plan may assume 
efficiencies in the operation of the Postal Service, reductions in 
capital expenditures, increases in the prices of services, or any 
combination, but may not assume a lower Fund surplus or higher Fund 
deficit and must follow the requirements of existing law governing the 
Postal Service in all other respects. Within 30 days of the receipt of 
that plan, the Postal Rate Commission shall approve the plan or modify 
it in the manner that modifications are allowed under current law. If 
the Postal Rate Commission does not respond to the plan within 30 days, 
the plan submitted by the Postmaster General shall go into effect. Any 
plan may be later revised by the submission of a new plan to the Postal 
Rate Commission, which may approve or modify it.
    (q) Power Marketing Administrations and TVA.--Any sequestration of 
the Department of Energy power marketing administration funds or the 
Tennessee Valley Authority fund shall be accomplished by annual 
payments from those funds to the General Fund of the Treasury, and the 
administrators of those funds shall have the duty to make those 
payments during the fiscal year to which the sequestration order 
applies and each succeeding fiscal year. The amount of each annual 
payment by a fund shall be--
            (1) the direct spending uniform sequestration percentage, 
        times
            (2) the estimated gross obligations of the fund in that 
        year other than those obligations financed from discretionary 
        appropriations for that year.
Any such payment for a fiscal year shall be made as soon as possible 
during the fiscal year, except that it may be made in installments 
within that year if the payment schedule is approved by the Secretary 
of the Treasury. Annual payments by a fund may be financed by 
reductions in costs required to produce the presequester amount of 
power (but those reductions shall not include reductions in the amount 
of power supplied by the fund), by reductions in capital expenditures, 
by increases in rates, or by any combination, but may not be financed 
by a lower fund surplus or a higher fund deficit and must follow the 
requirements of existing law governing the fund in all other respects. 
The administrator of a fund or the TVA Board is authorized to take the 
actions specified above in order to make the annual payments to the 
Treasury.
    (r) Veterans' Housing Loans.--(1) For all housing loans guaranteed, 
insured, or made under chapter 37 of title 38, United States Code, on 
or after the date of a sequestration, the origination fees shall be 
increased by a uniform percentage sufficient to produce the dollar 
savings in veterans' housing programs for the fiscal year of the 
sequestration required by section 108 or 109, and all subsequent 
origination fees shall be increased by the same percentage, 
notwithstanding any other provision of law.
    (2) The origination fees to which paragraph (1) applies are those 
referred to in section 3729 of title 38, United States Code.

SEC. 113. SEQUESTRATION THROUGH SURTAXES.

    (a) General Rule.--Subchapter A of chapter 1 of the Internal 
Revenue Code of 1986 (relating to determination of tax liability) is 
amended by adding at the end thereof the following new part:

                ``PART VIII--TAX SEQUESTRATION SURTAXES

                              ``Sec. 59B. Imposition of surtax on 
                                        individuals.
                              ``Sec. 59C. Imposition of surtax on 
                                        corporations.
                              ``Sec. 59D. Definitions and special 
                                        rules.

``SEC. 59B. IMPOSITION OF SURTAX ON INDIVIDUALS.

    ``(a) Section 1.--In the case of an individual, the amount of the 
tax imposed under section 1 for any taxable year shall be increased by 
the applicable surtax percentage of the tax imposed under section 1 for 
such taxable year (determined without regard to this section).
    ``(b) Minimum Tax.--In the case of an individual, the amount of the 
tentative minimum tax determined under section 55 for any taxable year 
shall be increased by the applicable surtax percentage of the amount of 
the tentative minimum tax for such taxable year (determined without 
regard to this section).
    ``(c) Surtax To Apply to Estates and Trusts.--For purposes of this 
section, the term `individual' includes any estate or trust taxable 
under section 1.
    ``(d) Coordination With Other Provisions.--The provisions of this 
section--
            ``(1) shall be applied after section 1(h), but
            ``(2) before the application of any other provision of this 
        title which refers to the amount of the tax imposed by section 
        1 or 55, as the case may be.

``SEC. 59C. IMPOSITION OF SURTAX ON CORPORATIONS.

    ``(a) Normal Corporate Tax.--
            ``(1) In general.--In the case of a corporation, the amount 
        of the tax imposed under section 11 for any taxable year shall 
        be increased by the applicable surtax percentage of the amount 
        of the tax imposed under section 11 for such taxable year 
        (determined without regard to this section).
            ``(2) Treatment of certain taxes.--For purposes of 
        paragraph (1), a tax shall be treated as imposed under section 
        11 if the amount of such tax is determined by reference to the 
        provisions of section 11 (or by reference to any rate contained 
        therein).
    ``(b) Minimum Tax.--In the case of a corporation, the amount of the 
tentative minimum tax determined under section 55 for any taxable year 
shall be increased by the applicable surtax percentage of the amount of 
the tentative minimum tax for such taxable year (determined without 
regard to this section).
    ``(c) Coordination With Other Provisions.--The provisions of this 
section shall be applied--
            ``(1) after the application of section 1201 and 801(a)(2), 
        but
            ``(2) before the application of any other provision of this 
        title which refers to the amount of tax imposed by section 11 
        or 55, as the case may be.

``SEC. 59D. DEFINITIONS AND SPECIAL RULES.

    ``(a) Applicable Surtax Percentage.--For purposes of this subpart--
            ``(1) In general.--The term `applicable surtax percentage' 
        means, with respect to a taxable year beginning in a calendar 
        year, the sum, rounded up to the nearest 0.5 percentage point, 
        of--
                    ``(A) the surtax percentage (if any) determined 
                under paragraph (2) for such calendar year, plus
                    ``(B) the sum of the surtax percentages (if any) 
                for all preceding calendar years.
            ``(2) Surtax percentage.--The surtax percentage for a 
        calendar year is the surtax percentage included in the final 
        sequestration report effectuated by the sequestration order 
        under section 114 of the Deficit Elimination Act of 1997 for 
        the fiscal year in which the calendar year begins.
    ``(b) Section 15 Not To Apply.--Section 15 shall not apply to any 
change in rates under this part.
    ``(c) Adjustment to Application of Certain Provisions.--
            ``(1) Dividends paid on certain preferred stock.--In 
        computing for a taxable year of a corporation the fractions 
        described in sections 244(a)(2) and 247(a)(2), the denominator 
        shall, under regulations prescribed by the Secretary, be 
increased to reflect the provisions of this part.
            ``(2) Shareholders of regulated investment companies.--In 
        computing the adjustment to basis described in section 
        852(b)(3)(D)(iii), the percentage set forth therein shall be 
        adjusted, under regulations prescribed by the Secretary, to 
        reflect the provisions of this part.''
    (b) Clerical Amendment.--The table of parts for subchapter A of 
chapter 1 of such Code is amended by adding at the end thereof the 
following new item:

                              ``Part VIII. Tax sequestration 
                                        surtaxes.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1997.

SEC. 114. ESTIMATING ASSUMPTIONS, REPORTS, AND ORDERS.

    (a) Timetable.--The timetable with respect to this part for any 
budget year is as follows:

Date:                               Action to be completed:
    Dec. 31........................
                                        OMB and CBO sequestration 
                                                preview reports 
                                                submitted to Board.
    Jan. 15........................
                                        Board selects sequestration 
                                                preview report.
    The President's budget 
        submission.
                                        OMB publishes sequestration 
                                                preview report.
    August 29:.....................
                                        President's midsession review; 
                                                notification regarding 
                                                military personnel.
    Within 10 days after end of 
        session.
                                        OMB and CBO final budget year 
                                                sequestration reports 
                                                submitted to Board.
    5 days later...................
                                        Board selects final 
                                                sequestration report; 
                                                President issues 
                                                sequestration order.
    (b) Submission and Availability of Reports.--Each report required 
by this section shall be submitted, in the case of CBO, to the House of 
Representatives, the Senate, OMB, and the Board and, in the case of 
OMB, to the House of Representatives, the Senate, the President, and 
the Board on the day it is issued. On the following day a notice of the 
report shall be printed in the Federal Register.
    (c) Exchange of Preliminary Current Policy Baselines.--On December 
15 or 3 weeks after Congress adjourns to end a session, whichever is 
later, OMB and CBO shall exchange their preliminary current policy 
baselines for the budget-year session starting in January.
    (d) Sequestration Preview Reports.--
            (1) Reporting requirement.--On December 31 or 2 weeks after 
        exchanging preliminary current policy baselines, whichever is 
        later, OMB and CBO shall each submit a sequestration preview 
        report.
            (2) Contents.--Each preview report shall set forth the 
        following:
                    (A) Major estimating assumptions.--The major 
                estimating assumptions for the current year, the budget 
                year, and the outyears, and an explanation of them.
                    (B) Current policy baseline.--A detailed display of 
                the current policy baseline for the current year, the 
                budget year, and the outyears, with an explanation of 
                changes in the baseline since it was last issued that 
                includes the effect of policy decisions made during the 
                intervening period and an explanation of the 
                differences between OMB and CBO for each item set forth 
                in the report.
                    (C) Deficits assuming compliance.--Estimates for 
                the budget year and each subsequent year through fiscal 
                year 2002 of the deficits or surpluses in the current 
                policy baseline assuming deficit reduction specified in 
                section 116.
                    (D) Discretionary funding limits.--(i) estimates 
                for the current year, the budget year, and each outyear 
                through 2002 of the discretionary funding limits and an 
                explanation of each adjustment made to those limits 
                under section 102(b), (ii) starting with fiscal year 
                2002, an estimate of the aggregate first-year spendout 
                rate for the budget year for discretionary programs, 
                (iii) starting with budget year 2002, an estimate for 
                the current year and for the budget year of the 
                discretionary funding limits under the spinoff law 
                under section 105, or if no such law exists for a 
                fiscal year, for those limits established under the 
                automatic application of section 103 or 104.
                    (E) Sequestration of discretionary accounts.--
                Estimates of the uniform percentage and the amount of 
                budgetary resources to be sequestered from 
                discretionary programs given the baseline level of 
                appropriations, and if the President chooses to exempt 
                some or all military personnel from sequestration, the 
                effect of that decision on the percentage and amounts.
                    (F) Deficit reduction requirements for direct 
                spending and receipts.--An estimate for direct spending 
                and receipts of the deficit reduction remaining to be 
                achieved for the budget year under section 101 or 104 
                or of the decrease in the surplus allowed for that year 
                under section 104 (given the amount already achieved as 
                measured under section 106).
                    (G) Direct spending sequestration.-- Estimates of 
                the uniform percentage and the amount of targeted 
sequestration under section 108 that will be necessary in each direct 
spending category to meet the direct spending targets for the budget 
year in the spin-off law under section 105, or if no such law has been 
enacted for the budget year, the uniform percentage and the amount of 
comprehensive sequestration of direct spending programs that will be 
necessary under section 109.
                    (H) Receipts sequestration.--Estimates of the 
                increase in receipts under section 108 that will be 
                necessary to meet the receipts targets for the budget 
                year in the spin-off law under section 105, or if no 
                such law has been enacted for the budget year, the 
                increase in receipts that will be necessary under 
                section 109; including the surtax percentage needed to 
                achieve the increase in receipts required under section 
                108 or the uniform percentage under section 109.
    (e) Selection of Official Sequestration Preview Report.--On January 
15 or 2 weeks after receiving the OMB and CBO sequestration preview 
reports, whichever is later, the Board shall choose either the OMB or 
CBO sequestration preview report as the official report for purposes of 
this Act. The Board shall add to the chosen report an analysis of which 
reports submitted in previous years have proven to be more accurate and 
recommendations about methods of improving the accuracy of future 
reports. That report shall be set forth, without change, in the budget 
submitted by the President under section 1105(a) of title 31, United 
States Code, for the budget year.
    (f) Agreeing on Earlier Dates.--The Chairman of the Board may set 
earlier dates for subsections (c), (d), and (e) if OMB and CBO concur.
    (g) Notification Regarding Military Personnel.--On or before August 
29, the President shall notify the Congress of the manner in which he 
intends to exercise flexibility with respect to military personnel 
accounts under section 111(b).
    (h) Final Sequestration Reports.--
            (1) Reporting requirement.--Not later than 10 days 
        following the end of a budget-year session, OMB and CBO shall 
        each submit a final sequestration report.
            (2) Contents.--That report shall be based upon laws enacted 
        through the date of the report and shall set forth all the 
        information and estimates required of a sequestration preview 
        report required by subsection (d)(2) (D) through (H). In 
        addition, that report shall include--
                    (A) for each account to be sequestered, the 
                baseline level of sequestrable budgetary resources and 
                the resulting reductions in new budget authority and 
                outlays;
                    (B) the effects of sequestration on the level of 
                direct spending outlays for each fiscal year through 
                2002; and
                    (C) the effects of sequestration on the level of 
                receipts for each fiscal year through 2002.
    (i) Selection of Official Final Sequestration Report.--Not later 
than 5 days after receiving the final OMB and CBO sequestration 
reports, the Board shall choose either the OMB or CBO final 
sequestration report as the official report for purposes of this Act, 
and shall issue a report stating that decision and making any comments 
that the Board chooses.
    (j) Presidential Order.--(1) On the day that the Board chooses a 
final sequestration report, the President shall issue an order fully 
implementing without change all sequestrations and tax actions required 
by--
            (A) the final sequestration report that requires the lesser 
        amount of discretionary sequestration under section 110; and
            (B) the final sequestration report that requires the lesser 
        total amount of direct spending and receipts sequestration 
        under section 108 or 109 (as applicable).
The order shall be effective on issuance and shall be issued only if 
sequestration is required.
    (2)(A) If both the CBO and OMB final sequestration reports require 
a sequestration of discretionary programs, and the Board chooses the 
report requiring the greater sequestration, then a positive amount 
equal to the difference between the CBO and OMB estimates of 
discretionary new budget authority for the budget year shall be 
subtracted from the budget-year column and added to the column for the 
first outyear of the discretionary scorecard under section 107 as 
though that amount had been enacted in the next session of Congress.
    (B) If one final sequestration report requires a sequestration of 
discretionary programs and the Board chooses that report, then an 
amount equal to the difference between that report's estimate of 
discretionary new budget authority for the budget year and the 
discretionary funding limit for that year shall be subtracted from the 
budget-year column and added to column for the first outyear of the 
discretionary scorecard under section 107 as though that amount had 
been enacted in the next session of Congress.
    (3)(A) If both the CBO and OMB final sequestration reports require 
a sequestration of direct spending or receipts, and the Board chooses 
the report requiring the greater sequestration, then a positive amount 
equal to the difference between the total CBO and OMB estimates of 
required budget-year direct spending and receipts sequestrations shall 
be subtracted from the budget-year column and added to the column for 
the first outyear of the direct spending and receipts scorecard under 
section 106 as though that amount had been enacted in the next session 
of Congress.
    (B) If one final sequestration report requires a sequestration of 
direct spending or receipts and the Board chooses that report, then the 
estimate of total required budget-year direct spending and receipts 
sequestrations shall be subtracted from the budget-year column and 
added to column for the first outyear of the direct spending and 
receipts scorecard under section 106 as though that amount had been 
enacted in the next session of Congress.
    (k) Low-Growth Report.--At any time until the end of fiscal year 
1999, the Director of the Board shall notify the Congress if--
            (1) during the period consisting of the quarter during 
        which such notification is given, the quarter preceding that 
        notification, and the 4 quarters following that notification, 
        CBO or OMB has determined that real economic growth is 
        projected or estimated to be less than zero for each of any 2 
        consecutive quarters within that period; or
            (2) the most recent of the Department of Commerce's 
        advance, preliminary, or final reports of actual real economic 
        growth for each of the most recently reported quarter and the 
        immediately preceding quarter is less than 1 percent.
    (l) Use of Major Estimating Assumptions and Scorekeeping 
Conventions.--In the estimates, projections, and reports under 
subsections (c) and (d), CBO and OMB shall use the best and most recent 
estimating assumptions available. In all other reports required by this 
section and in all estimates or calculations required by this Act, CBO 
and OMB shall use--
            (1) current-year and budget-year discretionary funding 
        limits chosen by the Board and the estimates chosen by the 
        Board of the deficit reduction (or decrease in the surplus) 
        through changes in direct spending and receipts required (or 
        allowed) in the budget year;
            (2) in estimating the effects of bills and discretionary 
        regulations, the major estimating assumptions most recently 
        chosen by the Board, except to the extent that they must be 
        altered to reflect actual results occurring or measured after 
        the Board's choice; and
            (3) scorekeeping conventions determined after consultation 
        among the House and Senate Committees on the Budget, CBO, and 
        OMB.
In applying the two previous sentences, the major estimating 
assumptions and other calculations required by this Act that are 
included in the statement of managers accompanying the conference 
report on this Act shall be considered, for all purposes of this Act, 
to be the report of the Board chosen under subsection (e) for fiscal 
year 1998.
    (m) Bill Cost Estimates.--Within 10 days after the enactment of any 
discretionary appropriations, direct spending, or receipts legislation, 
CBO and OMB shall transmit to each other, the Board, and to the 
Congress an estimate of the budgetary effects of that law, following 
the estimating requirements of this section. Those estimates may not 
change after the 10-day period except--
            (1) to the extent those estimates are subsumed within (and 
        implicitly changed by) the estimates made in preparation of a 
        new baseline under subsections (c), (d), and (h);
            (2) to reflect a choice of the Board regarding an official 
        set of estimates under subsections (l) and (n); and
            (3) to correct clerical errors or errors in the application 
        of this Act.

