[Congressional Record (Bound Edition), Volume 150 (2004), Part 8]
[House]
[Pages 10037-10079]
[From the U.S. Government Publishing Office, www.gpo.gov]




  CONFERENCE REPORT ON S. CON. RES. 95, CONCURRENT RESOLUTION ON THE 
                      BUDGET FOR FISCAL YEAR 2005

  Mr. NUSSLE submitted the following conference report and statement on 
the Senate concurrent resolution (S. Con.

[[Page 10038]]

Res. 95) setting forth the congressional budget for the United States 
Government for fiscal year 2005 and including the appropriate budgetary 
levels for fiscal years 2006 through 2009:

                  Conference Report (H. Rept. 108-498)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the House to the concurrent 
     resolution (S. Con. Res. 95), setting forth the congressional 
     budget for the United States Government for fiscal year 2005 
     and including the appropriate budgetary levels for fiscal 
     years 2006 through 2009, having met, after full and free 
     conference, have agreed to recommend and do recommend to 
     their respective Houses as follows:
       That the Senate recede from its disagreement to the 
     amendment of the House and agree to the same with an 
     amendment as follows:
       In lieu of the matter proposed to be inserted by the House 
     amendment, insert the following:

     SECTION 1. CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL 
                   YEAR 2005.

       (a) Declaration.--Congress declares that this resolution is 
     the concurrent resolution on the budget for fiscal year 2005 
     as authorized by section 301 of the Congressional Budget Act 
     of 1974 (2 U.S.C. 632).
       (b) Table of Contents.--The table of contents for this 
     concurrent resolution is as follows:

Sec. 1. Concurrent resolution on the budget for fiscal year 2005.

                      TITLE I--LEVELS AND AMOUNTS

Sec. 101. Recommended levels and amounts for the budget year.
Sec. 102. Social security.
Sec. 103. Major functional categories.

                        TITLE II--RECONCILIATION

                           Subtitle A--Senate

Sec. 201. Reconciliation in the Senate.

                  Subtitle B--House of Representatives

Sec. 211. Reconciliation in the House of Representatives.

                TITLE III--RESERVE FUNDS AND ADJUSTMENTS

                       Subtitle A--Reserve Funds

Sec. 301. Deficit neutral reserve fund for health insurance for the 
              uninsured.
Sec. 302. Deficit neutral reserve fund for higher education.
Sec. 303. Deficit neutral reserve fund for Montgomery GI Bill benefits.
Sec. 304. Deficit neutral reserve fund for Postal Service reform.
Sec. 305. Deficit neutral reserve fund for the Family Opportunity Act.
Sec. 306. Deficit neutral reserve fund for eliminating survivor benefit 
              plan-social security offset.
Sec. 307. Reserve fund for pending legislation.

     Subtitle B--Adjustments With Respect to Discretionary Spending

Sec. 311. Adjustment for surface transportation.
Sec. 312. Adjustment for wildland fire suppression.
Sec. 313. Mechanism for adjusting appropriate discretionary levels.

                      TITLE IV--BUDGET ENFORCEMENT

                        Subtitle A--Enforcement

Sec. 401. Restrictions on advance appropriations.
Sec. 402. Emergency legislation.
Sec. 403. Exemption of overseas contingency operations.
Sec. 404. Discretionary spending limits in the Senate.
Sec. 405. Adjustments to reflect changes in concepts and definitions.
Sec. 406. Application and effect of changes in allocations and 
              aggregates.
Sec. 407. Pay-as-you-go point of order in the Senate.
Sec. 408. Compliance with section 13301 of the Budget Enforcement Act 
              of 1990.

                     Subtitle B--Report Submissions

Sec. 411. Submission of report on defense savings.
Sec. 412. Submission of report on homeland security.

               Subtitle C--Exercise of Rulemaking Powers

Sec. 421. Exercise of rulemaking powers.

           TITLE V--REQUIRED LEVELS AND AMOUNTS FOR OUTYEARS.

Sec. 501. Recommended levels and amounts.
Sec. 502. Social security.
Sec. 503. Major functional categories.

          TITLE VI--SENSE OF THE SENATE AND SENSE OF THE HOUSE

                    Subtitle A--Sense of the Senate

Sec. 601. Sense of the Senate on budget process reform.
Sec. 602. Sense of the Senate on budget process reform with regard to 
              the creation of bipartisan commissions to combat waste, 
              fraud, and abuse and to promote spending efficiency.
Sec. 603. Sense of the Senate on the relationship between annual 
              deficit spending and increases in debt service costs.
Sec. 604. Sense of the senate regarding the costs of the medicare 
              prescription drug program.
Sec. 605. Sense of the Senate on returning stability to payments under 
              medicare physician fee schedule.
Sec. 606. Sense of the Senate supporting funding restoration for 
              agriculture research and extension.
Sec. 607. Sense of the Senate concerning a national animal 
              identification program.
Sec. 608. Sense of the Senate regarding contributions to the global 
              fund to fight aids, tuberculosis, and malaria.
Sec. 609. Sense of the Senate concerning child nutrition funding.
Sec. 610. Sense of the Senate regarding compensation for exposure to 
              toxic substances at the Department of Energy.
Sec. 611. Sense of the Senate regarding tax incentives for certain 
              rural communities.
Sec. 612. Sense of the Senate concerning summer food pilot projects.
Sec. 613. Sense of the Senate regarding closing the ``tax gap''.

                     Subtitle B--Sense of the House

Sec. 621. Sense of the House on entitlement reform.

                     Subtitle C--Sense of Congress

Sec. 631. Sense of Congress on spending accountability.
                      TITLE I--LEVELS AND AMOUNTS

     SEC. 101. RECOMMENDED LEVELS AND AMOUNTS FOR THE BUDGET YEAR.

       The following budgetary levels are appropriate for fiscal 
     year 2005:
       (1) Federal revenues.--For purposes of the enforcement of 
     this resolution--
       (A) The recommended level of Federal revenue for fiscal 
     year 2005 is $1,454,637,000,000.
       (B) The amount by which the aggregate level of Federal 
     revenues should be changed for fiscal year 2005 is 
     -$28,194,000,000.
       (2) New budget authority.--For purposes of the enforcement 
     of this resolution, the appropriate level of total new budget 
     authority for fiscal year 2005 is $2,005,068,000,000.
       (3) Budget outlays.--For purposes of the enforcement of 
     this resolution, the appropriate level of total budget 
     outlays for fiscal year 2005 is $1,996,028,000,000.
       (4) Deficit.--For purposes of the enforcement of this 
     resolution, the amount of the deficit for fiscal year 2005 is 
     $541,391,000,000.
       (5) Debt subject to limit.--Pursuant to section 301(a)(5) 
     of the Congressional Budget Act of 1974, the appropriate 
     level of the public debt for fiscal year 2005 is 
     $8,073,946,000,000.
       (6) Debt held by the public.--The appropriate level of the 
     debt held by the public for fiscal year 2005 is 
     $4,762,355,000,000.

     SEC. 102. SOCIAL SECURITY.

       (a) Social Security Revenues.--For purposes of Senate 
     enforcement under sections 302 and 311 of the Congressional 
     Budget Act of 1974, the amount of revenues of the Federal 
     Old-Age and Survivors Insurance Trust Fund and the Federal 
     Disability Insurance Trust Fund for fiscal year 2005 is 
     $572,309,000,000.
       (b) Social Security Outlays.--For purposes of Senate 
     enforcement under sections 302 and 311 of the Congressional 
     Budget Act of 1974, the amount of outlays of the Federal Old-
     Age and Survivors Insurance Trust Fund and the Federal 
     Disability Insurance Trust Fund for fiscal year 2005 is 
     $396,157,000,000.
       (c) Social Security Administrative Expenses.--In the 
     Senate, the amounts of new budget authority and budget 
     outlays of the Federal Old-Age and Survivors Insurance Trust 
     Fund and the Federal Disability Insurance Trust Fund for 
     administrative expenses for fiscal year 2005 are 
     $4,249,000,000 in new budget authority and $4,264,000,000 in 
     outlays.

     SEC. 103. MAJOR FUNCTIONAL CATEGORIES.

       Congress determines and declares that the appropriate 
     levels of new budget authority and budget outlays for fiscal 
     year 2005 for each major functional category are:
       (1) National Defense (050): $472,157,000,000 in new budget 
     authority and $474,298,000,000 in outlays.
       (2) International Affairs (150): $28,920,000,000 in new 
     budget authority and $32,795,000,000 in outlays.
       (3) General Science, Space, and Technology (250): 
     $23,928,000,000 in new budget authority and $23,278,000,000 
     in outlays.
       (4) Energy (270): $3,027,000,000 in new budget authority 
     and $1,380,000,000 in outlays.
       (5) Natural Resources and Environment (300): 
     $32,128,000,000 in new budget authority and $31,418,000,000 
     in outlays.
       (6) Agriculture (350): $21,797,000,000 in new budget 
     authority and $21,035,000,000 in outlays.
       (7) Commerce and Housing Credit (370): $9,284,000,000 in 
     new budget authority and $3,258,000,000 in outlays.
       (8) Transportation (400): $71,789,000,000 in new budget 
     authority and $68,560,000,000 in outlays.
       (9) Community and Regional Development (450): 
     $13,612,000,000 in new budget authority and $17,386,000,000 
     in outlays.
       (10) Education, Training, Employment, and Social Services 
     (500): $92,818,000,000 in new budget authority and 
     $90,716,000,000 in outlays.
       (11) Health (550): $252,426,000,000 in new budget authority 
     and $250,025,000,000 in outlays.
       (12) Medicare (570): $287,878,000,000 in new budget 
     authority and $288,987,000,000 in outlays.
       (13) Income Security (600): $339,157,000,000 in new budget 
     authority and $345,660,000,000 in outlays.
       (14) Social Security (650): $15,214,000,000 in new budget 
     authority and $15,214,000,000 in outlays.

[[Page 10039]]

       (15) Veterans Benefits and Services (700): $70,832,000,000 
     in new budget authority and $68,855,000,000 in outlays.
       (16) Administration of Justice (750): $41,945,000,000 in 
     new budget authority and $41,773,000,000 in outlays.
       (17) General Government (800): $17,383,000,000 in new 
     budget authority and $17,975,000,000 in outlays.
       (18) Net Interest (900): $270,436,000,000 in new budget 
     authority and $270,436,000,000 in outlays.
       (19) Allowances (920): -$7,158,000,000 in new budget 
     authority and -$14,516,000,000 in outlays.
       (20) Undistributed Offsetting Receipts (950): 
     -$52,505,000,000 in new budget authority and -$52,505,000,000 
     in outlays.
                        TITLE II--RECONCILIATION
                           Subtitle A--Senate

     SEC. 201. RECONCILIATION IN THE SENATE.

       (a) Tax Relief.--The Committee on Finance of the Senate 
     shall report a reconciliation bill not later than September 
     30, 2004, that consists of changes in laws within its 
     jurisdiction sufficient to reduce revenues by not more than 
     $22,900,000,000 and to increase outlays by not more than 
     $4,600,000,000 for the period of fiscal years 2005 through 
     2009.
       (b) Increase in Statutory Debt Limit.--The Committee on 
     Finance of the Senate shall report a reconciliation bill not 
     later than September 10, 2004, that consists solely of 
     changes in laws within its jurisdiction to increase the 
     statutory debt limit by $689,946,000,000.
                  Subtitle B--House of Representatives

     SEC. 211. RECONCILIATION IN THE HOUSE OF REPRESENTATIVES.

       (a) Tax Relief.--The Committee on Ways and Means of the 
     House shall report a reconciliation bill not later than 
     September 30, 2004, that consists of changes in laws within 
     its jurisdiction sufficient to reduce revenues by not more 
     than $22,900,000,000 and to increase outlays by not more than 
     $4,600,000,000 for the period of fiscal years 2005 through 
     2009.
       (b) Conforming Adjustment.--Upon the reporting of a 
     recommendation pursuant to section 211(a), or an amendment 
     thereto, that shall be deemed to have complied with the 
     directions under section 211 of this resolution by virtue of 
     section 310(c) of the Congressional Budget Act of 1974, the 
     chairman of the Committee on the Budget of the House may file 
     with the House appropriately revised allocations, functional 
     levels, and aggregates to carry out this subsection.
                TITLE III--RESERVE FUNDS AND ADJUSTMENTS
                       Subtitle A--Reserve Funds

     SEC. 301. DEFICIT NEUTRAL RESERVE FUND FOR HEALTH INSURANCE 
                   FOR THE UNINSURED.

       (a) Senate.--If the Committee on Finance or the Committee 
     on Health, Education, Labor, and Pensions of the Senate 
     reports a bill or joint resolution, or an amendment thereto 
     is offered or a conference report thereon is submitted, that 
     provides health insurance or expands access to care for the 
     uninsured (including a measure providing for tax deductions 
     for the purchase of health insurance or other measures and 
     including legislation to reallocate and maintain expiring 
     SCHIP funds rather than allowing such funds to revert to the 
     Treasury), increases access to health insurance through 
     lowering costs, and does not increase the costs of current 
     health insurance coverage, the chairman of the Committee on 
     the Budget of the Senate may revise allocations of new budget 
     authority and outlays, the revenue aggregates, and other 
     appropriate aggregates to reflect such legislation, to the 
     extent that such legislation would not increase the deficit 
     for fiscal year 2005 and for the period of fiscal years 2005 
     through 2009.
       (b) House.--In the House, if legislation is reported, or if 
     an amendment thereto is offered or a conference report 
     thereon is submitted, that provides health insurance for the 
     uninsured, the chairman of the Committee on the Budget may 
     revise the allocations for that committee and appropriate 
     aggregates to take into account the budgetary effects of such 
     measure for that purpose, to the extent the measure would not 
     increase the deficit for fiscal year 2005 and for the period 
     of fiscal years 2005 through 2009.

     SEC. 302. DEFICIT NEUTRAL RESERVE FUND FOR HIGHER EDUCATION.

       (a) In General.--If the Committee on Health, Education, 
     Labor, and Pensions of the Senate or the Committee on 
     Education and Workforce in the House reports a bill or joint 
     resolution, or if an amendment thereto is offered or a 
     conference report thereon is submitted, that reauthorizes the 
     Higher Education Act of 1965, the appropriate chairman of the 
     Committee on the Budget may revise the allocations for that 
     committee and appropriate aggregates to take into account the 
     budgetary effects of such measure for that purpose, to the 
     extent the measure would not increase the deficit for fiscal 
     year 2005 and for the period of fiscal years 2005 through 
     2009.
       (b) Sense of Senate.--It is the sense of the Senate that 
     this resolution contemplates that--
       (1) the provisions necessary to achieve the deficit 
     neutrality in subsection (a) may be offered as amendments on 
     the Senate floor;
       (2) the Committee on Health, Education, Labor, and Pensions 
     will not be limited to spending reductions within its 
     committee's jurisdiction to satisfy the requirements in 
     subsection (a) in such an amendment; and
       (3) the committee may report a bill with up to 
     $5,000,000,000 in new spending for higher education programs 
     provided that provisions necessary to achieve deficit 
     neutrality may be offered as amendments on the Senate floor.

     SEC. 303. DEFICIT NEUTRAL RESERVE FUND FOR MONTGOMERY GI BILL 
                   BENEFITS.

       If the Committee on Armed Services of the Senate or the 
     appropriate committee of the House reports a bill or joint 
     resolution, or an amendment thereto is offered or a 
     conference report thereon is submitted, that increases 
     benefit levels under the Montgomery GI Bill for members of 
     the Selected Reserves, the appropriate chairman of the 
     Committee on the Budget may revise the allocations for that 
     committee and appropriate aggregates to take into account the 
     budgetary effects of such measure for that purpose, to the 
     extent the measure would not increase the deficit for fiscal 
     year 2005 and for the period of fiscal years 2005 through 
     2009.

     SEC. 304. DEFICIT NEUTRAL RESERVE FUND FOR POSTAL SERVICE 
                   REFORM.

       If the Committee on Governmental Affairs of the Senate or 
     the Committee on Government Reform of the House reports a 
     bill or joint resolution, or an amendment thereto is offered 
     or a conference report thereon is submitted, that reforms the 
     United States Postal Service to improve its long-term 
     economic viability and provides for increased financial 
     transparency, the appropriate chairman of the Committee on 
     the Budget may revise the allocations for that committee and 
     appropriate aggregates to take into account the budgetary 
     effects of such measure for that purpose, to the extent the 
     measure would not increase the deficit for fiscal year 2005 
     and for the period of fiscal years 2005 through 2009.

     SEC. 305. DEFICIT NEUTRAL RESERVE FUND FOR THE FAMILY 
                   OPPORTUNITY ACT.

       If the Committee on Energy and Commerce of the House or the 
     Committee on Finance of the Senate reports legislation, or if 
     an amendment thereto is offered or a conference report 
     thereon is submitted, that provides medicaid coverage for 
     children with special needs (the Family Opportunity Act), the 
     appropriate chairman of the Committee on the Budget may 
     revise the allocations for that committee and appropriate 
     aggregates to take into account the budgetary effects of such 
     measure for that purpose, to the extent the measure would not 
     increase the deficit for fiscal year 2005 and for the period 
     of fiscal years 2005 through 2009.

     SEC. 306. DEFICIT NEUTRAL RESERVE FUND FOR ELIMINATING 
                   SURVIVOR BENEFIT PLAN-SOCIAL SECURITY OFFSET.

       If the Committee on Armed Services of the House or Senate 
     reports a bill or joint resolution, or an amendment thereto 
     is offered or a conference report thereon is submitted, that 
     increases the minimum Survivor Benefit Plan basic annuity for 
     surviving spouses age 62 and older, the appropriate chairman 
     of the Committee on the Budget may revise the allocations for 
     that committee and appropriate aggregates to take into 
     account the budgetary effects of such measure for that 
     purpose, to the extent the measure would not increase the 
     deficit for fiscal year 2005 and for the period of fiscal 
     years 2005 through 2009.

     SEC. 307. RESERVE FUND FOR PENDING LEGISLATION.

       In the House, for any bill that provides for the safe 
     importation of FDA-approved prescription drugs or places 
     limits on medical malpractice litigation, that has passed the 
     House in the first session of the 108th Congress and, after 
     the date of adoption of this concurrent resolution, is 
     enacted into law, the chairman of the Committee on the Budget 
     may make the appropriate adjustments in the allocations and 
     aggregates to reflect any resulting savings from any such 
     measure.
     Subtitle B--Adjustments With Respect to Discretionary Spending

     SEC. 311. ADJUSTMENT FOR SURFACE TRANSPORTATION.

       (a) In General.--If the Committee on Transportation and 
     Infrastructure of the House or the Committee on Environment 
     and Public Works, the Committee on Banking, Housing, and 
     Urban Affairs, or the Committee on Commerce, Science, and 
     Transportation of the Senate reports a bill or joint 
     resolution, or if an amendment thereto is offered or a 
     conference report thereon is submitted, that provides new 
     budget authority for the budget accounts or portions thereof 
     in the highway and transit categories as defined in 
     subparagraphs (B) and (C) of section 250(c)(4) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 in 
     excess of--
       (1) for fiscal year 2005: $42,657,000,000;
       (2) for fiscal year 2006: $43,635,000,000;
       (3) for fiscal year 2007: $45,709,000,000;
       (4) for fiscal year 2008: $46,945,000,000; or
       (5) for fiscal year 2009: $47,732,000,000;

     the appropriate chairman of the Committee on the Budget may 
     revise the appropriate budget aggregates and increase the 
     allocation of new budget authority to such committee for 
     fiscal year 2005 and for the period of fiscal years 2005 
     through 2009 to the extent such excess is offset by a 
     reduction in mandatory outlays from the Highway Trust Fund or 
     an increase in receipts appropriated to such fund (for the 
     applicable fiscal year) caused by such legislation or any 
     previously enacted legislation. In the Senate, any increase 
     in receipts shall be reported from the Committee on Finance.
       (b) Adjustment for Outlays.--For fiscal year 2005, in the 
     House and the Senate, if a bill or joint resolution is 
     reported, or if an amendment thereto is offered or a 
     conference report thereon is submitted, that changes 
     obligation limitations such that the total limitations are in

[[Page 10040]]

     excess of $41,204,000,000 for fiscal year 2005 for programs, 
     projects, and activities within the highway and transit 
     categories as defined in subparagraphs (B) and (C) of 
     sections 250(c)(4) of the Balanced Budget and Emergency 
     Deficit Control Act of 1985, and if legislation has been 
     enacted that satisfies the conditions set forth in subsection 
     (a) for such fiscal year, the appropriate chairman of the 
     Committee on the Budget may increase the allocation of 
     outlays and appropriate aggregates for such fiscal year for 
     the committee reporting such measure by the amount of outlays 
     that corresponds to such excess obligation limitations, but 
     not to exceed the amount of such excess that was offset 
     pursuant to subsection (a).

     SEC. 312. ADJUSTMENT FOR WILDLAND FIRE SUPPRESSION.

       (a) Findings.--Congress makes the following findings:
       (1) Due to the expansion of the wildland urban interface, 
     severe drought conditions in many regions of the country, and 
     the poor health of the Nation's forests and rangelands, the 
     Forest Service and the Department of the Interior regularly 
     spend more than the amount appropriated for fire suppression, 
     and then borrow from other accounts to pay for fire 
     suppression.
       (2) This borrowing has a negative effect on many Forest 
     Service and Department of the Interior programs.
       (3) This resolution provides an amount equal to the 10-year 
     average for fire suppression in fiscal year 2005.
       (4) The Forest Service and the Department of the Interior 
     should address cost containment within the fire suppression 
     account, and report to Congress regarding how funds 
     appropriated pursuant to this section are used.
       (b) Sense of Congress.--It is the sense of Congress that 
     the adjustment authorized by this section shall only be made 
     if--
       (1) the wildland fire suppression accounts in the Interior 
     Appropriations bill are funded at the 10-year average;
       (2) there are insufficient funds in such accounts; and
       (3) the current fire season is of sufficient severity to 
     require appropriations in excess of the base amount.
       (c) Cap Adjustment.--
       (1) Definition.--For this subsection, the term ``base 
     amount'' refers to the average of the obligations of the 10 
     fiscal years preceding the current year for wildfire 
     suppression in the Forest Service and in the Department of 
     the Interior, calculated by the Director of the Congressional 
     Budget Office in consultation with the chairmen of the 
     Committees on the Budget and Appropriations. The Director of 
     the Congressional Budget Office shall provide such 
     information for fiscal year 2005 in a letter to the chairmen 
     of such committees.
       (2) Adjustments for fiscal year 2005.--If any bill, joint 
     resolution, amendment, or conference report provides new 
     budget authority for wildland fire suppression in fiscal year 
     2005 that would cause the level of total new budget authority 
     for wildland fire suppression to exceed the base amount for 
     such fiscal year, then the chairman of the Committee on the 
     Budget may adjust the appropriate allocations and other 
     budgetary levels by the amount of excess new budget authority 
     provided by that measure for that purpose (and the outlays 
     flowing therefrom), but the adjustment for new budget 
     authority may not exceed--
       (A) for the Forest Service for fiscal year 2005, 
     $400,000,000; and
       (B) for the Department of the Interior for fiscal year 
     2005, $100,000,000.
       (3) Fiscal year 2004.--
       (A) Senate.--In the Senate, if any bill, joint resolution, 
     amendment, or conference report provides new budget authority 
     for wildland fire suppression in fiscal year 2004, then the 
     chairman of the Committee on the Budget may determine that 
     such amount of new budget authority (and outlays flowing 
     therefrom) shall not be counted for the purposes of the 
     Congressional Budget Act of 1974 and this resolution, if such 
     amounts for that fiscal year do not exceed the following 
     levels of new budget authority--
       (i) for the Forest Service, $400,000,000; and
       (ii) for the Department of the Interior, $100,000,000.
       (B) House.--In the House, if any bill, joint resolution, 
     amendment, or conference report provides new budget authority 
     for wildland fire suppression in fiscal year 2004, then the 
     chairman of the Committee on the Budget may adjust the 
     appropriate allocations and other budgetary levels by the 
     amount of new budget authority provided by that measure for 
     that purpose (and the outlays flowing therefrom), but the 
     adjustment for new budget authority may not exceed--
       (i) for the Forest Service, $400,000,000; and
       (ii) for the Department of the Interior, $100,000,000.

