[Congressional Record Volume 143, Number 104 (Tuesday, July 22, 1997)]
[House]
[Pages H5570-H5578]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               AMENDMENTS

  Under clause 6 of rule XXIII, proposed amendments were submitted as 
follows:

                               H.R. 2003

                    Offered By: Mr. Barton of Texas

               (Amendment in the Nature of a Substitute)

       Amendment No. 1: Strike all after the enacting clause and 
     insert the following:

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Balanced 
     Budget Assurance Act of 1997''.
       (b) Table of Contents.--

Sec. 1. Short title and table of contents.
Sec. 2. Definitions.

 Title I--Ensure That the Bipartisan Balanced Budget Agreement of 1997 
                           Achieves Its Goal

Sec. 101. Timetable.
Sec. 102. Procedures to avoid sequestration or delay of new revenue 
              reductions.
Sec. 103. Effect on Presidents' budget submissions; point of order.
Sec. 104. Deficit and revenue targets.
Sec. 105. Direct spending caps.
Sec. 106. Economic assumptions.
Sec. 107. Revisions to deficit and revenue targets and to the caps for 
              entitlements and other mandatory spending.

                    Title II--Enforcement Provisions

Sec. 201. Reporting excess spending.
Sec. 202. Enforcing direct spending caps.
Sec. 203. Sequestration rules.
Sec. 204. Enforcing revenue targets.
Sec. 205. Exempt programs and activities.
Sec. 206. Special rules.
Sec. 207. The current law baseline.
Sec. 208. Limitations on emergency spending.

Title III--Use of Budget Surplus to Preserve Social Security Trust Fund

Sec. 301. Ending use of receipts of Social Security Trust Fund for 
              other programs and activities.

     SEC. 2. DEFINITIONS.

       For purposes of this Act:
       (1) Eligible population.--The term ``eligible population'' 
     shall mean those individuals to whom the United States is 
     obligated to make a payment under the provisions of a law 
     creating entitlement authority. Such term shall not include 
     States, localities, corporations or other nonliving entities.
       (2) Sequester and sequestration.--The terms ``sequester'' 
     and ``sequestration'' refer to or mean the cancellation of 
     budgetary resources provided by discretionary appropriations 
     or direct spending law.
       (3) Breach.--The term ``breach'' means, for any fiscal 
     year, the amount (if any) by which outlays for that year 
     (within a category of direct spending) is above that 
     category's direct spending cap for that year.
       (4) Baseline.--The term ``baseline'' means the projection 
     (described in section 207) of current levels of new budget 
     authority, outlays, receipts, and the surplus or deficit into 
     the budget year and the outyears.
       (5) Budgetary resources.--The term ``budgetary resources'' 
     means new budget authority, unobligated balances, direct 
     spending authority, and obligation limitations.
       (6) Discretionary appropriations.--The term ``discretionary 
     appropriations'' means budgetary resources (except to fund 
     direct spending programs) provided in appropriation Acts. If 
     an appropriation Act alters the level of direct spending or 
     offsetting collections, that effect shall be treated as 
     direct spending. Classifications of new accounts or 
     activities and changes in classifications shall be made in 
     consultation with the Committees on Appropriations and the 
     Budget of the House of Representatives and the Senate and 
     with CBO and OMB.
       (7) Direct spending.--The term ``direct spending'' means--
       (A) budget authority provided by law other than 
     appropriation Acts, including entitlement authority;
       (B) entitlement authority; and
       (C) the food stamp program.

     If a law other than an appropriation Act alters the level of 
     discretionary appropriations or offsetting collections, that 
     effect shall be treated as direct spending.
       (8) Entitlement authority.--The term ``entitlement 
     authority'' means authority (whether temporary or permanent) 
     to make payments (including loans and grants), the budget 
     authority for which is not provided for in advance by 
     appropriation Acts, to any person or government if, under the 
     provisions of the law containing such authority, the United 
     States is obligated to make such payments to persons or 
     governments who meet the requirements established by such 
     law.
       (9) Current.--The term ``current'' means, with respect to 
     OMB estimates included with a budget submission under section 
     1105(a) of title 31 U.S.C., the estimates consistent with the 
     economic and technical assumptions underlying that budget.
       (10) Account.--The term ``account'' means an item for which 
     there is a designated budget account designation number in 
     the President's budget.
       (11) Budget year.--The term ``budget year'' means the 
     fiscal year of the Government that starts on the next October 
     1.
       (12) Current year.--The term ``current year'' means, with 
     respect to a budget year, the fiscal year that immediately 
     precedes that budget year.
       (13) Outyear.--The term ``outyear'' means, with respect to 
     a budget year, any of the fiscal years that follow the budget 
     year.
       (14) OMB.--The term ``OMB'' means the Director of the 
     Office of Management and Budget.
       (15) CBO.--The term ``CBO'' means the Director of the 
     Congressional Budget Office.
       (16) Budget outlays and outlays.--The terms ``budget 
     outlays'' and ``outlays'' mean,

[[Page H5571]]

     with respect to any fiscal year, expenditures of funds under 
     budget authority during such year.
       (17) Budget authority and new budget authority.--The terms 
     ``budget authority'' and ``new budget authority'' have the 
     meanings given to them in section 3 of the Congressional 
     Budget and Impoundment Control Act of 1974.
       (18) Appropriation act.--The term ``appropriation Act'' 
     means an Act referred to in section 105 of title 1 of the 
     United States Code.
       (19) Consolidated Deficit.--The term ``consolidated 
     deficit'' means, with respect to a fiscal year, the amount by 
     which total outlays exceed total receipts during that year.
       (20) Surplus.--The term ``surplus'' means, with respect to 
     a fiscal year, the amount by which total receipts exceed 
     total outlays during that year.
       (21) Direct spending caps.--The term ``direct spending 
     caps'' means the nominal dollar limits for entitlements and 
     other mandatory spending pursuant to section 105 (as modified 
     by any revisions provided for in this Act).
 TITLE I--ENSURE THAT THE BIPARTISAN BALANCED BUDGET AGREEMENT OF 1997 
                           ACHIEVES ITS GOAL

     SEC. 101. TIMETABLE.

Action to be completed:
CBO economic and budget update.........................................
President's budget update based on new assumptions.....................
CBO and OMB updates....................................................
Preview report.........................................................
Not later than November 1 (and as soon as practical after the end of 
OMB and CBO Analyses of Deficits, Revenues and Spending Levels and ....
  Projections for the Upcoming Year.
Congressional action to avoid sequestration............................
OMB issues final (look back) report for prior year and preview for ....
  current year.
Presidential sequester order or order delaying new/additional revenues 
  reductions scheduled to take effect pursuant to reconciliation 
  legislation enacted in calendar year 1997.

     SEC. 102. PROCEDURES TO AVOID SEQUESTRATION OR DELAY OF NEW 
                   REVENUE REDUCTIONS.

       (a) Special Message.--If the OMB Analysis of Actual 
     Spending Levels and Projections for the Upcoming Year 
     indicates that--
       (1) deficits in the most recently completed fiscal year 
     exceeded, or the deficits in the budget year are projected to 
     exceed, the deficit targets in section 104, as adjusted 
     pursuant to section 107;
       (2) revenues in the most recently completed fiscal year 
     were less than, or revenues in the current year are projected 
     to be less than, the revenue targets in section 104, as 
     adjusted pursuant to section 107; or
       (3) outlays in the most recently completed fiscal year 
     exceeded, or outlays in the current year are projected to 
     exceed, the caps in section 104, as adjusted pursuant to 
     section 107;

     the President shall submit to Congress with the OMB Analysis 
     of Actual Spending Levels and Projections for the Upcoming 
     Year a special message that includes proposed legislative 
     changes to--
       (A) offset all or part of net deficit or outlay excess;
       (B) offset all or part of any revenue shortfall; or
       (C) revise the deficit or revenue targets or the outlay 
     caps contained in this Act;