SEC. 115. THE CURRENT POLICY BASELINE.

    (a) In General.--For any budget year, the baseline refers to a 
projection of current-year levels of new budget authority, outlays, 
revenues, and the surplus or deficit into the budget year and the 
outyears based on laws enacted through, and discretionary regulations 
promulgated as final by, the applicable date.
    (b) Direct Spending and Receipts.--For the current year, the budget 
year, and each outyear, the baseline shall be calculated using the 
following assumptions:
            (1) In general.--Laws providing or creating direct spending 
        and receipts are assumed to operate in the manner specified in 
        those laws for each such year, funding for entitlement 
        authority is assumed to be adequate to make all payments 
        required by those entitlements, and funding for deposit 
        insurance is assumed to be adequate to meet the costs of the 
        Financial Institutions Reform, Recovery, and Enforcement Act of 
        1989 or successor laws.
            (2) Exceptions.--Except as provided in paragraph (3):
                    (A) No program with estimated current-year gross 
                new budget authority greater than $100 million is 
                assumed to expire in the budget year or outyears. In 
                carrying out the preceding sentence, expiring 
                entitlement programs and programs financed by 
                indefinite budget authority are assumed to continue as 
                in effect just prior to their expiration, and other 
                expiring programs are assumed to continue with new 
                budget authority projected as under subsection (c)(4).
                    (B) The percentage increase for veterans' 
                compensation for a fiscal year is assumed to be the 
                same as that required by law for veterans' pensions 
                unless otherwise provided by a law enacted in that 
                session.
                    (C) Excise taxes dedicated to a trust fund, if 
                expiring, are assumed to continue at the rates in 
                effect immediately prior to their expiration.
            (3) Cutoff date.--Programs or taxes that expire on or 
        before December 31 and that have not been reauthorized by the 
date of the final sequestration report are assumed to expire. If an 
increase in veterans compensation has not been enacted by the date of 
the final sequestration report, it is not assumed.
    (c) Discretionary Appropriations.--For the current year, the budget 
year, and each outyear, the baseline shall be calculated using the 
following assumptions regarding discretionary programs:
            (1) Inflation of current-year appropriations.--New budget 
        authority shall be at the level provided for that fiscal year 
        in appropriation Acts. If for any account an appropriation has 
        not yet been enacted, new budget authority is assumed to be at 
        the level available in the current year, adjusted sequentially 
        and cumulatively for expiring housing contracts as specified in 
        paragraph (2), for inflation as specified in paragraph (3), and 
        to account for changes required by law in the level of agency 
        payments for personnel benefits other than pay.
            (2) Expiring housing contracts.--New budget authority to 
        renew expiring multiyear subsidized housing contracts or 
        provide contracts to replace units lost due to prepayments 
        shall be adjusted to reflect the difference in the number of 
        such contracts that are estimated to expire or be prepaid in 
        that fiscal year and the number expiring or being prepaid in 
        the current year, with the per-contract renewal/replacement 
        cost equal to the average current-year cost of renewal or 
        replacement contracts.
            (3) Inflators.--The inflator to adjust new budget authority 
        relating to personnel is the percent by which the average rate 
        of basic pay for statutory pay systems, computed as specified 
        in section 5303(a) of title 5, United States Code, for that 
        fiscal year exceeds the average rate of pay for the current 
        year. The inflator to adjust all other budgetary resources is 
        the percent by which the average of the estimated gross 
        domestic product fixed-weight price index for that fiscal year 
        differs from the average of such estimated index for the 
        current year.
            (4) Part-year appropriations; permissive transfers.--If, 
        for any account, a continuing appropriation is in effect for 
        less than an entire fiscal year, then the amount available for 
        that fiscal year is assumed to equal the amount that would be 
        available if that continuing appropriation covered the entire 
        fiscal year. If law permits the transfer of budget authority 
        among budget accounts in the current year, the current-year 
        level for an account shall reflect transfers accomplished by 
        the applicable date or assumed for the current year in the 
        President's original budget or midsession review for the budget 
        year.
    (d) Up-to-Date Concepts.--In deriving the baseline for any budget 
year or outyear, current-year amounts shall be calculated using the 
concepts and definitions that are required for that budget year.

SEC. 116. BASELINE ASSUMING DEFICIT REDUCTION.

    For any budget year, a baseline assuming deficit reduction refers 
to a projection of current policy baseline surpluses or deficits into 
the budget year and the outyears that is adjusted in aggregate by--
            (1) assuming compliance with the deficit reduction targets 
        for direct spending and receipts legislation under section 101 
        without any adjustment pursuant to section 103;
            (2) assuming compliance with the discretionary funding 
        limits under section 102 without any adjustment pursuant to 
        section 103; and
            (3) excluding amounts resulting from legislation that has 
        been designated as an emergency requirement under section 
        102(b)(4) or 106(f).

SEC. 117. STABILIZATION RESERVE FUND.

    (a) Establishment and Purpose.--There is hereby established as a 
deposit fund in the Treasury a Stabilization Reserve Fund (``Fund''), 
to be administered by the Secretary of the Treasury. The purpose of 
that Fund is to accumulate balances during years of comparative 
prosperity, which balances may later be used to cover the loss of 
receipts and the increase in outlays that occur during times of 
comparative economic distress.
    (b) Amounts Paid to the Fund.--On the last day of any fiscal year 
for which an actual surplus has occurred, the amount of that surplus 
shall be paid to the Fund. In fiscal year 2003, the Secretary of the 
Treasury shall pay an additional $10 billion from the general fund of 
the Treasury to the Fund. In each fiscal year starting with 2000, the 
Secretary of the Treasury shall pay an additional $20 billion to the 
Fund from the general fund of the Treasury. Balances in the Fund shall 
not receive interest.
    (c) Transfer of Fund Balances.--At any time starting with the 
fiscal year 2003 session, a law may be enacted withdrawing some or all 
of the current balance of the Stabilization Reserve Fund and paying 
that amount, as a receipt, to the General Fund of the Treasury. That 
law may also provide for the later transfer to the Treasury (as a 
receipt) of some or all of the current-year estimated surplus (if any), 
to be paid into the Stabilization Reserve Fund at the end of the 
current year under subsection (b). Except for transfers to the General 
Fund of the Treasury, no law reducing the balances of the Stabilization 
Reserve Fund may be enacted in any year.

SEC. 118. MODIFICATIONS IF WAR OR LOW GROWTH.

