[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5752 Introduced in House (IH)]

111th CONGRESS
  2d Session
                                H. R. 5752

To make the Federal budget process more transparent and to make future 
                       budgets more sustainable.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 15, 2010

 Mr. Quigley (for himself, Mr. Minnick, and Mr. Foster) introduced the 
following bill; which was referred to the Committee on the Budget, and 
in addition to the Committees on Rules and Ways and Means, 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 make the Federal budget process more transparent and to make future 
                       budgets more sustainable.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Transparent and Sustainable Budget 
Act of 2010''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds that--
            (1) the public debt as a share of gross domestic product 
        should be stabilized at not more than 60 percent within 10 
        fiscal years;
            (2) annual deficits as a share of gross domestic product 
        should be reduced to not more than three percent within 10 
        fiscal years;
            (3) the Joint Committee on Taxation found that 247 tax 
        expenditures totaled $1.2 trillion in 2008, greater than all 
        Federal discretionary spending in that year; and
            (4) tax expenditures are analogous to spending programs, 
        and future budgets and deficit control measures should reflect 
        this fact.
    (b) Purpose.--The Congress declares that it is essential--
            (1) to establish the sustainability of public debt and 
        annual deficits as a fundamental objective of the budget 
        process;
            (2) to ensure that the budget of the United States 
        Government is fully transparent, comprehensible, and accurate;
            (3) to establish effective controls over tax expenditures 
        and to integrate them into the budget process; and
            (4) to initiate a public discussion about fiscal 
        sustainability and budget transparency.

SEC. 3. TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Findings and purpose.
Sec. 3. Table of contents.
                    TITLE I--BUDGET PROCESS REFORMS

              Subtitle A--Reform of the President's Budget

Sec. 101. Long-term fiscal responsibility.
       Subtitle B--Reform of the Congressional Budget Resolution

Sec. 111. Long-term fiscal responsibility.
  Subtitle C--Prompt Consideration of Recommendations of the National 
             Commission on Fiscal Responsibility and Reform

Sec. 121. Prompt consideration of recommendations of the National 
                            Commission on Fiscal Responsibility and 
                            Reform.
          Subtitle D--Quadrennial Fiscal Sustainability Report

Sec. 131. OMB quadrennial reports.
 Subtitle E--Presidential Address to Congress on Fiscal Sustainability

Sec. 141. Presidential address on long-term fiscal sustainability.
                TITLE II--ACCOUNTING AND SCORING REFORMS

                    Subtitle A--Discounted Baseline

Sec. 201. Discounted baseline.
               Subtitle B--Alternative Net Cost Estimate

Sec. 211. Alternative analysis by Congressional Budget Office.
                 Subtitle C--Deficit Control Mechanism

Sec. 221. Alternative net cost estimate by Congressional Budget Office.
                 Subtitle D--Accrual Accounting Report

Sec. 231. Accrual accounting report.
          Subtitle E--On-Budget Status of Trust Funds and GSEs

Sec. 241. OMB report respecting budgetary status of trust funds and 
                            GSEs.
                   TITLE III--TAX EXPENDITURE REFORMS

             Subtitle A--Identification of Tax Expenditures

Sec. 301. JCT reports on tax expenditures.
Sec. 302. Definition of tax subsidy.
        Subtitle B--Enforcement of Tax Expenditure Requirements

Sec. 311. Tax expenditure points of order.
       Subtitle C--Executive Branch Reporting of Tax Expenditures

Sec. 331. Executive branch reporting of tax expenditures.
                    Subtitle D--Tax Expenditure Data

Sec. 341. Development of electronic income tax filing system.
Sec. 342. GAO report on tax expenditures.
Sec. 343. Treasury report on tax expenditures.
            Subtitle E--Tax Expenditure Performance Reviews

Sec. 351. CBO tax expenditure performance reviews.

                    TITLE I--BUDGET PROCESS REFORMS

              Subtitle A--Reform of the President's Budget

SEC. 101. LONG-TERM FISCAL RESPONSIBILITY.