     through any combination of--
       (i) reductions in outlays;
       (ii) increases in revenues; or
       (iii) increases in the deficit targets or expenditure caps, 
     or reductions in the revenue targets, if the President 
     submits a written determination that, because of economic or 
     programmatic reasons, less than the entire amount of the 
     variances from the balanced budget plan should be offset.
       (b) Introduction of the President's Package.--Not later 
     than November 15, the message from the President required 
     pursuant to subsection (a) shall be introduced as a joint 
     resolution in the House of Representatives or the Senate by 
     the chairman of its Committee on the Budget. If the chairman 
     fails to do so, after November 15, the joint resolution may 
     be introduced by any Member of that House of Congress and 
     shall be referred to the Committee on the Budget of that 
     House.
       (c) House Committee Action.--The Committee on the Budget, 
     in consultation with the committees of jurisdiction, or, in 
     the case of revenue shortfalls, the Committee on Ways and 
     Means of the House of Representatives shall, by November 15, 
     report a joint resolution containing--
       (1) the recommendations in the President's message, or 
     different policies and proposed legislative changes than 
     those contained in the message of the President, to 
     ameliorate or eliminate any excess deficits or expenditures 
     or any revenue shortfalls, or
       (2) any changes to the deficit or revenue targets or 
     expenditure caps contained in this Act, except that any 
     changes to the deficit or revenue targets or expenditure caps 
     cannot be greater than the changes recommended in the message 
     submitted by the President.
       (d) Procedure if the Appropriate Committee of the House of 
     Representatives Fails To Report Required Resolution.--
       (1) Automatic discharge of committees on the budget of the 
     house.--If the Committee on the Budget of the House of 
     Representatives fails, by November 20, to report a resolution 
     meeting the requirements of subsection (c), the committee 
     shall be automatically discharged from further consideration 
     of the joint resolution reflecting the President's 
     recommendations introduced pursuant to subsection (a), and 
     the joint resolution shall be placed on the appropriate 
     calendar.
       (2) Consideration of discharge resolution in the house.--If 
     the Committee has been discharged under paragraph (1) above, 
     any Member may move that the House of Representatives 
     consider the resolution. Such motion shall be highly 
     privileged and not debatable. It shall not be in order to 
     consider any amendment to the resolution except amendments 
     which are germane and which do not change the net deficit 
     impact of the resolution.
       (e) Consideration of Joint Resolutions in the House.--
     Consideration of resolutions reported pursuant to subsection 
     (c) or (d) shall be pursuant to the procedures set forth in 
     section 305 of the Congressional Budget Act of 1974 and 
     subsection (d). Notwithstanding subsection (d) and any other 
     rule or order of the House of Representatives or the Senate, 
     it shall be in order to consider amendments to ameliorate any 
     excess spending or revenue shortfalls through different 
     policies and proposed legislation and which do not change the 
     net deficit impact of the resolution.
       (f) Transmittal to Senate.--If a joint resolution passes 
     the House of Representatives pursuant to subsection (e), the 
     Clerk of the House of Representatives shall cause the 
     resolution to be engrossed, certified, and transmitted to the 
     Senate within 1 calendar day of the day on which the 
     resolution is passed. The resolution shall be referred to the 
     Senate Committee on the Budget.
       (g) Requirements for Special Joint Resolution in the 
     Senate.--The Committee on the Budget, in consultation with 
     the committees of jurisdiction, or, in the case of revenue 
     shortfalls, the Committee on Finance of the Senate shall 
     report not later than December 1--
       (1) a joint resolution reflecting the message of the 
     President; or
       (2) the joint resolution passed by the House of 
     Representatives, with or without amendment; or
       (3) a joint resolution containing different policies and 
     proposed legislative changes than those contained in either 
     the message of the President or the resolution passed by the 
     House of Representatives, to eliminate all or part of any 
     excess deficits or expenditures or any revenue shortfalls, or
       (4) any changes to the deficit or revenue targets, or to 
     the expenditure caps, contained in this Act, except that any 
     changes to the deficit or revenue targets or expenditure caps 
     cannot be greater than the changes recommended in the message 
     submitted by the President.
       (h) Procedure if the Appropriate Committee of the Senate 
     Fails To Report Required Resolution.--(1) In the event that 
     the Committee on the Budget of the Senate fails, by December 
     1, to report a resolution meeting the requirements of 
     subsection (g), the committee shall be automatically 
     discharged from further consideration of the joint resolution 
     reflecting the President's recommendations introduced 
     pursuant to subsection (a) and of the resolution passed by 
     the House of Representatives, and both joint resolutions 
     shall be placed on the appropriate calendar.
       (2) Any member may move that the Senate consider the 
     resolution passed by the House of Representatives or the 
     resolution introduced pursuant to subsection (b).
       (i) Consideration of Joint Resolution in the Senate.--
     Consideration of resolutions reported pursuant to subsections 
     (c) or (d) shall be pursuant to the procedures set forth in 
     section 305 of the Congressional Budget Act of 1974 and 
     subsection (d).
       (j) Procedure if Joint Resolution Does Not Eliminate 
     Deficit Excess.--If the joint resolution reported by the 
     Committee on the Budget, Way and Means, or Finance pursuant 
     to subsection (c) or (g) or a joint resolution discharged in 
     the House of Representatives or the Senate pursuant to 
     subsection (d)(1) or (h) would eliminate less than--
       (1) the entire amount by which actual or projected deficits 
     exceed, or revenues fall short of, the targets in this Act; 
     or
       (2) the entire amount by which actual or projected outlays 
     exceed the caps contained in this Act;

     then the Committee on the Budget of the Senate shall report a 
     joint resolution, raising the deficit targets or outlay caps, 
     or reducing the revenue targets for any year in which actual 
     or projected spending, revenues or deficits would not conform 
     to the deficit and revenue targets or expenditure caps in 
     this Act.
       (k)  Conference Reports Shall Fully Address Deficit 
     Excess.--It shall not be in order in the House of 
     Representatives or the Senate to consider a conference report 
     on a joint resolution to eliminate all or part of any excess 
     deficits or outlays or to eliminate all or part of any 
     revenue shortfall compared to the deficit and revenue targets 
     and the expenditure caps contained in this Act, unless--
       (1) the joint resolution offsets the entire amount of any 
     overage or shortfall; or
       (2) the House of Representatives and Senate both pass the 
     joint resolution reported pursuant to subsection (j)(2).


[[Page H5572]]


     The vote on any resolution reported pursuant to subsection 
     (j)(2) shall be solely on the subject of changing the deficit 
     or revenue targets or the expenditure limits in this Act.

     SEC. 103. EFFECT ON PRESIDENTS' BUDGET SUBMISSIONS; POINT OF 
                   ORDER.

       (a) Budget Submission.--Any budget submitted by the 
     President pursuant to section 1105(a) of title 31, United 
     States Code, for each of fiscal years 1998 through 2002 shall 
     be consistent with the spending, revenue, and deficit levels 
     established in sections 104 and 105, as adjusted pursuant to 
     section 107, or it shall recommend changes to those levels
       (b) Point of Order.--It shall not be in order in the House 
     of Representatives or the Senate to consider any concurrent 
     resolution on the budget unless it is consistent with the 
     spending, revenue, and deficit levels established in sections 
     104 and 105, as adjusted pursuant to section 107.

     SEC. 104. DEFICIT AND REVENUE TARGETS.

       (a) Consolidated Deficit (or Surplus) Targets.--For 
     purposes of sections 102 and 107, the consolidated deficit 
     targets shall be--
       (1) for fiscal year 1998, $90,500,000,000;
       (2) for fiscal year 1999, $89,700,000,000;
       (3) for fiscal year 2000, $83,000,000,000;
       (4) for fiscal year 2001, $53,300,000,000; and
       (5) for fiscal year 2002, there shall be a surplus of not 
     less than $1,400,000,000.
       (b) Consolidated Revenue Targets.--For purposes of sections 
     102, 107, 201, and 204, the consolidated revenue targets 
     shall be--
       (1) for fiscal year 1998, $1,601,800,000,000;
       (2) for fiscal year 1999, $1,664,200,000,000;
       (3) for fiscal year 2000, $1,728,100,000,000;
       (4) for fiscal year 2001, $1,805,100,000,000; and
       (5) for fiscal year 2002, $1,890,400,000,000.

     SEC. 105. DIRECT SPENDING CAPS.

