    [Analytical Perspectives]
    [Budget Enforcement Act Preview Report]
    [14. Deficit Reduction Fund]
    [From the U.S. Government Printing Office, www.gpo.gov]

      On August 4, 1993, the President issued Executive Order 12858 to
    guarantee that the net deficit reduction achieved by the Omnibus Budget
    Reconciliation Act (OBRA) of 1993 is dedicated exclusively to reducing
    the deficit. The order established the Deficit Reduction Fund and
    requires that amounts equal to the spending reductions and revenue
    increases resulting from OBRA be credited to the Fund. The order also
    requires that information about the fund, including statements of the
    amounts in and Federal debt redeemed by the fund, be included in the
    President's budget. Table 14-1 presents the amounts that will be
    credited to the fund, based on the final scoring of OBRA by OMB:

      Table 14-1. REVENUE INCREASES AND SPENDING REDUCTIONS CREDITED TO THE
                             DEFICIT REDUCTION FUND
                             (In millons of dollars)
    ------------------------------------------------------------------------
                                                     Annual      Cumulative
                     Fiscal Year                     amount        amount
    ------------------------------------------------------------------------
    1994........................................     46,752        46,752
    1995........................................     82,713       129,465
    1996........................................    100,554       230,019
    1997........................................    128,898       358,917
    1998........................................    145,846       504,763
    ------------------------------------------------------------------------

      Each year, amounts are credited to the fund on a daily basis equal to
    the net deficit reduction achieved by OBRA. The order requires that the
    fund balances be used exclusively to redeem maturing debt obligations of
    the Treasury held by foreign governments. On October 1, 1993, amounts
    began to be credited to the fund and. Since then, the deposits made have
    been used for the stated debt redemption purposes.
      The status of the fund on December 31, 1995, was:

                Table 14-2. STATUS OF THE DEFICIT REDUCTION FUND
                            (In millions of dollars)
    ------------------------------------------------------------------------
                            Description                            Amount
    ------------------------------------------------------------------------
    Beginning balance.........................................  ............
    Deposits made between October 1, 1993, and December 31,
     1995.....................................................    153,902
    Redemptions of Treasury debt held by foreign governments
     between October 1, 1993, and December 31, 1995...........    153,501
    Fund balance as of December 31, 1995......................        401
    ------------------------------------------------------------------------