    (a) War.--Upon the enactment of a declaration of war--
            (1) the subsequent issuance of any sequestration report or 
        any sequestration order is precluded;
            (2) sections 302(f), 310(d), and 311 of the Congressional 
        Budget Act of 1974 are suspended; and
            (3) sections 1105(f) and 1103 of title 31, United States 
        Code, are suspended.
    (b) Peace.--In the event of a suspension of sequestration 
procedures due to a declaration of war, then, effective with the first 
fiscal year that begins in the session after the state of war is 
concluded by Senate ratification of the necessary treaties, the 
provisions of subsection (a) triggered by that declaration of war are 
no longer effective. The provisions of this Act that would have applied 
to the fiscal year that started in the calendar year in which the 
declaration of war was enacted shall instead apply to the first fiscal 
year that begins in the session after the state of was is concluded. 
The preceding sentence shall apply in the same manner to each 
succeeding fiscal year. If the implementation of this subsection 
requires adding entries to the direct spending and receipts scorecard 
under section 106, CBO and OMB shall submit estimates of those entries 
as part of their next sequestration preview report under section 114.
    (c) Low Growth.--
            (1) Trigger.--Within 20 days after the Board issues a low-
        growth report under section 114(k), the majority leader of the 
        House of Representatives may, and the majority leader of the 
        Senate shall, introduce a joint resolution in the form set 
        forth in paragraph (2).
            (2) Form of joint resolution.--
                    (A) The matter after the resolving clause in any 
                joint resolution introduced pursuant to paragraph (1) 
                shall be as follows: ``That the conditions specified in 
                section 114(k) of the Deficit Elimination Act of 1997 
                are met. The implementation of the Congressional Budget 
                Act of 1974, chapter 11 of title 31, United States 
                Code, and the Deficit Elimination Act of 1997 are 
                modified as follows:
                            (i) the subsequent issuance of any 
                        sequestration report or any sequestration order 
                        is precluded;
                            (ii) sections 302(f), 310(d), and 311 of 
                        the Congressional Budget Act of 1974 are 
                        suspended; and
                            (iii) sections 1105(f) and 1103 of title 
                        31, United States Code, are suspended.
                The provisions of this joint resolution shall cease to 
                be effective with respect to the first fiscal year 
                beginning at least 12 months after its enactment.''.
                    (B) The title of the joint resolution shall be 
                ``Joint resolution modifying certain provisions of law 
                pursuant to section 118(c) of the Deficit Elimination 
                Act of 1997.''; and the joint resolution shall not 
                contain any preamble.
            (3) Committee action.--Each joint resolution introduced 
        pursuant to paragraph (1) shall be referred to the Committees 
        on Rules, Government Operations, and Budget of the House of 
        Representatives or to the Committee on the Budget of the 
        Senate, as the case may be.
            (4) Senate budget comittee consideration.--The Committee on 
        the Budget of the Senate shall report the joint resolution with 
        or without amendment on or before the 20th day after the date 
        on which the joint resolution is introduced. If any committee 
        fails to report the joint resolution within that 20-day period, 
        it shall be automatically discharged from further consideration 
        of the joint resolution, and the joint resolution shall be 
        placed on the appropriate calendar.
            (5) Committee amendments.--Amendments reported by any 
        committee under paragraph (3) shall only strike the second and 
        third sentences of the joint resolution as introduced and 
        insert matter providing--
                    (A) changes to the budget targets or dates under 
                sections 101 through 104 to allow higher discretionary 
                funding limits or lower direct spending and receipts 
                deficit reduction requirements for any fiscal year or 
                years;
                    (B) conforming amendments that may be needed to 
                chapter 11 of title 31, United States Code; and
                    (C) conforming amendments that may be needed to the 
                Congressional Budget Act of 1974 or the rules of the 
                House of Representatives or the Senate.
            (6) Consideration of joint resolution.--
                    (A) A vote on final passage of a joint resolution 
                reported to the Senate or discharged pursuant to 
                paragraph (3) shall be taken on or before the close of 
                the 10th calendar day of session after the date on 
                which the joint resolution is reported or after the 
                Committee has been discharged from further 
                consideration of the joint resolution.
                    (B)(i) In the Senate, a joint resolution under this 
                paragraph shall be privileged. It shall not be in order 
                to move to reconsider the vote by which the motion is 
                agreed to or disagreed to.
                    (ii) Debate in the Senate on a joint resolution 
                under this paragraph, and all debatable motions and 
                appeals in connection therewith, shall be limited to 
                not more than five hours. The time shall be equally 
                divided between, and controlled by, the majority leader 
                and the minority leader or their designees.
                    (iii) Debate in the Senate on any debatable motion 
                or appeal in connection with a joint resolution under 
                this paragraph shall be limited to not more than one 
                hour, to be equally divided between, and controlled by, 
the mover and the manager of the joint resolution, except that in the 
event the manager of the joint resolution is in favor of any such 
motion or appeal, the time in opposition thereto shall be controlled by 
the minority leader or his designee.
                    (iv) A motion in the Senate to further limit debate 
                on a joint resolution under this paragraph is not 
                debatable. A motion to table or to recommit a joint 
                resolution under this paragraph is not in order.
                    (C) If, after a joint resolution has been reported 
                to one House and prior to its passage by that House, an 
                identical joint resolution is received from the other 
                House, then--
                            (i) the procedure in that House shall be 
                        the same as if no such joint resolution had 
                        been received from the other House, but
                            (ii) the vote on final passage shall be on 
                        the joint resolution of the other House, and
                when the joint resolution is agreed to, the Clerk of 
                the House of Representatives (in the case of a House 
                joint resolution agreed to in the House of 
                Representatives) or the Secretary of the Senate (in the 
                case of a Senate joint resolution agreed to in the 
                Senate) shall cause the joint resolution to be 
                engrossed, certified, and transmitted to the other 
                House of the Congress as soon as practicable.
                    (D) Amendments to a joint resolution considered 
                under this paragraph shall be in order in the Senate 
                only if germane to that resolution in the form in which 
                it was reported or discharged.
            (7) Consideration of a conference report.--Consideration of 
        a conference report on a joint resolution under this subsection 
        shall be governed by the Standing Rules of the Senate, and by 
        provisions of paragraph (5)(a) and (B) as if those provisions 
        applied to conference reports.

SEC. 119. BOARD OF ESTIMATES.

    (a) Establishment.--There is established a Board of Estimates.
    (b) Duties of the Board.--(1) On the dates specified in section 
114, the Board shall issue a report to the President and the Congress 
which states whether it has chosen (with no modification)--
            (A) the sequestration preview report for the budget year 
        submitted by OMB under section 114(d) or the report for that 
        year submitted by CBO under section 114(d); and
            (B) the final sequestration report for the budget year 
        submitted by OMB under section 114(h) or the report for that 
        year submitted by CBO under section 114(h);
that shall be used for purposes of this Act, chapter 11 of title 31, 
United States Code, and section 403 of the Congressional Budget Act of 
1974. In making its choice, the Board shall choose the report that, in 
its opinion, is the more accurate.
    (2) At any time the Board may change the list of major estimating 
assumptions to be used by OMB and CBO in preparing their sequestration 
preview reports.
    (3) At any time the Board may approve a revision to the list of the 
direct spending jurisdiction of the standing committees of the House of 
Representatives to be used for implementing targeted sequestration 
under section 108. Each such revision must be requested in writing by 
the Speaker of the House of Representatives and may be approved or 
disapproved, but may not be modified.
    (c) Membership.--
            (1) Number and appointment.--The Board shall be composed of 
        5 members, the chairman of the Board of Governors of the 
        Federal Reserve System and 4 other members to be appointed by 
        the President as follows:
                    (A) One from a list of at least 5 individuals 
                nominated for such appointment by the Speaker of the 
                House of Representatives.
                    (B) One from a list of at least 5 individuals 
                nominated for such appointment by the majority leader 
                of the Senate.
                    (C) One from a list of at least 5 individuals 
                nominated for such appointment by the minority leader 
                of the House of Representatives.
                    (D) One from a list of at least 5 individuals 
                nominated for such appointment by the minority leader 
                of the Senate.
        No member appointed by the President may be an officer or 
        employee of any government. A vacancy in the Board shall be 
        filled in the manner in which the original appointment was 
        made.
            (2) Continuation of membership.--If any member of the Board 
        appointed by the President becomes an officer or employee of a 
        government, he may continue as a member of the Board for not 
        longer than the 30-day period beginning on the date he becomes 
        such an officer or employee.
            (3) Terms.--(A) Members shall be appointed for terms of 4 
        years.
            (B) Any member appointed to fill a vacancy occurring before 
        the expiration of the term for which his predecessor was 
        appointed shall be appointed only for the remainder of such 
        term. A member may serve after the expiration of his term until 
        his successor has taken office.
            (4) Basic pay.--Members of the Board shall serve without 
        pay.
            (5) Quorum.--Three members of the Board shall constitute a 
        quorum but a lesser number may hold hearings.
            (6) Chairman.--The Chairman of the Board shall be chosen 
        annually by its members.
            (7) Meetings.--The Board shall meet at the call of the 
        Chairman or a majority of its members.
    (d) Director and Staff.--
            (1) Appointment.--The Board shall have a Director who shall 
        be appointed by the members of the Board. Subject to such rules 
        as may be prescribed by the Board, the Director may appoint and 
        fix the pay of such personnel as the Director considers 
        appropriate.
            (2) Applicability of certain civil service laws.--The 
        Director and staff of the Board may be appointed without regard 
        to the provisions of title 5, United States Code, governing 
        appointments in the competitive service, and may be paid 
        without regard to the provisions of chapter 51 and subchapter 
        III of chapter 53 of such title relating to classification and 
        General Schedule pay rates, except that no individual so 
        appointed may receive pay in excess of the annual rate of basic 
        pay payable for GS-18 of the General Schedule.
            (3) Staff of federal agencies.--Upon request of the Board, 
        the head of any Federal agency is authorized to detail, on a 
        reimbursable basis, any of the personnel of such agency to the 
        Board to assist the Board in carrying out its duties, 
        notwithstanding section 202(a) of the Legislative 
        Reorganization Act of 1946 (2 U.S.C. 72a(a)).
    (e) Powers.--
            (1) Hearings and sessions.--The Board may, for the purpose 
        of carrying out its duties, hold such hearings, sit and act at 
        such times and places, take such testimony, and receive such 
evidence, as it considers appropriate.
            (2) Obtaining official data.--The Board may secure directly 
        from any department or agency of the United States information 
        necessary to enable it to carry out its duties. Upon request of 
        the Chairman of the Board, the head of such department or 
        agency shall furnish such information to the Board.
            (3) Administrative support services.--The Administrator of 
        General Services shall provide to the Board on a reimbursable 
        basis such administrative support services as the Board may 
        request.

SEC. 120. JUDICIAL REVIEW.

