Establishing responsible budget targets

(a)

In general

Title IV of the Congressional Budget Act of 1974 (2 U.S.C. 651 et seq.) is amended by adding at the end the following:

Establishing responsible budget targets

441.

Definitions

In this part:(1)

Primary balance factor

(A)

In general

The term primary balance factor—(i)with respect to the first fiscal year that begins not less than 180 days after the date of enactment of this part, means 0.0 percentage point; and(ii)except as provided in subparagraphs (B) and (C), with respect to each fiscal year after the fiscal year described in clause (i), means the sum obtained by adding—(I)the primary balance factor for the previous fiscal year; and(II)(aa)if primary budget authority exceeded revenue for the fiscal year before the previous fiscal year, 0.2 percentage point; and(bb)if revenue exceeded primary budget authority for the fiscal year before the previous fiscal year, −0.2 percentage point.(B)

Special rule for first year after primary balance

(i)

In general

For the first fiscal year that begins after the date of a determination that, for a fiscal year beginning after the date of enactment of this part, revenue exceeded primary budget authority, the term primary balance factor means 0.0 percentage point.(ii)

Subsequent adjustment

After the first fiscal year described in clause (i), the primary balance factor shall be adjusted in accordance with subparagraph (A)(ii).(C)

Limit of zero

The primary balance factor for a fiscal year may not be less than 0.0 percentage point. (2)

Primary budget authority

The term primary budget authority means all budget authority except for net interest on the debt.(3)

Spending ceiling

The term spending ceiling, with respect to a fiscal year, means the maximum amount of primary budget authority for the fiscal year, as determined under section 442. (4)

Spending growth factor

The term spending growth factor, with respect to a fiscal year, means the difference obtained by subtracting—(A)the primary balance factor for the fiscal year; from(B)the average annual percentage growth in the gross domestic product of the United States during the 5-fiscal-year period before the beginning of the fiscal year before such fiscal year.

442.

Establishment of a spending ceiling

(a)

In general

The maximum amount of primary budget authority for a fiscal year shall be the amount of primary budget authority for the previous fiscal year as—(1)increased by the spending growth factor; and (2)modified by any adjustments under section 444 or 445.(b)

Exclusion of adjustments from baseline

In determining the maximum amount of primary budget authority for a fiscal year, the amount of primary budget authority for the previous fiscal year shall not include any adjustment under paragraph (1) or (3) of section 444 or under section 445(c).(c)

Determination

(1)

For congressional purposes

The Director of the Congressional Budget Office shall—(A)include in each report under section 202(e)(1) and revision of such a report an estimate of the amount of the spending ceiling (including factors necessary to produce the estimate) and any adjustments under section 444 for the fiscal year commencing on October 1 of the year during which the Director submits the report; and(B)provide to the Committee on the Budget of the Senate and the Committee on the Budget of the House of Representatives updates to the estimate of the spending ceiling and adjustments, as appropriate. (2)

For executive branch purposes

The President shall— (A)include in each budget of the President submitted under section 1105 of title 31, United States Code, an estimate by the Office of Management and Budget of the amount of the spending ceiling and any adjustments under section 444 for the fiscal year commencing on October 1 of the year during which the President submits the budget; and(B)obtain from the Office of Management and Budget updates to the estimate of the spending ceiling and adjustments, as appropriate.

443.

Use of ceiling

(a)

By Congress

When considering legislation, the Senate and the House of Representatives shall adhere to the spending ceiling, as determined by the Director of the Congressional Budget Office under section 442(c)(1) (including any adjustments under section 444 or 445(c)).(b)

By executive branch

When considering proposals with fiscal implications, the President shall adhere to the spending ceiling, as determined by the Director of the Office of Management and Budget under section 442(c)(2) (including any adjustments under sections 444 or 445(c)).

444.

Adjusting the spending ceiling

When adopting a concurrent resolution on the budget (including a concurrent resolution on the budget described in section 304), Congress may adjust the spending ceiling as determined under section 442(c)(1), and when enacting a supplemental appropriations Act, Congress may adjust the spending ceiling as determined under section 442(c)(2), commensurate with—(1)appropriations for an emergency, as defined in section 250(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 900(c));(2)a revision in the estimate of the gross domestic product of the United States for any year to which section 441(4)(B) applies; (3)cyclical variations due to the difference between the actual and potential amount of the gross domestic product of the United States; (4)timing shifts of expenditures or revenues due; or(5)enacted laws that result in a change in revenue.

445.

Emergency account adjustments

(a)

Establishment of emergency account

The Director of the Congressional Budget Office and the Director of the Office of Management and Budget shall each maintain an emergency account.(b)

Computation

(1)

In general

The amount of the emergency account shall be—(A)increased by the amount of the adjustment made under section 444(1); and(B)decreased by the difference obtained by subtracting the amount of primary budget authority provided for a fiscal year from the adjusted spending ceiling (excluding any adjustment under section 444(1), and including the effect of adjustments under section 445(c)) for that fiscal year.(2)

Limit of zero

The amount of the emergency account may not be less than $0. (c)

Adjustment

(1)

In general

If the amount of the emergency account on the last day of a fiscal year has increased, as compared to the last day of the fiscal year before such fiscal year, the amount of the spending ceiling for the second fiscal year after such fiscal year and each of the ensuing 5 fiscal years shall be reduced by the amount equal to one-sixth of the amount of the increase in the emergency account.(2)

Modification of adjustment

(A)

For congressional purposes

When adopting a concurrent resolution on the budget (including a concurrent resolution on the budget described in section 304), Congress may, for purposes of applying the spending ceiling in the Senate and the House of Representatives—(i)reduce the amount of the spending ceiling by the amount of the emergency account over a period shorter than 6 fiscal years; or(ii)in the case of an ongoing emergency, reduce the amount of the spending ceiling by the amount of the emergency account over a period longer than 6 fiscal years.(B)

For executive branch purposes

When enacting a supplemental appropriations Act, Congress may, for purposes of applying the spending ceiling in the executive branch—(i)reduce the amount of the spending ceiling by the amount of the emergency account over a period shorter than 6 fiscal years; or(ii)in the case of an ongoing emergency, reduce the amount of the spending ceiling by the amount of the emergency account over a period longer than 6 fiscal years.

(b)

Conforming amendment

The table of contents in section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 is amended by inserting after the item relating to section 428 the following:

PART C—Establishing responsible budget targets

Sec. 441. Definitions.

Sec. 442. Establishment of a spending ceiling.

Sec. 443. Use of ceiling.

Sec. 444. Adjusting the spending ceiling.

Sec. 445. Emergency account adjustments.