     SEC. 313. MECHANISM FOR ADJUSTING APPROPRIATE DISCRETIONARY 
                   LEVELS.

       (a) Section 504 Compliance.--In the House and the Senate, 
     whenever the Committee on Appropriations reports the first 
     bill or joint resolution making regular appropriations for 
     fiscal year 2005, the appropriate chairman of the Committee 
     on the Budget may revise the committee's allocation in this 
     resolution by $4,630,000,000 in new budget authority and 
     $14,240,000,000 in outlays and make conforming adjustments to 
     other levels in this resolution.
       (b) Funding for Project Bioshield.--In the House and the 
     Senate, on the same day that the Committee on Appropriations 
     reports as provided in subsection (a), the appropriate 
     chairman of the Committee on the Budget may also revise the 
     allocations to the Committee on Appropriations, discretionary 
     spending limits, and other appropriate levels and limits in 
     this resolution by $2,528,000,000 in new budget authority and 
     $276,000,000 in outlays for Project Bioshield for fiscal year 
     2005.
                      TITLE IV--BUDGET ENFORCEMENT
                        Subtitle A--Enforcement

     SEC. 401. RESTRICTIONS ON ADVANCE APPROPRIATIONS.

       (a) Senate.--
       (1) Point of order.--Except as provided in paragraph (2), 
     it shall not be in order in the Senate to consider any bill, 
     joint resolution, motion, amendment, or conference report 
     that would provide an advance appropriation.
       (2) Exception.--An advance appropriation may be provided 
     for fiscal year 2006 for programs, projects, activities, or 
     accounts identified in the joint explanatory statement of 
     managers accompanying this resolution under the heading 
     ``Accounts Identified for Advance Appropriations'' in an 
     aggregate amount not to exceed $23,158,000,000 in new budget 
     authority.
       (3) Waiver and appeals.--
       (A) Waiver.--In the Senate, paragraph (1) may be waived or 
     suspended only by an affirmative vote of three-fifths of the 
     Members, duly chosen and sworn. An affirmative vote of three-
     fifths of the Members of the Senate, duly chosen and sworn, 
     shall be required to sustain an appeal of the ruling of the 
     Chair on a point of order raised under paragraph (1).
       (B) Procedure.--A point of order under paragraph (1) may be 
     raised by a Senator as provided in section 313(e) of the 
     Congressional Budget Act of 1974.
       (C) Conference report.--If a point of order is sustained 
     under paragraph (1) against a conference report in the 
     Senate, the report shall be disposed of as provided in 
     section 313(d) of the Congressional Budget Act of 1974.
       (4) Advance appropriation.--In this subsection, the term 
     ``advance appropriation'' means any discretionary new budget 
     authority in a bill or joint resolution making general 
     appropriations or continuing appropriations for fiscal year 
     2005 that first becomes available for any fiscal year after 
     2005.
       (5) Repeal.--Section 501 of H. Con. Res. 95 (108th 
     Congress) is repealed.
       (b) House.--
       (1) In general.--(A) In the House, except as provided in 
     paragraph (2), an advance appropriation may not be reported 
     in a bill or joint resolution making a general appropriation 
     or continuing appropriation, and may not be in order as an 
     amendment thereto.
       (B) Managers on the part of the House may not agree to a 
     Senate amendment that would violate subparagraph (A) unless 
     specific authority to agree to the amendment first is given 
     by the House by a separate vote with respect thereto.
       (2) Limitation.--In the House, an advance appropriation may 
     be provided for fiscal year 2006 for programs, projects, 
     activities or accounts identified in the joint explanatory 
     statement of managers accompanying this resolution under the 
     heading ``Accounts Identified for Advance Appropriations, 
     Part A'' in an aggregate amount not to exceed $23,158,000,000 
     in new budget authority, and an advance appropriation may be 
     provided for fiscal year 2007 for any program identified in 
     such statement under the heading ``Accounts Identified for 
     Advance Appropriations, Part B''.
       (3) Definition.--In this subsection, the term ``advance 
     appropriation'' means any discretionary new budget authority 
     in a bill or joint resolution making general appropriations 
     or continuing appropriations for fiscal year 2005 that first 
     becomes available for any fiscal year after 2005.

     SEC. 402. EMERGENCY LEGISLATION.

       (a) Exemption of Emergency Provisions.--
       (1) In general.--In the House and Senate, if a bill, joint 
     resolution, amendment, or conference report designates a 
     provision as an emergency requirement pursuant to this 
     section, then the new budget authority, new entitlement 
     authority, outlays, and receipts resulting therefrom shall 
     not count for purposes of sections 302, 303, 311, and 401 of 
     the Congressional Budget Act of 1974 or any concurrent 
     resolution on the budget and, in the Senate only, shall not 
     count for the purpose of sections 404 (relating to 
     discretionary spending limits in the Senate) and 407 
     (relating to the pay-go requirement) of this resolution.
       (2) Designations.--
       (A) Guidance.--If a provision of legislation is designated 
     as an emergency requirement under paragraph (1), the 
     committee report and any joint explanatory statement of 
     managers accompanying that legislation shall include an 
     explanation of the manner in which the provision meets the 
     criteria in subparagraph (B). If such legislation is to be 
     considered by the House without being reported, then the 
     committee shall cause the explanation to be published in the 
     Congressional Record in advance of floor consideration.
       (B) Criteria.--
       (i) In general.--Any such provision is an emergency 
     requirement if the underlying situation poses a threat to 
     life, property, or national security and is--

       (I) sudden, quickly coming into being, and not building up 
     over time;
       (II) an urgent, pressing, and compelling need requiring 
     immediate action;
       (III) subject to clause (ii), unforeseen, unpredictable, 
     and unanticipated; and
       (IV) not permanent, temporary in nature.

       (ii) Unforeseen.--An emergency that is part of an aggregate 
     level of anticipated emergencies,

[[Page 10041]]

     particularly when normally estimated in advance, is not 
     unforeseen.
       (b) Point of Order in the Senate.--
       (1) Definitions.--In this subsection, the terms ``direct 
     spending'', ``receipts'', and ``appropriations for 
     discretionary accounts'' means any provision of a bill, joint 
     resolution, amendment, motion, or conference report that 
     affects direct spending, receipts, or appropriations as those 
     terms have been defined and interpreted for purposes of the 
     Balanced Budget and Emergency Deficit Control Act of 1985.
       (2) Point of order.--When the Senate is considering a bill, 
     resolution, amendment, motion, or conference report, if a 
     point of order is made by a Senator against an emergency 
     designation in that measure, that provision making such a 
     designation shall be stricken from the measure and may not be 
     offered as an amendment from the floor.
       (3) Waiver and appeal.--Paragraph (2) may be waived or 
     suspended in the Senate only by an affirmative vote of three-
     fifths of the Members, duly chosen and sworn. An affirmative 
     vote of three-fifths of the Members of the Senate, duly 
     chosen and sworn, shall be required to sustain an appeal of 
     the ruling of the Chair on a point of order raised under this 
     section.
       (4) Definition of an emergency designation.--For purposes 
     of paragraph (2), a provision shall be considered an 
     emergency designation if it designates any item as an 
     emergency requirement pursuant to this section.
       (5) Form of the point of order.--A point of order under 
     paragraph (2) may be raised by a Senator as provided in 
     section 313(e) of the Congressional Budget Act of 1974.
       (6) Conference reports.--If a point of order is sustained 
     under paragraph (2) against a conference report, the report 
     shall be disposed of as provided in section 313(d) of the 
     Congressional Budget Act of 1974.
       (7) Exception for defense spending.--Paragraph (2) shall 
     not apply against an emergency designation for a provision 
     making discretionary appropriations in the defense category.
       (c) Repeal.--Section 502 of H. Con. Res. 95 (108th 
     Congress) is repealed.

     SEC. 403. EXEMPTION OF OVERSEAS CONTINGENCY OPERATIONS.

       In the House and Senate, if a bill, joint resolution, 
     amendment, or a conference report makes supplemental 
     appropriations for fiscal year 2005 for overseas contingency 
     operations related to the global war on terrorism, then the 
     new budget authority, new entitlement authority, and outlays 
     resulting from the provisions of such measure that are 
     designated pursuant to this section as making appropriations 
     for such contingency operations shall not count for purposes 
     of sections 302, 303, and 401 of the Congressional Budget Act 
     of 1974 and, in the Senate only, shall not count for the 
     purpose of section 404 (relating to discretionary spending 
     limits in the Senate and 407 (relating to the pay-go 
     requirement) of this resolution, except that the amounts that 
     are not counted for purposes of this section shall not exceed 
     $50,000,000,000 in new budget authority.

     SEC. 404. DISCRETIONARY SPENDING LIMITS IN THE SENATE.

       (a) Discretionary Spending Limits.--In the Senate and as 
     used in this section, the term ``discretionary spending 
     limit'' means for fiscal year 2005--
       (1) $812,773,000,000 in new budget authority and 
     $818,285,000,000 in outlays for the discretionary category;
       (2) for the highway category, $33,393,000,000 in outlays; 
     and
       (3) for the mass transit category, $1,488,000,000 in new 
     budget authority, and $6,726,000,000 in outlays.
       (b) Discretionary Spending Point of Order in the Senate.--
       (1) In general.--Except as otherwise provided in this 
     subsection, it shall not be in order in the Senate to 
     consider any bill or joint resolution or amendment, motion, 
     or conference report thereon that would exceed any of the 
     discretionary spending limits in this section.
       (2) Waiver.--This subsection may be waived or suspended in 
     the Senate only by the affirmative vote of three-fifths of 
     the Members, duly chosen and sworn.
       (3) Appeals.--Appeals in the Senate from the decisions of 
     the Chair relating to any provision of this subsection shall 
     be limited to 1 hour, to be equally divided between, and 
     controlled by, the appellant and the manager of the bill or 
     joint resolution, as the case may be. An affirmative vote of 
     three-fifths of the Members of the Senate, duly chosen and 
     sworn, shall be required to sustain an appeal of the ruling 
     of the Chair on a point of order raised under this 
     subsection.
       (c) Adjustments.--
       (1) In general.--
       (A) Chairman.--After the reporting of a bill or joint 
     resolution, or the offering of an amendment thereto or the 
     submission of a conference report thereon, the chairman of 
     the Committee on the Budget may make the adjustments set 
     forth in subparagraph (B) for the amount of new budget 
     authority in that measure (if that measure meets the 
     requirements set forth in paragraph (2)) and the outlays 
     flowing from that budget authority.
       (B) Matters to be adjusted.--The adjustments referred to in 
     subparagraph (A) are to be made to--
       (i) the discretionary spending limits, if any, set forth in 
     the appropriate concurrent resolution on the budget;
       (ii) the allocations made pursuant to the appropriate 
     concurrent resolution on the budget pursuant to section 
     302(a) of the Congressional Budget Act of 1974; and
       (iii) the budgetary aggregates as set forth in the 
     appropriate concurrent resolution on the budget.
       (2) Amounts of adjustments.--The adjustment referred to in 
     paragraph (1) shall be--
       (A) an amount provided for transportation under section 
     311;
       (B) an amount provided for fire suppression pursuant to 
     section 312; and
       (C) the amounts provided in section 313.
       (3) Reporting revised suballocations.--Following any 
     adjustment made under paragraph (1), the Committee on 
     Appropriations of the Senate shall report appropriately 
     revised suballocations under section 302(b) to carry out this 
     subsection.
       (d) Repeal.--Section 504 of H. Con. Res. 95 (108th 
     Congress) is repealed.

     SEC. 405. ADJUSTMENTS TO REFLECT CHANGES IN CONCEPTS AND 
                   DEFINITIONS.

       (a) Changes in Concepts and Definitions.--In the House and 
     Senate, upon the enactment of a bill or joint resolution 
     providing for a change in concepts or definitions, the 
     chairman of the Committee on the Budget shall make 
     adjustments to the levels and allocations in this resolution 
     in accordance with section 251(b) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 (as in effect prior to 
     September 30, 2002).
       (b) Miscellaneous Adjustments.--
       (1) Senate.--In the Senate, for fiscal year 2005, if a bill 
     is reported, or an amendment thereto is offered or a 
     conference report thereon is submitted, that changes 
     offsetting receipts collected from the Power Marketing 
     Administration into offsetting collections credited against 
     the allocation of the Committee on Appropriations, the 
     chairman of the Committee on the Budget may adjust the 
     appropriate allocations and levels by the amount of new 
     budget authority provided by that measure (and outlays 
     flowing therefrom) for the Army Corps of Engineers and the 
     Pick-Sloan Missouri Basin Project within the Bureau of 
     Reclamation, but not to exceed the amount of forgone 
     offsetting receipts.
       (2) House.--In the House, the chairman of the Committee on 
     the Budget may reduce the revenue aggregates and increase the 
     allocations to the Committee on Ways and Means and other 
     appropriate spending aggregates for legislation that extends 
     the child tax credit, other than measures considered pursuant 
     to section 211, to the extent such adjustments are deficit 
     neutral for fiscal year 2005 and for the period covered by 
     this resolution.

     SEC. 406. APPLICATION AND EFFECT OF CHANGES IN ALLOCATIONS 
                   AND AGGREGATES.

       (a) Application.--Any adjustments of allocations and 
     aggregates made pursuant to this resolution shall--
       (1) apply while that measure is under consideration;
       (2) take effect upon the enactment of that measure; and
       (3) be published in the Congressional Record as soon as 
     practicable.
       (b) Effect of Changed Allocations and Aggregates.--Revised 
     allocations and aggregates resulting from these adjustments 
     shall be considered for the purposes of the Congressional 
     Budget Act of 1974 as allocations and aggregates contained in 
     this resolution.
       (c) Budget Committee Determinations.--For purposes of this 
     resolution--
       (1) the levels of new budget authority, outlays, direct 
     spending, new entitlement authority, revenues, deficits, and 
     surpluses for a fiscal year or period of fiscal years shall 
     be determined on the basis of estimates made by the 
     appropriate Committee on the Budget; and
       (2) such chairman may make any other necessary adjustments 
     to such levels to carry out this resolution.
       (d) Amendment in the House.--In the House, for purposes of 
     titles II and III, the term ``amendment'' or ``amendment 
     thereto'' means an amendment offered or an amendment made in 
     order as original text, or considered as adopted by special 
     order of the House.
       (e) Allocations.--The allocations set forth in the joint 
     explanatory statement accompanying this resolution made under 
     section 302(a)(1) of the Congressional Budget Act of 1974 
     shall be for fiscal year 2005 and (except in the case of the 
     Committee on Appropriations) for the period of fiscal years 
     covered by this resolution.

     SEC. 407. PAY-AS-YOU-GO POINT OF ORDER IN THE SENATE.

       (a) Point of Order.--
       (1) In general.--It shall not be in order in the Senate to 
     consider any direct spending or revenue legislation that 
     would increase the on-budget deficit or cause an on-budget 
     deficit for any one of the three applicable time periods as 
     measured in paragraphs (5) and (6).
       (2) Applicable time periods.--For purposes of this 
     subsection, the term ``applicable time period'' means any 1 
     of the 3 following periods:
       (A) The first year covered by the most recently adopted 
     concurrent resolution on the budget.
       (B) The period of the first 5 fiscal years covered by the 
     most recently adopted concurrent resolution on the budget.
       (C) The period of the 5 fiscal years following the first 5 
     fiscal years covered in the most recently adopted concurrent 
     resolution on the budget.
       (3) Direct-spending legislation.--For purposes of this 
     subsection and except as provided in paragraph (4), the term 
     ``direct-spending legislation'' means any bill, joint 
     resolution, amendment, motion, or conference report that 
     affects direct spending as that term is defined by, and 
     interpreted for purposes of, the Balanced Budget and 
     Emergency Deficit Control Act of 1985.

[[Page 10042]]

       (4) Exclusion.--For purposes of this subsection, the terms 
     ``direct-spending legislation'' and ``revenue legislation'' 
     do not include--
       (A) any concurrent resolution on the budget;
       (B) any provision of legislation that affects the full 
     funding of, and continuation of, the deposit insurance 
     guarantee commitment in effect on the date of enactment of 
     the Budget Enforcement Act of 1990; or
       (C) any legislation considered pursuant to title II of this 
     resolution.
       (5) Baseline.--Estimates prepared pursuant to this section 
     shall--
       (A) use the baseline surplus or deficit used for the most 
     recently adopted concurrent resolution on the budget; and
       (B) be calculated under the requirements of subsections (b) 
     through (d) of section 257 of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 for fiscal years beyond 
     those covered by that concurrent resolution on the budget.
       (6) Prior surplus.--If direct spending or revenue 
     legislation increases the on-budget deficit or causes an on-
     budget deficit when taken individually, it must also increase 
     the on-budget deficit or cause an on-budget deficit when 
     taken together with all direct spending and revenue 
     legislation enacted since the beginning of the calendar year 
     not accounted for in the baseline under paragraph (5)(A), 
     except that direct spending or revenue effects resulting in 
     net deficit reduction enacted pursuant to reconciliation 
     instructions since the beginning of that same calendar year 
     shall not be available.
       (b) Waiver.--This section may be waived or suspended in the 
     Senate only by the affirmative vote of three-fifths of the 
     Members, duly chosen and sworn.
       (c) Appeals.--Appeals in the Senate from the decisions of 
     the Chair relating to any provision of this section shall be 
     limited to 1 hour, to be equally divided between, and 
     controlled by, the appellant and the manager of the bill or 
     joint resolution, as the case may be. An affirmative vote of 
     three-fifths of the Members of the Senate, duly chosen and 
     sworn, shall be required to sustain an appeal of the ruling 
     of the Chair on a point of order raised under this section.
       (d) Determination of Budget Levels.--For purposes of this 
     section, the levels of new budget authority, outlays, and 
     revenues for a fiscal year shall be determined on the basis 
     of estimates made by the Committee on the Budget of the 
     Senate.
       (e) Repeal.--Section 505 of H. Con. Res. 95 (108th 
     Congress) is repealed.
       (f) Sunset.--This section shall expire on April 15, 2005.

     SEC. 408. COMPLIANCE WITH SECTION 13301 OF THE BUDGET 
                   ENFORCEMENT ACT OF 1990.

       (a) In General.--In the House, notwithstanding section 
     302(a)(1) of the Congressional Budget Act of 1974 and section 
     13301 of the Budget Enforcement Act of 1990, the joint 
     explanatory statement accompanying the conference report on 
     any concurrent resolution on the budget shall include in its 
     allocation under section 302(a) of the Congressional Budget 
     Act of 1974 to the Committee on Appropriations amounts for 
     the discretionary administrative expenses of the Social 
     Security Administration.
       (b) Special Rule.--In the House, for purposes of applying 
     section 302(f) of the Congressional Budget Act of 1974, 
     estimates of the level of total new budget authority and 
     total outlays provided by a measure shall include any 
     discretionary amounts provided for the Social Security 
     Administration.
                     Subtitle B--Report Submissions

     SEC. 411. SUBMISSION OF REPORT ON DEFENSE SAVINGS.

       Not later than June 25, 2004, the Committees on Armed 
     Services of the House and the Senate shall submit to the 
     relevant Committee on the Budget (and publish in the 
     Congressional Record) its findings that identify 
     $2,000,000,000 in savings from (1) activities that are 
     determined to be of a low priority to the successful 
     execution of current military operations; and (2) activities 
     that are determined to be wasteful or unnecessary to national 
     defense. Funds identified should be reallocated to programs 
     and activities that directly contribute to enhancing the 
     combat capabilities of the U.S. military forces with an 
     emphasis on force protection, munitions and surveillance 
     capabilities.

     SEC. 412. SUBMISSION OF REPORT ON HOMELAND SECURITY.

       In the House and Senate, not later than June 25, 2004, the 
     Select Committee on Homeland Security and the Committee on 
     Governmental Affairs respectively, shall submit to the 
     corresponding Committees on the Budget (and publish in the 
     Congressional Record) a report identifying no less than 
     $150,000,000 in savings from--
       (1) activities that are determined to be of low priority to 
     the successful execution of current domestic homeland 
     security operations; and
       (2) activities that are determined to be wasteful or 
     unnecessary to homeland security.
     Funds identified should be accompanied by recommendations on 
     reallocation to programs and activities that are considered 
     top priority activities or directly contribute to enhancing 
     the defense of our homeland.
               Subtitle C--Exercise of Rulemaking Powers

     SEC. 421. EXERCISE OF RULEMAKING POWERS.

       Congress adopts the provisions of this title--
       (1) as an exercise of the rulemaking power of the Senate 
     and the House, respectively, and as such they shall be 
     considered as part of the rules of each House, or of that 
     House to which they specifically apply, and such rules shall 
     supersede other rules only to the extent that they are 
     inconsistent therewith; and
       (2) with full recognition of the constitutional right of 
     either House to change those rules (so far as they relate to 
     that House) at any time, in the same manner, and to the same 
     extent as in the case of any other rule of that House.
           TITLE V--REQUIRED LEVELS AND AMOUNTS FOR OUTYEARS.

     SEC. 501. RECOMMENDED LEVELS AND AMOUNTS.

       In accordance with section 301(a) of the Congressional 
     Budget Act of 1974 (requiring levels for at least 4 years 
     following the budget year), the following budgetary levels 
     are appropriate for the fiscal years 2006 through 2009:
       (1) Federal revenues.--For purposes of the enforcement of 
     this resolution--
       (A) The recommended levels of Federal revenues are as 
     follows:
       Fiscal year 2006: $1,634,152,000,000.
       Fiscal year 2007: $1,753,744,000,000.
       Fiscal year 2008: $1,844,828,000,000.
       Fiscal year 2009: $1,950,926,000,000.
       (B) The amounts by which the aggregate levels of Federal 
     revenues should be changed are as follows:
       Fiscal year 2006: -$21,416,000,000.
       Fiscal year 2007: $0.
       Fiscal year 2008: $0.
       Fiscal year 2009: $0.
       (2) New budget authority.--For purposes of the enforcement 
     of this resolution, the appropriate levels of total new 
     budget authority are as follows:
       Fiscal year 2006: $2,068,452,000,000.
       Fiscal year 2007: $2,178,188,000,000.
       Fiscal year 2008: $2,287,795,000,000.
       Fiscal year 2009: $2,398,895,000,000.
       (3) Budget outlays.--For purposes of the enforcement of 
     this resolution, the appropriate levels of total budget 
     outlays are as follows:
       Fiscal year 2006: $2,082,187,000,000.
       Fiscal year 2007: $2,155,801,000,000.
       Fiscal year 2008: $2,254,981,000,000.
       Fiscal year 2009: $2,363,019,000,000.
       (4) Deficits.--For purposes of the enforcement of this 
     resolution, the amounts of the deficits are as follows:
       Fiscal year 2006: $448,035,000,000.
       Fiscal year 2007: $402,057,000,000.
       Fiscal year 2008: $410,153,000,000.
       Fiscal year 2009: $412,093,000,000.
       (5) Debt subject to limit.--Pursuant to section 301(a)(5) 
     of the Congressional Budget Act of 1974, the appropriate 
     levels of the public debt are as follows:
       Fiscal year 2006: $8,645,824,000,000.
       Fiscal year 2007: $9,168,812,000,000.
       Fiscal year 2008: $9,699,909,000,000.
       Fiscal year 2009: $10,235,831,000,000.
       (6) Debt held by the public.--The appropriate levels of the 
     debt held by the public are as follows:
       Fiscal year 2006: $5,030,718,000,000.
       Fiscal year 2007: $5,237,335,000,000.
       Fiscal year 2008: $5,436,448,000,000.
       Fiscal year 2009: $5,623,726,000,000.