    Section 1105 of title 31, United States Code, is amended by adding 
at the end the following new subsection:
    ``(i)(1) The budget transmitted pursuant to subsection (a) for a 
fiscal year shall include--
            ``(A) a scorecard of progress in meeting the debt and 
        deficit reduction targets set forth in subparagraph (B);
            ``(B) a plan for long-term fiscal sustainability, defined 
        as reducing to within 10 fiscal years and then maintaining a 
        debt to potential gross domestic product (GDP) ratio, as 
        defined by the Director of the Office of Management and Budget, 
        of not more than 60 percent and an annual deficit to GDP ratio 
        of not more than three percent;
            ``(C) a supplemental report from the Director of the Office 
        of Management and Budget of the nonbudgeted fiscal exposures of 
        the Government, which may be included in the Analytical 
        Perspectives report, and shall include--
                    ``(i) explicit liabilities and implicit promises 
                embedded in the structure of current programs, 
                including Federal credit programs; and
                    ``(ii) a concise description of, including cost 
                information for, such exposures; and
            ``(D) explicit goals for carrying out the long-term fiscal 
        sustainability plan for the first fiscal year after the fiscal 
        year of the budget submission and each of the nine ensuing 
        fiscal years.
    ``(2) Unless the supplemental report is included in the Analytical 
Perspectives report referred to in paragraph (1)(C), then not later 
than March 15 of each calendar year, the Director of the Office of 
Management and Budget shall transmit such report to the President and 
to Congress.
    ``(3) Not later than two months after the supplemental report 
referred to in paragraph (1)(C) is transmitted to the President and to 
Congress, the Comptroller General shall publish a report auditing the 
supplemental report referred to in paragraph (1)(C).''.

       Subtitle B--Reform of the Congressional Budget Resolution

SEC. 111. LONG-TERM FISCAL RESPONSIBILITY.

    (a) Content of Congressional Budget Resolution.--Section 301 of the 
Congressional Budget Act of 1974 is amended by adding at the end the 
following new subsection:
    ``(j) Additional Matters in Report Accompanying the Resolution.--
The report accompanying the resolution shall include--
            ``(1) a scorecard of progress in meeting the debt and 
        deficit reduction targets set forth in paragraph (2); and
            ``(2) a plan for long-term fiscal sustainability, defined 
        as reducing to within 10 fiscal years and then maintaining a 
        debt to gross domestic product (GDP) ratio of not more than 60 
        percent and an annual deficit to GDP ratio of not more than 
        three percent.''.
    (b) Additional Matters in CBO Reports to Budget Committees.--
Section 202(e) of the Congressional Budget Act of 1974 is amended by 
adding at the end the following new paragraph:
            ``(4) On or before February 15 of each year, the Director 
        shall submit to the Committees on the Budget of the House of 
        Representatives and the Senate, a report that includes an 
        assessment of the plan for long-term fiscal sustainability set 
        forth in section 1105(i)(1) of title 31, United States Code, 
        and include it in the most recent budget submission of the 
        President, pursuant to subsection (a) of that section. When 
        such plan is submitted to the Committees on the Budget, the 
        Director shall place it on the public Web site of the 
        Congressional Budget Office.''.

  Subtitle C--Prompt Consideration of Recommendations of the National 
             Commission on Fiscal Responsibility and Reform

SEC. 121. PROMPT CONSIDERATION OF RECOMMENDATIONS OF THE NATIONAL 
              COMMISSION ON FISCAL RESPONSIBILITY AND REFORM.

    It is the sense of Congress that the recommendations reported to 
Congress by the National Commission on Fiscal Responsibility and Reform 
should receive prompt consideration, and that neither the House of 
Representatives nor the Senate should obstruct a final roll call vote 
on such recommendations.

          Subtitle D--Quadrennial Fiscal Sustainability Report

SEC. 131. OMB QUADRENNIAL REPORTS.

    The Director of the Office of Management and Budget, in 
consultation with the Secretary of the Treasury, shall publically 
issue, including by publishing on its Web site, a Quadrennial Fiscal 
Sustainability Report not later than April 1, 2013 and April 1 of every 
fourth year thereafter. The report shall address the long-term fiscal 
sustainability of the Government, including its ability to manage 
finances to meet spending commitments, with a detailed analysis of 
social insurance programs, for the budget year and for the 30-year 
period commencing with the budget year.

 Subtitle E--Presidential Address to Congress on Fiscal Sustainability

SEC. 141. PRESIDENTIAL ADDRESS ON LONG-TERM FISCAL SUSTAINABILITY.

    During October 2011 and each October thereafter, there shall be 
convened a joint session of Congress at which the President shall be 
invited to give an address on the long-term fiscal sustainability of 
the Government. As used in the preceding sentence, the term ``long-term 
fiscal sustainability'' means the ability of the Government to achieve 
and then maintain a debt to gross domestic product ratio of not more 
than 60 percent and an annual deficit to gross domestic product ratio 
of not more than 3 percent.