       (a) In General.--Effective upon submission of the report by 
     OMB pursuant to subsection (c), direct spending caps shall 
     apply to all entitlement authority except for undistributed 
     offsetting receipts and net interest outlays, subject to 
     adjustments for changes in eligible populations and inflation 
     pursuant to section 107. For purposes of enforcing direct 
     spending caps under this Act, each separate program shown in 
     the table set forth in subsection (d) shall be deemed to be a 
     category.
       (b) Budget Committee Reports.--Within 30 days after 
     enactment of this Act, the Budget Committees of the House of 
     Representatives and the Senate shall file with their 
     respective Houses identical reports containing account 
     numbers and spending levels for each specific category.
       (c) Report by OMB.--Within 30 days after enactment of this 
     Act, OMB shall submit to the President and each House of 
     Congress a report containing account numbers and spending 
     limits for each specific category.
       (d) Contents of Reports.--All direct spending accounts not 
     included in these reports under separate categories shall be 
     included under the heading ``Other Entitlements and Mandatory 
     Spending''. These reports may include adjustments among the 
     caps set forth in this Act as required below, however the 
     aggregate amount available under the ``Total Entitlements and 
     Other Mandatory Spending'' cap shall be identical in each 
     such report and in this Act and shall be deemed to have been 
     adopted as part of this Act. Each such report shall include 
     the actual amounts of the caps for each year of fiscal years 
     1998 through 2002 consistent with the concurrent resolution 
     on the budget for FY 1998 for each of the following 
     categories:
       Earned Income Tax Credit,
       Family Support,
       Civilian and other Federal retirement:
       Military retirement,
       Food stamps,
       Medicaid,
       Medicare,
       Social security,
       Supplemental security income,
       Unemployment compensation,
       Veterans' benefits,
       Other entitlements and mandatory spending, and
       Aggregate entitlements and other mandatory spending.
       (e) Additional Spending Limits.--Legislation enacted 
     subsequent to this Act may include additional caps to limit 
     spending for specific programs, activities, or accounts with 
     these categories. Those additional caps (if any) shall be 
     enforced in the same manner as the limits set forth in such 
     joint explanatory statement.

     SEC. 106. ECONOMIC ASSUMPTIONS.

       Subject to periodic reestimation based on changed economic 
     conditions or changes in eligible population, determinations 
     of the direct spending caps under section 105, any breaches 
     of such caps, and actions necessary to remedy such breaches 
     shall be based upon the economic assumptions set forth in the 
     joint explanatory statement of managers accompanying the 
     concurrent resolution on the budget for fiscal year 1998 
     (House Concurrent Resolution 84, 105th Congress). At the same 
     time as the submission of the report by OMB pursuant to 
     section 104(c), OMB shall submit to the President and 
     Congress a report setting forth the economic assumptions in 
     the joint explanatory statement of managers accompanying the 
     concurrent resolution on the budget for fiscal year 1998 and 
     the assumptions regarding eligible populations used in 
     preparing the report submitted pursuant to section 104(c).

     SEC. 107. REVISIONS TO DEFICIT AND REVENUE TARGETS AND TO THE 
                   CAPS FOR ENTITLEMENTS AND OTHER MANDATORY 
                   SPENDING.

       (a) Automatic Adjustments to Deficit and Revenue Targets 
     and to Caps for Entitlements and Other Mandatory Spending.--
     When the President submits the budget under section 1105(a) 
     of title 31, United States Code, and upon submission of the 
     OMB report pursuant to section 201(a) for any year, OMB shall 
     calculate (in the order set forth below), and the budget and 
     reports shall include, adjustments to the deficit and revenue 
     targets, and to the direct spending caps (and those limits as 
     cumulatively adjusted) for the current year, the budget year, 
     and each outyear, to reflect the following:
       (1) Changes to revenue targets.--
       (A) Changes in growth.--For Federal revenues and deficits 
     under laws and policies enacted or effective before July 1, 
     1997, growth adjustment factors shall equal the ratio between 
     the level of year-over-year Gross Domestic Product, as 
     adjusted by the chain-weighted GDP deflator measured for the 
     fiscal year most recently completed and the applicable 
     estimated level for that year as described in section 106.
       (B) Changes in inflation.--For Federal revenues and 
     deficits under laws and policies enacted or effective before 
     July 1, 1997, inflation adjustment factors shall equal the 
     ratio between the level of year-over-year change in the 
     Consumer Price Index measured for the fiscal year most 
     recently completed and the applicable estimated level for 
     that year as described in section 106.
       (2) Adjustments to direct spending caps.--
       (A) Changes in concepts and definitions.--The adjustments 
     produced by changes in concepts and definitions shall equal 
     the baseline levels of new budget authority and outlays using 
     up-to-date concepts and definitions minus those levels using 
     the concepts and definitions in effect before such changes. 
     Such changes in concepts and definitions may only be made in 
     consultation with the Committees on Appropriations, the 
     Budget, and Government Reform and Oversight and Governmental 
     Affairs of the House of Representatives and the Senate.
       (B) Changes in net outlays.--Changes in net outlays for all 
     programs and activities exempt from sequestration under 
     section 204.
       (C) Changes in inflation.--For direct spending under laws 
     and policies enacted or effective on or before July 1, 1997, 
     inflation adjustment factors shall equal the ratio between 
     the level of year-over-year change in the Consumer Price 
     Index measured for the fiscal year most recently completed 
     and the applicable estimated level for that year as described 
     in section 106 (relating to economic assumptions). For direct 
     spending under laws and policies enacted or effective after 
     July 1, 1997, there shall be no adjustment to the direct 
     spending caps (for changes in economic conditions including 
     inflation, nor for changes in numbers of eligible 
     beneficiaries) unless--
       (i) the Act or the joint explanatory statement of managers 
     accompanying such Act providing new direct spending includes 
     economic projections and projections of numbers of 
     beneficiaries; and
       (ii) such Act specifically provides for automatic 
     adjustments to the direct spending caps in section 105 based 
     on those projections.
       (D) Changes in eligible populations.--For direct spending 
     under laws and policies enacted or effective on or before 
     July 1, 1997, the direct spending caps shall be adjusted to 
     reflect changes in eligible populations, based on the 
     assumptions set forth in the OMB report submitted pursuant to 
     section 106. In making such adjustments, OMB shall estimate 
     the changes in spending resulting from the change in eligible 
     populations. For direct spending under laws and policies 
     enacted or effective after July 1, 1997, there shall be no 
     adjustment to the direct spending caps for changes in numbers 
     of eligible beneficiaries unless--
       (i) the Act or the joint explanatory statement of managers 
     accompanying such Act providing new direct spending includes 
     economic projections and projections of numbers of 
     beneficiaries; and
       (ii) such Act specifically provides for automatic 
     adjustments to the direct spending caps in section 105 based 
     on those projections.
       (E) Intra-budgetary payments.--From discretionary accounts 
     to mandatory accounts. The baseline and the discretionary 
     spending caps shall be adjusted to reflect those changes.
       (b) Changes to Deficit Targets.--The deficit targets in 
     section 104 shall be adjusted to reflect changes to the 
     revenue targets or changes to the caps for entitlements and 
     other mandatory spending pursuant to subsection (a).
       (c) Permissible Revisions to Deficit and Revenue Targets 
     and Direct Spending Caps.--Deficit and revenue targets and 
     direct spending caps as enacted pursuant to sections 104 and 
     105 may be revised as follows: Except as required pursuant to 
     subsection (a) and (b), deficit, revenue, and direct spending 
     caps may only be adjusted by recorded vote. It shall be a 
     matter of highest privilege in the House of Representatives 
     and the Senate for a Member of the House of Representatives 
     or the Senate to insist on a recorded vote solely on the 
     question of amending such caps. It shall not be in order for 
     the Committee on Rules of the House of Representatives to 
     report a resolution waiving the provisions of this 
     subsection. This subsection may be waived in the Senate

[[Page H5573]]

     only by an affirmative vote of three-fifths of the Members 
     duly chosen and sworn.
                    TITLE II--ENFORCEMENT PROVISIONS

     SEC. 201. REPORTING EXCESS SPENDING.