     SEC. 502. SOCIAL SECURITY.

       (a) Social Security Revenues.--For purposes of Senate 
     enforcement under sections 302 and 311 of the Congressional 
     Budget Act of 1974, the amounts of revenues of the Federal 
     Old-Age and Survivors Insurance Trust Fund and the Federal 
     Disability Insurance Trust Fund are as follows:
       Fiscal year 2006: $600,872,000,000.
       Fiscal year 2007: $629,263,000,000.
       Fiscal year 2008: $658,631,000,000.
       Fiscal year 2009: $689,510,000,000.
       (b) Social Security Outlays.--For purposes of Senate 
     enforcement under sections 302 and 311 of the Congressional 
     Budget Act of 1974, the amounts of outlays of the Federal 
     Old-Age and Survivors Insurance Trust Fund and the Federal 
     Disability Insurance Trust Fund are as follows:
       Fiscal year 2006: $406,380,000,000.
       Fiscal year 2007: $419,538,000,000.
       Fiscal year 2008: $433,728,000,000.
       Fiscal year 2009: $450,526,000,000.
       (c) Social Security Administrative Expenses.--In the 
     Senate, the amounts of new budget authority and budget 
     outlays of the Federal Old-Age and Survivors Insurance Trust 
     Fund and the Federal Disability Insurance Trust Fund for 
     administrative expenses are as follows:
       Fiscal year 2006:
       (A) New budget authority, $4,334,000,000.
       (B) Outlays, $4,273,000,000.
       Fiscal year 2007:
       (A) New budget authority, $4,429,000,000.
       (B) Outlays, $4,361,000,000.
       Fiscal year 2008:
       (A) New budget authority, $4,526,000,000.
       (B) Outlays, $4,455,000,000.
       Fiscal year 2009:
       (A) New budget authority, $4,626,000,000.
       (B) Outlays, $4,552,000,000.

     SEC. 503. MAJOR FUNCTIONAL CATEGORIES.

       Congress determines and declares that the appropriate 
     levels of new budget authority and budget outlays for fiscal 
     years 2006 through 2009 for each major functional category 
     are:
       (1) National Defense (050):
       Fiscal year 2006:
       (A) New budget authority, $432,366,000,000.
       (B) Outlays, $452,218,00,000.
       Fiscal year 2007:
       (A) New budget authority, $442,103,000,000.
       (B) Outlays, $434,750,000,000.
       Fiscal year 2008:
       (A) New budget authority, $452,073,000,000.
       (B) Outlays, $438,532,000,000.
       Fiscal year 2009:
       (A) New budget authority, $462,069,000,000.

[[Page 10043]]

       (B) Outlays, $447,384,000,000.
       (2) International Affairs (150):
       Fiscal year 2006:
       (A) New budget authority, $30,619,000,000.
       (B) Outlays, $32,248,000,000.
       Fiscal year 2007:
       (A) New budget authority, $31,291,000,000.
       (B) Outlays, $29,599,000,000.
       Fiscal year 2008:
       (A) New budget authority, $31,977,000,000.
       (B) Outlays, $28,793,000,000.
       Fiscal year 2009:
       (A) New budget authority, $32,677,000,000.
       (B) Outlays, $29,123,000,000.
       (3) General Science, Space, and Technology (250):
       Fiscal year 2006:
       (A) New budget authority, $24,406,000,000.
       (B) Outlays, $23,864,000,000.
       Fiscal year 2007:
       (A) New budget authority, $24,943,000,000.
       (B) Outlays, $24,316,000,000.
       Fiscal year 2008:
       (A) New budget authority, $25,491,000,000.
       (B) Outlays, $24,755,000,000.
       Fiscal year 2009:
       (A) New budget authority, $26,052,000,000.
       (B) Outlays, $25,287,000,000.
       (4) Energy (270):
       Fiscal year 2006:
       (A) New budget authority, $3,122,000,000.
       (B) Outlays, $1,866,000,000.
       Fiscal year 2007:
       (A) New budget authority, $3,253,000,000.
       (B) Outlays, $1,619,000,000.
       Fiscal year 2008:
       (A) New budget authority, $3,090,000,000.
       (B) Outlays, $1,113,000,000.
       Fiscal year 2009:
       (A) New budget authority, $2,730,000,000.
       (B) Outlays, $1,318,000,000.
       (5) Natural Resources and Environment (300):
       Fiscal year 2006:
       (A) New budget authority, $32,942,000,000.
       (B) Outlays, $32,931,000,000.
       Fiscal year 2007:
       (A) New budget authority, $33,755,000,000.
       (B) Outlays, $33,655,000,000.
       Fiscal year 2008:
       (A) New budget authority, $34,443,000,000.
       (B) Outlays, $34,118,000,000.
       Fiscal year 2009:
       (A) New budget authority, $35,923,000,000.
       (B) Outlays, $35,413,000,000.
       (6) Agriculture (350):
       Fiscal year 2006:
       (A) New budget authority, $23,914,000,000.
       (B) Outlays, $22,748,000,000.
       Fiscal year 2007:
       (A) New budget authority, $24,920,000,000.
       (B) Outlays, $23,758,000,000.
       Fiscal year 2008:
       (A) New budget authority, $24,865,000,000.
       (B) Outlays, $23,735,000,000.
       Fiscal year 2009:
       (A) New budget authority, $25,928,000,000.
       (B) Outlays, $24,917,000,000.
       (7) Commerce and Housing Credit (370):
       Fiscal year 2006:
       (A) New budget authority, $8,720,000,000.
       (B) Outlays, $4,292,000,000.
       Fiscal year 2007:
       (A) New budget authority, $8,191,000,000.
       (B) Outlays, $2,744,000,000.
       Fiscal year 2008:
       (A) New budget authority, $8,154,000,000.
       (B) Outlays, $1,485,000,000.
       Fiscal year 2009:
       (A) New budget authority, $8,014,000,000.
       (B) Outlays, $1,202,000,000.
       (8) Transportation (400):
       Fiscal year 2006:
       (A) New budget authority, $73,253,000,000.
       (B) Outlays, $71,302,000,000.
       Fiscal year 2007:
       (A) New budget authority, $75,911,000,000.
       (B) Outlays, $73,633,000,000.
       Fiscal year 2008:
       (A) New budget authority, $77,709,000,000.
       (B) Outlays, $75,611,000,000.
       Fiscal year 2009:
       (A) New budget authority, $79,072,000,000.
       (B) Outlays, $77,027,000,000.
       (9) Community and Regional Development (450):
       Fiscal year 2006:
       (A) New budget authority, $13,607,000,000.
       (B) Outlays, $14,457,000,000.
       Fiscal year 2007:
       (A) New budget authority, $13,905,000,000.
       (B) Outlays, $14,231,000,000.
       Fiscal year 2008:
       (A) New budget authority, $14,127,000,000.
       (B) Outlays, $14,032,000,000.
       Fiscal year 2009:
       (A) New budget authority, $14,439,000,000.
       (B) Outlays, $14,318,000,000.
       (10) Education, Training, Employment, and Social Services 
     (500):
       Fiscal year 2006:
       (A) New budget authority, $95,108,000,000.
       (B) Outlays, $93,772,000,000.
       Fiscal year 2007:
       (A) New budget authority, $97,167,000,000.
       (B) Outlays, $95,389,000,000.
       Fiscal year 2008:
       (A) New budget authority, $99,113,000,000.
       (B) Outlays, $97,331,000,000.
       Fiscal year 2009:
       (A) New budget authority, $101,229,000,000.
       (B) Outlays, $99,469,000,000.
       (11) Health (550):
       Fiscal year 2006:
       (A) New budget authority, $257,888,000,000.
       (B) Outlays, $257,875,000,000.
       Fiscal year 2007:
       (A) New budget authority, $272,290,000,000.
       (B) Outlays, $271,481,000,000.
       Fiscal year 2008:
       (A) New budget authority, $292,081,000,000.
       (B) Outlays, $291,298,000,000.
       Fiscal year 2009:
       (A) New budget authority, $314,270,000,000.
       (B) Outlays, $311,345,000,000.
       (12) Medicare (570):
       Fiscal year 2006:
       (A) New budget authority, $322,742,000,000.
       (B) Outlays, $322,339,000,000.
       Fiscal year 2007:
       (A) New budget authority, $362,593,000,000.
       (B) Outlays, $362,827,000,000.
       Fiscal year 2008:
       (A) New budget authority, $387,739,000,000.
       (B) Outlays, $387,718,000,000.
       Fiscal year 2009:
       (A) New budget authority, $414,248,000,000.
       (B) Outlays, $413,776,000,000.
       (13) Income Security (600):
       Fiscal year 2006:
       (A) New budget authority, $342,290,000,000.
       (B) Outlays, $345,570,000,000.
       Fiscal year 2007:
       (A) New budget authority, $343,329,000,000.
       (B) Outlays, $345,588,000,000.
       Fiscal year 2008:
       (A) New budget authority, $356,872,000,000.
       (B) Outlays, $358,513,000,000.
       Fiscal year 2009:
       (A) New budget authority, $366,779,000,000.
       (B) Outlays, $367,788,000,000.
       (14) Social Security (650):
       Fiscal year 2006:
       (A) New budget authority, $16,779,000,000.
       (B) Outlays, $16,779,000,000.
       Fiscal year 2007:
       (A) New budget authority, $18,269,000,000.
       (B) Outlays, $18,269,000,000.
       Fiscal year 2008:
       (A) New budget authority, $20,218,000,000.
       (B) Outlays, $20,218,000,000.
       Fiscal year 2009:
       (A) New budget authority, $22,229,000,000.
       (B) Outlays, $22,229,000,000.
       (15) Veterans Benefits and Services (700):
       Fiscal year 2006:
       (A) New budget authority, $69,263,000,000.
       (B) Outlays, $68,135,000,000.
       Fiscal year 2007:
       (A) New budget authority, $67,925,000,000.
       (B) Outlays, $66,976,000,000.
       Fiscal year 2008:
       (A) New budget authority, $71,702,000,000.
       (B) Outlays, $70,938,000,000.
       Fiscal year 2009:
       (A) New budget authority, $72,937,000,000.
       (B) Outlays, $72,132,000,000.
       (16) Administration of Justice (750):
       Fiscal year 2006:
       (A) New budget authority, $40,338,000,000.
       (B) Outlays, $40,851,000,000.
       Fiscal year 2007:
       (A) New budget authority, $41,111,000,000.
       (B) Outlays, $41,209,000,000.
       Fiscal year 2008:
       (A) New budget authority, $41,990,000,000.
       (B) Outlays, $41,682,000,000.
       Fiscal year 2009:
       (A) New budget authority, $42,889,000,000.
       (B) Outlays, $42,492,000,000.
       (17) General Government (800):
       Fiscal year 2006:
       (A) New budget authority, $17,840,000,000.
       (B) Outlays, $17,685,000,000.
       Fiscal year 2007:
       (A) New budget authority, $18,267,000,000.
       (B) Outlays, $17,917,000,000.
       Fiscal year 2008:
       (A) New budget authority, $18,204,000,000.
       (B) Outlays, $17,849,000,000.
       Fiscal year 2009:
       (A) New budget authority, $18,645,000,000.
       (B) Outlays, $18,096,000,000.
       (18) Net Interest (900):
       Fiscal year 2006:
       (A) New budget authority, $318,053,000,000.
       (B) Outlays, $318,053,000,000.
       Fiscal year 2007:
       (A) New budget authority, $362,002,000,000.
       (B) Outlays, $362,002,000,000.
       Fiscal year 2008:
       (A) New budget authority, $393,729,000,000.
       (B) Outlays, $393,729,000,000.
       Fiscal year 2009:
       (A) New budget authority, $419,915,000,000.
       (B) Outlays, $419,915,000,000.
       (19) Allowances (920):
       Fiscal year 2006:
       (A) New budget authority, $0.
       (B) Outlays, $0.
       Fiscal year 2007:
       (A) New budget authority, $0.
       (B) Outlays, $0.
       Fiscal year 2008:
       (A) New budget authority, $0.
       (B) Outlays, $0.
       Fiscal year 2009:
       (A) New budget authority, $0.
       (B) Outlays, $0.
       (20) Undistributed Offsetting Receipts (950):
       Fiscal year 2006:
       (A) New budget authority, -$54,798,000,000.
       (B) Outlays, -$54,798,000,000.
       Fiscal year 2007:
       (A) New budget authority, -$63,037,000,000.
       (B) Outlays, -$64,162,000,000.
       Fiscal year 2008:
       (A) New budget authority, -$65,782,000,000.
       (B) Outlays, -$66,469,000,000.
       Fiscal year 2009:
       (A) New budget authority, -$61,150,000,000.
       (B) Outlays, -$60,212,000,000.
          TITLE VI--SENSE OF THE SENATE AND SENSE OF THE HOUSE
                    Subtitle A--Sense of the Senate

     SEC. 601. SENSE OF THE SENATE ON BUDGET PROCESS REFORM.

       It is the sense of the Senate that Congress and the 
     President should work together to enact

[[Page 10044]]

     budget process reform legislation that would include 
     mechanisms to restrain Government spending. Such legislation 
     may include--
       (1) deficit targets that, when exceeded, would result in 
     across-the-board reductions in Federal spending except Social 
     Security, Medicare, and Veterans' benefits;
       (2) revision of the content of budget resolutions to 
     increase their focus on aggregate levels, and to include 
     easily understood enforcement tools such as--
       (A) discretionary spending limits;
       (B) pay-as-you-go; and
       (C) explicit committee allocations;
       (3) emergency spending procedures which budget for 
     emergency needs;
       (4) pay-as-you-go limitations which apply to non-budget 
     expenditures;
       (5) limitations on unauthorized appropriations; and
       (6) enhanced rescission or constitutional line-item veto 
     authority for the President.

     SEC. 602. SENSE OF THE SENATE ON BUDGET PROCESS REFORM WITH 
                   REGARD TO THE CREATION OF BIPARTISAN 
                   COMMISSIONS TO COMBAT WASTE, FRAUD, AND ABUSE 
                   AND TO PROMOTE SPENDING EFFICIENCY.

       (a) Waste, Fraud, and Abuse.--It is the sense of the Senate 
     that legislation should be enacted that would create a 
     bipartisan commission for the purpose of--
       (1) submitting recommendations on ways to eliminate waste, 
     fraud, and abuse; and
       (2) to provide recommendations on ways in which to achieve 
     cost savings through enhancing program efficiencies in all 
     discretionary and entitlement programs.
     The findings of the commission should be made on an annual 
     basis, and should be presented in conjunction with the 
     submission of the President's budget request to Congress.
       (b) Efficiency.--It is the sense of the Senate that a 
     bipartisan commission should be established to--
       (1) audit Federal domestic agencies, and programs within 
     such agencies, with the express purpose of providing Congress 
     with recommendations, and legislation;
       (2) implement those recommendations; and
       (3) realign or eliminate government agencies and programs 
     that are duplicative, inefficient, outdated, irrelevant, or 
     have failed to accomplish their intended purpose.
     The findings of the commission should be made on an annual 
     basis, and should be presented in conjunction with the 
     submission of the President's budget request to Congress.

     SEC. 603. SENSE OF THE SENATE ON THE RELATIONSHIP BETWEEN 
                   ANNUAL DEFICIT SPENDING AND INCREASES IN DEBT 
                   SERVICE COSTS.

       It is the sense of the Senate that the Congressional Budget 
     Office shall consult with the Committee on the Budget of the 
     Senate in order to prepare a report containing a discussion 
     of--
       (1) the relationship between annual deficit spending and 
     increases in debt service costs;
       (2) the relationship between incremental increases in 
     discretionary spending and debt service costs; and
       (3) the feasibility of providing estimates of debt service 
     costs in the cost estimates prepared pursuant to section 308 
     of the Congressional Budget Act of 1974.

     SEC. 604. SENSE OF THE SENATE REGARDING THE COSTS OF THE 
                   MEDICARE PRESCRIPTION DRUG PROGRAM.

       It is the sense of the Senate that the Committee on Finance 
     of the Senate should report a bill that consists of changes 
     in laws within its jurisdiction sufficient to ensure that 
     spending within part D of the Medicare Prescription Drug 
     Benefit program in fiscal years 2005 through 2013 does not 
     exceed the total of $409,000,000,000 as estimated by the 
     Congressional Budget Office.

     SEC. 605. SENSE OF THE SENATE ON RETURNING STABILITY TO 
                   PAYMENTS UNDER MEDICARE PHYSICIAN FEE SCHEDULE.

       It is the sense of the Senate that, while recent actions by 
     Congress have helped address the immediate reductions in 
     reimbursement, further action by Congress is urgently needed 
     to put in place a new formula or mechanism for updating 
     Medicare physician fees in 2006 and thereafter, in order to 
     ensure--
       (1) the long-term stability of the Medicare payment system 
     for physicians and other health care professionals, such that 
     payment rates keep pace with practice cost increases; and
       (2) future access to physicians' services for Medicare 
     beneficiaries.

     SEC. 606. SENSE OF THE SENATE SUPPORTING FUNDING RESTORATION 
                   FOR AGRICULTURE RESEARCH AND EXTENSION.

       It is the sense of the Senate that in making appropriations 
     and revenue decisions, the Senate supports--
       (1) the restoration of the 33 accounts of the Cooperative 
     State Research, Education, and Extension Service;
       (2) the fiscal year 2005 funding of the National Research 
     Initiative; and
       (3) the fiscal year 2005 funding of competitive research 
     programs of the Cooperative State Research, Education, and 
     Extension Service in an amount that is adequate to--
       (A) fight obesity and stave off chronic diseases;
       (B) combat insects and animal and plant diseases;
       (C) establish new crops, improved livestock, and economic 
     opportunities for producers; and
       (D) keep pathogens and other dangers out of the air, water, 
     soil, plants, and animals.

     SEC. 607. SENSE OF THE SENATE CONCERNING A NATIONAL ANIMAL 
                   IDENTIFICATION PROGRAM.

       It is the sense of the Senate that in making appropriations 
     and revenue decisions, the Senate supports--
       (1) the development and implementation of a national animal 
     identification program recognizing the need for resources to 
     carry out the implementation of the plan;
       (2) the provision by the Secretary of Agriculture of a 
     time-line for the development and implementation of the 
     program as soon as practicable after the date of approval of 
     this concurrent resolution;
       (3) the provision by the Secretary of Agriculture to ensure 
     the Animal and Plant Health Inspection Service, State animal 
     health agencies, and agricultural producers are provided 
     funds necessary to implement a national animal identification 
     program; and
       (4) the establishment of a program that is not overly 
     burdensome to agricultural producers and ensures the privacy 
     of information of agricultural producers.

     SEC. 608. SENSE OF THE SENATE REGARDING CONTRIBUTIONS TO THE 
                   GLOBAL FUND TO FIGHT AIDS, TUBERCULOSIS, AND 
                   MALARIA.

       It is the sense of the Senate that appropriations Acts 
     should provide sufficient funds to continue matching 
     contributions from other sources to The Global Fund to Fight 
     AIDS, Tuberculosis, and Malaria on a 1 to 2 basis.

     SEC. 609. SENSE OF THE SENATE CONCERNING CHILD NUTRITION 
                   FUNDING.

       It is the sense of the Senate that the levels in this 
     concurrent resolution assume additional funds for the 
     reauthorization of Federal child nutrition programs.

     SEC. 610. SENSE OF THE SENATE REGARDING COMPENSATION FOR 
                   EXPOSURE TO TOXIC SUBSTANCES AT THE DEPARTMENT 
                   OF ENERGY.

       It is the sense of the Senate that--
       (1) claims for occupational illness, which are determined 
     to be caused by exposure to toxic substances at Department of 
     Energy facilities under subtitle D of the EEOICPA, should be 
     promptly, equitably, and efficiently compensated;
       (2) administrative and technical changes should be made to 
     the EEOICPA to--
       (A) improve claims processing and review by physicians 
     panels to ensure cost-effective and efficient consideration 
     and determination of workers' claims;
       (B) provide for membership in additional special exposure 
     cohorts; and
       (C) address eligibility issues at facilities with residual 
     radiation; and
       (3) the President and Congress should work together at the 
     earliest opportunity to develop a plan that effectively 
     resolves the issue of a lack of a willing payor for many 
     claims that are determined under subtitle D of the EEOICPA to 
     be related to exposure to a toxic substance at Department of 
     Energy facilities.

     SEC. 611. SENSE OF THE SENATE REGARDING TAX INCENTIVES FOR 
                   CERTAIN RURAL COMMUNITIES.

       It is the sense of the Senate that if tax relief measures 
     are enacted in accordance with the assumptions in the budget 
     resolution in this session of Congress, such legislation 
     should include incentives to help rural communities attract 
     individuals to live and work and start and grow a business in 
     those communities.

     SEC. 612. SENSE OF THE SENATE CONCERNING SUMMER FOOD PILOT 
                   PROJECTS.

       It is the sense of the Senate that sufficient funds should 
     be provided to the Food and Nutrition Service and other 
     appropriate agencies within the Department of Agriculture to 
     enable those agencies to expand the summer food pilot 
     projects established under section 18(f) of the Richard B. 
     Russell National School Lunch Act (42 U.S.C. 1769(f)) to all 
     States of the United States and to all service institutions 
     (including service institutions described in section 13(a)(7) 
     of that Act).

     SEC. 613. SENSE OF THE SENATE REGARDING CLOSING THE ``TAX 
                   GAP''.

       It is the sense of the Senate that the Internal Revenue 
     Service should be provided the resources necessary to 
     increase enforcement activities that would be concentrated on 
     efforts to reduce the tax gap substantially by the end of 
     fiscal year 2009.
                     Subtitle B--Sense of the House

     SEC. 621. SENSE OF THE HOUSE ON ENTITLEMENT REFORM.

       (a) Findings.--The House finds that welfare was 
     successfully reformed through the application of work 
     requirements, education and training opportunity, and time 
     limits on eligibility.
       (b) Sense of the House.--It is the sense of the House that 
     authorizing committees should--
       (1) systematically review all means-tested entitlement 
     programs and track beneficiary participation across programs 
     and time;
       (2) enact legislation to develop common eligibility 
     requirements for means-tested entitlement programs;
       (3) enact legislation to accurately rename means-tested 
     entitlement programs;
       (4) enact legislation to coordinate program benefits in 
     order to limit to a reasonable period of time the Government 
     dependency of means-tested entitlement program participants;
       (5) evaluate the costs of, and justifications for, 
     nonmeans-tested, nonretirement-related entitlement programs; 
     and
       (6) identify and utilize resources that have conducted 
     cost-benefit analyses of participants

[[Page 10045]]

     in multiple means- and nonmeans-tested entitlement programs 
     to understand their cumulative costs and collective benefits.
                     Subtitle C--Sense of Congress

     SEC. 631. SENSE OF CONGRESS ON SPENDING ACCOUNTABILITY.