                TITLE II--ACCOUNTING AND SCORING REFORMS

                    Subtitle A--Discounted Baseline

SEC. 201. DISCOUNTED BASELINE.

    Section 257 of the Balanced Budget and Emergency Deficit Control 
Act of 1985 is amended as follows:
            (1) At the end of subsection (a), insert the following new 
        sentence: ``For any budget year the discounted baseline refers 
        to an alternative projection of current-year levels of new 
        budget authority, outlays, revenues, and the surplus or deficit 
        into the budget year and the outyears, for a minimum of 30 
        years, based on laws enacted through the applicable year, and 
        annually discounted for--
            ``(1) the present value of money, set at the prevailing 
        interest rate for 30-year Treasury bonds; and
            ``(2) the uncertainty of policies announced for the 
        outyears, set at 10 percent.''.
            (2) At the end, add the following new subsection:
    ``(f) Discounted Baseline.--The discounted baseline shall be 
computed using the same exceptions, assumptions, and other qualifying 
guidelines applicable to the baseline under this section.''.

               Subtitle B--Alternative Net Cost Estimate

SEC. 211. ALTERNATIVE ANALYSIS BY CONGRESSIONAL BUDGET OFFICE.

    (a) In General.--Part A of title IV of the Congressional Budget Act 
of 1974 is amended by adding at the end the following new section:

         ``alternative analysis by congressional budget office

    ``Sec. 407.  (a) Alternative Net Cost Estimates.--To the extent 
practicable, the Director of the Congressional Budget Office shall 
prepare for each bill or joint resolution of a public character 
reported by any committee of the House of Representatives or the Senate 
(except the Committee on Appropriations of each House) and for 
amendments thereto and conference reports thereon an alternative net 
cost estimate.
    ``(b) Calculation.--The alternative net cost estimate of proposed 
measures shall be calculated by comparing the current discounted 
baseline with an alternative discounted baseline that accounts for the 
policy changes in the proposed measures reported from committee.
    ``(c) Period.--The alternative net cost estimate shall cover as 
many years as the Director deems appropriate for the applicable 
legislation to have a significant budgetary impact, but for not more 
than 30 fiscal years.
    ``(d) Submissions.--To the extent practicable, the alternative net 
cost estimate shall be submitted--
            ``(1) for a reported bill or resolution referred to in 
        subsection (a), to the House of Representatives or the Senate, 
        as applicable, at the same time as the submission under section 
        402;
            ``(2) for any amendment, to the applicable House of 
        Congress before the amendment is offered; and
            ``(3) for any conference report, to the House of 
        Representatives and the Senate before the conference report is 
        first considered.''.
    (b) Conforming Amendment.--The table of contents set forth in 
section 1(b) of the Congressional Budget and Impoundment Control Act of 
1974 is amended by inserting after the item relating to section 406 the 
following new item:

``Sec. 407. Alternative analysis by Congressional Budget Office.''.

                 Subtitle C--Deficit Control Mechanism

SEC. 221. ALTERNATIVE NET COST ESTIMATE BY CONGRESSIONAL BUDGET OFFICE.

    (a) In General.--Part A of title IV of the Congressional Budget Act 
of 1974 (as amended by section 211) is further amended by adding at the 
end the following new section:

     ``alternative net cost estimate by congressional budget office

    ``Sec. 408.  (a) Alternative Net Cost Estimate.--The Director of 
the Congressional Budget Office shall, to the extent practicable, 
prepare for each bill or joint resolution of a public character 
reported by any committee of the House of Representatives or the Senate 
(except the Committee on Appropriations of each House) and for 
amendments thereto and conference reports thereon a statement of 
whether the measure's alternative net cost would exceed $5 billion. The 
alternative net cost shall be obtained by computing the total value of 
the measure, discounting for the present value of money and the 
uncertainty of policies announced for future periods, using the same 
methodology as in section 407.
    ``(b) Point of Order.--It shall not be in order in the House of 
Representatives or the Senate to consider any bill, joint resolution, 
amendment, motion, or conference report for which the Director issues a 
statement under the preceding subsection that shows a alternative net 
cost exceeding $5 billion, as adjusted annually for inflation.
    ``(c) Emergency Designation.--If a measure or provision is 
designated as an emergency requirement under the applicable rules of 
the House of Representatives and the Senate, the Director shall not 
include the cost of such a provision in the statement of the budgetary 
effects of such measure or provision.
    ``(d) Public Availability.--Not later than 14 days (excluding 
Saturdays, Sundays, and public holidays) after Congress adjourns to end 
a session, the Director shall make publicly available and cause to be 
printed in the Federal Register an annual Discounted Score Deficit 
Control report. The report shall include up-to-date deficit control 
mechanism scorecards, information about emergency legislation (if any) 
designated under subsection (c), and other data and explanations that 
enhance public understanding of this Act and actions taken under it.''.
    (b) Conforming Amendments.--(1) Subsections (c)(1) and (d)(2) of 
section 904 of the Congressional Budget Act of 1974 are amended by 
inserting ``408(b),'' after ``313,''.
    (2) The table of contents set forth in section 1(b) of the 
Congressional Budget and Impoundment Control Act of 1974 (as amended by 
section 211) is further amended by inserting after the item relating to 
section 407 the following new item:

``Sec. 408. Alternative net cost estimate by Congressional Budget 
                            Office.''.

                 Subtitle D--Accrual Accounting Report

SEC. 231. ACCRUAL ACCOUNTING REPORT.

    (a) Accrual-Based Accounting System.--The Director of the Office of 
Management and Budget shall develop a proposal for the implementation 
of an accrual-based accounting system for certain portions of the 
budget, including--
            (1) insurance, including social insurance programs such as 
        Social Security, Medicare, and Medicaid;
            (2) environmental liabilities;
            (3) Federal employee pensions;
            (4) retiree health benefits; and
            (5) other budget items where accrual-based accounting would 
        feasibly capture significant future cash resource requirements 
        that are not reflected in the cash-based budget; where 
        appropriate and reasonable.
    (b) Report.--Within one year of the date of enactment of this Act, 
the Director of the Office of Management and Budget shall submit a 
report to Congress setting forth the legislation necessary for the 
implementation of an accrual-based accounting system for part of the 
budget, along with any recommendations regarding its proposed 
legislation.

          Subtitle E--On-Budget Status of Trust Funds and GSEs

SEC. 241. OMB REPORT RESPECTING BUDGETARY STATUS OF TRUST FUNDS AND 
              GSES.

    (a) Report.--Within one year after the date of enactment of this 
Act, the Director of the Office of Management and Budget shall submit a 
report to Congress on the various scenarios by which the receipts and 
disbursements of the following entities could be counted as new budget 
authority, outlays, receipts, or deficit or surplus for the purposes of 
the budget of the United States Government as submitted by the 
President, the congressional budget, the Balanced Budget and Emergency 
Deficit Control Act of 1985, and the Statutory Pay-As-You-Go Act of 
2010:
            (1) Government-sponsored enterprises (GSEs), including the 
        Federal National Mortgage Association and the Federal Home Loan 
        Mortgage Corporation.
            (2) The various trust funds, including the Federal Old-Age 
        and Survivors Insurance Trust Fund, the Federal Disability 
        Insurance Trust Fund, and the Highway Trust Fund.
    (b) Specific Recommendations.--In the report described in 
subsection (a), the Director of the Office of Management and Budget 
shall provide a specific recommendation for each scenario described in 
the report, taking into account at least the following factors:
            (1) Whether the reformed budget would more or less 
        accurately reflect the Government's finances, short-, medium-, 
        and long-term.
            (2) Challenges associated with implementing the reformed 
        budget.
            (3) Whether the reformed budget would be more or less 
        useful in enforcing the pay-as-you-go requirements of the 
        Statutory Pay-As-You-Go Act of 2010 and other deficit control 
        provisions.
            (4) Whether the reformed budget could use the same 
        accounting standard for all budget items.
            (5) Whether the reformed budget would have any impact on 
        the financing of Government-sponsored enterprises, trust funds, 
        Social Security, Medicare, or Medicaid.

                   TITLE III--TAX EXPENDITURE REFORMS

             Subtitle A--Identification of Tax Expenditures

SEC. 301. JCT REPORTS ON TAX EXPENDITURES.