    (a) Expedited Review.--
            (1) Any Member of Congress may bring an action, in the 
        United States District Court for the District of Columbia, for 
        declaratory judgment and injunctive relief on the ground that 
        any order that might be issued pursuant to section 114 violates 
        the Constitution.
            (2) Any Member of Congress, or any other person adversely 
        affected by any action taken under this title, may bring an 
        action, in the United States District Court for the District of 
        Columbia, for declaratory judgment and injunctive relief 
        concerning the constitutionality of this title.
            (3) Any Member of Congress may bring an action, in the 
        United States District Court for the District of Columbia, for 
        declaratory and injunctive relief on the ground that the terms 
        of an order issued under section 114 do not comply with the 
        requirements of this title.
            (4) A copy of any complaint in an action brought under 
        paragraph (1), (2), or (3) shall be promptly delivered to the 
        Secretary of the Senate and the Clerk of the House of 
        Representatives, and each House of Congress shall have the 
        right to intervene in such action.
            (5) Any action brought under paragraph (1), (2), or (3) 
        shall be heard and determined by a three-judge court in 
        accordance with section 2284 of title 28, United States Code.
Nothing in this section or in any other law shall infringe upon the 
right of the House of Representatives to intervene in an action brought 
under paragraph (1), (2), or (3) without the necessity of adopting a 
resolution to authorize such intervention.
    (b) Appeal to Supreme Court.--Notwithstanding any other provision 
of law, any order of the United States District Court for the District 
of Columbia which is issued pursuant to an action brought under 
paragraph (1), (2), or (3) of subsection (a) shall be reviewable by 
appeal directly to the Supreme Court of the United States. Any such 
appeal shall be taken by a notice of appeal filed within 10 days after 
such order is entered; and the jurisdictional statement shall be filed 
within 30 days after such order is entered. No stay of an order issued 
pursuant to an action brought under paragraph (1), (2), or (3) of 
subsection (a) shall be issued by a single Justice of the Supreme 
Court.
    (c) Expedited Consideration.--It shall be the duty of the District 
Court for the District of Columbia and the Supreme Court of the United 
States to advance on the docket and to expedite to the greatest 
possible extent the disposition of any matter brought under subsection 
(a).
    (d) Noncompliance With Sequestration Procedures.--
            (1) If it is finally determined by a court of competent 
        jurisdiction that an order issued by the President under 
        section 114 for any fiscal year does not fully implement 
        without change all sequestrations required by the appropriate 
        Office of Management and Budget or Congressional Budget Office 
        report chosen by the Board to be the basis for the order, the 
        President shall, within 20 days after such determination is 
        made, revise the order in accordance with such determination.
            (2) If the order issued by the President under section 114 
        for any fiscal year does not fully implement without change all 
        sequestrations required by the appropriate OMB or CBO report 
        chosen by the Board to be the basis for the order on the claim 
        or defense that the constitutional powers of the President 
        prevent such sequestration or reduction or permit the avoidance 
        of such sequestration or reduction, and such claim or defense 
        is finally determined by the Supreme Court of the United States 
        to be valid, then the entire order issued pursuant to section 
        114 for such fiscal year shall be null and void.
    (e) Timing of Relief.--No order of any court granting declaratory 
or injunctive relief from the order of the President issued under 
section 114, including relief permitting or requiring the expenditure 
of funds sequestered by such order, shall take effect during the 
pendency of the action before such court, during the time appeal may be 
taken, or, if appeal is taken, during the period before the court to 
which such appeal is taken has entered its final order disposing of 
such action.
    (f) Alternative Procedures.--(1) If any order is invalidated 
because of the manner of appointment of members of the Board, then 
section 120(c)(1) is amended to read as follows:
            ``(1) Number and Appointment.--The Board shall be composed 
        of 5 members, the Chairman of the Board of Governors of the 
        Federal Reserve System and 4 other members to be appointed by 
        the President. No member appointed by the President may be an 
        officer or employee of any government.'';
and any reports upon which such order was based shall be transmitted to 
the newly constituted Board.
    (2) No later than 5 days after the receipt of the reports, the 
Board shall choose the report upon which the order is to be based.
    (3) This report shall be deemed to be the report received by the 
President under section 114.
    (g) Preservation of Other Rights.--The rights created by this 
section are in addition to the rights of any person under law, subject 
to subsection (e).
    (h) Economic Data, Assumptions, and Methodologies.--The economic 
data and economic and technical assumptions and estimation of 
methodologies used by OMB or CBO in preparing any report issued under 
section 114 shall not be subject to review in any judicial or 
administrative proceeding, and any choice made by the Board under 
section 114 shall not be subject to any such review.

             TITLE II--TECHNICAL AND CONFORMING AMENDMENTS

SEC. 201. AMENDMENTS TO THE CONGRESSIONAL BUDGET AND IMPOUNDMENT 
              CONTROL ACT OF 1974.