       It is the sense of Congress that--
       (1) authorizing committees should actively engage in 
     oversight utilizing--
       (A) the plans and goals submitted by executive agencies 
     pursuant to the Government Performance and Results Act of 
     1993; and
       (B) the performance evaluations submitted by such agencies 
     (that are based upon the Program Assessment Rating Tool which 
     is designed to improve agency performance);

     in order to enact legislation to eliminate waste, fraud, and 
     abuse to ensure the efficient use of taxpayer dollars;
       (2) all Federal programs should be periodically 
     reauthorized and funding for unauthorized programs should be 
     level-funded in fiscal year 2005 unless there is a compelling 
     justification;
       (3) committees should submit written justifications for 
     earmarks and should consider not funding those most 
     egregiously inconsistent with national policy;
       (4) the fiscal year 2005 budget resolution should be 
     vigorously enforced and legislation should be enacted 
     establishing statutory limits on appropriations and a pay-as-
     you-go rule for new and expanded entitlement programs; and
       (5) Congress should make every effort to offset nonwar-
     related supplemental appropriations.
       And the House agree to the same.

     Jim Nussle,
     Rob Portman,
                                Managers on the Part of the House.

     Don Nickles,
     Pete Domenici,
     Chuck Grassley,
     Judd Gregg,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The managers on the part of the House and the Senate at the 
     conference on the disagreeing votes of the two Houses on the 
     amendment of the House to the concurrent resolution (S. Con. 
     Res. 95) setting forth the congressional budget for the 
     United States Government for fiscal year 2005 and setting 
     forth appropriate budgetary levels for fiscal years 2006 
     through 2009, submit the following joint statement to the 
     House and the Senate in explanation of the effect of the 
     action agreed upon by the managers and recommended in the 
     accompanying conference report:
       The House amendment struck all out of the Senate resolution 
     after the resolving clause and inserted a substitute text.
       The Senate recedes from its disagreement to the amendment 
     of the House with an amendment that is a substitute for the 
     Senate resolution and the House amendment. The differences 
     between the Senate resolution, the House amendment, and the 
     substitute agreed to in conference are noted below, except 
     for clerical corrections, conforming changes made necessary 
     by agreements reached by the conferees, and minor drafting 
     and clarifying changes.

                          DISPLAYS AND AMOUNTS

       The contents of concurrent budget resolutions are set forth 
     in section 301(a) of the Congressional Budget Act of 1974. 
     The years in this document are fiscal years unless otherwise 
     noted.
     Senate Resolution
       The Senate resolution includes all of the items required as 
     part of a concurrent budget resolution under section 301(a) 
     of the Congressional Budget Act. The Senate resolution 
     included the traditional function categories and set out 
     levels for fiscal year 2005.
     House Amendment
       The House amendment includes all of the items required as 
     part of a concurrent budget resolution under section 301(a) 
     of the Congressional Budget Act. It also included a new 
     separate functional category, function 100, for Homeland 
     Security. As permitted under section 301(b) of the 
     Congressional Budget Act, Section 101(6) of the House 
     amendment includes advisory levels on debt held by the 
     public. The House Amendment revised the levels for the 
     current year, fiscal year 2004.
     Conference Agreement
       The conference agreement includes all of the items required 
     as part of a concurrent budget resolution under section 
     301(a) of the Congressional Budget Act. As permitted under 
     section 301(b) of the Congressional Budget Act, Section 
     101(6) of the conference agreement includes advisory levels 
     on debt held by the public. The conference agreement does not 
     include a function 100.

                     AGGREGATE AND FUNCTION LEVELS

       The following tables are included in this section:

     Conference Report on the Fiscal Year 2005 Budget Resolution: 
         Aggregate and Function Levels
     Senate-Passed Fiscal Year 2005 Budget Resolution: Aggregate 
         and Function Levels
     House-Passed Fiscal Year 2005 Amendment: Total Spending and 
         Revenues
     House-Passed Fiscal Year 2005 Amendment: Discretionary 
         Spending
     House-Passed Fiscal Year 2005 Amendment: Mandatory Spending

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                         FUNCTIONS AND REVENUES

       Pursuant to section 301(a)(4) of the Budget Act, the budget 
     resolution must set appropriate levels for each major 
     functional category based on the 302(a) allocations and the 
     budgetary totals.
       The respective levels of the Senate resolution, the House 
     amendment, and the conference agreement for each major budget 
     function and revenue totals are discussed in the following 
     section.
       Note: In the House amendment as passed, funding amounts for 
     certain homeland security activities were moved out of their 
     customary functions and into a separate category, Function 
     100--Homeland Security. Therefore, the House-passed totals in 
     these functions do not precisely correspond with those in the 
     Senate-passed resolution. The functions affected are Function 
     050 (non-military activities only), Function 150, Function 
     250, Function 270, Function 300, Function 350, Function 370, 
     Function 400, Function 450, Function 500, Function 550, 
     Function 570, Function 600, Function 700, Function 750, and 
     Function 800. The customary correspondence was restored in 
     the process of developing the conference agreement.
       The conference agreement provides aggregate discretionary 
     spending in 2005 of $814.261 billion in budget authority and 
     $890.812 billion in outlays including outlays flowing from 
     prior-year emergencies. These two aggregate numbers are 
     allocated to the Appropriations Committees to be suballocated 
     to their 13 individual appropriations subcommittees as 
     required by section 302 of the Budget Act.

                                REVENUES

       Federal revenues are taxes and other collections from the 
     public that result from the government's sovereign or 
     governmental powers. Revenues contained in the budget 
     resolution reflect all of the Federal government's various 
     tax receipts that are classified as ``on budget.'' This 
     includes individual income taxes, corporate income taxes, 
     excise taxes, estate and gift taxes, customs duties and 
     miscellaneous receipts (which include deposits of earnings by 
     the Federal Reserve System, fines, penalties, fees for 
     regulatory services, and others). The component of social 
     insurance taxes that is collected for the Social Security 
     system--the Old Age and Survivors and Disability Insurance 
     [OASDI] payroll tax--is ``off budget.'' The remaining social 
     insurance taxes (the Hospital Insurance [HI] payroll tax 
     portion of Medicare, the Federal Unemployment Tax Act [FUTA] 
     payroll tax, railroad retirement and other retirement 
     systems) are all on budget. Pursuant to the Congressional 
     Budget Act of 1974 and the Budget Enforcement Act of 1990, 
     Social Security payroll taxes, which constitute slightly more 
     than a quarter of all Federal receipts, are not included in 
     the budget resolution.
       Under current law, federal tax collections are projected to 
     total $11.8 trillion over the next five years. For 2004, 
     total revenues are projected to be 15.9 percent of gross 
     domestic product [GDP], far below the post-World War II 
     average of 17.9 percent. Over the period covered by the 
     budget resolution, 2005-2009, total baseline revenues are 
     projected to average 17.8 percent of GDP (nearly back to the 
     long-term historical average). Even though this conference 
     agreement assumes policies producing a net reduction in tax 
     revenues, total federal taxes are still projected to rise 
     from 16.8 percent of GDP in 2005 to 18.2 percent of GDP in 
     2009--above the historical average. The increase in Federal 
     taxes relative to GDP occurs because of provisions in the tax 
     code that are not indexed fully for inflation and real, 
     inflation-adjusted, income growth. The tendency for taxes to 
     increase relative to the size of the economy due to inflation 
     and a growing economy highlights the need to regularly adjust 
     tax policies to avoid an ever-increasing tax burden on our 
     economy.
     Senate Resolution
       The Senate resolution assumes total revenues of $11.7 
     trillion over the next five years, $0.1 trillion less than 
     baseline, climbing from 15.9 percent of GDP this year to 18.0 
     percent of GDP by 2009.
       The Senate resolution assumes that the accelerated tax 
     relief provisions in the 2003 Jobs and Growth Tax Relief 
     Reconciliation Act [JGTRRA] that expire at the end of 2004 
     ($1,000 child credit, marriage penalty relief and a one-year 
     extension of the 10-percent income tax bracket expansion) are 
     permanently extended. The resolution assumes that the repeal 
     of the death tax is accelerated by one year to 2009. The 
     resolution reconciles the Finance Committee for a reduction 
     in revenues consistent with these changes through 2009 (the 
     scope of the budget resolution). The Finance Committee is 
     instructed to report legislation to reduce revenues by $80.6 
     billion over the 2005-2009 period.
       The Senate resolution assumes, but does not reconcile, 
     another $22.7 billion in tax relief over five years; this 
     reflects making permanent: the JGTRRA dividends and capital 
     gains tax rate structures, the 2001 Economic Growth and Tax 
     Relief Reconciliation Act marginal rate reductions, estate 
     tax repeal, education incentives, modifications of pension 
     plans, and other incentives for families and children 
     (adoption tax credit, employer-provided child care tax 
     credit, and dependent care tax credit).
       The Senate resolution assumes $23.1 billion in tax relief 
     for the President's proposal for a one-year extension of the 
     alternative minimum tax exemption amount and the treatment of 
     personal credits under the AMT. The resolution assumes $15 
     billion in tax relief related to energy policy legislation. 
     The resolution also assumes the revenue impact of medical 
     malpractice reform.
       The Senate resolution assumes that Congress will act to 
     close tax loopholes identified by the President and by the 
     tax-writing committees. For example, the Senate resolution 
     assumes revenue from the President's proposal to increase 
     disclosure of tax shelters and increase penalties for failure 
     to disclose those shelter arrangements, from the President's 
     proposal to shut down abusive leasing transactions between 
     U.S. corporations and tax-exempt entities (so-called ``SILO'' 
     transactions), and from the Finance Committee's proposal to 
     shut down Enron-related tax shelters. The Senate resolution 
     assumes that the revenue raised by closing loopholes and 
     reducing fraud (such as in the Earned Income Credit, see 
     function 600) is available to offset tax relief provisions 
     that have been recommended by the President and supported by 
     the Committee, such as the proposal to allow individuals to 
     deduct the cost of high-deductible health plans, as well as 
     many proposals that are being considered by Congress.
       During Senate consideration of the 2005 budget resolution, 
     the Senate adopted by voice vote a Landrieu amendment (S.A. 
     2775) that increased revenues by $876 million in 2005 and by 
     $5.5 billion over the 2005-2009 period.
     House Amendment
       The House amendment calls for $1.457 trillion in on-budget 
     revenue for fiscal year 2005, and $8.539 trillion over 2005-
     2009. Total revenue in the House amendment is $2.030 trillion 
     for fiscal year 2005 and $11.691 trillion over 2005-2009. The 
     House amendment assumes policies with a revenue impact of 
     $19.919 billion for fiscal year 2005 and $145.799 billion 
     over 2005-2009. These effects are principally the result of 
     preventing automatic tax increases that would otherwise 
     occur.
       Although the House amendment does not explicitly define 
     specific changes in tax policy, the revenue levels of the 
     amendment are consistent with a general policy of not 
     increasing taxes compared to policies currently in place. In 
     particular, the amendment includes adjustments to revenue of 
     sufficient size to accommodate continuation of specific 
     provisions that are set to expire, including:
       No tax increase for those claiming the child tax credit. 
     The amendment provides for retaining the current credit level 
     of $1,000 per child. It assumes Congress will act to prevent 
     a reduction in the credit, to $700 per child, scheduled to 
     occur in 2005. In other words, the House amendment 
     accommodates changes to prevent a potential tax increase of 
     $600 on a family with two children--from that provision 
     alone--that would otherwise occur.
       No increase in the marriage penalty. The amendment 
     accommodates changes to prevent a scheduled reduction in the 
     upper bound of the 15-percent bracket and standard deduction 
     for a married couple.
       No increase in taxes resulting from a reduction in the 
     upper threshold for the 10-percent income tax bracket (e.g., 
     scheduled to decline from $14,000 adjusted for inflation in 
     2004 for joint filers to $12,000 in 2005 if not extended).
       The House amendment accommodates extending the small 
     business expensing limits (the expensing of business 
     equipment and computer software spending is scheduled to fall 
     back to a limit of $25,000 in 2005, from the inflation-
     indexed level of $100,000 for 2003). Extension of bonus 
     depreciation for corporate investment spending is not 
     accommodated, reflecting the original intent of it serving as 
     a temporary, short-run stimulus at the time of its adoption 
     in 2002 and its extension in 2003.
       The House amendment sets the on-budget revenue level of the 
     Federal government for 2004 and the next five years, but it 
     is the responsibility of the Committee on Ways and Means to 
     make the specific adjustments in law to implement these 
     levels.
       The House amendment directs the Committee on Ways and Means 
     to report legislation to the House floor by October 1, 2004, 
     making adjustments in current law to prevent tax increases of 
     $13.182 billion in fiscal year 2005 and $137.580 billion for 
     fiscal year 2005-2009. These reconciled tax adjustments 
     provide the full amount necessary to prevent tax increases 
     from the provisions of law enacted in 2001 and 2003. The 
     President's budget proposals assumed these amounts as a 
     baseline adjustment.
     Conference Agreement
       The conference agreement for revenues assumes a level 
     sufficient to accommodate the extension of the $1,000 child 
     credit, marriage penalty relief, and the expansion of the 10-
     percent individual income tax bracket, all of which are 
     scheduled to expire at the end of 2004. The conference 
     agreement includes a reconciliation instruction to the House 
     Ways and Means Committee and the Senate Finance Committee to 
     report legislation by September 30, 2004, that reduces 
     revenues by $22.9 billion and that increases related outlays 
     by $4.6 billion, which is sufficient to accommodate a one-
     year extension of certain

[[Page 10059]]

     expiring tax cuts. The reconciled amounts provide an amount 
     sufficient to prevent the tax increases that would occur if 
     these provisions were allowed to expire.
       The conference agreement also can accommodate, but does not 
     reconcile, $27.7 billion (over five years) of tax relief.

                     Function 050: National Defense

     Function Summary
       Function 050 includes funds to develop, maintain, and equip 
     the military forces of the United States. More than 95 
     percent of the funding in this function goes to Function 
     051--Department of Defense [DOD] military activities; the 
     remaining funding in the function applies to atomic energy 
     defense activities of the Department of Energy (Function 
     053), and other defense-related activities (Function 054).
       Function 050 budget authority rose from $292.3 billion in 
     fiscal year 1999 to $463.6 billion in fiscal year 2004, a 
     9.7-percent average annual growth rate. During the same time 
     period, outlays rose from $274.9 billion to $453.0 billion, a 
     10.5 percent average annual growth rate (these figures 
     include the effects of supplemental spending). The largest 
     component of this was the budget of the Department of 
     Defense, whose budget authority grew from $278.5 billion in 
     fiscal year 1999 to $443.8 billion in 2004, a 9.8 percent 
     average annual increase.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function would total $420.8 billion in budget authority 
     and $447.1 billion in outlays for 2005. This represents a 
     decrease of $38.3 billion in budget authority (-8.3 percent) 
     and $4.8 billion in outlays (-1.1 percent) from the 2004 
     level, factoring in $65.1 billion in budget authority 
     provided in the 2004 Emergency Supplemental for military 
     operations in Iraq and Afghanistan. When the Emergency 
     funding is excluded the Senate resolution for 2005 represents 
     an increase of $26.8 billion in budget authority (6.8 
     percent) above the 2004 level.
       To address the ongoing costs of military operations in Iraq 
     and Afghanistan, the Senate resolution includes a $30 billion 
     reserve for supplemental appropriations. This ``war reserve'' 
     is described in the enforcement title. When the war reserve 
     is included, the Senate resolution for function 050 
     represents an increase of $56.8 billion in budget authority 
     (14.4 percent) above the 2004 level.
       The Senate resolution reflects the President's request for 
     defense. Ultimately, the conference report on the 2005 budget 
     resolution will allocate one discretionary level to the 
     Appropriations Committee (302(a) allocation), and it is in 
     the jurisdiction of the Appropriations Committee, not the 
     Budget Committee, to set appropriation levels for 2005 for 
     all discretionary programs. In light of that reality, the 
     Senate resolution encourages the Appropriations Committee to 
     give careful consideration to the President's $72 million 
     requested increase for the Radiation Exposure Compensation 
     Act to ensure adequate resources will be available to pay all 
     claimants through 2005.
     House Amendment
       Note: In the House amendment as passed, funding amounts for 
     certain homeland security activities were moved out of this 
     function into a separate category, Function 100--Homeland 
     Security. The effect applied only to non-military, non-
     Department of Defense activities. Accordingly, the House-
     passed totals in these functions do not precisely correspond 
     with those in the Senate-passed resolution. The customary 
     correspondence was restored in the process of developing the 
     conference agreement.
       The amendment calls for $419.6 billion in budget authority 
     and $447.1 billion in outlays in fiscal year 2005. The 
     function totals are $2.321 trillion in budget authority and 
     $2.285 trillion in outlays over 5 years. Mandatory spending 
     is $1.4 billion in budget authority and $2.4 billion in 
     outlays in fiscal year 2005, and totals $15.8 billion in 
     budget authority and $16.9 billion in outlays over 5 years. 
     Discretionary spending is $418.3 billion in budget authority 
     and $444.7 billion in outlays in fiscal year 2005; and over 5 
     years, it is $2.305 trillion in budget authority and $2.268 
     trillion in outlays.
       Mandatory
       Function 050 contains numerous small mandatory accounts 
     such as stock funds, trust funds, and gift funds whose 
     receipts vary from year to year. The resolution assumes 2005 
     mandatory spending that matches the President's request. For 
     2004, the amendment accommodates $13 million to retroactively 
     compensate service members for purchase of domestic airline 
     tickets used for travel from the Iraqi theater of war to 
     their final destination. The Supplemental Appropriations Act 
     for Fiscal Year 2004 (Public Law 108-106) specified that 
     funds be used to reimburse service members, but DOD did not 
     authorize disbursement until 19 December 2003. Under current 
     government compensation rules, no decision can be implemented 
     retroactively; hence there is a need to allocate direct 
     spending to fund a provision that would specifically 
     reimburse service members not compensated under the 
     supplemental appropriation.
       Discretionary
       Figures show a recommended increase of 7 percent (excluding 
     the 2004 supplemental), fully accommodating the President's 
     request. Department of Defense discretionary funding, at 
     $401.8 billion, matches the President's request. The national 
     defense budget presented here is part of a multiyear plan 
     enabling the military to fight the war against terrorism now, 
     and to transform to counter unconventional threats in the 
     future. Elsewhere (in Function 920) the resolution includes 
     $50 billion to anticipate additional needs in the Afghanistan 
     and Iraq theaters. This is a mid-range estimate for 
     anticipated annual costs. It is not an attempt to 
     predetermine the scope of operations or which weapons and 
     supplies DOD will need, but rather an effort to make the 
     budget reflect a likely future outlay.
       A special procedure provided for in the budget resolution 
     would exempt appropriations related to the global war on 
     terrorism, and hence a supplemental appropriation toward this 
     end will not trigger a point of order.
       A saving of $199 million from the request in Functions 053 
     and 054 is assumed for efficiencies; it should be noted, 
     however, that the 2005 resolution total (including Homeland 
     Security accounts) for these functions is $543 million more 
     than the previous year's appropriations. This modest 
     adjustment does not affect Department of Defense funding or 
     ongoing contingency operations.
     Conference Agreement
       The conference agreement assumes the President's requested 
     levels for national defense plus $50 billion for supplemental 
     appropriations for operations in the Afghan and Iraqi 
     theaters. The conference agreement for this function reflects 
     total spending of $472.2 billion in budget authority and 
     $474.3 billion in outlays for fiscal year 2005. Mandatory 
     spending for this function is $1.4 billion in budget 
     authority and $2.4 billion in outlays in fiscal year 2005. 
     Discretionary spending for this function is $470.8 billion in 
     budget authority and $471.9 billion in outlays in fiscal year 
     2005.
       During the conference on the budget resolution, conferees 
     received information that the Department of Defense is likely 
     to reach the current statutory limit on the number of 
     military housing projects allowed under the Military Housing 
     Privatization Initiative [MHPI] sometime during fiscal year 
     2005. The administration and the General Accounting Office 
     are reviewing the program. The conferees understand the 
     importance of improved military housing for the quality of 
     life of service personnel and their families and are 
     committed to working with the committees of jurisdiction to 
     address procedural issues that could apply to legislation 
     allowing a temporary extension of military family housing 
     improvements.

                  Function 150: International Affairs

     Function Summary
       Function 150 includes international development and 
     humanitarian assistance; international security assistance; 
     the conduct of foreign affairs; foreign information and 
     exchange activities; and international financial programs. 
     Function 150 supports the Department of State and related 
     international affairs organizations including the U.S. Agency 
     for International Development [USAID].
       Function 150 budget authority rose from $37.9 billion in 
     fiscal year 1999 to $43.7 billion in fiscal year 2004, a 2.9 
     percent average annual growth rate. During the same time 
     period, outlays rose from $15.2 billion to $29.3 billion, a 
     14.0 percent average annual growth rate. The largest 
     component of this was the budget of the Department of State, 
     whose budget authority grew from $8.8 billion in 1999 to 
     $10.6 billion in fiscal year 2004, a 3.7 percent average 
     annual increase.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of $32.3 billion in budget authority and $37.0 
     billion in outlays for 2005. This represents a decrease of 
     $16.3 billion in budget authority (-33.6 percent) and an 
     increase of $2.9 billion in outlays (8.5 percent) from the 
     2004 level, factoring in $21.8 billion in budget authority 
     provided in the 2004 Emergency Supplemental for international 
     affairs activities (including $19.4 billion for international 
     relief and reconstruction activities in Iraq). When this 
     funding is excluded the resolution for 2005 represents an 
     increase of $5.5 billion in budget authority (20.3 percent).
       The Senate resolution reflects the President's request for 
     international affairs (Lugar Amendment 2845) plus $730 
     million in additional funding. The Senate resolution assumes 
     $330 million would be added to the requested level for the 
     Child Survival and Health program (DeWine Amendment 2697), 
     $300 million would be added to the requested level for 
     fighting global HIV/AIDS (Lugar Amendment 2845), and $100 
     million would be added for Haiti reconstruction (DeWine 
     Amendment 2715). The amendments adopted by the Senate 
     included corresponding negative entries for function 920 to 
     result in no net effect on the overall budget.
       The Senate resolution supports the use of United States 
     contributions to the Global Fund to Fight AIDS, Tuberculosis 
     and Malaria as leverage for increasing the amount

[[Page 10060]]

     of international financial support in this battle. However, 
     the Senate is concerned by recent reports that suggest the 
     Fund has been making grants to finance the purchase of 
     ineffective malaria drugs, contrary to preferred World Health 
     Organization policy on malaria treatment. The reports have 
     called into question whether the nascent Fund has the 
     necessary mechanisms in place to guarantee the effective use 
     of United States and international contributions to the Fund. 
     Because continued support for the Fund depends upon 
     transparency and accountability in the Fund's grant-making 
     process, the Senate believes the United States should work 
     with foreign governments and international organizations to 
     ensure that the Fund has the necessary capabilities to use 
     its contributions most effectively.
       Mandatory
       The resolution assumes no mandatory increases or decreases 
     in this function.
     House Amendment
       The amendment calls for $26.5 billion in budget authority 
     and $32.8 billion in outlays in fiscal year 2005. The 
     function totals are $138.5 billion in budget authority and 
     $140.0 billion in outlays over 5 years. Mandatory spending is 
     -$0.4 billion in budget authority and -$3.0 billion in 
     outlays in fiscal year 2005, and totals $2.8 billion in 
     budget authority and -$13.0 billion in outlays over 5 years. 
     Discretionary spending is $26.9 billion in budget authority 
     and $35.8 billion in outlays in fiscal year 2005; and over 5 
     years, it is $135.8 billion in budget authority and $153.0 
     billion in outlays.
       The negative budget authority and outlay levels in 
     mandatory spending reflect receipts of the Foreign Military 
     Sales Trust Fund, interest income earned on U.S. Government 
     securities held by the Exchange Stabilization Fund, and the 
     liquidation of economic assistance loans, foreign military 
     financing loans, Export-Import Bank loans, loans to the 
     United Kingdom, and loan guarantees to Israel.
       Mandatory
       There are no specific mandatory assumptions in this 
     function. In fiscal year 2005, the mandatory budget authority 
     and outlay levels are negative, reflecting receipts of the 
     Foreign Military Sales Trust Fund, and the liquidation of 
     economic assistance loans, foreign military financing loans, 
     Export-Import Bank loans, loans to the United Kingdom, and 
     loan guarantees to Israel.
       Discretionary
       Specific programs will be increased or decreased when the 
     Appropriations subcommittees write their respective bills. 
     Outyear levels result from applying a simple computation of 
     modest growth, consistent with the President's budget. 
     Outyear levels are not binding and will be revisited in 
     subsequent years.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of $28.9 billion in budget authority and $32.8 
     billion in outlays for fiscal year 2005. Mandatory spending 
     for this function is -$357 million in budget authority and 
     -$3.0 billion in outlays in fiscal year 2005. Discretionary 
     spending for this function is $29.3 billion in budget 
     authority and $35.8 billion in outlays in fiscal year 2005. 
     The conference agreement for International Affairs is 
     sufficient to support an historic level of funding for HIV/
     AIDS.