    Section 202(f) of the Congressional Budget Act of 1974 is amended 
by inserting ``(1)'' before ``For'' and by adding at the end the 
following new paragraph:
    ``(2) Reports to Congress by the Joint Committee on Taxation 
identifying tax expenditures shall also--
            ``(A) include an aggregate net cost of tax expenditures 
        that estimates the net impact of all tax expenditures on tax 
        revenues, taking into account, where possible, interaction 
        between such tax expenditures; and
            ``(B) compare this aggregate net cost with the total 
        revenue currently raised by the Internal Revenue Code of 
        1986.''.

SEC. 302. DEFINITION OF TAX SUBSIDY.

    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 `tax subsidy' means those tax expenditures 
        that are deliberately inconsistent with an identifiable general 
        rule of the present tax law, and that collect less revenue than 
        does the general rule.''.

        Subtitle B--Enforcement of Tax Expenditure Requirements

SEC. 311. TAX EXPENDITURE POINTS OF ORDER.

    (a) Points of Order.--Title III of the Congressional Budget Act of 
1974 is amended by adding at the end the following new section:

                   ``tax expenditure points of order

    ``Sec. 316.  (a) Tax Expenditure Point of Order.--(1) It shall not 
be in order in the House of Representatives or the Senate to consider 
any bill or joint resolution reported by the Committee on Ways and 
Means of the House or the Committee on Finance of the Senate that 
proposes to amend the Internal Revenue Code of 1986 to establish a new 
tax expenditure unless the committee report includes--
            ``(A) a clear statement of the purpose of the tax 
        expenditure, including a justification of why this purpose is 
        best achieved through the tax system rather than as an outlay;
            ``(B) an explanation of how the tax expenditure will be 
        implemented and integrated with other related tax expenditures 
        and outlays;
            ``(C) a macroeconomic impact analysis; and
            ``(D) a statement from the Joint Committee on Taxation 
        explaining why a macroeconomic analysis is not calculable.
    ``(2) As used in paragraph (1), the term `macroeconomic impact 
analysis' means--
            ``(A) an estimate prepared by the Joint Committee on 
        Taxation of the changes in economic output, employment, capital 
        stock, and tax revenues expected to result from enactment of 
        the applicable bill or joint resolution; and
            ``(B) a statement from the Joint Committee on Taxation 
        identifying the critical assumptions and the source of data 
        underlying that estimate.
    ``(b) Tax Subsidy Points of Order.--(1) It shall not be in order in 
the House of Representatives or the Senate to consider any bill, joint 
resolution, amendment, motion, or conference report that contains a new 
tax subsidy, or modifies an existing tax subsidy so that the modified 
tax code collects less revenue than the current tax code for the ten-
year period beginning with the fiscal year in which the modification 
takes effect, without a provision terminating it after not more than 
ten years.
    ``(2)(A) It shall not be in order in the House of Representatives 
or the Senate to consider any bill or joint resolution reported by the 
Committee on Ways and Means of the House or the Committee on Finance of 
the Senate, as applicable, that proposes to amend the Internal Revenue 
Code of 1986 to establish a new tax subsidy, or to modify an existing 
tax subsidy so that the modified tax code would collect less revenue 
than the current tax code, unless--
            ``(i) each new tax subsidy or each modification of an 
        existing tax subsidy is explicitly approved by the affirmative 
        vote of the applicable committee, quorum being present; and
            ``(ii) the chair of the applicable committee causes such 
        official statement to be printed in the Congressional Record 
        before consideration of the applicable bill or joint 
        resolution;
as determined under paragraph (3).
    ``(B) The Speaker of the House and the presiding officer of the 
Senate shall determine the applicable committee by determining the 
committee of jurisdication of legislation authorizing comparable 
spending programs or by considering the tax subsidy to be a spending 
program. For purposes of paragraph (2), the applicable committee shall 
be the committee determined under the preceding sentence.''.
    (b) Rules Amendment.--Clause 6(c) of rule XIII of the Rules of the 
House of Representatives, as amended by section 221(b), is further 
amended by adding before the period at the end thereof the following: 
``, or a rule or order that would waive any point of order set forth in 
section 316 of the Congressional Budget Act of 1974''.
    (c) Conforming Amendment.--The table of contents set forth in 
section 1(b) of the Congressional Budget and Impoundment Control Act of 
1974 (as amended by section 211) is further amended by inserting after 
the item relating to section 315 the following new item:

``Sec. 316. Tax expenditure points of order.''.

       Subtitle C--Executive Branch Reporting of Tax Expenditures

SEC. 331. EXECUTIVE BRANCH REPORTING OF TAX EXPENDITURES.