    (a) Repealer.--Paragraph (2) of section 3 of the Congressional 
Budget and Impoundment Control Act of 1974, the first time it appears, 
is repealed.
    (b) Definition of Budget Authority.--Paragraph (2) of section 3 of 
the Congressional Budget and Impoundment Control Act of 1974, the 
second time it appears, is amended by inserting ``in any form'' after 
``promissory notes'', by inserting at the end of subparagraph (A) the 
following new sentence: ``Such term excludes transactions classified as 
means of financing.'', and by striking ``With respect to'' and all that 
follows through ``retirement account, any'' and inserting ``Any'', by 
inserting after subparagraph (B) the following:
                    ``(C) Relationship to entitlement authority.--For 
                purposes of titles III and IV, all references to budget 
                authority shall be considered to include the amount of 
                budget authority estimated to be needed to fund 
                entitlement provisions under existing or proposed law, 
                and all legislation increasing (or decreasing) the 
                level of entitlement authority under existing law shall 
                be considered to provide (or decrease) new budget 
                authority in that amount.'',
and by redesignating the next subparagraph accordingly.
    (c) Definition of Entitlement Authority.--Paragraph (9) of section 
3 of the Congressional Budget and Impoundment Control Act of 1974 is 
amended by striking ``spending authority described by section 
401(c)(2)(C)'' and inserting the following: ``, and the term 
`entitlement program' refers to, any provision of law that has the 
effect of requiring the Government to make net payments (including 
intragovernmental payments) regardless of the amount of budget 
authority that may be available to make those payments. Those terms 
shall include amounts estimated to be required under provisions of law 
that depend on the fulfillment of non-legislative conditions or are 
indefinite as to amount or timing. Except as provided in the next 
sentence, if a provision of law that otherwise requires the Government 
to make net payments is directly or indirectly limited by any other 
provision of law to an amount of available budget authority, then 
entitlement authority does not exist. Subchapter II of chapter 13 of 
title 31, United States Code, and the sequestration provisions of the 
Deficit Elimination Act of 1997 shall not be considered provisions of 
law that limit entitlement authority to the amount of available budget 
authority.''
    (d) Definition of Means of Financing.--Section 3 of the 
Congressional Budget and Impoundment Control Act of 1974 is amended by 
adding at the end the following new paragraph:
            ``(11) The term `means of financing' means the financial 
        transactions of the Government that consist of exchanges of 
        money or monetary proxies of equal value and therefore are not 
        counted as obligations, outlays, or revenues, such as net 
        Federal borrowing from the public in any form, debt redemption, 
        seignorage on coins and profits from the sale of gold, and 
        changes in outstanding check or other monetary credits, 
        including write-offs.''.
    (e) CBO Studies.--Section 202(h) of the Congressional Budget Act of 
1974 is amended by striking ``outlays, credit authority,'' and 
inserting ``outlays''.
    (f) Timetable.--Section 300 of the Congressional Budget Act of 1974 
is amended by striking ``February 25'' and inserting ``Six weeks after 
the President's budget submission''.
    (g) Required Contents of Budget Resolution.--Section 301(a) of the 
Congressional Budget Act of 1974 is amended by striking ``planning 
levels'', by striking ``two'' and inserting ``four'', by striking ``, 
budget outlays, direct loan obligations, and primary loan guarantee 
commitments'' both places it appears and inserting ``and outlays'', by 
striking paragraphs (5), (6) and (7), by striking the semicolon at the 
end of paragraph (4) and inserting a period, by inserting ``and'' after 
the semicolon at the end of paragraph (3), and by striking the last 
sentence.
    (h) Delayed Enrollment.--Section 301(b)(3) of the Congressional 
Budget Act of 1974 is amended by striking ``or new entitlement 
authority''.
    (i) Spin-Off Bill.--(1) Paragraphs (5), (6), (7), and (8) of 
section 301(b) of the Congressional Budget Act of 1974 are amended to 
read as follows:
            ``(5) set forth in a separate section--
                    ``(A) the appropriate level of the debt held by the 
                public;
                    ``(B) the discretionary funding limit for the 
                fiscal year, but only if and to the extent required by 
                section 103 or 104 of the Deficit Elimination Act of 
                1997;
                    ``(C) the amount of direct spending change required 
                of or allowed by each committee of the House of 
                Representatives in laws within that committee's 
                jurisdiction and the amount of receipts change required 
                of or allowed by the Committee on Ways and Means of the 
                House of Representatives in laws within that 
                committee's jurisdiction, but only to the extent 
                specified in section 105 of that Act; and
                    ``(D) the amount, if any, to be withdrawn from the 
                Stabilization Reserve Fund and paid to the General Fund 
                of the Treasury during the fiscal year under section 
                117 of that Act.''.
    (2) Paragraph (4) of section 301(b) of the Congressional Budget Act 
of 1974 is amended by inserting ``and'' after the semicolon.
    (j) Technical Correction to Section 301(e).--Section 301(e) of the 
Congressional Budget Act of 1974 is amended by inserting ``new'' before 
``budget authority'' in the second sentence.
    (k) Section 301(i) Point of Order.--Section 301(i) of the 
Congressional Budget Act of 1974 is amended to read as follows:
    ``(i) It shall not be in order in the House of Representatives or 
the Senate to consider any concurrent resolution on the budget for a 
fiscal year beginning on October 1 of the year in which the resolution 
is considered (or amendment to, motion regarding, or conference report 
on such a resolution) unless--
            ``(1) it does not exceed the discretionary funding limit, 
        and
            ``(2) it fully meets the direct spending and receipts 
        deficit reduction requirement,
for that fiscal year under sections 101 through 104 of the Deficit 
Elimination Act of 1997, using estimates of that limit and that 
requirement chosen by the Board of Estimates.''.
    (l) Committee Allocations and Suballo- cations.--Section 602 of the 
Congressional Budget Act of 1974 is amended--
            (1) by striking ``of--'' and all that follows through 
        ``outlays;'' both places it appears and inserting ``of total 
        new budget authority and outlays'';
            (2) in subsection (a)(1)(B), by striking ``committee.'' and 
        inserting ``committee, except that new budget authority and 
        outlays for entitlement programs funded through annual 
        appropriations shall be allocated and scored both to the 
        Committee on Appropriations and to the committee that 
        authorized such programs.''; and
            (3) in subsection (a)(3), by striking ``, entitlement 
        authority,'' both times it appears and by striking ``, outlays, 
        or social security outlays'' both times it appears and 
        inserting ``or outlays''.
    (m) Redesignation of Committee Allocations.--Subsections (a) and 
(b) of section 302 of the Congressional Budget Act of 1974 are repealed 
and subsections (a) and (b) of section 602 of that Act (as amended by 
subsection (g)) are redesignated as subsections (a) and (b) of section 
302, respectively.
    (n) Consideration of Appropriation Bills.--Section 302(c) of the 
Congressional Budget Act of 1974 is amended by striking ``--(1)'' and 
everything that follows through ``401(c)(2) for a fiscal year;'' and 
inserting ``new budget authority for a fiscal year''.
    (o) Points of Order Under Section 302(f).--(1) Section 302(f)(1) of 
the Congressional Budget Act of 1974 is amended to read as follows:
            ``(1) In the house of representatives.--It shall not be in 
        order in the House of Representatives to consider any bill, 
        joint resolution, or amendment providing new budget authority, 
        or any conference report on any such bill or joint resolution, 
        if--
                    ``(A) the enactment of the bill or resolution as 
                reported or in the form recommended in the conference 
                report, or
                    ``(B) the adoption of the amendment,
        when added to existing levels of new budget authority, would 
        cause the level of new budget authority for the fiscal year 
        starting in the year in which the most recent concurrent 
        resolution on the budget was agreed to, or for the sum of that 
        fiscal year and the next 4 fiscal years, to exceed an 
        allocation to a committee made under subsection (a) for either 
        period, or to exceed a suballocation made under subsection (b) 
        for that fiscal year.''.
    (2) Section 302(f)(2) of that Act is amended--
            (A) in the first sentence, by striking ``for budget 
        outlays,'', by striking ``new budget authority, or new spending 
        authority (as defined in section 401(c)(2))'' and inserting 
        ``new budget authority'', by striking ``outlays or'' both 
        places it appears, and by striking ``or provides for social 
        security outlays in excess of the appropriate allocation of 
        social security outlays under subsection (a)''; and
            (B) by striking the third sentence.
    (3) Section 302(g) of that Act is amended by striking ``budget 
authority'' and all that follows through ``credit authority'' and 
inserting ``budget authority and outlays''.
    (p) Section 303.--Section 303 of the Congressional Budget Act of 
1974 is amended--
            (1) in its title by striking ``, New Spending Authority, 
        New Credit Authority,'';
            (2) in subsection (a) by striking ``either the House of 
        Representatives or'', by inserting ``or'' at the end of 
        paragraph (2), by striking ``paragraphs (4), (5), and (6), and 
        after paragraph (6) by striking ``for'' and inserting 
        ``covering'' and by striking ``(or, in the Senate, a concurrent 
        resolution on the budget covering such fiscal year)'';
            (3) in subsection (b) by repealing paragraph (1) and by 
        striking ``(2)''; and
            (4) by adding at the end the following new subsection:
    ``(d) Point of Order in the House of Representatives.--It shall not 
be in order in the House of Representatives to consider any bill, joint 
resolution, amendment, or conference report if that legislation, as 
reported, includes any provision--
            ``(1) providing new budget authority;
            ``(2) reducing the level of revenues; or
            ``(3) altering the limit on the debt held by the public;
that is first effective in the last fiscal year covered by the most 
recently agreed to concurrent resolution on the budget or any 
subsequent fiscal year.''.
    (q) Consideration of Spin-off Legislation.--Section 305 of the 
Congressional Budget Act of 1974 is amended by adding at the end the 
following new subsection:
    ``(e) Conference Reports.--Conference reports on concurrent 
resolutions on the budget that contain additional matter under section 
301(b)(5) shall be considered first in the House of Representatives.''.
    (r) Cost Estimates and Scorekeeping Reports.--Section 308 of the 
Congressional Budget Act of 1974 is amended--
            (1) in its title, by striking ``, new spending authority, 
        or new credit authority,'';
            (2) by striking ``, new spending authority described in 
        section 401(c)(2), or new credit authority,'' the 3 times it 
        appears;
            (3) in subsection (a), by striking ``in the reports 
        submitted'', by inserting ``302(a) or'' before ``302(b)'', in 
        paragraph (1)(B) by striking ``spending authority'' and 
        everything that follows through ``401(c)(2) which is'' and 
        inserting ``budget authority'' and by striking ``annual 
        appropriations'' and inserting ``annual discretionary 
        appropriations'', and in paragraph (1)(C) by striking ``such 
        budget authority'' and all that follows through ``loan 
        guarantee commitments'' and inserting ``new budget authority, 
        outlays, or revenues''; and
            (4) in subsection (c), by adding ``and'' at the end of 
        paragraph (1), by striking ``period;'' and inserting 
        ``period.'' at the end of paragraph (2), and by striking 
        paragraphs (3), (4), and (5).
    (s) Reconciliation.--Section 310 of the Congressional Budget Act of 
1974 is amended--
            (1) in subsection (a), by striking ``which--(A)'' and all 
        that follows through ``fiscal year, contained in'' and 
        inserting the following: ``which outlays resulting from'' and 
        by striking ``jurisdiction of a committee is'' and inserting 
        ``jurisdiction of a committee other than the Committee on 
        Appropriations of either House are'';
            (2) by repealing subsection (c) and inserting the following 
        new subsection:
    ``(c) Inclusion of Spin-off Bill in Reconciliation Legislation.--
Reconciliation legislation may include a separate title to be inserted 
by the Committee on the Budget consisting of a spin-off bill 
(containing the matter described in section 301(b)(5)), if such bill 
has not been enacted for the first fiscal year covered by that 
legislation. The targets for each category contained in this title 
shall be identical to the reconciliation directive contained in the 
most recently agreed to concurrent resolution on the budget.'';
            (3) in subsection (d)(1), by striking ``or new entitlement 
        authority''; and
            (4) by repealing subsection (g).
    (t) Revision of Section 311.--(1) Section 311 of the Congressional 
Budget Act of 1974 is amended to read as follows:

                     ``enforcing the revenue floor

    ``Sec. 311. (a) Point of Order.--It shall not be in order in either 
the House of Representatives or the Senate to consider any bill, joint 
resolution, amendment, motion, or conference report if, as proposed to 
be adopted and when added to existing revenue levels, it would cause 
the level of revenues for the fiscal year starting in the year in which 
the most recent concurrent resolution on the budget was agreed to, or 
for the sum of that fiscal year and the 4 succeeding fiscal years, to 
be lower than the appropriate level of revenues for either period set 
forth in that concurrent resolution.
    ``(b) Determination of Revenue Levels.--For purposes of this 
section, the levels of revenues for a fiscal year shall be determined 
on the basis of estimates made by the Committee on the Budget of the 
House of Representatives or of the Senate, as the case may be.''.
    (2) Conforming Amendment.--The item relating to section 311 in the 
table of contents set forth in section 1(b) is amended to read as 
follows:

``Sec. 311. Enforcing the revenue floor.''.
    (u) Technical Correction to Section 312.--Section 312 of the 
Congressional Budget Act of 1974 is amended by inserting ``(a)'' after 
``312.''.
    (v) Consideration of Legislation That Has Not Been Reported.--
Section 312 of the Congressional Budget Act of 1974 is amended by 
inserting at the end the following:
    ``(c) Consideration of Legislation That Has Not Been Reported.--In 
the House of Representatives, any point of order under title III or IV 
that would lie against consideration of a bill or joint resolution as 
reported by a committee shall also lie against a motion to consider 
legislation respecting which no report has been filed.''
    (w) Conforming Amendments to Section 313.--Section 313 of the 
Congressional Budget Act of 1974 is amended by striking ``or section 
258C'' and everything that follows through ``Deficit Control Act of 
1985'', by striking ``; and (F)'' and everything that follows through 
``310(g)'', by redesignating the second subsection (c) and subsection 
(d) as subsections (d) and (e), respectively, and by striking ``or 
(b)(1)(F),''.
    (x) Borrowing and Contract Authority.--Section 401 of the 
Congressional Budget Act of 1974 is amended--
            (1) in subsection (a), by striking ``new spending authority 
        described in subsection (c)(2)(A) or (B)'' both times it 
        appears and inserting ``borrowing authority or contract 
        authority'';
            (2) by repealing subsections (b) and (c) and by 
        redesignating subsection (d) as subsection (b); and
            (3) in subsection (b) (as redesignated), by striking 
        ``Subsections (a) and (b)'' and inserting ``Subsection (a)'', 
        by inserting ``non-interest'' before ``receipts'' in paragraph 
        (1)(B), by repealing paragraph (2), and by redesignating 
        paragraph (3) as paragraph (2).
    (y) Credit Authority.--Section 402(a) of the Congressional Budget 
Act of 1974 is amended by inserting before the period the following: 
``, except that this provision shall not apply with respect to programs 
that, as of August 15, 1992, provide credit authority as an 
entitlement''.
    (z) Costs of Federal Mandates; Conforming Change to Section 403.--
Section 403 of the Congressional Budget Act of 1974 is amended--
            (1) by adding at the end the following new subsection:
    ``(d) In fulfilling the requirements of subsection (a)(2), the 
Director shall place special emphasis on costs imposed on State or 
local governments by the enactment or expansion of Federal mandates, 
and shall estimate both the costs of those mandates and the degree, if 
any, to which Federal financing is provided to State or local 
governments to cover those costs.''; and
            (2) in subsection (a), by striking ``of a public 
        character''.
    (aa) Conforming Change to Section 405.--Section 405 of the 
Congressional Budget Act of 1974 is amended by striking ``spending 
authority'' and all that follows through ``permanent appropriations'' 
and inserting ``new budget authority (other than through appropriations 
Acts) or entitlement authority''.
    (bb) Off-Budget Agencies.--Section 406(a) of the Congressional 
Budget Act of 1974 is amended by striking ``credit authority, and 
estimates of outlays'' and inserting ``outlays,'', by striking ``the 
date of enactment'' and all that follows through ``Trust Funds,'' and 
inserting ``August 15, 1992,'', and by striking ``, outlays, and 
spending authority'' and inserting ``and outlays''.
    (cc) Repeal of Title VI.--Title VI of the Congressional Budget Act 
of 1974 is repealed.

SEC. 202. AMENDMENTS TO THE FEDERAL CREDIT REFORM ACT OF 1990.

    (a) Deferred Cost Sharing.--The second sentence of section 502(1) 
of the Congressional Budget Act of 1974 is amended by inserting before 
the period the following: ``, and Federal payments for the construction 
of a Federal project to the extent those payments must, by law or 
contract, be repaid to the Government''.
    (b) Loan Modifications.--Section 502(5) of the Congressional Budget 
Act of 1974 is amended--
            (1) in subparagraph (A), by inserting ``or a modification 
        thereof'' after ``guarantee'';
            (2) in subparagraph (B), by striking ``recoveries.'' and 
        inserting ``recoveries, and routine work-outs of loans in 
        imminent danger of default when those work-outs are to maximize 
        repayments to the Government.'';
            (3) in subparagraph (C), by striking ``and'' at the end of 
        clause (i), by striking the period at the end of clause (ii) 
        and inserting a comma, and by adding at the end the following:
                    ``(iii) routine work-outs of loans in imminent 
                danger of default when those work-outs are to minimize 
                claims against the Government.''; and
            (4) by striking subparagraph (D) and inserting the 
        following new subparagraph:
            ``(D) The cost of a modification of a direct loan, a direct 
        loan obligation, a loan guarantee, or a loan guarantee 
        commitment shall be the net present value, at the time of the 
        modification, of the change in cash flows estimated to occur as 
        a result of that modification. OMB shall measure that change in 
        relation to the current policy baseline in the most recent 
        budget under section 1105(a) of title 31, United States Code. A 
        modification may result either from the enactment of 
        legislation that directly or indirectly alters the expected 
        cash flows, or from the exercise of administrative discretion 
        under existing law, and includes the sale (with or without 
        recourse) of loan assets by the Government. Modifications do 
        not include changes in loan terms resulting from the exercise 
        by the borrower of an option included in the loan contract.''.
    (c) Credit Reform Act Clarification.--Section 504 of the 
Congressional Budget Act of 1974 is amended--
            (1) in subsection (b)(1), by striking ``appropriations of'' 
        and inserting ``new'', by striking ``are made'' and inserting 
        ``is provided'', and by inserting ``in appropriation Acts'' 
        before the semicolon;
            (2) in subsection (b)(2), by striking ``enacted'' and 
        inserting ``provided in an appropriation Act'';
            (3) in subsection (d)(1) by striking ``costs of outstanding 
        direct loans and loan guarantees'' and inserting ``costs of 
        outstanding direct loans (or direct loan obligations) or loan 
        guarantees (or loan guarantee commitments)''; and
            (4) in subsection (e), by striking ``A direct loan'' and 
        all that follows through ``comitment'' and inserting ``An 
        outstanding direct loan (or direct loan obligation) or loan 
        guarantee (or loan guarantee commitment)''.
    (d) Credit Reform Act Correction.--(1) Section 506 of the 
Congressional Budget Act of 1974 is repealed.
    (2) Section 507 of the Congressional Budget Act of 1974 is 
redesignated as section 506, and the table of contents in section 1(b) 
of the Congressional Budget and Impoundment Control Act of 1974 is 
amended by striking the item relating to section 506 and striking 
``Sec. 507.'' and inserting ``Sec. 506.''.
    (e) Existing Rights Not Impaired.--Section 506 of the Congressional 
Budget Act of 1974 (as redesignated) is amended by striking ``title. 
Nothing'' and inserting ``title, except that nothing'' and by inserting 
after ``construed'' the following ``(1) to alter the terms or 
conditions authorized to be included in loan or guarantee contracts or 
the rights and responsibilities of the government and the recipients of 
loans or guarantees under those contracts or the laws that authorize 
them, or (2)''.
    (f) Credit Reform Liquidating Accounts.--(1) Section 502(8) of the 
Congressional Budget Act of 1974 is amended by striking ``budget 
account'' and inserting ``nonbudget account'' and by striking the last 
sentence and inserting ``Transactions between the Treasury or the 
Federal Financing Bank and any liquidating account shall be considered 
non-budgetary.''.
    (2) Section 505(d) of the Congressional Budget Act of 1974 is 
amended by striking ``If funds'' and all that follows through 
``accounts, there'' and inserting ``There'' and by striking ``such 
obligations and commitments'' and inserting ``the obligations and 
commitments of liquidating accounts''.
    (3) Section 506(b) of the Congressional Budget Act of 1974 (as 
redesignated) is amended by striking ``be available, to'' and all that 
follows through the end of that section, and inserting ``immediately be 
transferred to the Federal Financing Bank to repay those debt 
obligations held by the Bank that were created to finance the loan 
being repaid, and all amounts not transferred to the Bank shall 
immediately be paid to the general fund of the Treasury. All debt owed 
to the Treasury as a result of agency borrowing authority used before 
October 1, 1991, for loans or guarantees is hereby cancelled. The 
provisions of this subsection shall not diminish any rights or 
responsibilities guaranteed by subsection (a).''.

SEC. 203. AMENDMENTS TO THE RULES OF THE HOUSE OF REPRESENTATIVES.