          Function 250: General Science, Space, and Technology

     Function Summary
       Function 250 consists of General Science, Space and 
     Technology programs. The largest component of this function--
     about two-thirds of total spending--is for the space flight, 
     research, and supporting activities of the National 
     Aeronautics and Space Administration [NASA]. The function 
     also contains general science funding, including the budgets 
     for the National Science Foundation [NSF], and the 
     fundamental science programs of the Department of Energy 
     [DOE].
       Function 250 budget authority rose from $18.9 billion in 
     fiscal year 1999 to $23.4 billion in fiscal year 2004, a 4.4 
     percent average annual growth rate. During the same period, 
     outlays rose from $18.1 billion to $22.3 billion, a 4.2 
     percent average annual growth rate.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of $24.2 billion in budget authority and $23.6 
     billion in outlays for 2005. This represents an increase of 
     $0.9 billion in budget authority and $1.4 billion in outlays 
     from the 2004 level. The resolution includes the following 
     specific assumptions:
       For NASA (including function 250 and 400 accounts), $16.2 
     billion is assumed, a 5.6 percent increase over 2004. The 
     Senate resolution assumes fully funding the President's 
     request for NASA in 2005 and the outyears. The Committee-
     reported resolution did not assume fully funding the 
     President's request in 2005, but an amendment (SA 2733) 
     offered by Senator Sessions and adopted by the Senate 
     increased NASA by $600 million in 2005 and reduced function 
     800 by a like amount, resulting in no net effect on the 
     overall budget.
       For the Department of Energy Office of Science, the 
     resolution rejects the President's requested cut, and instead 
     assumes an additional $38 million (1.1 percent) above the 
     2004 level.
       Mandatory
       The Senate resolution assumes no mandatory increases or 
     decreases for this function.
     House Amendment
       The amendment calls for $22.8 billion in budget authority 
     and $22.5 billion in outlays in fiscal year 2005. The 
     function totals are $115.2 billion in budget authority and 
     $113.5 billion in outlays over five years. Mandatory spending 
     is $30 million in budget authority and $111 million in 
     outlays in fiscal year 2005, and totals $154 million in 
     budget authority and $321 million in outlays over five years. 
     Discretionary spending is $22.8 billion in budget authority 
     and $22.3 billion in outlays in fiscal year 2005; and over 
     five years, it is $115.1 billion in budget authority and 
     $113.2 billion in outlays.
       Mandatory
       There are no specific mandatory assumptions in this 
     function.
       Discretionary
       Specific programs will be increased or decreased when the 
     Appropriations subcommittees write their respective bills. 
     Outyear levels result from applying a simple computation of 
     modest growth, consistent with the President's budget. 
     Outyear levels are not binding and will be revisited in 
     subsequent years.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of $23.9 billion in budget authority and $23.3 
     billion in outlays for fiscal year 2005. Mandatory spending 
     for this function is $30 million in budget authority and $111 
     million in outlays in fiscal year 2005. Discretionary 
     spending for this function is $23.9 billion in budget 
     authority and $23.2 billion in outlays in fiscal year 2005.
       The conferees support the President's Vision for 
     Exploration and believe the fiscal year 2005 funding for 
     Function 250 should provide sufficient funding to initiate 
     the process. Additionally, the bulk of the requested increase 
     for fiscal year 2005 is for return to flight of the Space 
     Shuttle and continued assembly and operations for the 
     International Space Station. The Conferees hope that these 
     two must-fund requirements will be taken into account during 
     their consideration of the NASA appropriation. The conferees 
     also recognize the importance of the research and education 
     initiatives of the Department of Energy's Office of Science 
     and the National Science Foundation.

                          Function 270: Energy

     Function Summary
       Function 270 includes civilian energy and environmental 
     programs of the Department of Energy [DOE] (it does not 
     include DOE's national security activities--the National 
     Nuclear Security Administration--which are in Function 050, 
     or its basic research and science activities, which are in 
     Function 250). Function 270 also includes the Rural Utilities 
     Service of the Department of Agriculture, the Tennessee 
     Valley Authority [TVA], the U.S. Enrichment Corporation, the 
     Federal Energy Regulatory Commission, and the Nuclear 
     Regulatory Commission.
       Function 270 budget authority rose from $979 million in 
     fiscal year 1999 to $2.4 billion in fiscal year 2004, a 19.2 
     percent average annual growth rate. During the same time 
     period, outlays dropped from $911 million to $84 million, a 
     37.9 percent average annual reduction rate. Receipts, 
     repayments, and electricity sales (negative spending) result 
     in negative budget authority and are the primary causes for 
     the drop in outlays.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of $2.0 billion in budget authority and $2.1 
     billion in outlays for 2005. The Senate resolution includes 
     the following specific assumptions:
       The Senate resolution includes $1 billion for non-defense 
     Environmental Management, which is $86 million more than last 
     year. There is also $7.0 billion for Defense Environmental 
     Management, which is the same as the President's request and 
     $365 million more than last year in function 050. This 
     resolution does not assume that any of this funding will be 
     delayed until legal uncertainties regarding high level 
     nuclear waste are resolved.
       The resolution does not assume the President's cuts to 
     Fossil Energy Research and Development, and instead funds the 
     program at $673 million which is the same as last year.
       The resolution assumes $834 million for Energy supply which 
     is the same level as the President's request and $81 million 
     more than last year's level. The resolution assumes that $55 
     million of this increase will be for Nuclear Energy, Science, 
     and Technology, and will support the Generation IV Nuclear 
     Energy Systems Initiative, Nuclear Hydrogen Initiative, and 
     Advanced Fuel Cycle Initiative.
       During floor debate on the Senate resolution, the Levin 
     amendment (SA 2817) was accepted on a roll call vote. This 
     amendment

[[Page 10061]]

     reduced spending in this function by $1.7 billion by 
     canceling the royalty in kind program for the Strategic 
     Petroleum Reserve, $1.5 billion of this amount was then 
     redirected towards Homeland Security activities in a reserve 
     fund.
       Mandatory
       The Senate resolution includes a reserve fund for an energy 
     bill totaling $261 million in fiscal year 2005 and $1.5 
     billion over five years. This includes provisions dealing 
     with renewable energy, oil and gas, coal, electricity, energy 
     tax incentives, and ethanol.
     House Amendment
       The amendment calls for $2.9 billion in budget authority 
     and $1.2 billion in outlays in fiscal year 2005. The function 
     totals are $13.0 billion in budget authority and $5.2 billion 
     in outlays over five years. Mandatory spending is -$0.6 
     billion in budget authority and -$2.3 billion in outlays in 
     fiscal year 2005. Over the 2005-2009 period, mandatory 
     spending is -$4.7 billion in budget authority and -$12.7 
     billion in outlays due to increasing offsetting receipts from 
     various loan repayments and liquidations, electricity sales, 
     and fees. Discretionary spending is $3.5 billion in budget 
     authority and $3.5 billion in outlays in fiscal year 2005; 
     and over five years, it is $17.6 billion in budget authority 
     and $17.9 billion in outlays.
       Mandatory
       As noted, the negative figures in mandatory spending result 
     from increasing offsetting receipts from various loan 
     repayments and liquidations, electricity sales, and fees.
       The amendment accommodates the conference version of the 
     H.R. 6, the Energy Policy Act of 2003, which passed the House 
     on 18 November 2003, but has not been passed by the Senate. 
     The assumption is reflected in the allocation to the 
     Committee on Energy and Commerce. The authorizing committee 
     is free to determine its own policies within the allocation 
     limits.
       Discretionary
       Specific programs will be increased or decreased when the 
     Appropriations subcommittees write their respective bills. 
     Outyear levels are not binding and will be revisited in 
     subsequent years.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of $3.0 billion in budget authority and $1.4 billion 
     in outlays for fiscal year 2005. Mandatory spending for this 
     function is -$0.6 billion in budget authority and -$2.4 
     billion in outlays in fiscal year 2005. Discretionary 
     spending for this function is $3.6 billion in budget 
     authority and $3.8 billion in outlays in fiscal year 2005.

            Function 300: Natural Resources and Environment

     Function Summary
       Function 300 consists of water resources, conservation, 
     land management, pollution control and abatement, and 
     recreational resources. Major departments and agencies in 
     this function are the Department of Interior, including the 
     National Park Service [NPS], the Bureau of Land Management 
     [BLM], the Bureau of Reclamation, and the Fish and Wildlife 
     Service [FWS]; conservation-oriented and land management 
     agencies within the Department of Agriculture [USDA] 
     including the Forest Service; the National Oceanic and 
     Atmospheric Administration [NOAA] in the Department of 
     Commerce; the Army Corps of Engineers; and the Environmental 
     Protection Agency [EPA].
       Function 300 budget authority rose from $24.4 billion in 
     1999 to $32.3 billion in 2004, a 5.8 percent average annual 
     growth rate. During the same period, outlays increased from 
     $24.0 billion to $30.5 billion, a 4.9 percent average annual 
     increase.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of $33.3 billion in budget authority and $29.4 
     billion in outlays for 2005. The Senate passed resolution 
     includes the following specific assumptions:
       The resolution does not accept the Administration's cuts to 
     the Corps of Engineers and instead assumes $4.4 billion, 
     which is the same level of funding as last year. This 
     includes $1.4 billion for operation and maintenance and $1.6 
     billion for construction.
       The resolution assumes $11.6 billion for the Environmental 
     Protection Agency. This includes $7.0 billion for State and 
     Tribal Assistance Grants plus an additional $65 million for 
     the new clean school bus program. This level also includes 
     the President's request of $1.4 billion for Superfund, which 
     is an increase of $138 million or 11 percent from last year. 
     This level also assumes $3 million within the EPA budget to 
     fund the establishment of an independent Office of Ombudsman, 
     pending enactment of authorizing legislation.
       The Senate resolution assumes $907 million for fire 
     suppression within the Forest Service and Department of the 
     Interior. This is the same as the President's request and 
     $117 million more than was spent last year after adjusting 
     emergency funding out of the 2004 level. In addition, the 
     resolution includes language that will allow up to $500 
     million in additional funds for wildfire suppression to be 
     appropriated without penalty if the 10-year average is 
     appropriated in the Interior Appropriations bill. In addition 
     the Senate resolution supports the establishment of cost 
     containment measures for fire suppression.
       The resolution does not accept the Administration's cuts to 
     State and Private Forestry, and instead assumes $429 million, 
     the same level of funding as last year. The Committee 
     recognizes the important role that these programs play in 
     order to implement cooperative forestry across federal, state 
     and private lands.
       The resolution assumes $5 million will be spent within the 
     Bureau of Land Management on wilderness proposals resulting 
     from the collaborative process.
       The resolution supports payments of $53 million in 2005 and 
     $265 million over 5 years from the Abandoned Mine Reclamation 
     Fund to the certified public lands states.
       The resolution supports continued funding of programs 
     within the expired Conservation Spending Caps.
       The resolution assumes $100 million for Pacific Coastal 
     Salmon Recovery. This is an $11 million increase over last 
     year's level and the same as the President's request.
       The resolution assumes that $410 million from mandatory 
     Farm Bill conservation programs will be used as discretionary 
     offsets in 2005.
       During floor debate on the Senate resolution, the Senate 
     accepted a Wyden amendment (SA 2717) by voice vote which 
     added $343 million in 2005 to this function for hazardous 
     fuels reduction and reduced function 920 by the same amount. 
     In addition, the Senate accepted a Crapo amendment (SA 2784) 
     by voice vote that added $3 billion in 2005 to this function 
     for the EPA clean and safe drinking water revolving funds and 
     was offset in function 920.
       Mandatory
       The Senate passed resolution assumes the President's 
     proposal allowing the Park Service to change rental payments 
     to the city of San Francisco for the Hetch Hetchy Dam in 
     Yosemite National Park.
       The resolution assumes a technical correction to the 
     baseline that will allow technical assistance for the 
     Conservation Reserve Program and the Wetlands Reserve Program 
     to come out of mandatory Agriculture funds as was intended in 
     2002 Farm Bill.
       The Committee adopted an amendment by Senator Grassley 
     during the Committee markup that added $531 million over five 
     years to this function to support farm conservation programs.
     House Amendment
       The amendment calls for $31.2 billion in budget authority 
     and $30.9 billion in outlays in fiscal year 2005. The 
     function totals are $159.6 billion in budget authority and 
     $159.9 billion in outlays over five years. Mandatory spending 
     is $2.7 billion in budget authority and $1.8 billion in 
     outlays in fiscal year 2005. Over the 2005-2009 period, 
     mandatory spending increases by $15.7 billion in budget 
     authority and $15.3 billion in outlays. Discretionary 
     spending is $28.5 billion in budget authority and $29.1 
     billion in outlays in fiscal year 2005; and over five years, 
     it is $143.9 billion in budget authority and $144.6 billion 
     in outlays.
       Mandatory
       The assumptions accommodate legislation, H.R. 313, to 
     assist the United Mine Workers of America Combined Benefit 
     Fund in averting financial crisis by transferring to it any 
     additional interest from the Abandoned Mine Land Reclamation 
     Fund. The measure was reported by the Committee on Resources 
     on 1 October 2003. The resolution also accommodates 
     legislation that passed the House last year and is awaiting 
     Senate action to increase the waiver requirement for certain 
     local matching requirements for grants provided to American 
     Samoa, Guam, the Virgin Islands, or the Commonwealth of the 
     Northern Mariana Islands. These assumptions are reflected in 
     the allocation to the Committee on Resources, which is free 
     to determine its own policies within the allocation limits. 
     The accommodation is necessary to allow for a potential 
     conference agreement.
       Discretionary
       The amendment can accommodate full funding for the Healthy 
     Forests Initiative legislation (H.R. 1904) signed into law 
     last year. The Healthy Forests Initiative is a critical tool 
     for reducing the threat of severe wildfire and insect 
     infestation in heavily forested communities.
       The amendment also can accommodate full funding for 
     numerous other Federal agencies and programs, including the 
     Army Corps of Engineers, the Superfund program, and reducing 
     the Operations and Maintenance backlog within the National 
     Park Service.
       Outyear levels are not binding and will be revisited in 
     subsequent years.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of $32.1 billion in budget authority and $31.4 
     billion in outlays for fiscal year 2005. Mandatory spending 
     for this function is $2.8 billion in budget authority and 
     $1.8 billion in outlays in fiscal year 2005. Discretionary 
     spending for this function is $29.3 billion in budget 
     authority and $29.7 billion in outlays in fiscal year 2005.
       The agreement assumes a technical correction to the 
     baseline that will allow technical

[[Page 10062]]

     assistance for the Conservation Reserve Program and the 
     Wetlands Reserve Program to come out of mandatory agriculture 
     spending.
       The funding levels in this agreement assume funding levels 
     equal to the 10 year average for wildland fire suppression 
     within the Forest Service and Department of Interior.
       The agreement can accommodate level funding for the Army 
     Corps of Engineers.
       The conferees support restoring funding for beach 
     renourishment projects for local communities with contractual 
     agreements with the Army Corps of Engineers. These projects 
     are critical for combating erosion caused by the federal 
     government's coastal navigation construction projects.

                       Function 350: Agriculture

     Function Summary
       Function 350 includes funds for direct assistance and loans 
     to food and fiber producers, export assistance, market 
     information, inspection services, and agricultural research. 
     Farm policy is driven by the Farm Security and Rural 
     Investment Act of 2002, which provides producers with 
     continued planting flexibility while protecting them against 
     unique uncertainties such as poor weather conditions and 
     unfavorable market conditions.
       Function 350 budget authority fell from $23.9 billion in 
     1999 to $20.2 billion in 2004, a 3.3 percent average annual 
     reduction rate. During the same time period, outlays dropped 
     from $22.9 billion to $18.8 billion, a 3.9 percent average 
     annual reduction rate. The primary reason for this reduction 
     is more favorable overall commodity prices. Commodity prices 
     often fluctuate from year to year. This has a significant 
     impact on mandatory programs, which account for the vast 
     majority of spending within Function 350.
     Senate Resolution
       Discretionary
       The resolution assumes discretionary spending in this 
     function of $5.4 billion in budget authority and $5.6 billion 
     in outlays for 2005. This represents a decrease of $0.2 
     billion in budget authority and an increase of $0.1 billion 
     in outlays from the 2004 level. The Committee-reported 
     resolution includes the following specific assumptions:
       The resolution assumes an increase of $294 million in 
     budget authority from last year's level for activities 
     related to homeland security, a 94 percent increase over last 
     year. This includes a $115 million increase for the 
     Agriculture Research Service to provide for the acceleration 
     of the completion of the animal research lab in Ames, Iowa.
       The resolution assumes an increase of $85 million over last 
     year for activities to respond to the discovery of Bovine 
     Spongiform Encephalopathy [BSE] in the United States and 
     Canada. Of this increase, $50 million is in this function for 
     the Animal and Plant Health Inspection Service. The remaining 
     $35 million increase is for the Food Safety Inspection 
     Service and appears in function 550.
       The resolution assumes $105 million for PL 480 Title I 
     funding. This is the same as last year, but $15 million over 
     the President's request.
       The resolution did not accept any of the Administration's 
     proposed user fees for this function.
       The resolution assumes $260 million in discretionary 
     savings by blocking funding for the Initiative for Future 
     Agriculture and Food Systems. This proposal was enacted in 
     the 2004 Agriculture Appropriations Bill.
       Mandatory
       The resolution includes an amendment (by Senator Grassley) 
     adopted during mark-up to reduce farm program payments in 
     this function and provide additional funds for agriculture 
     conservation programs, food nutrition programs and rural 
     development programs in functions 300, 450 and 600.
     House Amendment
       The amendment calls for $21.1 billion in budget authority 
     and $20.5 billion in outlays in fiscal year 2005. The 
     function totals are $117.7 billion in budget authority and 
     $112.9 billion in outlays over five years. Mandatory spending 
     is $16.3 billion in budget authority and $15.4 billion in 
     outlays in fiscal year 2005. Over the 2005-2009 period, 
     mandatory spending increases by $93.4 billion in budget 
     authority and $88.4 billion in outlays. Discretionary 
     spending is $4.8 billion in budget authority and $5.1 billion 
     in outlays in fiscal year 2005; and over five years, it is 
     $24.3 billion in budget authority and $24.6 billion in 
     outlays.
       Mandatory
       The amendment assumes no new mandatory spending proposals.
       Discretionary
       The amendment can accommodate full funding for enhanced 
     efforts to protect the food supply from Bovine Spongiform 
     Encephalopathy [BSE], or Mad Cow Disease, as well as other 
     important food safety and agricultural research programs 
     within function 350. Outyear levels are not binding and will 
     be revisited in subsequent years.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of $21.8 billion in budget authority and $21.0 
     billion in outlays for fiscal year 2005. Mandatory spending 
     for this function is $16.5 billion in budget authority and 
     $15.5 billion in outlays in fiscal year 2005. Discretionary 
     spending for this function is $5.3 billion in budget 
     authority and $5.5 billion in outlays in fiscal year 2005.
       The conference agreement assumes funding for agriculture 
     related homeland security activities that could accommodate a 
     substantial increase in Agriculture Research Service.

               Function 370: Commerce and Housing Credit

     Function Summary
       Function 370 includes four components: mortgage credit 
     (usually negative budget authority because receipts tend to 
     exceed the losses from defaulted mortgages); the Postal 
     Service (mostly off budget); deposit insurance (negative 
     outlays resulting from payment of deposit insurance premiums 
     currently more than outweigh low outlays for losses); and 
     other advancement of commerce (the majority of the 
     discretionary and mandatory spending in this function). This 
     last component includes most of the Commerce Department, 
     including the International Trade Administration, Bureau of 
     Economic Analysis, Patent and Trademark Office, National 
     Institute of Standards and Technology, National 
     Telecommunications and Information Administration, and the 
     Bureau of the Census; as well as independent agencies such as 
     the Securities and Exchange Commission, the Commodity Futures 
     Trading Commission, the Federal Trade Commission, the Federal 
     Communications Commission, and all the activities of the 
     Small Business Administration that are not related to 
     disaster assistance.
       About $7 billion of the spending in function 370 is out of 
     the FCC's Universal Service Fund, which subsidizes service to 
     rural and low-income users, high-cost areas, and public 
     institutions such as schools and libraries. This spending has 
     no net impact on the deficit because it is offset on the 
     revenue side of the budget by fees collected by providers of 
     telecommunications services from their customers.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of $1.8 billion in budget authority and -$0.5 
     billion in outlays for 2005 (several activities in this 
     function are funded by offsetting collections that exceed the 
     level of spending). The Senate resolution includes the 
     following specific assumptions:
       The President's requested increases in 2005 (compared to 
     2004) for conducting the decennial census (45 percent), for 
     strengthening the Securities and Exchange Commission (12.4 
     percent), and for making homeland security investments in the 
     Department of Commerce (4.6 percent).
       The President's budget proposes to eliminate the Advanced 
     Technology Program [ATP] in the Department of Commerce 
     because private investors are better able than the federal 
     government to decide which research efforts should be funded. 
     The U.S. venture-capital markets are the best developed in 
     the world, do an effective job of funding new ideas, and 
     focus on many of the same research areas as the ATP. Venture-
     capital funds have grown enormously since the ATP was 
     conceived. Therefore, this proposal is reflected in the 
     Senate resolution.
       The President's budget proposes to terminate payments of 
     tariffs (collected under antidumping or countervailing duty 
     orders) over to affected industries. Before 2001, these 
     tariffs were deposited in and retained by the Treasury. Since 
     then, the tariffs have become mandatory payments. The World 
     Trade Organization has ruled that such payments violate 
     international trade agreements. On March 2, 2004, CBO 
     released an analysis of these payments that said the 
     following:

       The Continued Dumping and Subsidy Offset Act [CDSOA] of 
     2000 can be expected to result in more antidumping and 
     countervailing-duty petitions and more support for those 
     petitions by import-competing industries. That, in turn, 
     would lead to the initiation of more AD/CVD cases, the 
     imposition of more duties, and greater consequent harm to the 
     economy as a whole . . . Under CDSOA, the firm sees a lower 
     cost than the true cost to the economy of its output. As a 
     result, the firm increases its output beyond the point where 
     the unsubsidized cost to the firm--and thus to the economy--
     is balanced by the price. Since the price or value is less 
     than the cost to the economy of that additional output, the 
     economic welfare of the country is reduced . . . 
     Consequently, U.S. gross domestic product and gross national 
     product decline.