       (a) Analysis of Actual Deficit, Revenue, and Spending 
     Levels.--As soon as practicable after any fiscal year, OMB 
     shall compile a statement of actual and projected deficits, 
     revenues, and direct spending for that year and the current 
     fiscal year. The statement shall identify such spending by 
     categories contained in section 105.
       (b) Estimate of Necessary Spending Reduction.--Based on the 
     statement provided under subsection (a), the OMB shall issue 
     a report to the President and the Congress on December 15 of 
     any year in which such statement identifies actual or 
     projected deficits, revenues, or spending in the current or 
     immediately preceding fiscal years in violation of the 
     revenue targets or direct spending caps in section 104 or 
     105, as adjusted pursuant to section 107, by more than one-
     tenth of one percent of the applicable total revenues or 
     direct spending for such year. The report shall include:
       (1) The amount, if any, that total direct spending 
     exceeded, or is projected to exceed, the aggregate direct 
     spending cap in section 105, as adjusted pursuant to section 
     107.
       (2) All instances in which actual direct spending has 
     exceeded the applicable direct spending cap.
       (3) The difference between the amount of spending available 
     under the direct spending caps for the current year and 
     estimated actual spending for the categories associated with 
     such caps.
       (4) The amounts by which direct spending shall be reduced 
     in the current fiscal year to offset the net amount that 
     actual direct spending in the preceding fiscal year and 
     projected direct spending in the current fiscal year exceeds 
     the amounts available for each cap category.

     SEC. 202. ENFORCING DIRECT SPENDING CAPS.

       (a) Purpose.--This subtitle provides enforcement of the 
     direct spending caps on categories of spending established 
     pursuant to section 105. This section shall apply for any 
     fiscal year in which the statement provided under section 201 
     identifies actual direct spending in the preceding fiscal 
     year or projected direct spending in the current year in 
     excess of the aggregate direct spending cap, as adjusted 
     pursuant to section 107.
       (b) General Rules.--
       (1) Eliminating a breach.--Each non-exempt account within a 
     category shall be reduced by a dollar amount calculated by 
     multiplying the baseline level of sequestrable budgetary 
     resources in that account at that time by the uniform 
     percentage necessary to eliminate a breach within that 
     category.
       (2) Programs, projects, or activities.--Except as otherwise 
     provided, the same percentage sequestration shall apply to 
     all programs, projects and activities within a budget 
     account.
       (3) 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.
       (4) Cancellation of budgetary resources.--Budgetary 
     resources sequestered from any account other than an trust, 
     special or revolving fund shall revert to the Treasury and be 
     permanently canceled.
       (5) Implementing regulations.--Notwithstanding any other 
     provision of law, administrative rules or similar actions 
     implementing any sequestration shall take effect within 30 
     days after that sequestration.

     SEC. 203. SEQUESTRATION RULES.

       (a) General Rules.--For programs subject to direct spending 
     caps:
       (1) Triggering of sequestration.--Sequestration is 
     triggered if total direct spending subject to the caps in the 
     preceding fiscal year and projected direct spending subject 
     to the caps in the current fiscal year exceeds the total of 
     aggregate caps for direct spending for the current and 
     immediately preceding fiscal year.
       (2) Calculation of reductions.--The amount to be 
     sequestered from direct spending programs under each separate 
     cap shall be determined by multiplying the total amount that 
     direct spending in that category exceeded or is projected to 
     exceed the direct spending cap for that category by--
       (A) the net amount that total direct spending exceeded, or 
     is projected to exceed, the aggregate spending caps, as 
     identified pursuant to paragraph 201(b)(1); multiplied by
       (B) the net amount that direct spending by which the 
     category exceeded and is projected to exceed the direct 
     spending cap for that category, divided by the net amount 
     that total spending exceeded and is projected to exceed the 
     applicable direct spending cap for all categories in which 
     spending exceeds the applicable direct spending caps.
       (3) Uniform percentages.--In calculating the uniform 
     percentage applicable to the sequestration of all spending 
     programs or activities within each category, or the uniform 
     percentage applicable to the sequestration of nonexempt 
     direct spending programs or activities, the sequestrable base 
     for direct spending programs and activities is the total 
     level of outlays for the fiscal year for those programs or 
     activities in the current law baseline.
       (4) Permanent sequestration of direct spending.--
     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, any later sequestration shall reduce direct 
     spending by an amount in addition to, rather than in lieu of, 
     the reduction in direct spending in place under the existing 
     sequestration or sequestrations.
       (5) Special rule.--For any direct spending program in 
     which--
       (A) outlays pay for entitlement benefits;
       (B) a current-year sequestration takes effect after the 1st 
     day of the budget year;
       (C) that delay reduces the amount of entitlement authority 
     that is subject to sequestration in the budget; and
       (D) the uniform percentage otherwise applicable to the 
     budget-year sequestration of a program or activity is 
     increased due to the delay;

     then the uniform percentage shall revert to the uniform 
     percentage calculated under paragraph (3) when the budget 
     year is completed.
       (6) 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 (commonly called ``cost of living adjustments'');

     sequestration shall first be applied to the cost of living 
     adjustment before reductions are made to the base benefit. 
     For the first fiscal year to which a sequestration applies, 
     the benefit payment reductions in such programs accomplished 
     by the order shall take effect starting with the payment made 
     at the beginning of January following a final sequester. For 
     the purposes of this subsection, veterans' compensation shall 
     be considered a program that meets the conditions of the 
     preceding sentence.
       (7) Loan programs.--For all loans made, extended, or 
     otherwise modified on or after any sequestration under loan 
     programs subject to direct spending caps--
       (A) the sequestrable base shall be total fees associated 
     with all loans made extended or otherwise modified on or 
     after the date of sequestration; and
       (B) the fees paid by borrowers shall be increased by a 
     uniform percentage sufficient to produce the dollar savings 
     in such loan programs for the fiscal year or years of the 
     sequestrations required by this section.

     Notwithstanding any other provision of law, in any year in 
     which a sequestration is in effect, all subsequent fees shall 
     be increased by the uniform percentage and all proceeds from 
     such fees shall be paid into the general fund of the 
     Treasury.
       (8) Insurance programs.--Any sequestration of 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 increasing premiums on contracts entered into 
     extended or otherwise modified, after the date a 
     sequestration order takes effect by the uniform sequestration 
     percentage. Notwithstanding any other provision of law, for 
     any year in which a sequestration affecting such programs is 
     in effect, subsequent premiums shall be increased by the 
     uniform percentage and all proceeds from the premium increase 
     shall be paid from the insurance fund or account to the 
     general fund of the Treasury.
       (9) State grant formulas.--For all State grant programs 
     subject to direct spending caps--
       (A) the total amount of funds available for all States 
     shall be reduced by the amount required to be sequestered; 
     and
       (B) if States are projected to receive increased funding in 
     the budget year compared to the immediately preceding fiscal 
     year, sequestration shall first be applied to the estimated 
     increases before reductions are made compared to actual 
     payments to States in the previous year--
       (i) the reductions shall be applied first to the total 
     estimated increases for all States; then
       (ii) the uniform reduction shall be made from each State's 
     grant; and
       (iii) the uniform reduction shall apply to the base funding 
     levels available to states in the immediately preceding 
     fiscal year only to the extent necessary to eliminate any 
     remaining excess over the applicable direct spending cap.
       (10) Special rule for certain programs.--Except matters 
     exempted under section 205 and programs subject to special 
     rules set forth under section 206 and notwithstanding any 
     other provisions of law, any sequestration required under 
     this Act shall reduce benefit levels by an amount sufficient 
     to eliminate all excess spending identified in the report 
     issued pursuant to section 201, while maintaining the same 
     uniform percentage reduction in the monetary value of 
     benefits subject to reduction under this subsection.
       (b) Within-Session Sequester.--If a bill or resolution 
     providing direct spending for the current year is enacted 
     before July 1 of that fiscal year and causes a breach within 
     any direct spending cap for that fiscal year, 15 days later 
     there shall be a sequestration to eliminate that breach 
     within that cap.

[[Page H5574]]

     SEC. 204. ENFORCING REVENUE TARGETS.