    (a) Budget Committee Jurisdiction.--Clause 1(e)(2) of rule X of the 
Rules of the House of Representatives is amended by inserting ``(A)'' 
after ``(2)'' and by inserting at the end the following:
    ``(B) Budget targets contained in any joint resolution described in 
section 118 of the Deficit Elimination Act of 1997 (relating to low 
growth).''.
    (b) Miscellaneous Conforming Amendments.--Clause 4 of rule X of the 
Rules of the House of Representatives is amended--
            (1) by repealing subparagraph (2) of paragraph (a) and by 
        redesignating subparagraph (3) as subparagraph (2);
            (2) in paragraph (g), by striking ``February 25 of each 
        year'' and inserting ``within 6 weeks after the President's 
        budget submission''; and
            (3) in paragraph (h), by striking ``or section 602 (in the 
        case of fiscal years 1991 through 1995)''.
    (c) Emergency Designations.--Clause 2(b) of rule XXI of the Rules 
of the House of Representatives is amended by striking ``and'' and by 
inserting before the period the following: ``, and except emergency 
designations under section 102(b)(4) of the Deficit Elimination Act of 
1997''.
    (d) Repealer.--Clause 8 of rule XXI of the Rules of the House of 
Representatives is repealed.
    (e) Spin-Off Legislation.--Rule XLIX of the Rules of the House of 
Representatives is amended--
            (1) by changing the name of that rule to ``Enactment of 
        Spin-Off Legislation under the Congressional Budget Act'';
            (2) in clause 2 by striking ``section 301, 304, or 310'' 
        and inserting ``section 301 or 304'';
            (3) in clause 1 by striking ``adoption by the Congress'' 
        and all that follows through ``for such period'' and inserting 
        ``passage by the House of Representatives (under section 301 or 
        304 of the Congressional Budget Act of 1974) of a conference 
        report or final agreement on any concurrent resolution on the 
        budget containing any matter under section 301(b)(5) of that 
        Act'';
            (4) in clause 1 by striking ``, increasing or decreasing 
        the statutory limit on the public debt'';
            (5) in the last sentence of clause 1 by inserting ``at the 
        same time the engrossed copy of the concurrent resolution on 
        the budget is transmitted to the Senate'' after ``transmitted 
        to the Senate for further legislative action'';
            (6) in the first sentence of clause 2 by striking ``be as 
        follows'' and all that follows through the period and inserting 
        the following: ``be the text of the section in the concurrent 
        resolution on the budget included under section 301(b)(5) of 
        the Congressional Budget Act of 1974, without change.'', and in 
        the second sentence by striking ``budget;'' and all that 
        follows through the period and inserting ``budget.''; and
            (7) in clause 3 by striking ``301(d)'' and inserting 
        ``301(e)'', and by striking ``upon the statutory limit on the 
        public debt''.

SEC. 204. AMENDMENTS TO THE STANDING RULES OF THE SENATE.

    The Standing Rules of the Senate are amended by adding at the end 
the following:

                              ``Rule ----

                         ``spin-off legislation

    ``Upon passage of a conference report on any concurrent resolution 
on the budget containing additional matter under section 301(b)(5) of 
the Congressional Budget Act of 1974, the joint resolution passed by 
the House of Representatives under rule XLIX of the Rules of the House 
of Representatives shall be deemed to have been passed by the Senate, 
and shall be prepared for transmittal to the President under the 
applicable rules of the Senate and the House of Representatives. The 
vote by which the conference report on the concurrent resolution on the 
budget was agreed to in the Senate shall be deemed to have been a vote 
in favor of such joint resolution upon final passage in the Senate.''.

SEC. 205. PRESIDENT'S BUDGET AND SUPPLEMENTAL BUDGET ESTIMATES.

    (a) Definitions.--Section 1101 of title 31, United States Code, is 
amended by adding at the end the following:
            ``(3) `Expenditures' has the same meaning as the term 
        `outlays' in the Deficit Elimination Act of 1997.
            ``(4) All other terms used herein or in the documents 
        prepared hereunder shall have the meanings set forth in the 
        Deficit Elimination Act of 1997.''.
    (b) Byrd Amendment.--Section 1103 of title 31, United States Code, 
is amended by striking ``commitment that budget'' and inserting 
``commitment that, starting with fiscal year 2002,''.
    (c) President's Budget Submission.--Section 1105(a) of title 31, 
United States Code, is amended--
            (1) in the first sentence by striking ``On or after the 
        first Monday in January but not later than the first Monday in 
        February of each year'' and inserting ``On or before the first 
        Monday in February or the 21st calendar day beginning after the 
        date the Board of Estimates issues a report to the President 
        under section 114 of the Deficit Elimination Act of 1997'';
            (2) in paragraph (15) by striking ``section 301(a)(1)-(5)'' 
        and inserting ``section 301(a)(1)-(4);
            (3) in paragraph (16) by striking ``section 3(a)(3)'' and 
        inserting ``section 3(3)''; and
            (4) by adding at the end the following new paragraph:
            ``(32) an analysis of the financial condition of 
        Government-sponsored enterprises and the financial exposure of 
        the Government, if any, posed by them.''.
    (d) Use of Official Estimates.--Section 1105(f) of title 31, United 
States Code, is amended by striking ``Balanced Budget and Emergency 
Deficit Control Act of 1985'' and inserting ``Deficit Elimination Act 
of 1997'' and by inserting at the end the following new sentence: 
``That budget shall be consistent with the discretionary funding limit 
and the direct spending and receipts deficit reduction requirement for 
that year chosen by the Board of Estimates and shall be based upon the 
major estimating assumptions chosen by that Board.''.
    (e) Midsession Review.--Section 1106(a) of title 31, United States 
Code, is amended by striking ``July 16 of each year'' and inserting 
``August 30 of each year'' and by striking ``submitted before July 
16''.
    (f) Current Policy Baseline.--(1) The first sentence of section 
1109 of title 31, United States Code, is amended to read as follows: 
``In the budget submitted under section 1105(a) or 1106(a), the 
President shall include a current policy baseline (as defined in 
section 116 of the Deficit Elimination Act of 1997) for the current 
year, the budget year, and the outyears, including a detailed 
comparison of that baseline with his proposed budget for those 
years.''.
    (2) Subsection (b) of that section 1109 is amended to read as 
follows:
    ``(b) The baseline referred to in subsection (a) shall be 
calculated using the major estimating assumptions chosen by the Board 
of Estimates under section 114 of the Deficit Elimination Act of 
1997.''.
    (g) Glossary of Terms.--Section 1112(c) of title 31, United States 
Code, is amended by striking ``The Comptroller General--'' and 
inserting ``The Directors of CBO and OMB, jointly--''.

SEC. 206. AMENDMENTS TO OTHER LAWS.

    (a) Repealers.--The following provisions of law are repealed:
            (1) Section 710 of the Social Security Act.
            (2) Section 201 (relating to 2-year appropriations) of 
        Public Law 100-119 (2 U.S.C. 621 note).
            (3) Section 203 (relating to financial management reform) 
        of Public Law 100-119 (2 U.S.C. 621 note).
            (4) The first subparagraph (F) of section 201(d)(2) of the 
        Agricultural Act of 1949 (7 U.S.C. 1446(d)(2)(F)).
    (b) Antideficiency Act.--Section 1341(a)(1) of title 31, United 
States Code, is amended by striking ``section 252 of the Balanced 
Budget and Emergency Deficit Control Act of 1985'' both times it 
appears and inserting ``the Deficit Elimination Act of 1997''.
    (c) Debt Held by the Public.--(1) Section 3101 of title 31, United 
States Code, is amended to read as follows:

``SEC. 3101. PUBLIC DEBT LIMIT.

    ``(a) The amount of public debt obligations issued under this 
chapter, and the amount of debt issued by agencies other than the 
Treasury under separate statutory authority, may be not more than 
$5,500,000,000,000 outstanding at one time, subject to changes 
periodically made in that amount as provided by law through the 
congressional budget process described in rule XLIX of the Rules of the 
House of Representatives or otherwise.
    ``(b) Debt issued to United States Government trust funds or to 
other agencies or accounts of the United States Government (except the 
Federal Reserve System) shall be excluded from the amount of debt taken 
into account in deciding whether the limit of subsection (a) has been 
exceeded.
    ``(c) The limit in subsection (a) shall be applied to the face 
amount of securities except for securities issued on a discount basis:
            ``(1) Securities issued on a discount basis that are 
        redeemable before maturity at the option of their holders shall 
        be included in the total subject to subsection (a) at their 
        current redemption values.
            ``(2) Securities issued on a discount basis that are not 
        redeemable before maturity at the option of their holders shall 
        be included in the total subject to subsection (a) in an amount 
        equal to the sum of--
                    ``(A) the original purchase price of the 
                obligation, plus
                    ``(B) the portion of the discount on the obligation 
                attributable to periods before the beginning of such 
                month (as determined under the principles of section 
                1272(a) of the Internal Revenue Code of 1986 without 
                regard to any exceptions contained in paragraph (2) of 
                such section).''.
                                 <all>