     This proposal is assumed in the Senate resolution, saving 
     $1.45 billion in budget authority in 2005.
       The Senate resolution reflects the Snowe amendment (SA 
     2839) adopted by a voice vote in the Senate to increase the 
     level in this function by $121 million in budget authority in 
     2005 for programs of the Small Business Administration. The 
     amendment included a corresponding negative entry for 
     function 920 to result in no net effect on the overall 
     budget.
       Mandatory
       The Senate resolution assumes no mandatory increases or 
     decreases in this function.

[[Page 10063]]


     House Amendment
       For on-budget amounts, the House amendment calls for $10.8 
     billion in budget authority and $5.8 billion in outlays in 
     fiscal year 2005. The function totals are $50.0 billion in 
     budget authority and $23.3 billion in outlays over five 
     years. Mandatory spending is $9.7 billion in budget authority 
     and $4.8 billion in outlays in fiscal year 2005, and totals 
     $44.4 billion in budget authority and $17.7 billion in 
     outlays over five years. Discretionary spending is $1.1 
     billion in budget authority and $1.0 billion in outlays in 
     fiscal year 2005; and over five years, it is $5.6 billion in 
     budget authority and $5.6 billion in outlays.
       Discretionary
       The Committee on Appropriations will determine how funds 
     will be apportioned among the various discretionary programs. 
     Specific programs will be increased or decreased when the 
     Appropriations subcommittees write their respective bills. 
     Outyear levels result from applying a simple computation of 
     modest growth, consistent with the President's budget. 
     Outyear levels are not binding and will be revisited in 
     subsequent years.
       Mandatory
       The House amendment accommodates the following measures: 
     H.R. 758, the Business Checking Freedom Act, which passed the 
     House on 1 April 2003; H.R. 522, the Federal Deposit 
     Insurance Reform Act of 2003, which passed the House on 2 
     April 2003; and H.R. 1375, the Financial Services Regulatory 
     Relief Act of 2003, which passed the House on 18 March 2004. 
     All three bills are awaiting action in the Senate. The 
     assumptions are reflected in the allocation to the Committee 
     on Financial Services.
     Conference Agreement
       For on-budget spending, the conference agreement for this 
     function reflects $9.3 billion in budget authority and $3.3 
     billion in outlays for fiscal year 2005. Discretionary 
     spending for this function is -$0.4 billion in budget 
     authority and -$0.2 billion in outlays in fiscal year 2005. 
     On-budget mandatory spending for this function is $9.7 
     billion in budget authority and $3.5 billion in outlays in 
     fiscal year 2005.
       Including on- and off-budget spending, the conference 
     agreement for this function reflects total spending of $7.2 
     billion in budget authority and $1.2 billion in outlays for 
     fiscal year 2005. Discretionary spending for this function is 
     -$0.4 billion in budget authority and -$0.2 billion in 
     outlays in fiscal year 2005. Mandatory spending for this 
     function is $7.6 billion in budget authority and $1.4 billion 
     in outlays in fiscal year 2005.

                     Function 400: Transportation 

     Function Summary
       Function 400 includes the Federal Highway Administration; 
     the Federal Transit Administration; the National Rail 
     Passenger Corporation [Amtrak]; highway, motor carrier and 
     rail safety programs; the Federal Aviation Administration; 
     the aeronautical activities of the National Aeronautics and 
     Space Administration; the Coast Guard; and the Maritime 
     Administration.
       Function 400 budget authority rose from $51.6 billion in 
     1999 to $69.2 billion in fiscal year 2004, a 6.1 percent 
     average annual growth rate. During the same time period, 
     outlays rose from $42.5 billion to $65.7 billion, a 9.1 
     percent average annual growth rate.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of $23.8 billion in budget authority and $66.2 
     billion in outlays for 2005. This represents an increase of 
     $0.1 billion in budget authority and $2.3 billion in outlays 
     from the 2004 level.
       The Senate resolution reflects the President's full request 
     for the homeland security activities in this function (a 13.2 
     percent increase over 2004).
       Discretionary and Mandatory
       The budgetary presentation of federal transportation 
     programs is complicated by the fact that most of the budget 
     authority for the programs is (because of committee 
     jurisdictions) classified as mandatory while the related 
     outlays are considered discretionary. The Senate-passed 
     surface transportation bill for highways and transit (S. 
     1072--SAFETEA) exceeded the level allowed by the fiscal year 
     2004 budget resolution by $41 billion in contract authority 
     over 2004-2009. In addition, the bill would increase the 
     deficit by spending a net of $30 billion (over the next six 
     years) more than the highway trust fund revenues that would 
     be collected under current law (estimated to be $228 billion 
     over 2004-2009, only a 14.6 percent increase over the $199 
     billion in highway trust fund receipts that were collected 
     over 1998-2003 during TEA-21.)
       The Administration has informed Congress that the 
     President's senior advisors would recommend that he veto S. 
     1072 as passed by the Senate. In light of this veto threat, 
     the Senate resolution reflects the President's request for 
     surface transportation mandatory contract authority (with 
     related outlays on the discretionary side of the budget) for 
     the next five years. As in the 2004 budget resolution, the 
     Senate resolution for 2005 includes a mechanism by which 
     these initial levels could be increased if legislation is 
     considered by the Senate that would levy and deposit net new 
     transportation user fee revenues (which are not already being 
     collected by the federal government under current law) into 
     the Highway Trust Fund.
       The President's proposal for the transportation 
     reauthorization bill is $256 billion (in terms of the figures 
     usually discussed, this includes both contract authority as 
     well as an authorization of $8 billion in discretionary 
     budget authority for transit programs for 2004-2009). This is 
     a 17 percent increase over the total level enacted in the 
     previous authorization bill [TEA-21], which was $218 billion 
     for 1998-2003. In contrast, according to the CBO estimate of 
     the bill as passed by the Senate, S. 1072 totals $322 billion 
     (including discretionary budget authority for transit), which 
     is a 48 percent increase over TEA-21 and is 26 percent more 
     than the President's request.
     House Amendment
       The House amendment calls for $65.0 billion in budget 
     authority and $62.0 billion in outlays in fiscal year 2005. 
     The function totals are $339.4 billion in budget authority 
     and $328.3 billion in outlays over five years. Mandatory 
     spending is $47.2 billion in budget authority and $2.0 
     billion in outlays in fiscal year 2005, and totals $249.6 
     billion in budget authority and $8.8 billion in outlays over 
     five years. Discretionary spending is $17.8 billion in budget 
     authority and $60.0 billion in outlays in fiscal year 2005; 
     and over five years, it is $89.8 billion in budget authority 
     and $319.5 billion in outlays. Homeland security components 
     formerly found in Function 400--including the Transportation 
     Security Administration, the United States Coast Guard, and 
     the Federal Air Marshals--are recorded in Function 100: 
     Homeland Security, and are consistent with the President's 
     request.
       Discretionary
       Specific programs will be increased or decreased when the 
     Appropriations subcommittees write their respective bills. 
     Outyear levels are not binding and will be revisited in 
     subsequent years.
       Mandatory
       The House amendment creates a reserve fund that allows the 
     chairman of the House Budget Committee to adjust the 
     allocation of budget authority to the Committee on 
     Transportation and Infrastructure for any measure that 
     reauthorizes surface transportation programs and provides new 
     budget authority for highway and transit spending. The 
     adjustment may only be made if it is offset by changes in 
     law, either included in the same measure or by previously 
     enacted legislation. The language in the House amendment 
     regarding this contingency measure is identical to that 
     included in the budget resolution for fiscal year 2004.
       The House amendment assumes a stream of mandatory budget 
     authority for a reauthorization of surface transportation 
     programs. It also creates a reserve fund to provide 
     additional budget authority for such a bill to the extent 
     that it is offset in the same or other legislation.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of $71.8 billion in budget authority and $68.6 
     billion in outlays for fiscal year 2005. Discretionary 
     spending for this function is $24.1 billion in budget 
     authority and $66.4 billion in outlays in fiscal year 2005. 
     Mandatory spending for this function is $47.7 billion in 
     budget authority and $2.2 billion in outlays in fiscal year 
     2005.
       Regarding the levels for the reauthorization of the highway 
     bill, the Senate recedes to the House. The conference 
     agreement includes an adjustment mechanism (section 311) to 
     accommodate higher spending than the levels assumed in the 
     conference agreement to the extent the additional spending is 
     offset through reduced outlays from, or additional receipts 
     to, the Highway Trust Fund.

            Function 450: Community and Regional Development

     Function Summary
       Function 450 includes programs that provide Federal funding 
     for economic and community development in both urban and 
     rural areas, including: Community Development Block Grants 
     [CDBGs]; the non-power activities of the Tennessee Valley 
     Authority; the non-roads activities of the Appalachian 
     Regional Commission; the Economic Development Administration 
     [EDA]; and partial funding for the Bureau of Indian Affairs. 
     Funding for disaster relief and insurance--including the 
     Federal Emergency Management Agency [FEMA], now part of the 
     Department of Homeland Security [DHS]--also appear here.
       Function 450 budget authority rose from $11.3 billion in 
     fiscal year 1999 to $16.7 billion in fiscal year 2004, an 8.2 
     percent average annual growth rate. During the same time 
     period, outlays rose from $11.9 billion to $16.7 billion, a 7 
     percent average annual growth rate.
       A factor in this growth was the presence of Federal 
     Emergency Management Agency [FEMA] funding for first 
     responders and one-time New York City recovery funds in the 
     wake of the events of 9-11.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of $13.5 billion in budget authority and $15.2 
     billion in

[[Page 10064]]

     outlays for 2005, a decrease of $2.2 billion in budget 
     authority and $0.9 billion in outlays from the 2004 level. 
     The Senate resolution includes the following specific 
     assumptions:
       For the Office of Domestic Preparedness, the Senate 
     resolution fully supports the President's proposal for first 
     responders and assumes $3.6 billion to ensure that they are 
     properly trained and equipped. This includes $500 million for 
     assistance to firefighters and $500 million for state and 
     local law enforcement antiterrorism activities. Since 2001, 
     Congress has appropriated close to $15 billion (or $20 
     billion if programs outside the Department of Homeland 
     Security are included) for state and local first responders. 
     The Senate notes with concern reports about misuse of money 
     provided to states and localities under this program and 
     supports policies to ensure these funds are being properly 
     spent.
       The Senate resolution assumes $3.0 billion in 2005 for 
     disaster relief activities. This level is consistent with the 
     average annual cost of (non-terrorist) disaster events over 
     the past five years. This includes $2.2 billion in new budget 
     authority, as well as money left over from prior years. This 
     $2.2 billion in new money represents an increase of $384 
     million, or 21.7 percent, over the 2004 level.
       The Senate resolution supports the pre-disaster mitigation 
     grant program that helps communities prevent, rather than 
     react to, disasters. The Senate resolution assumes $169 
     million for the program, an amount equal to last year's 
     level.
       The Senate resolution assumes continuation of the Community 
     Development Block Grant Program, but proposes to target CDBG 
     entitlement grants to lower income communities.
       The Senate resolution reflects a Dorgan amendment, (SA 
     2850) adding $260 million in budget authority in 2005 (and in 
     each year thereafter through 2009) for a new Homestead 
     Venture Capital Fund.
       Mandatory
       The Senate resolution assumes a savings proposal that would 
     deny federal flood insurance for certain repeatedly flooded 
     properties. The National Flood Insurance Program [NFIP] 
     currently insures roughly 45,000 repeatedly flooded 
     properties, representing about 1 percent of all policies in 
     force but accounting for a much larger share of annual flood 
     losses.
     House Amendment
       The House amendment calls for $11.9 billion in budget 
     authority and $14.2 billion in outlays in fiscal year 2005. 
     The function totals are $58.7 billion in budget authority and 
     $61.2 billion in outlays over five years. Mandatory spending 
     is $402 million in budget authority and -$183 million in 
     outlays in fiscal year 2005, and totals $780 million in 
     budget authority and -$924 million in outlays over five 
     years. The negative figures appear because of receipts to 
     revolving loan funds. Discretionary spending is $11.5 billion 
     in budget authority and $14.4 billion in outlays in fiscal 
     year 2005; and over five years, it is $57.9 billion in budget 
     authority and $62.2 billion in outlays.
       Mandatory
       The House amendment assumes no new mandatory spending 
     proposals.
       Discretionary
       The House amendment does not assume specific levels for 
     individual discretionary programs within Function 450. 
     Instead, $11.5 billion in budget authority and $14.4 billion 
     in outlays in fiscal year 2005 is assumed for overall 
     discretionary spending within the function. The Committee on 
     Appropriations will determine how these funds will be 
     apportioned among the various discretionary Community and 
     Regional Development programs. Outyear levels are not binding 
     and will be revisited in subsequent years.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of $13.6 billion in budget authority and $17.4 
     billion in outlays. Mandatory spending for this function is 
     $0.4 billion in budget authority and -$0.2 billion in outlays 
     in fiscal year 2005. Discretionary spending for this function 
     is $13.2 billion in budget authority and $17.6 billion in 
     outlays in fiscal year 2005.

   Function 500: Education, Training, Employment, and Social Services

     Function Summary
       Function 500 primarily covers federal spending within the 
     Departments of Education, Labor, and Health and Human 
     Services for programs that directly provide--or assist states 
     and localities in providing--services to young people and 
     adults. Its activities provide developmental services to low-
     income children; help fund programs for disadvantaged and 
     other elementary and secondary school students, make grants 
     and loans to post secondary students, and fund job-training 
     and employment services for people of all ages.
       Function 500 budget authority rose from $55.5 billion in 
     1999 to $89.5 billion in 2004, a 10 percent average annual 
     growth rate. During the same period, outlays rose from $50.6 
     billion to $86.5 billion, an 11.3 percent average annual 
     growth rate.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of $83.9 billion in budget authority and $78.3 
     billion in outlays for 2005. This represents an increase of 
     $5.9 billion (7.5 percent) in budget authority and $1.2 
     billion in outlays from the 2004 level. The resolution 
     includes the following specific assumptions:
       Consistent with the President's proposals, the increases 
     assumed in the Senate resolution would bring our Nation's 
     overall investment in elementary and secondary education to 
     nearly $500 billion, surpassing spending on our national 
     defense and exceeding per-pupil education spending of every 
     other nation except Switzerland.
       The Senate resolution includes $13.3 billion in 2005 for 
     Title I grants to Local Education Agencies [LEAs]--the 
     largest component of the No Child Left Behind Act. The $1.0 
     billion (8.1 percent) increase over 2004 would fund services 
     to disadvantaged students and improvements for low-performing 
     schools. At this level, funding for Title I grants would be 
     $4.6 billion (52 percent) greater than in 2001.
       The Senate resolution would increase funding for Part B 
     Grants to States for individuals with disabilities by $1.0 
     billion in each of the next two years. This is the fourth in 
     a series of consecutive $1.0 billion annual increases, which 
     cumulatively have raised the Federal share of average per 
     pupil expenditures to nearly 20 percent, the highest level of 
     Federal support ever provided to disabled children. With 2005 
     funding at $11.1 billion, funding for Part B Grants would 
     reflect an increase of $4.7 billion (75 percent) since 2001.
       The Senate resolution does not incorporate any of the 
     President's program terminations. However, the resolution 
     supports the President's effort to eliminate duplicative and 
     unproductive programs and encourage the Appropriations 
     Committees to carefully examine these proposals to maximize 
     efficient use of taxpayer dollars during this challenging 
     budget cycle.
       For Pell Grants, the Senate resolution assumes a $2.7 
     billion increase over 2004, which provides a total of $14.7 
     billion to fully fund a $4,500 maximum award. This level 
     reflects the Senate's adoption of the Coleman amendment (SA 
     2821), which increased the level assumed for Pell Grants by 
     $1.9 billion. The amendment included a corresponding negative 
     entry for function 920 to result in no net effect on the 
     overall budget. In recent years, the shortfall in the Pell 
     Grant program has grown dramatically due to insufficient 
     appropriations. The program may not continue to be 
     financially viable unless this shortfall is addressed.
       The resolution also incorporates the $0.9 billion cost of 
     Senators Dorgan and Brownback's American Heartland amendment 
     (SA 2850), which provides 50% loan forgiveness to recent 
     graduates who live and work in out migration counties. In 
     addition, the resolution incorporates the cost of the Enzi-
     Cantwell amendment (SA 2832), which added $250 million in 
     2005 for job training funding under the Workforce Investment 
     Act.
       Currently, the administrative expenses of the Federal 
     Direct Student Loan Program receive a permanent mandatory 
     appropriation. No other federal credit program has such a 
     mandatory appropriation for administrative expenses. Instead, 
     they are subject to annual review by the Appropriations 
     committee. The Senate resolution, consistent with the 
     President's proposal, assumes shifting the $795 million in 
     mandatory spending for these administrative expenses (Sec. 
     458) to an annual discretionary appropriation.
       The resolution recognizes how important the Impact Aid 
     Program is for school districts serving the needs of 
     federally connected children throughout the country 
     especially the emotional and family needs of military 
     dependent children during this time of conflict in Iraq. The 
     resolution urges that sufficient resources be provided 
     allowing school districts to maintain the same level of 
     service as what they were able to provide in fiscal year 
     2004.
       Mandatory
       The Senate resolution provides a reserve fund to facilitate 
     consideration of the Higher Education Reauthorization. This 
     fund provides a total of $5 billion to the Health, Education, 
     Labor and Pensions [HELP] Committee for the 2005-2009 period. 
     These funds may be used to increase student loan limits, 
     reduce borrower origination fees or maintain the existing 
     variable rate interest structure for Stafford loans after 
     2006.
     House Amendment
       The amendment calls for $92.5 billion in budget authority 
     and $90.5 billion in outlays in fiscal year 2005. The 
     function totals are $470.5 billion in budget authority and 
     $465.4 billion in outlays over 5 years. Mandatory spending is 
     $11.8 billion in budget authority and $10.0 billion in 
     outlays in fiscal year 2005, and totals $63.0 billion in 
     budget authority and $55.5 billion in outlays over 5 years. 
     Discretionary spending is $80.7 billion in budget authority 
     and $80.5 billion in outlays in fiscal year 2005, and totals 
     $407.4 billion in budget authority and $409.9 billion in 
     outlays over 5 years.
       Mandatory
       The assumptions accommodate H.R. 438, the Teacher 
     Recruitment and Retention Act

[[Page 10065]]

     of 2003, which passed the House on 9 July 2003 and is 
     awaiting action in the Senate. The assumption is reflected in 
     the allocation to the Committee on Education and the 
     Workforce, which is free to determine its own policies within 
     the allocation limits.
       Discretionary
       The amendment gives Function 500 priority status within the 
     overall framework of level funding for fiscal year 2005 in 
     non-defense, non-homeland-security spending. The resolution 
     calls for an increase from level funding of $2.8 billion in 
     budget authority and $3.6 billion in outlays. This increase 
     is intended to accommodate increases in the funding levels 
     for priority programs, such as special education state 
     grants, Title I grants to local education agencies, and Pell 
     Grants for low-income college students. Outyear levels are 
     not binding and will be revisited in subsequent years.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of $92.8 billion in budget authority and $90.7 
     billion in outlays for fiscal year 2005. Mandatory spending 
     for this function is $11.8 billion in budget authority and 
     $10.0 billion in outlays in fiscal year 2005. Discretionary 
     spending for this function is $81.0 billion in budget 
     authority and $80.7 billion in outlays in fiscal year 2005.
       The conference agreement provides sufficient funding to 
     accommodate increases consistent with the President's budget 
     for Title I grants to local education agencies and state 
     grants for special education. In addition, the conference 
     agreement recognizes the importance of Pell Grants for low-
     income undergraduates and will continue to work with the 
     Appropriations Committee and other interested parties to 
     ensure it is a financially sound and robust program.
       While the conferees support the Federal student loan 
     programs, the conference is concerned that the Ford Direct 
     Loan Program's subsidy estimates do not reflect the program's 
     true cost to the Federal Government. Therefore the conferees 
     support the Department of Education's continuing efforts to 
     refine and improve its cost estimating techniques.
       The conference agreement assumes additional funding for the 
     Workforce Investment Act (this could accommodate additional 
     funding for WIA consistent with the Enzi amendment # 2832.)