       (a) Purpose.--This section enforces the revenue targets 
     established pursuant to section 104. This section shall apply 
     for any year in which actual revenues in the preceding fiscal 
     year or projected revenues in the current year are less than 
     the applicable revenue target, as adjusted pursuant to 
     section 107.
       (b) Estimate of Necessity To Suspend New Revenue 
     Reductions.--Based on the statement provided under section 
     201(a), OMB shall issue a report to the President and the 
     Congress on December 15 of any year in which such statement 
     identifies actual or projected revenues in the current or 
     immediately preceding fiscal years lower than the applicable 
     revenue target in section 104, as adjusted pursuant to 
     section 107, by more than 0.1 percent of the applicable total 
     revenue target for such year. The report shall include--
       (1) all laws and policies described in subsection (c) which 
     would cause revenues to decline in the calendar year which 
     begins January 1 compared to the provisions of law in effect 
     on December 15;
       (2) the amounts by which revenues would be reduced by 
     implementation of the provisions of law described in 
     paragraph (1) compared to provisions of law in effect on 
     December 15; and
       (3) whether delaying implementation of the provisions of 
     law described in paragraph (1) would cause the total for 
     revenues in the current fiscal year and actual revenues in 
     the immediately preceding fiscal year to equal or exceed the 
     total of the targets for the applicable years.
       (c) No Credits, Deductions, Exclusions, Preferential Rate 
     of Tax, Etc.--(1) If any provision of the Internal Revenue 
     Code of 1986 added by the Revenue Reconciliation Act of 1997 
     establishing or increasing any credit, deduction, exclusion, 
     or eligibility limit or reducing any rate would (but for this 
     section) first take effect in a tax benefit suspension year, 
     and would reduce revenues over the 5-year period beginning 
     with the tax benefit suspension year, such provision shall 
     not take effect until the first calendar year which is not a 
     tax benefit suspension year.
       (2) Suspension of Indexation.--No new adjustment for 
     inflation shall be made to any credit, deduction, or 
     exclusion enacted as part of the Revenue Reconciliation Act 
     of 1997 in a tax benefit suspension year.
       (d) End of Session.--If the OMB report issued under 
     subsection (a) indicates that the total revenues projected in 
     the current year and actual revenues in the immediately 
     preceding year will equal or exceed the applicable targets, 
     the President shall sign an order ending the delayed phase-in 
     of new tax cuts effective January 1. Such order shall provide 
     that the new tax cuts and adjustments for inflation shall 
     take effect as if the provisions of this section had not 
     taken effect.
       (e) Suspension of New Benefits Being Phased In.--If, under 
     any provision of the Internal Revenue Code of 1986 added by 
     the Revenue Reconciliation Act of 1997, there is an increase 
     in any benefit which would (but for this section) take effect 
     with respect to a tax benefit suspension year, in lieu of 
     applying subsection (c)--
       (1) any increase in the benefit under such section with 
     respect to such year and each subsequent calendar year shall 
     be delayed 1 calendar year, and
       (2) the level of benefit under such section with respect to 
     the prior calendar year shall apply to such tax benefit 
     suspension year.
       (f) Percentage Suspension Where Full Suspension Unnecessary 
     To Achieve Revenue Target.--If the application of subsections 
     (c), (d), and (e) to any tax benefit suspension year would 
     result in total revenues in the current year to equal or 
     exceed the targets described in section 104 such that the 
     amount of each benefit which is denied is only the percentage 
     of such benefit which is necessary to result in revenues 
     equal to such target. Such percentage shall be determined by 
     OMB, and the same percentage shall apply to such benefits.
       (g) Tax Benefit Suspension Year.--For purposes of this 
     section, the term ``tax benefit suspension year'' means any 
     calendar year if the statement issued under subsection (b) 
     during the preceding calendar year indicates that--
       (1) for the fiscal year ending in such preceding calendar 
     year, actual revenues were lower than the applicable revenue 
     target in section 104, as adjusted pursuant to section 106, 
     for such fiscal year by more than 1 percent of such target, 
     or
       (2) for the fiscal year beginning in such preceding 
     calendar year, projected revenues (determined without regard 
     to this section) are estimated to be lower than the 
     applicable revenue target in section 104, as adjusted 
     pursuant to section 106, for such fiscal year by more than 
     0.1 percent of such target.

     SEC. 205. EXEMPT PROGRAMS AND ACTIVITIES.

       The following budget accounts, activities within accounts, 
     or income shall be exempt from sequestration--
       (1) net interest;
       (2) all payments to trust funds from excise taxes or other 
     receipts or collections properly creditable to those trust 
     funds;
       (3) offsetting receipts and collections;
       (4) all payments from one Federal direct spending budget 
     account to another Federal budget account;
       (5) all intragovernmental funds including those from which 
     funding is derived primarily from other Government accounts;
       (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--
       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);
       Payments of Vietnam and USS Pueblo prisoner-of-war claims 
     (15-0104-0-1-153):
       Payments to copyright owners (03-5175-0-2-376);
       Salaries of Article III judges (not including cost of 
     living adjustments);
       Soldier's and Airman'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--
       Exchange Stabilization Fund (20-4444-0-3-155); and
       Foreign Military Sales trust fund (11-82232-0-7-155).

     SEC. 206. SPECIAL RULES.

       (a) 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.
       (b) Commodity Credit Corporation.--
       (1) Effective date.--For the Commodity Credit Corporation, 
     the date on which a sequestration order takes effect in a 
     fiscal year shall vary for each crop of a commodity. In 
     general, the sequestration order shall take effect when 
     issued, but for each crop of a commodity for which 1-year 
     contracts are issued as an entitlement, the sequestration 
     order shall take effect with the start of the sign-up period 
     for that crop that begins after the sequestration order is 
     issued. Payments for each contract in such a crop shall be 
     reduced under the same terms and conditions.
       (2) Dairy program.--
       (A) 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 in the United States 
     and marketed by producers for commercial use.
       (B) That price reduction (measured in cents per hundred-
     weight of milk marketed) shall occur under subparagraph (A) 
     of section 201(d)(2) of the Agricultural Act of 1949 (7 
     U.S.C. 1446(d)(2)(A)), shall begin on the day any 
     sequestration order is issued, and 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 this subsection during that 
     fiscal year.
       (3) 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 international trade, or limit or reduce in any 
     way any appropriation that provides the Corporation with 
     funds to cover its realized losses.
       (c) Earned Income Tax Credit.--
       (1) The sequestrable base for earned income tax credit 
     program is the dollar value of all current year benefits to 
     the entire eligible population.
       (2) In the event sequestration is triggered to reduce 
     earned income tax credits, all earned income tax credits 
     shall be reduced, whether or not such credits otherwise would 
     result in cash payments to beneficiaries, by a uniform 
     percentage sufficient to produce the dollar savings required 
     by the sequestration.
       (d) Regular and Extended Unemployment Compensation.--
       (1) A State may reduce each weekly benefit payment made 
     under the regular and extended unemployment benefit programs 
     for

[[Page H5575]]

     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 is to be reduced for such 
     week as a result of such order.
       (2) A reduction by a State in accordance with paragraph (1) 
     shall not be considered as a failure to fulfill the 
     requirements of section 3304(a)(11) of the Internal Revenue 
     Code of 1986.
       (e) 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. The sequestrable base for the Fund is the current-
     year level of gross outlays resulting from claims paid after 
     the sequestration order takes effect.
       (f) Federal Housing Finance Board.-- Any sequestration of 
     the Federal Housing 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.
       (g) Federal Pay.--
       (1) In general.-- New budget authority to pay Federal 
     personnel from direct spending accounts shall be reduced by 
     the uniform percentage calculated under section 203(c)(3), 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 any increase in rates of pay which is scheduled to 
     take effect under section 5303 of title 5, United States 
     Code, section 1109 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;
      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 403(a) and 405 of such title; and
       (iii) cadet pay and midshipman pay under section 203(c) of 
     such title; and
       (C) the term ``uniformed services'' shall have the same 
     meaning given that term in section 101(3) of title 37, United 
     States Code.
       (h) Medicare.--
       (1) In general.--Any sequestration shall accomplish 90 
     percent of the required reduction by reductions in payments 
     for services under title XVIII of the Social Security Act and 
     10 percent of the required reduction through increases in 
     beneficiary premiums under part B of title XVIII of the 
     Social Security Act.
       (2) Timing of application of reductions.--
       (A) In general.-- Except as provided in subparagraph (B), 
     if a reduction is made in payment amounts pursuant to 
     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 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.
       (3) 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.
       (4) Part b premiums.--In computing the amount and method, 
     part B premiums shall be increased by a percentage to be 
     determined by dividing 10 percent of the amount that medicare 
     spending exceeds the applicable cap by the total amount of 
     all premium collections. All beneficiary premiums shall be 
     increased by the percentage calculated pursuant to the 
     preceding sentence, except that no increase in the premium 
     shall result in a reduction in social security benefit 
     payments to any beneficiary.
       (5) 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.
       (i) 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 and shall have the 
     duty to make those payments during the first 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 forgone 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 shall 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.
       (j) Power Marketing Administrations and T.V.A.-- 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 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 pre-sequester 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 tax rates, or by any 
     combination, but may not be financed by a lower fund surplus, 
     a higher fund deficit, additional borrowing, delay in 
     repayment of principal on outstanding debt and shall 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 in this 
     subsection in order to make the annual payments to the 
     Treasury.
       (k) Business-like Transactions.--Notwithstanding any other 
     provision of law, for programs which provide a business-like 
     service in exchange for a fee, sequestration shall be 
     accomplished through a uniform increase in fees (sufficient 
     to produce the dollar savings in such programs for the fiscal 
     year of the sequestration required by section 201(a)(2), all 
     subsequent fees shall be increased by the same percentage, 
     and all proceeds from such fees shall be paid into the 
     general fund of the Treasury, in any year for which a 
     sequester affecting such programs are in effect.