    (a) OMB Guidance Regarding Tax Expenditures.--The Director of the 
Office of Management and Budget shall develop clear and consistent 
guidance to agencies on how to incorporate tax expenditures in their 
strategic plans, annual performance plans, and performance and 
accountability reports, to provide a broader perspective and more 
cohesive plan of the Government's goals and strategies.
    (b) Reporting of Tax Expenditure Data.--The Director of the Office 
of Management and Budget shall require agencies to report tax 
expenditure data related to their overall mission in their annual 
financial statements.
    (c) Definitions.--As used in this section--
            (1) the term ``agency'' has the meaning given to such term 
        in paragraph (1) of section 551 of title 5, United States Code; 
        and
            (2) the term ``tax expenditure'' has the meaning given to 
        such term in paragraph (3) of section 3 of the Congressional 
        Budget and Impoundment Control Act of 1974.

                    Subtitle D--Tax Expenditure Data

SEC. 341. DEVELOPMENT OF ELECTRONIC INCOME TAX FILING SYSTEM.

    Not later than one year after the date of enactment of this Act, 
the Secretary of the Treasury (or his designee) shall develop and 
report to Congress on the legislative steps necessary to implement an 
income tax filing system which--
            (1) allows users to save their work;
            (2) provides simple instructions for filing;
            (3) allows users to file their income tax returns 
        electronically; and
            (4) respects taxpayer privacy and security concerns.

SEC. 342. GAO REPORT ON TAX EXPENDITURES.

    Not later than one year after the date of the enactment of this 
Act, the Government Accountability Office shall publish a written 
report making recommendations for improving the rules of the Internal 
Revenue Service to facilitate the evaluation of tax expenditures. Such 
report shall include a description of how to implement such 
improvements, including a list of the key steps in such implementation.

SEC. 343. TREASURY REPORT ON TAX EXPENDITURES.

    Not later than one year after the date of enactment of this Act, 
the Secretary of the Treasury (or his designee) shall make a written 
report to Congress which describes how the Secretary intends to use the 
Internal Revenue Service panel data sample which was created to 
facilitate the evaluation of savings-related tax expenditures. Such 
report shall also include a description of all other efforts related to 
tax expenditure data acquisition that the Secretary has taken or plans 
to undertake.

            Subtitle E--Tax Expenditure Performance Reviews

SEC. 351. CBO TAX EXPENDITURE PERFORMANCE REVIEWS.

    (a) CBO Performance Review Schedule and Reports.--(1) Title II of 
the Congressional Budget Act of 1974 is amended by adding at the end 
the following new section:

             ``cbo performance review schedule and reports

    ``Sec. 204.  (a) Performance Review Schedule.--
            ``(1) The Director shall conduct performance reviews of tax 
        expenditures, as identified by the Joint Committee on Taxation, 
        on an ongoing basis. The Director shall develop the schedule 
        for these reviews, such that each tax expenditure is reviewed 
        at least once in every four-year period. A four-year schedule 
        shall be submitted by the Director to Congress, the Secretary 
        of the Treasury, and the Director of the Office of Management 
        and Budget during January of each calendar year.
            ``(2) Within three months after the enactment of any new 
        tax expenditure, the Director shall revise the most recent 
        four-year schedule of tax expenditure performance reviews and 
        submit them with the quarterly reports as set forth in section 
        204(b)(1) of the Congressional Budget Act of 1974.
            ``(3) Not later than one year after the enactment of this 
        Act, the Director shall have submitted to Congress, the 
        Secretary of the Treasury, and the Director of the Office of 
        Management and Budget the first four-year schedule and begin 
        the first performance reviews under paragraph (1).
            ``(4) The Director shall endeavor to develop a four-year 
        schedule that provides for the simultaneous review of tax 
        expenditures that have similar policy objectives.
    ``(b) Reports.--
            ``(1) The Director shall report each of its performance 
        reviews of tax expenditures to Congress, the Secretary of the 
        Treasury, and the Director of the Office of Management and 
        Budget in quarterly reports and containing all of the 
        performance reviews conducted since the preceding report.
            ``(2) The Director may conduct expedited performance 
        reviews for any tax expenditure that has an estimated annual 
        fiscal impact of less than $1 billion, annually adjusted for 
        inflation, unless the Secretary of the Treasury requests or the 
        chairs and ranking minority members of the Committees on the 
        Budget of the House of Representatives and the Senate jointly 
        request, in writing, a full review.
            ``(3) Each performance review, except for expedited 
        performance reviews, shall include the following explanations, 
        descriptions, estimates, analyses, and recommendations:
                    ``(A) An explanation of the tax expenditure and any 
                relevant economic, social, or other context under which 
                it was first enacted.
                    ``(B) A description of the intended purpose of the 
                tax expenditure.
                    ``(C) An analysis of the overall success of the tax 
                expenditure in achieving such purpose, and evidence 
                supporting such analysis.
                    ``(D) An analysis of the extent to which further 
                extending the tax expenditure, or making it permanent, 
                would contribute to achieving such purpose.
                    ``(E) A description of the direct and indirect 
                beneficiaries of the tax expenditure, also specifying--
                            ``(i) any unintended beneficiaries of the 
                        tax expenditure;
                            ``(ii) the classes of individuals, types of 
                        organizations, or types of industries whose 
                        Federal tax liabilities are directly affected 
                        by the tax expenditure;
                            ``(iii) the extent to which terminating the 
                        tax expenditure may have negative effects on 
                        the category of taxpayers that currently 
                        benefit from the tax preference and on the 
                        economy; and
                            ``(iv) the extent to which the termination 
                        of the tax expenditure would affect the 
                        distribution of liability for payments of 
                        Federal taxes.
                    ``(F) An analysis of whether the tax expenditure is 
                the most cost-effective method for achieving the 
                purpose for which it was intended, and a description of 
                any more cost-effective methods through which such 
                purpose could be accomplished, and in particular the 
                extent to which a direct spending program might be 
                preferable to a tax expenditure, including--
                            ``(i) whether an outlay program might 
                        achieve the same policy objectives as a tax 
                        expenditure;
                            ``(ii) whether an outlay program might 
                        reduce deadweight losses and improve economic 
                        efficiency in the national economy; and
                            ``(iii) whether a direct spending program 
                        might be more or less expense to administer.
                    ``(G) A description of any unintended effects of 
                the tax expenditure that is useful in understanding the 
                tax expenditure's overall value.
                    ``(H) A description of any interactions (actual or 
                potential) with other tax expenditures or direct 
                spending programs in the same or related budget 
                function that should be studied further.
                    ``(I) An estimate of the annual cost in forgone 
                revenues of the tax expenditure, as well as a 
                projection of the cost in foregone revenues for the 
                ensuing ten fiscal years.
                    ``(J) A description of any further information 
                needed to complete a more thorough examination and 
                analysis of the tax expenditure, and what is necessary 
                to make such information available.
                    ``(K) A specific recommendation, based on analysis 
                conducted in the performance review, as to whether the 
                tax expenditure should be continued without 
                modification, modified (including converted fully or 
                partly into a direct spending program), scheduled for 
                sunset, reviewed at a later date, or terminated 
                immediately. The Director may decline to provide a 
                specific recommendation, but in each such case shall 
                provide an explanation of why a recommendation has not 
                been given.
            ``(4) An expedited performance review shall include at 
        least the explanations, descriptions, estimates, analyses, and 
        recommendations as listed in subparagraphs (A), (B), (C), (D), 
        (I), (J), and (K) of paragraph (3).
    ``(c) Committee Hearings.--Not later than 60 days after the 
submission of any performance review report under subsection (b), the 
Committees on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate shall hold public hearings to 
consider the performance review recommendations contained in that 
report. The Committees on the Budget of the House of Representatives 
and the Senate may also hold hearings on such performance review 
recommendations.''.
    (2) The table of contents set forth in section 1(b) of the 
Congressional Budget and Impoundment Control Act of 1974 is amended by 
inserting after the item relating to section 203 the following new 
item:

``Sec. 204. CBO performance review schedule and reports.''.
    (b) Treasury and OMB Comments.--Not later than 60 days after 
submission of a performance review report pursuant to section 204(b) of 
the Congressional Budget Act of 1974, the Secretary of the Treasury and 
the Director of the Office of Management and Budget shall each provide 
to Congress and to the Director of the Congressional Budget Office 
detailed, written comments on the performance review recommendations, 
stating whether the Secretary of the Treasury or the Director of the 
Office of Management and Budget, as applicable, agrees or disagrees 
with all or any part of the report or, if no opinion is given, 
providing an explanation of why the Secretary or the Director has no 
opinion or has not given one.
                                 <all>