                          Function 550: Health

     Function Summary
       Function 550 consists of health care services, including 
     Medicaid, the Nation's major program covering medical and 
     long-term care costs for low-income persons; the State 
     Children's Health Insurance Program [SCHIP], health research 
     and training, including the National Institutes of Health 
     [NIH] and substance abuse prevention and treatment; and 
     consumer and occupational health and safety, including the 
     Occupational Safety and Health Administration. Medicaid 
     represents about 72 percent of the spending in this function.
       Function 550 budget authority rose from $142.2 billion in 
     1999 to $241.8 billion in 2004, an 11.2 percent average 
     annual growth rate. During the same time period, outlays rose 
     from $141.1 billion to $239.6 billion, an 11.2 percent 
     average annual growth rate. The largest component of this was 
     the budget of the Medicaid, for which federal payments grew 
     from $108.0 billion in 1999 to $173.9 billion in fiscal year 
     2004, a 10 percent average annual increase.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of 55.1 billion in budget authority and $50.4 
     billion in outlays for 2005. The resolution includes the 
     following specific assumptions:
       The Omnibus Appropriations Bill of 2003 completed the 
     planned five-year doubling of the NIH budget from $13.7 
     billion in 1998 to $27.2 billion in 2003. The Senate 
     resolution includes an additional increase in 2005, bringing 
     the total NIH funding to $28.7 billion. As part of this, the 
     resolution assumes $1.7 billion for NIH biodefense efforts, 
     an increase of 7.5 percent over 2004.
       The resolution also assumes a $35 million increase in food 
     safety and inspections at USDA. These funds will help USDA 
     detect and prevent BSE (mad cow disease) as well as help 
     detect bioterrrorism.
       The resolution also includes two one-year changes in 
     Medicaid to offset 2005 discretionary spending. The first is 
     a reduction in the federal medical assistance percentage 
     [FMAP] for information systems from a 90 percent to 75 
     percent federal share. The second is a reduction in federal 
     reimbursement for the administrative costs of Medicaid to 
     reflect the share assumed in the Temporary Assistance for 
     Needy Families [TANF] block grant and prohibit states from 
     using TANF funds to pay those costs in 2005.
       The Senate adopted an amendment (SA 2780) by Senator 
     Clinton creating a deficit-neutral reserve fund for 
     appropriations addressing minority health disparities.
       The Senate adopted an amendment (SA 2741) by Senator 
     Specter to increase the level in this function by $1.3 
     billion in budget authority in 2005 for the National 
     Institutes of Health. The amendment included a corresponding 
     negative entry for function 920 to result in no net effect on 
     the overall budget.
       The Senate adopted an amendment (SA 2822) by Senator 
     Murkowski to increase the level in this function by $282 
     million in budget authority in 2005 for Indian Health 
     Services. The amendment included a corresponding negative 
     entry for function 920 to result in no net effect on the 
     overall budget.
       The Senate adopted an amendment (SA 2794) by Senator Thomas 
     to increase the level in this function by $100 million in 
     budget authority in 2005 for rural health programs. The 
     amendment included a corresponding negative entry for 
     function 920 to result in no net effect on the overall 
     budget.
       Mandatory
       The Senate-passed resolution provides for a one-year 
     extension of the QI-1 program, under which Medicaid pays the 
     Medicare Part B premium for low-income beneficiaries.
       The Senate recognizes that the Temporary Assistance for 
     Needy Families [TANF] reauthorization is likely this year, 
     and that the reauthorization will be paid for with spending 
     reductions and not increase the deficit.
       The Senate also notes that there is great potential for 
     savings in the Medicaid program due to waste and abuse in the 
     system. The Senate points out that many states are using 
     Medicaid funds to provide health care to low-income 
     individuals and understands the need to balance all issues 
     when addressing this issue.
       The resolution also includes a deficit-neutral reserve fund 
     for legislation that addresses access to health-care services 
     and health insurance for the uninsured. This reserve fund 
     allows the chairman of the Budget Committee to adjust 
     applicable allocations and aggregates to accommodate this 
     legislation if the Committee on Finance or the Committee on 
     Health, Education, Labor, and Pensions reports a bill that 
     provides health insurance for the uninsured or that increases 
     access to health insurance through lowering costs--provided 
     that any such measure does not increase the costs of current 
     health coverage.
       The Senate understands that protecting patients' access to 
     quality and affordable health care by reducing the effects of 
     excessive liability costs is important to improve access to 
     health-care providers and reduce health-care costs. The 
     Senate encourages the committees of jurisdiction to examine 
     such concepts as sensible limits on non-economic damages and 
     reserving punitive damages for case that justify them.
       Public and private health plans and employers pay the 
     medical expenses of insured individuals when they are injured 
     by a third party, but in these circumstances public and 
     private health plans and employers are entitled under federal 
     law to be repaid if the individual later recovers damages 
     from the third party causing the injury. The right of 
     recovery is an important means to restore federal revenue, to 
     contain private health plan and employer costs and to reduce 
     health care premiums for individuals. The Senate understands 
     the recovery rights of federal health programs (Medicare, 
     FEHPB and M+C) and private health plans have been eroded by 
     recent court decisions. The result is higher federal and 
     private health plan costs. Last year, Congress acted to shore 
     up the Medicare program's recovery right. The Senate 
     encourages the committees of jurisdiction to examine 
     proposals that will strengthen the right of recovery for 
     federal programs and private health plans and employers.
       The Senate adopted an amendment (SA 2699) by Senator 
     Kennedy that allows legislation that maintained expiring 
     SCHIP funds to be included in the reserve fund for the 
     uninsured.
       The Senate adopted an amendment (SA 2833) by Senator 
     Bingaman that establishes a deficit-neutral reserve fund for 
     legislation reforming the vaccines for children program.
     House Amendment
       The House amendment calls for $245.1 billion in budget 
     authority and $244.9 billion in outlays in fiscal year 2005. 
     The function totals are $1.353 trillion in budget authority 
     and $1.350 trillion in outlays over 5 years. Mandatory 
     spending is $198.8 billion in budget authority and $198.9 
     billion in outlays in fiscal year 2005, and totals $1.119 
     trillion in budget authority and $1.120 trillion in outlays 
     over 5 years. Discretionary spending is $46.3 billion in 
     budget authority and $46.1 billion in outlays in fiscal year 
     2005; and over 5 years, it is $233.9 billion in budget 
     authority and $230.4 billion in outlays.
       Mandatory
       The assumptions accommodate H.R. 4, the Personal 
     Responsibility, Work, and Family Promotion Act of 2003, which 
     passed the House on 13 February 2003, and is awaiting action 
     in the Senate. The assumption is necessary to allow for a 
     potential conference agreement. The assumption is reflected 
     in the allocation to the Committee on Energy and Commerce.
       Discretionary
       The Committee on Appropriations will determine how funds 
     will be apportioned among the various discretionary programs.

[[Page 10066]]

     Specific programs will be increased or decreased when the 
     Appropriations subcommittees write their respective bills. 
     Outyear levels are not binding and will be revisited in 
     subsequent years.
       Reserve Fund
       The House amendment provides a reserve fund to reflect the 
     savings from legislation that has passed the House of 
     Representatives and is pending in the Senate ``that provides 
     for the safe importation of FDA-approved prescription drugs 
     or places limits on medical malpractice litigation.'' This 
     reserve fund affects Function 570 as well as Function 550.
       The adjustment will be made by the chairman of the 
     Committee on the Budget to the allocations and aggregates to 
     reflect any resulting savings from any such measure. The 
     effect of any adjustment would be to lock in the savings for 
     deficit reduction. The chairman of the Budget Committee will 
     consult with the committees of jurisdiction before making any 
     adjustments pursuant to this section.
       The House amendment also provides a deficit-neutral reserve 
     fund for the period of fiscal years 2005-2009 for legislation 
     that addresses access to health care services and health 
     insurance for the uninsured. The reserve fund is needed to 
     allow an initiative for the uninsured to come to the floor as 
     long as it is deficit neutral in the first year and over the 
     5-year period.
       The House amendment also provides a reserve fund for the 
     Family Opportunity Act. If legislation is reported by the 
     Energy and Commerce Committee that provides Medicaid coverage 
     for children with special needs (the Family Opportunity Act), 
     the chairman of the Budget Committee may adjust the levels in 
     the allocations and aggregates to the extent such legislation 
     is deficit neutral in fiscal year 2005, and the period of 
     fiscal years 2005-2009. The reserve fund would allow these 
     initiatives to come to the floor with offsets, as long as 
     that initiative is deficit neutral in the first year and over 
     the 5-year period.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of $252.4 billion in budget authority and $250.0 
     billion in outlays for fiscal year 2005. Mandatory spending 
     for this function is $199.1 billion in budget authority and 
     $199.2 billion in outlays in fiscal year 2005. Discretionary 
     spending for this function is $53.3 billion in budget 
     authority and $50.8 billion in outlays in fiscal year 2005.
       The conference agreement can accommodate a 1-year extension 
     of the QI-1 program. It also includes a deficit-neutral 
     reserve fund for the enactment of the Family Opportunity Act 
     for both the House and the Senate. Finally, the agreement 
     recognizes the importance of addressing the problem of the 
     uninsured and includes two separate reserve funds, one for 
     the House and one for the Senate.

                         Function 570: Medicare

     Function Summary
       Function 570 reflects the Medicare Part A Hospital 
     Insurance [HI] Program, Part B Supplementary Medical 
     Insurance [SMI] Program, and premiums paid by qualified aged 
     and disabled beneficiaries. In addition, with the enactment 
     of H.R. 1 last year, the Medicare Advantage Program replaced 
     Medicare+Choice under Part C and a new Voluntary Prescription 
     Drug Benefit Program was established under Part D of 
     Medicare. Prior to implementation of the new drug benefit in 
     2006, certain low-income seniors will be eligible for 
     transitional low-income drug assistance of up to $600 in 
     conjunction with their prescription drug discount card.
       Function 570 budget authority rose from $190.6 billion in 
     1999 to $269.6 billion in 2004, a 7.2 percent average annual 
     growth rate. During the same time period, outlays rose from 
     $190.4 billion to $268.8 billion, a 7.1 percent average 
     annual growth rate. This function consists entirely of the 
     Medicare program.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of $3.7 billion in budget authority and $3.7 
     billion in outlays for 2005. This represents a decrease of 
     $0.2 billion in budget authority and $0.1 billion in outlays 
     from the 2004 level. The resolution includes the following 
     specific assumptions:
       The resolution assumes three relatively minor changes 
     proposed by the President to offset discretionary spending. 
     These are user fees relating to claims, a change to the 
     Medicare secondary payer [MSP], and a change in durable 
     medical equipment. These proposals would save approximately 
     $1 billion over the next five years.
       The Senate resolution recognizes the importance of the 
     proper and timely implementation of the Medicare Prescription 
     Drug, Improvement, and Modernization Act of 2003, P.L. 108-
     173 and assumes increased funding for administering this new 
     program in 2005 and beyond.
       The Senate resolution also recognizes the importance of the 
     administrative funding for the Social Security Administration 
     included in this function, and assumes the increased funding 
     proposed by the President.
     House Amendment
       The House amendment calls for $288.2 billion in budget 
     authority and $289.1 billion in outlays in fiscal year 2005. 
     The function totals are $1.776 trillion in budget authority 
     and $1.776 trillion in outlays over 5 years. Mandatory 
     spending is $284.0 billion in budget authority and $285.1 
     billion in outlays in fiscal year 2005, and totals $1.755 
     trillion in budget authority and $1.756 trillion in outlays 
     over 5 years. Discretionary spending is $4.1 billion in 
     budget authority and $4.0 billion in outlays in fiscal year 
     2005; and over 5 years, it is $20.9 billion in budget 
     authority and $20.7 billion in outlays.
       Mandatory
       The House amendment assumes growth in mandatory spending to 
     accommodate projected caseloads, inflation, and other normal 
     factors. It also provides for the continuation of the new 
     modernization of Medicare with prescription drug coverage 
     that was enacted by the President and Congress last year. The 
     assumptions appear in the allocations of the respective 
     committees of jurisdiction, which limit the amount that 
     programs can be increased. The authorizing committees are 
     free to determine their own policies, so long as they stay 
     within the allocation limits.
       Discretionary
       The House amendment gives Function 570 priority status 
     within the overall framework of level funding for fiscal year 
     2005 in non-defense, non-homeland-security spending. 
     Consequently, the amendment calls for an increase from level 
     funding of $302 million in budget authority and $199 million 
     in outlays. This amount accommodates the President's request 
     for Function 570 discretionary--including the President's 
     $100-million request for additional funds for prescription 
     drug administrative costs--without including any of the 
     President's offsets. Outyear levels are not binding and will 
     be revisited in subsequent years.
       Reserve Fund
       The House amendment provides a reserve fund to reflect the 
     savings from legislation that has passed the House of 
     Representatives and is pending in the Senate ``that provides 
     for the safe importation of FDA-approved prescription drugs 
     or places limits on medical malpractice litigation.'' This 
     reserve fund affects Function 550 as well as Function 570.
       The adjustment will be made by the chairman of the 
     Committee on the Budget to the allocations and aggregates to 
     reflect any resulting savings from any such measure. The 
     effect of any adjustment would be to lock in the savings for 
     deficit reduction. The chairman of the Budget Committee will 
     consult with the committees of jurisdiction before making any 
     adjustments pursuant to this section.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of $287.9 billion in budget authority and $289.0 
     billion in outlays for fiscal year 2005. Mandatory spending 
     for this function is $284.0 billion in budget authority and 
     $285.1 billion in outlays in fiscal year 2005. Discretionary 
     spending for this function is $3.9 billion in budget 
     authority and $3.9 billion in outlays in fiscal year 2005. 
     The conference agreement assumes the QI-1 program will be 
     extended for one year.

                     Function 600: Income Security

     Function Summary
       Function 600 includes most of the Federal Government's 
     income support programs. These include: general retirement 
     and disability insurance (excluding Social Security)--mainly 
     through the Pension Benefit Guaranty Corporation--and 
     benefits to railroad retirees. Other components are Federal 
     employee retirement and disability benefits (including 
     military retirees); unemployment compensation; low-income 
     housing assistance, including section 8 housing; food and 
     nutrition assistance, including food stamps and school lunch 
     subsidies; and other income security programs.
       This last category includes: Temporary Assistance for Needy 
     Families [TANF]; Supplemental Security Income [SSI]; spending 
     for the refundable portion of the Earned Income Credit [EIC]; 
     and the Low Income Home Energy Assistance Program [LIHEAP]. 
     Agencies involved in these programs include the Departments 
     of Agriculture, Health and Human Services, Housing and Urban 
     Development, the Social Security Administration (for SSI), 
     and the Office of Personnel Management (for Federal 
     retirement benefits).
       Function 600 budget authority rose from $243.5 billion in 
     1999 to $329.3 billion in 2004, a 6.2 percent average annual 
     growth rate. During the same period, outlays rose from $242.4 
     billion to $336.1 billion, a 6.8 percent average annual 
     growth rate.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of $46.4 billion in budget authority and $51.4 
     billion in outlays for 2005. This represents an increase of 
     $1.8 billion in budget authority and a decrease of $1.7 
     billion in outlays from the 2004 level. The Senate resolution 
     includes the following specific assumptions:
       The Senate resolution incorporates the President's funding 
     proposal for the Special

[[Page 10067]]

     Supplemental Nutrition Program for Women, Infants and 
     Children [WIC]. The resolution provides $4.8 billion in 2005, 
     an increase of $175 million from 2004, or 3.8 percent.
       The Senate resolution assumes the President's funding level 
     for the Low Income Home Energy Assistance Program. The 
     resolution assumes $2 billion in 2005, a $112 million (6 
     percent) increase.
       The Senate resolution assumes the President's proposed 
     funding level of $2.1 billion for discretionary payments to 
     the States for the Child Care Development and Block Grant 
     Program. This represents a $13 million increase from 2004.
       Under the Senate resolution, sufficient budget authority 
     and outlays are provided to renew all utilized section 8 
     housing contracts. The resolution does not reflect the 
     Administration's block grant proposal (consistent with 
     Congressional action in 2004 appropriations on a similar 
     proposal in 2004 budget request). The Senate resolution 
     assumes the President's proposal to complete the phase-out of 
     funding for revitalization of severely distressed public 
     housing [HOPE VI] because the program has achieved its goal 
     of demolishing 100,000 severely distressed public housing 
     units by 2003.
       Mandatory
       The Senate resolution assumes $18 billion in additional 
     outlays (over five years) that are related to the President's 
     proposal to extend the $1,000 child credit and marriage 
     penalty relief.
       The Senate resolution recognizes that TANF reauthorization 
     is likely this year and assumes that the reauthorization will 
     be paid for with spending cuts and will not increase the 
     deficit. The Senate is supportive of efforts to recognize and 
     develop the role of self-sustainable social services, such as 
     Goodwill, which are critical in the success of moving welfare 
     recipients to work.
       The Senate resolution also assumes aspects of the 
     President's proposal to enhance Child Support Enforcement 
     collections. These efforts will increase collections and 
     direct more of the support collected to children and 
     families.
       The Senate resolution recognizes that the Child Nutrition 
     program is likely to be reauthorized this year, and assumes 
     $11.7 billion for these programs in 2005. The Senate 
     resolution also assumes $232 million for fiscal years 2005-
     2009 for the continued cost of excluding certain military 
     housing allowances from income when determining eligibility 
     for free and reduced-price school meals, and allowing for-
     profit child care centers to participate in the Child and 
     Adult Care Food Program [CACFP]. By voice vote, the Senate 
     adopted an amendment (SA 2844, offered by Senator Dole) to 
     increase the level in this function by $842 million in budget 
     authority from 2005-2009 for Child Nutrition Programs. The 
     amendment included a corresponding reduction for function 920 
     to result in no net effect on the overall budget.
       The Senate resolution assumes the President's proposal for 
     an administrative fee for non-TANF child support collections 
     of at least $500, saving $199 million over 5 years.
       The Senate resolution assumes the President's funding level 
     of $28.3 billion for the Food Stamp program in 2005.
       The Senate resolution incorporates the Administration's 
     plan to change the Federal Employee Compensation [FECA] 
     benefit structure and reform proposal.
       The Senate resolution assumes savings from reform of the 
     Earned Income Credit. The cost of the EIC has skyrocketed in 
     recent years due to program expansions, fraud, and errors, 
     with total program costs growing from $6.6 billion in 1990 to 
     nearly $36 billion in 2003. IRS and GAO estimate that over-
     claim rates on 1999 tax returns were about 30 percent.
       The Senate resolution assumes $665 million over five years 
     in new mandatory spending for Food and Nutrition Programs.
     House Amendment
       The House amendment calls for $337.3 billion in budget 
     authority and $341.7 billion in outlays in fiscal year 2005. 
     The function totals are $1.728 trillion in budget authority 
     and $1.742 trillion in outlays over 5 years. Mandatory 
     spending is $291.5 billion in budget authority and $290.7 
     billion in outlays in fiscal year 2005, and totals $1.496 
     trillion in budget authority and $1.492 trillion in outlays 
     over 5 years. Discretionary spending is $45.8 billion in 
     budget authority and $51.0 billion in outlays in fiscal year 
     2005; and over 5 years, it is $231.4 billion in budget 
     authority and $250.3 billion in outlays.
       Discretionary
       The Committee on Appropriations will determine how these 
     funds will be apportioned among the various discretionary 
     income security programs. Outyear levels are not binding and 
     will be revisited in subsequent years.
       Mandatory
       The assumptions accommodate H.R. 4, the Personal 
     Responsibility, Work, and Family Promotion Act of 2003, which 
     passed the House on 13 February 2003; H.R. 7, the Charitable 
     Giving Act of 2003, which passed the House on 17 September 
     2003; and H.R. 1000, the Pension Security Act of 2003, which 
     passed the House on 14 May 2003. All three measures are 
     awaiting action in the Senate. The assumptions also 
     accommodate H.R. 3108, the Pension Funding Equity Act of 
     2003, which passed the House on 8 October 2003 and was in 
     conference with the Senate at the time the House considered 
     the budget resolution. These accommodations are necessary to 
     allow for potential conference agreements.
       The assumptions are reflected in the allocations to the 
     respective committees of jurisdiction, which limit the amount 
     that programs can be increased.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of $339.2 billion in budget authority and $345.7 
     billion in outlays for fiscal year 2005. Mandatory spending 
     for this function is $292.8 billion in budget authority and 
     $291.6 billion in outlays in fiscal year 2005. Discretionary 
     spending for this function is $46.4 billion in budget 
     authority and $54.1 billion in outlays in fiscal year 2005.
       Discretionary
       The level of discretionary spending in the conference 
     agreement could allow for the President's funding proposal 
     for the Special Supplemental Nutrition Program for Women, 
     Infants, and Children [WIC] and for the Low Income Home 
     Energy Assistance Program. The conference agreement also 
     provides a level that could allow for the President's 
     proposal for discretionary payments to the states for the 
     Child Care and Development Grant Program.
       Mandatory
       The conference agreement assumptions accommodate H.R. 4, 
     the Personal Responsibility, Work, and Family Promotion Act 
     of 2003, which passed the House in February 2003. The 
     conference agreement also accommodates assumptions in H.R. 
     3873, which continues the cost of excluding certain military 
     housing allowances from income when determining eligibility 
     for free and reduced-price school meals, and allowing for-
     profit child care centers to participate in the Child and 
     Adult Care Food Program, but could also be used to fund other 
     Child Nutrition programs, such as funding additional school 
     lunches.

                     Function 650: Social Security

     Function Summary
       Function 650 consists of the Social Security program, or 
     Old-Age, Survivors, and Disability Insurance, the 
     Government's largest entitlement program. Social Security 
     consists of two parts, each tied to a trust fund. The Old-Age 
     and Survivors Insurance program provides monthly benefits to 
     eligible retired workers and their families and survivors. 
     The Disability Insurance program provides monthly benefits to 
     eligible disabled workers and their families.
       Under provisions of the Budget Enforcement Act, Social 
     Security trust funds are off budget.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of $4.2 billion in budget authority and $4.3 
     billion in outlays for 2005. This represents an increase of 
     2.8 percent, or $0.1 billion, in budget authority compared to 
     2004.
       Mandatory
       The Senate resolution assumes the President's proposal to 
     close an existing loophole that allows former state and local 
     employees to receive their public pension and Social Security 
     benefits even though they did not pay Social Security taxes. 
     The resolution assumes the President's proposal to improve 
     the reporting of non-covered pension income through pension 
     administrators for state and local pensions sharing 
     information with the Social Security Administration.
     House Amendment
       The amendment calls for $15.1 billion in budget authority 
     and $15.1 billion in outlays in fiscal year 2005. The 
     function totals are $91.7 billion in budget authority and 
     $91.7 billion in outlays over five years. All of this 
     spending is mandatory; all discretionary spending in function 
     650 is off budget, but is included in the section 302(a) 
     allocation to the Committee on Appropriations.
       Mandatory
       There are no specific mandatory assumptions in this 
     function.
       Discretionary
       The Committee on Appropriations will determine how funds in 
     this function are apportioned. Outyear levels are not binding 
     and will be revisited in subsequent years.
     Conference Agreement
       For on-budget spending, the conference agreement for this 
     function reflects $15.2 billion in budget authority and 
     outlays for fiscal year 2005. Mandatory spending for this 
     function is $15.2 billion in budget authority and outlays in 
     fiscal year 2005. There is no on-budget discretionary 
     spending for this function.
       Including on- and off-budget spending, the conference 
     agreement reflects a total of $518.9 billion in budget 
     authority and $517.2 billion in outlays for fiscal year 2005. 
     Mandatory spending for this function is $514.7 billion in 
     budget authority and $512.9 billion in outlays in fiscal year 
     2005. Discretionary

[[Page 10068]]

     spending for this function is $4.2 billion in budget 
     authority and $4.3 billion in outlays in fiscal year 2005.