     SEC. 207. THE CURRENT LAW BASELINE.

       (a) Submission of Reports.--CBO and OMB shall submit to the 
     President and the Congress reports setting forth the budget 
     baselines for the budget year and the next nine fiscal years. 
     The CBO report shall be submitted on or before January 15. 
     The OMB report shall accompany the President's budget.
       (b) Determination of the Budget Baseline.--(1) The budget 
     baseline shall be based on the common economic assumptions 
     set forth in section 106, adjusted to reflect revisions 
     pursuant to subsection (c).
       (2) The budget baseline shall consist of a projection of 
     current year levels of budget authority, outlays, revenues 
     and the surplus or deficit into the budget year and the 
     relevant outyears based on current enacted laws as of the 
     date of the projection.
       (3) For discretionary spending items, the baseline shall be 
     the spending caps in effect pursuant to section 601(a)(2) of 
     the Congressional Budget Act of 1974. For years for which 
     there are no caps, the baseline for discretionary spending 
     shall be the same as the

[[Page H5576]]

     last year for which there were statutory caps.
       (4) For all other expenditures and for revenues, the 
     baseline shall be adjusted by comparing unemployment, 
     inflation, interest rates, growth and eligible population for 
     the most recent period for which actual data are available, 
     compared to the assumptions contained in section 107.
       (c) Revisions to the Baseline.--The baseline shall be 
     adjusted for up-to-date economic assumptions for all reports 
     issued pursuant to section 107 of this Act and section 254 of 
     the Balanced Budget and Emergency Deficit Control Act of 
     1985.

     SEC. 208. LIMITATIONS ON EMERGENCY SPENDING.

       (a) In General.--(1) Within the discretionary caps for each 
     fiscal year contained in this Act, an amount shall be 
     withheld from allocation to the appropriate committees of the 
     House of Representatives and of the Senate and reserved for 
     natural disasters and other emergency purposes.
       (2) Such amount for each such fiscal year shall not be less 
     than 1 percent of total budget authority and outlays 
     available within those caps for that fiscal year.
       (3) No adjustments shall be made to the discretionary 
     spending limits under section 251(b)(2)(D) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 unless the 
     amount appropriated for discretionary accounts that have been 
     designated as emergency requirements exceed the amount 
     reserved pursuant to paragraph (1). Any adjustment shall be 
     limited to the amount that total appropriations designated as 
     emergency requirements for the fiscal year exceeds the amount 
     reserved pursuant to paragraph (1).
       (4) The amounts reserved pursuant to this subsection shall 
     be made available for allocation to such committees only if--
       (A) the President has made a request for such disaster 
     funds;
       (B) the programs to be funded are included in such request; 
     and
       (C) the projected obligations for unforeseen emergency 
     needs exceed the 10-year rolling average annual expenditures 
     for existing programs included in the Presidential request 
     for the applicable fiscal year.
       (5) Notwithstanding any other provision of law--
       (A) States and localities shall be required to maintain 
     effort and ensure that Federal assistance payments do not 
     replace, subvert or otherwise have the effect of reducing 
     regularly budgeted State and local expenditures for law 
     enforcement, firefighting, road construction and maintenance, 
     building construction and maintenance or any other category 
     of regular government expenditure (to ensure that Federal 
     disaster payments are made only for incremental costs 
     directly attributable to unforeseen disasters, and do not 
     replace or reduce regular State and local expenditures for 
     the same purposes);
       (B) the President may not take administrative action to 
     waive any requirement for States or localities to make 
     minimum matching payments as a condition or receiving Federal 
     disaster assistance or take administrative action to waive 
     all or part of any repayment of Federal loans for the State 
     or local matching share required as a condition of receiving 
     Federal disaster assistance. This clause shall apply to all 
     matching share requirements and loans to meet matching share 
     requirements under the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5121 et seq.) and any 
     other Acts pursuant to which the President may declare a 
     disaster or disasters and States and localities otherwise 
     qualify for Federal disaster assistance; and
       (C) a two-thirds vote in each House of Congress shall be 
     required for each emergency to reduce or waive the State 
     matching requirement or to forgive all or part of loans for 
     the State matching share as required under the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act.
       (b) Effect Budget Resolutions.--(1) All concurrent 
     resolutions on the budget (including revisions) shall specify 
     the amount of new budget authority and outlays within the 
     discretionary spending cap that shall be withheld from 
     allocation to the committees and reserved for natural 
     disasters, and a procedure for releasing such funds for 
     allocation to the appropriate committee. The amount withheld 
     shall be equal to 1 percent of the total discretionary 
     spending cap for fiscal year covered by the resolution, 
     unless additional amounts are specified.
       (2) The procedure for allocation of the amounts pursuant to 
     paragraph (1) shall ensure that the funds are released for 
     allocation only pursuant to the conditions contained in 
     subsection (a)(3)(A) through (C).
       (c) Restriction on Use of Funds.--Notwithstanding any other 
     provision of law, the amount reserved pursuant to subsection 
     (a) shall not be available for other than emergency funding 
     requirements for particular natural disasters or national 
     security emergencies so designated by Acts of Congress.
       (d) New Point of Order.--(1) Title IV of the Congressional 
     Budget Act of 1974 is amended by adding at the end the 
     following new section:


                 ``point of order regarding emergencies

       ``Sec. 408. It shall not be in order in the House of 
     Representatives or the Senate to consider any bill or joint 
     resolution, or amendment thereto or conference report 
     thereon, containing an emergency designation for purposes of 
     section 251(b)(2)(D) or 252(e) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 or of section 208 of 
     the Budget Enforcement Act of 1997 if it also provides an 
     appropriation or direct spending for any other item or 
     contains any other matter, but that bill or joint resolution, 
     amendment, or conference report may contain rescissions of 
     budget authority or reductions of direct spending, or that 
     amendment may reduce amounts for that emergency.''.
       (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 407 
     the following new item:

``Sec. 408. Point of order regarding emergencies.''.

TITLE III--USE OF BUDGET SURPLUS TO PRESERVE SOCIAL SECURITY TRUST FUND

     SEC. 301. ENDING USE OF RECEIPTS OF SOCIAL SECURITY TRUST 
                   FUND FOR OTHER PROGRAMS AND ACTIVITIES

       (a) If, in any year, revenues are higher than the targets 
     in section 104, as adjusted pursuant to section 107, or 
     spending is lower than the caps in section 105, as adjusted, 
     and the deficits are lower than the targets in section 105, 
     as adjusted pursuant to section 107, those amounts shall be 
     applied pursuant to subsection (b).
       (b) All funds described in subsection (a) up to $100 
     billion shall be used to reduce the consolidated budget 
     deficit and, to the extent that funds are available to 
     eliminate the consolidated budget deficit, to retire the 
     outstanding debt of the United States Government held by the 
     public.
       (c) Any use of funds described in subsection (a) for any 
     purpose other than provided in subsection (b) shall be 
     subject to the requirements of section 252 of the Balanced 
     Budget and Emergency Deficit Control Act of 1985, and any 
     reduction in the amounts described in subsection (a) shall be 
     considered as an increase in the deficit.
       (d) When the President submits the budget under section 
     1105(a) of title 31, United States Code, for any year, OMB 
     shall adjust the Social Security Trust Fund surpluses for 
     each year under this section, based on the most recent 
     estimates of such surpluses to be provided to OMB by the 
     Secretary of the Treasury.

                               H.R. 2003

                         Offered By: Mr. Evans

       Amendment No. 2: Page 17, strike line 2.
       Page 36, after line 15, insert the following (and 
     redesignate the succeeding paragraph accordingly):
       (10) payments and expenses under programs, benefits, and 
     activities of the Department of Veterans Affairs and, insofar 
     as they relate to veterans, of the Department of Labor;

                               H.R. 2159

                   Offered By: Mr. Burton of Indiana

       Amendment No. 3: At the end of the bill, insert after the 
     last section (preceding the short title) the following new 
     section:


                   limitation on assistance in india

       Sec. 572. Not more than $51,180,000 of the funds 
     appropriated or otherwise made available in this Act under 
     the heading ``Development Assistance'' may be made available 
     for assistance in India.

                               H.R. 2159

                   Offered By: Mr. Burton of Indiana

       Amendment No. 38: At the end of the bill, insert after the 
     last section (preceding the short title) the following new 
     section:


                   limitation on assistance in india

       Sec. 572. Not more than $41,775,000 of the funds 
     appropriated or otherwise made available in this Act under 
     the heading ``Development Assistance'' may be made available 
     for assistance in India.

                               H.R. 2159

                   Offered By: Mr. Burton of Indiana

       Amendment No. 39: At the end of the bill, insert after the 
     last section (preceding the short title) the following new 
     section:


                   limitation on assistance for india

       Sec. 572. None of the funds appropriated or otherwise made 
     available in this Act under the heading ``Development 
     Assistance'' may be made available for assistance to the 
     Government of India.

                               H.R. 2159

                   Offered By: Mr. Burton of Indiana

       Amendment No. 40: At the end of the bill, insert after the 
     last section (preceding the short title) the following new 
     section:


                   limitation on assistance for india

       Sec. 572. None of the funds appropriated or otherwise made 
     available in this Act under the heading ``Development 
     Assistance'' may be made available for assistance in India 
     unless such funds are provided to nongovernmental 
     organizations.

                               H.R. 2159

                  Offered By: Mr. Fox of Pennsylvania

       Amendment No. 41: Page 94, after line 3, insert the 
     following:
       Sec. 572. None of the funds made available under the 
     heading ``development assistance'' may be used to directly 
     support or promote trophy hunting or the international 
     commercial trade in elephant ivory, elephant hides, or 
     rhinoceros horns.

                               H.R. 2159

                         Offered By: Ms. Harman

       Amendment No. 42: At the end of the bill, insert after the 
     last section (preceding the short title) the following new 
     section:


  sense of the congress regarding proliferation of missile technology 
                          from russia to iran

       Sec. 572. (a) Findings.--The Congress find the following:

[[Page H5577]]

       (1) There is substantial evidence that missile technology 
     and technical advice have been provided from Russia to Iran, 
     in violation of the Missile Technology Control Regime.
       (2) These violations include providing assistance to Iran 
     in developing ballistic missiles, including the transfer of 
     wind tunnel and rocket engine testing equipment.
       (3) These technologies give Iran the capability to deploy a 
     missile of sufficient range to threaten United States 
     military installation in the Middle East and Persian Gulf, as 
     well as the territory of Israel, and our North Atlantic 
     Treaty Organization ally Turkey.
       (4) President Clinton has raised with Russian President 
     Boris Yeltsin United States concerns about these activities 
     and the Russian response has to date been inadequate.
       (b) Sense of the Congress.--It is the sense of the Congress 
     that--
       (1) the President should demand that the Government of 
     Russia take concrete actions to stop governmental and 
     nongovernmental entities in the Russian Federation from 
     providing missile technology and technical advice to Iran, in 
     violation of the Missile Technology Control Regime;
       (2) if the Russian response is inadequate, the United 
     States should impose sanctions on the responsible Russian 
     entities in accordance with Executive Order 12938 on the 
     Proliferation of Weapons of Mass Destruction, and reassess 
     cooperative activities with Russia;
       (3) the threshold under current law allowing for the waiver 
     of the prohibition on the release of foreign assistance to 
     Russia should be raised; and
       (4) our European allies should be encouraged to take steps 
     in accordance with their own laws to stop such proliferation.

                               H.R. 2159

                         Offered By: Mr. Lazio

       Amendment No. 43: At the end of the bill, insert after the 
     last section (preceding the short title) the following new 
     section:


                   limitation on assistance for egypt

       Sec. 572. Of the funds appropriated or otherwise made 
     available in this Act under the heading ``economic support 
     fund'' not more than $615,000,000 may be made available for 
     Egypt.

                               H.R. 2159

                        Offered By: Mr. Menendez

       Amendment No. 44: At the end of the bill, insert after the 
     last section (preceding the short title) the following new 
     section:
       Sec. 572. None of the funds appropriated or otherwise made 
     available by this Act under the heading ``international 
     organizations and programs'' that are made available for the 
     International Atomic Energy Agency shall be made available 
     for programs or projects of such Agency in Cuba.

                               H.R. 2159

                          Offered By: Mr. Mica

       Amendment No. 45: Page 6, line 3, after ``$650,000,000'' 
     insert ``(increased by $19,400,000)''.
       Page 12, line 9, after ``$468,750,000'' insert ``(decreased 
     by $19,400,000)''.

                               H.R. 2159

                         Offered By: Mr. Saxton

       Amendment No. 46: At the end of the bill, insert after the 
     last section (preceding the short title) the following new 
     section:


limitation on assistance to the p.l.o., the palestinian authority, and 
                     related or successor entities

       Sec. 572. None of the funds appropriated or otherwise made 
     available by this Act may be provided directly to the 
     Palestine Liberation Organization (P.L.O.), the Palestinian 
     Authority, or related or successor entities.

                               H.R. 2159

                         Offered By: Mr. Saxton

       Amendment No. 47: At the end of the bill, insert after the 
     last section (preceding the short title) the following new 
     section:


  limitation on assistance to the p.l.o. or the palestinian authority

       Sec. 572. None of the funds appropriated or otherwise made 
     available by this Act may be provided directly to the 
     Palestine Liberation Organization (P.L.O.), or the 
     Palestinian Authority.

                               H.R. 2159,

                         Offered By: Mr. Taylor

       Amendment No. 48: Page 22, after line 10, add the 
     following:
       (o) Funds appropriated under this heading may be made 
     available to establish and carry out a pilot program to 
     provide affordable housing in the Russian Federation. 
     Provided, that none of the funds appropriated may be used for 
     the purposes of providing Russian military housing.

                               H.R. 2159,

                         Offered By: Mr. Yates

       Amendment No. 49: At the end of the bill, insert the 
     following after the last section (preceding the short title):


         limitation on assistance to the government of croatia

       Sec. 572. (a) Limitation.--None of the funds appropriated 
     or otherwise made available by Title II of this Act may be 
     made available to the Government of Croatia if that 
     government relocates the remains of Croatian Ustashe 
     soldiers, who participated during the Holocaust in the mass 
     murder of Jews, Serbs, and Gypsies, at the site of the World 
     War II concentration camp at Jasenovac, Croatia.
       (b) National Interest Exception.--Assisatnce restricted by 
     subsection (a) may be furnished if the President determines 
     that furnishing such assistance is important to the national 
     interests of the United States.
       (c) Report to Congress.--Whenever the President makes a 
     determination under subsection (b), the President shall 
     submit to the appropriate congressional committees a report 
     with respect to the furnishing of assistance pursuant to the 
     determination. Any such report shall include a detailed 
     explanation of the assistance and how it furthers United 
     States national interests.

                               H.R. 2159,

                         Offered By: Mr. Yates

       Amendment No. 50: At the end of the bill, insert the 
     following after the last section (preceding the short title):


         limitation on assistance to the government of croatia

       Sec. 572. (a) Limitation.--None of the funds appropriated 
     or otherwise made available by Title II of this Act may be 
     made available to the Government of Croatia if that 
     government relocates the remains of Croatian Ustashe 
     soldiers, who participated during the Holocaust in the mass 
     murder of Jews, Serbs, and Gypsies, at the site of the World 
     War II concentration camp at Jasenovac, Croatia.
       (b) Termination of Prohibition.--The prohibition under 
     subsection (a) with respect to the Government of Croatia 
     shall terminate after the Government of Croatia provides the 
     Secretary of State with compelling proof that the historical 
     symbolism of Jasenovac, and the remains of those who were 
     murdered by the Nazis and their collaborators, will remain 
     undisturbed and that no other remains will ever be added to 
     the remains of the victims of Nazi tyranny buried at 
     Jasenovac, Croatia.
       (d) Definitions.--For purposes of this section, the term 
     ``appropriate congressional committees'' means the Committees 
     on Appropriations of the House of Representatives and Senate.

                               H.R. 2159

                         Offered By: Mr. Yates

       Amendment No. 51: At the end of the bill, insert the 
     following after the last section (preceding the short title):


         limitation of assistance to the government of croatia

       Sec. 572. None of the funds appropriated or otherwise made 
     available by title II of this Act may be made available to 
     the Government of Croatia if that government relocates the 
     remains of Croatian Ustashe soldiers, who participated during 
     the Holocaust in the mass murder of Jews, Serbs, and Gypsies, 
     at the site of the World War II concentration camp at 
     Jasenovac, Croatia.

                               H.R. 2159

                         Offered By: Mr. Yates

       Amendment No. 52: At the end of the bill, insert after the 
     last section (preceding the short title) the following new 
     section:
       Sec. 572. Of the funds appropriated or otherwise made 
     available by this Act under the heading ``development 
     assistance'', not more than $2,900,000 may be made available 
     to the Administrator of the United States Agency for 
     International Development for the Communal Areas Management 
     Programme for Indigenous Resources (CAMPFIRE) in Zimbabwe: 
     Provided, That none of the funds appropriated or otherwise 
     made available by this Act to such Agency under the heading 
     ``development assistance'' may be used to directly finance 
     the trophy hunting of elephants or other endangered species 
     as defined in the Convention on International Trade in 
     Endangered Species of Flora and Fauna (CITES) or the 
     Endangered Species Act: Provided further, That funds 
     appropriated or otherwise made available by this Act to such 
     Agency under the heading ``development assistance'' that are 
     provided under the CAMPFIRE program may not be used for 
     activities with the express intent to lobby or otherwise 
     influence international conventions or treaties, or United 
     States government decisionmakers: Provided further, That 
     funds appropriated or otherwise made available by this Act to 
     such Agency under the heading ``development assistance'' that 
     are made available for the CAMPFIRE program may be used only 
     in Zimbabwe for the purpose of maximizing benefits to rural 
     people while strengthening natural resources management 
     institutions: Provided further, That not later than March 1, 
     1998, the Administrator of the United States Agency for 
     International Development shall submit to the appropriate 
     congressional committees a report describing the steps taken 
     to implement the CAMPFIRE program, the impact of the program 
     on the people and wildlife of CAMPFIRE districts, 
     alternatives to trophy hunting as a means of generating 
     income for CAMPFIRE districts, and a description of how funds 
     made available for CAMPFIRE in fiscal year 1998 are to be 
     used.

                               H.R. 2160

                   Offered By: Mr. Miller of Florida

       Amendment No. 21: Insert before the short title the 
     following new section:
       Sec.   . None of the funds appropriated or otherwise made 
     available by this Act to the Department of Agriculture shall 
     be used to pay the salaries and expenses of personnel who 
     issue, under section 156 of the Agricultural Market 
     Transition Act (7 U.S.C. 7272), any nonrecourse loans to 
     sugar beet or sugar cane processors.

[[Page H5578]]

                               H.R. 2160

                         Offered By: Mr. Chabot

       Amendment No. 22: Insert before the short title the 
     following new section:
       Sec.   . None of the funds appropriated or otherwise made 
     available by this Act may be used to carry out section 203 of 
     the Agricultural Trade Act of 1978 (7 U.S.C. 5623) or to pay 
     the salaries and expenses of personnel who carry out a market 
     program under such section.

                               H.R. 2160

                         Offered By: Mr. Pombo

       Amendment No. 23: At the end of the bill, insert after the 
     last section (preceding the short title) the following new 
     section:
       Sec. 728. None of the funds made available in title III of 
     this Act may be used to provide any assistance (other than 
     the servicing of loans made on or before September 30, 1997) 
     under any program under title V of the Housing Act of 1949 
     relating to any housing or project located, or to be located, 
     in the City of Galt, California.

                               H.R. 2160

                          Offered By: Mr. Obey

       Amendment No. 24: Page 54, after line 13, insert the 
     following:
       In addition, for the Food for Progress Act of 1985 (7 
     U.S.C. 1736o), in addition to the amounts and commodities 
     made available in fiscal year 1997 under subsections (f)(3), 
     (g), and (l)(1) of that Act, $50,000,000 shall be available 
     to furnish dairy products on a grant basis, to be derived by 
     transfer from fiscal year 1997 unexpended balances for the 
     Dairy Export Incentive Program. Products furnished under this 
     provision shall not be subject to the existing commodity 
     ceiling and funds made available under this provision shall 
     not be subject to the caps under subsections (f)(3) and 
     (l)(1).

                               H.R. 2160

                          Offered By: Mr. Obey

       Amendment No. 25: On page 67, line 6, after the dollar 
     amount insert: ``(reduced by $155,000,000)''.

                               H.R. 2160

                          Offered By: Mr. Obey

       Amendment No. 26: On page 67, line 6, after the dollar 
     amount insert: ``(reduced by $105,000,000)''.

                               H.R. 2160

                          Offered By: Mr. Obey

       Amendment No. 27: On page 67, line 6, after the dollar 
     amount insert: ``(reduced by $80,000,000)''.

                               H.R. 2160

                          Offered By: Mr. Obey

       Amendment No. 28: On page 67, line 6, after the dollar 
     amount insert: ``(reduced by $55,000,000)''.

                               H.R. 2160

                          Offered By: Mr. Obey

       Amendment No. 29: On page 67, line 6, after the dollar 
     amount insert: ``(reduced by $30,000,000)''.

                               H.R. 2160

                          Offered By: Mr. Obey

       Amendment No. 30: On page 67, line 6, after the dollar 
     amount insert: ``(reduced by $5,000,000)''.

                               H.R. 2160

                          Offered By Mr. Obey

       Amendment No. 31: On page 67, strike lines 7 through 13.

                               H.R. 2160

                          Offered By Mr. Obey

       Amendment No. 32: On page 67, strike lines 14 through 19.

                               H.R. 2160

                          Offered By Mr. Obey

       Amendment No. 33: On page 67, strike lines 20 through 24.

                               H.R. 2160

                          Offered By Mr. Obey

       Amendment No. 34: On page 68, strike lines 8 through 11.

                               H.R. 2160

                          Offered By Mr. Wynn

       Amendment No. 35: On page 68, after line 16, add the 
     following new section:
       ``Sec.    For an additional amount for the purposes 
     provided for under the heading `Departmental Administration' 
     in Title I of this Act, $1,500,000, and the amount provided 
     under `National Agricultural Statistics Service' is hereby 
     reduced by $1,500,000.' ''

                               H.R. 2203

                         Offered By Mr. Solomon

       Amendment No. 1: At the end of the bill, insert after the 
     last section (preceding the short title) the following new 
     section:
       Sec. 502. None of the funds made available in this Act may 
     be provided by contract or by grant (including a grant of 
     funds to be available for student aid) to any institution of 
     higher education, or subelement thereof, that is currently 
     ineligible for contracts and grants pursuant to section 514 
     of the Departments of Labor, Health and Human Services, and 
     Education, and Related Agencies Appropriations Act, 1997 (as 
     contained in section 101(e) of division A of Public Law 104-
     208; 110 Stat. 3009-270).