              Function 700: Veterans Benefits and Services

     Function Summary
       Function 700 includes funding for the Department of 
     Veterans Affairs [VA], which provides benefits to veterans 
     who meet various eligibility rules. Benefits range from 
     income security for veterans, principal disability 
     compensation and pensions; veterans education, training, and 
     rehabilitation services; hospital and medical care for 
     veterans; and other veterans benefits and services, such as 
     home loan guarantees. There are about 25 million veterans.
       Function 700 budget authority rose from $44.2 billion in 
     1999 to $61.5 billion in 2004, a 6.8 percent average annual 
     growth rate. During the same time period, outlays rose from 
     $43.2 billion to $60.1 billion, a 6.8 percent average annual 
     growth rate. The two largest components of this growth were 
     veterans medical care, whose budget authority grew from $17.8 
     billion in 1999 to $28.0 billion in 2004, a 9.4 percent 
     average annual increase, and disability compensation, whose 
     budget authority grew from $18.7 billion in 1999 to $30.7 
     billion in 2004, a 10.4 percent average annual increase.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of $31.7 billion in budget authority and $30.7 
     billion in outlays for 2005.
       The Senate resolution assumes $30.3 billion in total 
     funding for VA medical programs. This reflects a Murkowski 
     amendment (SA 2846) to increase Veterans medical care by $1.2 
     billion. The Murkowski amendment included a corresponding 
     reduction to function 920 to result in no net effect on the 
     overall budget. This includes $28.3 billion in budget 
     authority and $2 billion in offsetting collections from the 
     Medical Care Collections Fund [MCCF]. This is an increase of 
     9.4 percent, or $2.6 billion, over the 2004 enacted level. VA 
     Medical Care spending has grown by 100 percent since 1993 and 
     42 percent since 2001.
       The Senate resolution does not assume the President's 
     proposal to establish a new $250 enrollment fee for priority 
     level 7 and 8 veterans or to increase the insurance and 
     prescription drug co-payments for Priority 7 and 8 veterans 
     from $7 to $15.
       Mandatory
       The Senate resolution assumes a 1.3 percent cost of living 
     adjustment for compensation benefits that is due in 2005 
     under current law. After the adjustment, total mandatory 
     spending in this function is projected to be $39.8 billion in 
     2005, an increase of 23.6 percent or $7.6 billion over the 
     2004 enacted level. Mandatory spending includes funding for 
     veterans compensation, pensions, insurance funds and 
     readjustment programs.
       The Senate resolution assumes the President's proposal to 
     restore the original interpretation of section 1110 of title 
     38 of the U.S. Code. This section prohibits veterans from 
     receiving disability compensation for alcohol or drug abuse 
     which arises secondarily from a service connected disability. 
     In February 2001, the U.S. Court of Appeals decided that 
     section 1110 did not preclude compensation for alcohol or 
     drug abuse arising secondarily from a service-connected 
     disability. If this legislation were enacted it would save $9 
     million in fiscal year 2005 and $95 million for fiscal years 
     2005--2009 period.
     House Amendment
       Note: In the House amendment as passed, funding amounts for 
     certain homeland security activities were moved out of this 
     function into a separate category, Function 100--Homeland 
     Security. Accordingly, the House-passed totals in these 
     functions do not precisely correspond with those in the 
     Senate-passed resolution, and the figures in the House-passed 
     and Senate-passed measures cannot be compared at face value. 
     The customary correspondence was restored in the process of 
     developing the conference agreement.
       The House amendment calls for $70.5 billion in budget 
     authority and $68.6 billion in outlays in fiscal year 2005. 
     The function totals are $346.0 billion in budget authority 
     and $341.7 billion in outlays over five years. Mandatory 
     spending is $39.8 billion in budget authority and $39.5 
     billion in outlays in fiscal year 2005, and totals $190.9 
     billion in budget authority and $190.4 billion in outlays 
     over five years. Discretionary spending is $30.7 billion in 
     budget authority and $29.1 billion in outlays in fiscal year 
     2005; and over five years, it is $155.1 billion in budget 
     authority and $151.4 billion in outlays.
       Mandatory
       There are no specific mandatory assumptions in this 
     function.
       Discretionary
       During markup, the Budget Committee adopted an amendment 
     offered by Representative Brown-Waite adding $200 million to 
     the Chairman's Mark in veterans benefits and services. As a 
     result, the amendment includes an increase in total veterans 
     budget authority of $1.2 billion in fiscal year 2005 over the 
     President's request with none of the fees in the President's 
     budget. Outyear levels are not binding and will be revisited 
     in subsequent years.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of $70.8 billion in budget authority and $68.9 
     billion in outlays for fiscal year 2005. Mandatory spending 
     for this function is $39.8 billion in budget authority and 
     $39.5 billion in outlays in fiscal year 2005. Discretionary 
     spending for this function is $31.0 billion in budget 
     authority and $29.4 billion in outlays in fiscal year 2005. 
     The conference agreement includes $1.2 billion more than the 
     President's request, consistent with the funding need 
     identified by Secretary of Veterans Affairs Anthony J. 
     Principi.

                Function 750: Administration of Justice

     Function Summary
       Function 750 supports the majority of Federal justice and 
     law enforcement programs and activities. This includes 
     funding for the Department of Justice, a large portion of the 
     Department of Homeland Security [DHS], as well as the 
     financial law enforcement activities of the Department of the 
     Treasury, Federal courts and prisons, and criminal justice 
     assistance to State and local governments.
       Function 750 budget authority rose from $28.1 billion in 
     1999 to $41.2 billion in 2004, an 8.0 percent average annual 
     growth rate. During the same time period, outlays rose from 
     $26.5 billion to $39.6 billion, an 8.3 percent average annual 
     growth rate. The largest component of this growth was for 
     Federal law enforcement activities, with budget authority 
     growing from $11.9 billion in 1999 to $19.0 billion in 2004, 
     a 9.9 percent average annual increase.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of $37.5 billion in budget authority and $37.0 
     billion in outlays for 2005, an increase of $0.4 billion in 
     budget authority and an increase of $1.5 billion in outlays 
     from the 2004 level. The Senate resolution includes the 
     following specific assumptions:
       The Senate resolution assumes a total of $4.6 billion for 
     the Federal Bureau of Investigation [FBI], an increase of 
     $0.5 billion or 12.8 percent over the 2004 level. Another 
     $0.5 billion is assumed for the FBI in the defense function 
     of the federal budget. Overall, the budget for the FBI is 
     $5.1 billion. The Senate resolution concurs with the 
     President's proposal to dramatically increase the agency's 
     funding in order to fulfill the FBI's primary mission of 
     preventing further terrorist attacks in America. A large 
     portion of the funding increases will go to improve the FBI's 
     intelligence capabilities, counterterrorism investigations, 
     and combating cybercrime.
       The Senate resolution includes $1.7 billion for a 
     restructured account entitled Justice Assistance. The Senate 
     resolution concurs with the President's proposal to 
     consolidate many duplicative grant programs within the 
     Department of Justice in order to achieve better 
     effectiveness. Programs from the State and Local Law 
     Enforcement Assistance account, the Juvenile Justice account, 
     and the Community Oriented Policing Services [COPS] account 
     are combined under Justice Assistance in the Committee-
     reported resolution. Some highlights of this new Justice 
     Assistance account include a $509 million Justice Assistance 
     Grant Program, the $176 million DNA Initiative, the Southwest 
     Border Prosecution Initiative, and funding for bulletproof 
     vests.
       For the Bureau of Alcohol, Tobacco, Firearms and 
     Explosives, the Senate resolution assumes a level of $868 
     million, which represents an increase of $41 million or 5 
     percent above the 2004 level.
       The Senate resolution assumes $4.6 billion for the salaries 
     and expenses of the Bureau of Customs and Border Protection, 
     an increase of $207 million or 4.7 percent above the 2004 
     level. The increase in funding will enhance border patrol 
     surveillance and technology, continue the Container Security 
     Initiative, and support the purchase of radiation detection 
     equipment.
       The Senate resolution assumes $4.0 billion for the salaries 
     and expenses of the Federal Courts of Appeals, District 
     Courts, and other judicial services. This matches the 
     President's request for 2005 and represents an increase of 
     $357 million or 9.7 percent above the 2004 level.
       The Senate is concerned about efficiency and cost-
     effectiveness of first responder spending and training. 
     Therefore, the Senate resolution encourages the use of 
     homeland security funds to examine and possibly expand upon 
     the Federal Law Enforcement Training Center's Distributed 
     Learning Program for the purpose of secure, encrypted, 
     geographically dispersed first responder e-learning.
       The Senate resolution reflects a Hatch amendment (SA 2843) 
     adding $600 million in 2005 for various law enforcement grant 
     programs.
       Mandatory
       The Senate resolution assumes the extension of two types of 
     Customs User Fees, yielding $784 million in 2005, $7.6 
     billion over 5 years, and $18.6 billion over 10 years.

[[Page 10069]]

       The Senate resolution does not assume any funding for the 
     creation of a government-administered trust fund intended to 
     resolve the claims of victims for bodily injury caused by 
     asbestos exposure. Although the Senate recognizes the urgent 
     need for litigation reform designed to expedite justice for 
     legitimate victims of asbestos exposure and to halt the 
     corrosive effect that litigation abuse has on the economy, it 
     is concerned that the creation of a new uncapped government 
     entitlement, during a period requiring austere budget 
     discipline, would be imprudent and inconsistent with fiscal 
     responsibility. The proposed use of mandatory contributions 
     from defendant companies and insurers does not alleviate 
     those concerns if the private contributions are capped at a 
     finite level and the fund is not expected to meet the total 
     liability of anticipated asbestos claims. The Senate does not 
     believe it would be prudent to rely upon ``sunset'' 
     provisions that would be triggered upon fund insolvency, thus 
     returning potentially large numbers of unpaid claimants to 
     the federal tort system. Past experience with government 
     administered trust funds designed to mandate a ``no-fault'' 
     solution for liability claimants demonstrate that, even with 
     specific legislative language to the contrary, there is a low 
     probability of an actual return to the tort system. Political 
     resistance to implementing such a reversion will likely be 
     insurmountable. In essence, the Senate is concerned that 
     under such a scenario there is a possibility that a massive 
     taxpayer bail-out could occur if Congress is forced to step 
     in and sustain the fund.
     House Amendment
       The amendment calls for $30.1 billion in budget authority 
     and $30.0 billion in outlays in fiscal year 2005. The 
     function totals are $140.4 billion in budget authority and 
     $141.0 billion in outlays over five years. Mandatory spending 
     is $5.0 billion in budget authority and $4.3 billion in 
     outlays in fiscal year 2005, and totals $13.2 billion in 
     budget authority and $13.1 billion in outlays over five 
     years. Discretionary spending is $25.2 billion in budget 
     authority and $25.7 billion in outlays in fiscal year 2005; 
     and over five years, it is $127.2 billion in budget authority 
     and $127.9 billion in outlays. Homeland security components 
     formerly found in Function 750 are recorded in Function 100: 
     Homeland Security.
       Mandatory
       The assumptions accommodate H.R. 975, the Bankruptcy Abuse 
     Prevention and Consumer Protection Act of 2003, which passed 
     the House on 19 March 2003 and is awaiting action in the 
     Senate. The accommodation is needed to allow for a potential 
     conference agreement. The assumption is reflected in the 
     allocation to the Committee on the Judiciary, which is free 
     to determine its own policies within the allocation limits.
       Discretionary
       The Committee on Appropriations will determine how these 
     funds will be apportioned among the various discretionary 
     programs. Outyear levels are not binding and will be 
     revisited in subsequent years.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of $41.9 billion in budget authority and $41.8 
     billion in outlays for fiscal year 2005. Mandatory spending 
     for this function is $5.1 billion in budget authority and 
     $4.5 billion in outlays in fiscal year 2005. Discretionary 
     spending for this function is $36.8 billion in budget 
     authority and $37.3 billion in outlays in fiscal year 2005.

                    Function 800: General Government

     Function Summary
       Function 800 consists of the activities of the Legislative 
     Branch; the Executive Office of the President; general tax 
     collection and fiscal operations of the Department of 
     Treasury (including the Internal Revenue Service); the Office 
     of Personnel Management; the property and personnel costs of 
     the General Services Administration; general purpose fiscal 
     assistance to States, localities, the District of Columbia, 
     and U.S. territories; and other general Government 
     activities.
       Function 800 budget authority rose from $16.7 billion in 
     1999 to $23.9 billion in 2004, a 7.5 percent average annual 
     growth rate. During the same time period, outlays rose from 
     $15.3 billion to $24.7 billion, a 10.0 percent average annual 
     growth rate.
     Senate Resolution
       Discretionary
       The Senate resolution assumes discretionary spending in 
     this function of $14.4 billion in budget authority and $15.0 
     billion in outlays for 2005. The Senate resolution includes 
     the following specific assumptions:
       The Senate resolution assumes that $1.4 billion provided 
     for election reform programs in 2004 is not continued in the 
     budget. To date, appropriations for election reform have been 
     essentially at the level recommended by the authorizing bill, 
     totaling just over $3.0 billion. The disbursement of these 
     funds has been significantly delayed while awaiting the 
     formation of the Election Assistance Commission [EAC], which 
     is responsible for the oversight and disbursement of the 
     federal grants to the states. The EAC was formed earlier this 
     year and it is attempting to distribute these funds before 
     the fall elections. The Senate resolution does assume $40 
     million for the Election Assistance Commission.
       The Senate resolution reflects two amendments, a Dorgan 
     amendment (SA 2850) and a Hatch amendment (SA 2843), that 
     reduced the general government function by $1.2 billion in 
     2005 to pay for other discretionary spending.
       Mandatory
       Under current law, there is a significant drop in mandatory 
     spending from 2004 to 2005. This decrease is due to $5.0 
     billion in state assistance provided as one-time funds for 
     2004 by the Jobs and Growth Tax Relief and Reconciliation Act 
     of 2003.
       The Senate resolution assumes an adjustment to the current 
     fee structure for the National Indian Gaming Commission, 
     which regulates and monitors gaming operations on Indian 
     lands. Since 1998, the Commission has been prevented from 
     collecting additional annual fees from gaming operations to 
     cover the costs of its oversight responsibilities. The 
     assumed restructuring of fees would allow the Commission to 
     adjust its activities to the growth in the Indian gaming 
     industry.
     House Amendment
       The amendment calls for $17.2 billion in budget authority 
     and $17.9 billion in outlays in fiscal year 2005. The 
     function totals are $86.8 billion in budget authority and 
     $86.8 billion in outlays over five years. Mandatory spending 
     is $1.8 billion in budget authority and $1.7 billion in 
     outlays in fiscal year 2005, and totals $8.9 billion in 
     budget authority and $8.9 billion in outlays over five years. 
     Discretionary spending is $15.4 billion in budget authority 
     and $16.2 billion in outlays in fiscal year 2005; and over 
     five years, it is $77.9 billion in budget authority and $77.9 
     billion in outlays. Homeland security components formerly 
     found in Function 800--including the Federal Protective 
     Service--are recorded in Function 100: Homeland Security, and 
     are consistent with the President's request.
       Mandatory
       Mandatory totals allow for inclusion of H.R. 2751, the GAO 
     Human Capital Reform Act of 2003, as passed by the House last 
     year. The accommodation is needed to allow for a potential 
     conference agreement. The amendment assumes growth in 
     mandatory spending to accommodate projected inflation, and 
     other normal factors. The assumptions appear in the 
     allocations of the respective committees of jurisdiction, 
     which are free to determine their own policies within the 
     allocation limits.
       Discretionary
       The amendment can accommodate funding for the Payment in 
     Lieu of Taxes [PILT] program at the fully authorized level. 
     Specific programmatic decisions will be made by the Committee 
     on Appropriations. Outyear levels are not binding and will be 
     revisited in subsequent years.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of $17.4 billion in budget authority and $18.0 
     billion in outlays for fiscal year 2005. Mandatory spending 
     for this function is $1.8 billion in budget authority and 
     $1.7 billion in outlays in fiscal year 2005. Discretionary 
     spending for this function is $15.6 billion in budget 
     authority and $16.2 billion in outlays in fiscal year 2005.

                       Function 900: Net Interest

     Function Summary
       Function 900 includes net interest, which is the interest 
     paid for the Federal Government's borrowing less the interest 
     received by the Federal Government from trust fund 
     investments and loans to the public. It is a mandatory 
     payment, with no discretionary components.
       Net interest spending declined from $229.8 billion in 1999 
     to $154.8 billion in 2004, an average annual reduction of 7.6 
     percent. This decline was caused by lower interest paid to 
     finance the debt, as well as higher interest received by the 
     continued build-up of off-budget trust funds.
     Senate Resolution
       The Senate resolution sets forth $179.9 billion in budget 
     authority and outlays for fiscal year 2005 and $1.220 
     trillion in budget authority and outlays over 5 years. On-
     budget net interest is $270.1 billion in budget authority and 
     outlays in 2005 and $1,766 trillion in budget authority and 
     outlays over 5 years. Off-budget interest collections are 
     $90.2 billion in budget authority and outlays in 2005 and 
     $545.5 billion in budget authority and outlays over 5 years.
     House Amendment
       The House amendment calls for $180.5 billion in budget 
     authority and outlays in fiscal year 2005. The function 
     totals are $1.235 trillion in budget authority and outlays 
     over 5 years. On-budget spending is $270.7 billion in budget 
     authority and outlays in fiscal year 2005, and totals $1.780 
     trillion in budget authority and outlays over 5 years. Off-
     budget interest collections are $90.2 billion in budget 
     authority and outlays in fiscal year 2005; and over 5 years, 
     $545.5 billion in budget authority and outlays. There are no 
     specific mandatory assumptions in this function.
     Conference Agreement
       For on-budget spending, the conference agreement for this 
     function reflects $270.4

[[Page 10070]]

     billion in budget authority and outlays for fiscal year 2005. 
     Total on- and off-budget spending is $180.3 billion in budget 
     authority and outlays for fiscal year 2005.

                        Function 920: Allowances

     Function Summary
       Function 920, Allowances, is used for planning purposes to 
     address the budgetary effects of proposals or assumptions 
     that cross various other budget functions. Once such changes 
     are enacted, the budgetary effects are distributed to the 
     appropriate budget functions.
     Senate Resolution
       Discretionary
       This function includes -$11.2 billion in discretionary 
     budget authority and -$4.3 billion in outlays for 2005. This 
     is the result of amendments adopted during consideration of 
     the resolution on the Senate floor that were ``offset'' in 
     function 920.
       Mandatory
       This function includes -$256 million in mandatory budget 
     authority and -$235 million in outlays for 2005. This 
     reflects the Dole child nutrition amendment that was adopted 
     during Senate consideration of the committee-reported 
     resolution and the total combined impact of the Committee-
     adopted amendment by Senator Stabenow to allow drug 
     reimportation, rather than reflecting the effects across the 
     various federal health programs (e.g. Medicaid, Medicare, 
     FEHBP, military health) as they would occur in their 
     respective functions.
     House Amendment
       The amendment calls for $50.0 billion in budget authority 
     and $24.9 billion in outlays in fiscal year 2005. This 
     provides for an expected supplemental spending bill to 
     address operations in Afghanistan and Iraq. The function 
     totals are $50.0 billion in budget authority and $49.8 
     billion in outlays over 5 years. Discretionary spending is 
     $50.0 billion in budget authority and $24.9 billion in 
     outlays in fiscal year 2005; and over 5 years, it is $50.0 
     billion in budget authority and $49.8 billion in outlays.
       Mandatory
       There is no mandatory spending in this function.
     Conference Agreement
       The conference agreement for this function reflects total 
     spending of -$7.2 billion in budget authority and -$14.5 
     billion in outlays for fiscal year 2005. There is no 
     mandatory spending in this function. These amounts will be 
     restored via cap adjustments when certain conditions are met.

            Function 950: Undistributed Offsetting Receipts

     Function Summary
       Function 950 consists of receipts to the Treasury. Receipts 
     recorded in this function are either intrabudgetary (a 
     payment from one Federal agency to another, such as agency 
     payments to the retirement trust funds) or proprietary (a 
     payment from the public for some kind of business transaction 
     with the Government). The main types of receipts recorded in 
     this function are: the payments Federal employees and 
     agencies make to employee retirement trust funds; and 
     payments by those who bid for the right to buy or use public 
     property or resources, such as licenses to use the 
     electromagnetic spectrum or the right to explore and produce 
     oil and gas on the Outer Continental Shelf. By convention, 
     these receipts are treated as negative spending, with budget 
     authority and outlays matching exactly for each account. 
     There is no discretionary spending in this function.
     Senate Resolution
       Mandatory
       The Senate resolution assumes the President's proposal to 
     extend the authority of the Federal Communications Commission 
     to auction spectrum, which would otherwise expire at the end 
     of 2007.
     House Amendment
       The House amendment calls for -$63.7 billion in budget 
     authority and -$63.8 billion in outlays in fiscal year 2005. 
     (The minus signs indicate receipts into the Treasury.) The 
     function totals are -$360.4 billion in budget authority and 
     -$361.4 billion in outlays over 5 years.
       Mandatory
       The assumptions accommodate H.R. 1320, which passed the 
     House on 11 June 2003, and is awaiting action in the Senate. 
     Although H.R. 1320 has budgetary effect in Function 950 
     (Undistributed Offsetting Receipts) because it is a receipt 
     against spending, it is within the scope of the Federal 
     Communications Commission. The accommodation is needed to 
     allow for a potential conference agreement.
     Conference Agreement
       For on-budget offsetting receipts, the conference agreement 
     for this function reflects -$52.5 billion in budget authority 
     and outlays for fiscal year 2005.
       The combined on- and off-budget offsetting receipts, the 
     conference agreement for this function reflects -$63.9 
     billion in budget authority and outlays for fiscal year 2005.

                      RECONCILIATION INSTRUCTIONS

       Under section 310(a) of the Congressional Budget Act, the 
     budget resolution may include directives to the committees of 
     jurisdiction to make revisions in law necessary to accomplish 
     a specified change in spending or revenues. If the resolution 
     includes a reconciliation directive to only one committee of 
     the House or Senate, then that committee is required to 
     directly report to its House the legislative language that 
     would implement the spending or revenue changes provided for 
     in the resolution. If the resolution includes an instruction 
     with directives to more than one committee, the reporting 
     committees submit their recommendations to the Budget 
     Committee, which then packages them together and votes to 
     report one bill, without substantive change, to its 
     respective House. Under either scenario, the committees have 
     discretion as to how they meet the targets, as long as the 
     targets are met within the respective committees' 
     jurisdictions. Any bill considered pursuant to a 
     reconciliation instruction is subject to special procedures 
     set forth in section 310 and, in the Senate, section 313 of 
     the Budget Act.


                        Title II: Reconciliation

     Senate Resolution
       Section 201: Reconciliation in the Senate
       Section 201 includes two reconciliation directives to the 
     Finance Committee (with a reporting date not later than 
     September 30, 2004). The Finance Committee is instructed to 
     report legislation to reduce revenues by not more than $12.3 
     billion in 2005 and $80.6 billion for the period 2005-2009 
     and to increase outlays by not more than $2 billion for the 
     period 2005-2009. The Finance Committee is free to satisfy 
     this instruction with legislation of its choosing, but the 
     Senate resolution assumes the 2005-2009 revenue effects of 
     extending the $1,000 child tax credit, extending marriage 
     penalty relief, extending the expanded 10 percent individual 
     income tax bracket, and accelerating the repeal of the death 
     tax to 2009. The outlay increase instruction was added with 
     the adoption of an amendment (SA 2837) which the Senate 
     accepted by voice vote.
       The second instruction directs the Finance Committee to 
     report legislation to increase the statutory debt limit by 
     $664.028 billion. The current statutory debt ceiling is 
     $7.384 trillion; under the Senate resolution, the debt 
     subject to limit is projected to be $8.051 trillion at the 
     end of fiscal year 2005.
       By a vote of 53-43, the Senate agreed to the Baucus 
     amendment (SA 2751), which struck the reconciliation 
     instruction to the Finance Committee to reduce outlays by 
     $2.9 billion in 2005 and by $3.4 billion over the period 
     2005-2009.
     House Amendment
       Section 201: Reconciliation in the House
       The House amendment provides instructions for two 
     reconciliation bills. The first instructs five authorizing 
     committees to report changes in current law to achieve 
     specified level of deficit reduction on the assumption that 
     the savings will come from the elimination of waste, fraud 
     and abuse in specific programs in their jurisdictions. The 
     committees may make whatever changes in the law they deem 
     appropriate to achieve the specified amount of savings for 
     fiscal year 2005 and for the period of fiscal years 2005 
     through 2009. The Agriculture Committee is instructed to save 
     $110 million in 2005 and $371 million for fiscal years 2005-
     2009; the Education and Workforce Committee is instructed to 
     save $5 million in fiscal year 2005 and $43 million for 
     fiscal years 2005-2009, under the assumption such savings 
     will be achieved through changes in the Federal Employees 
     Compensation Act; the Energy and Commerce Committee is 
     instructed to save $410 million in fiscal year 2005 and 
     $2.185 billion for fiscal years 2005-2009; the Government 
     Reform Committee is instructed to save $170 million in fiscal 
     year 2005 and $2.365 billion for fiscal years 2005-2009; and, 
     the Committee on Ways and Means is instructed to reduce the 
     deficit by $1.126 billion in fiscal year 2005 and by $8.269 
     billion for fiscal years 2005-2009. The first reconciliation 
     bill has a reporting deadline of July 15, 2004.
       The second reconciliation bill directs the Committee on 
     Ways and Means to report a measure that would reduce taxes by 
     $13.182 billion in 2005 and by $137.580 billion for fiscal 
     years 2005-2009. These amounts are sufficient to accommodate 
     an extension of certain expiring tax provisions from the 2001 
     Economic Growth and Tax Relief Reconciliation and the 2003 
     Jobs and Growth Tax Relief Reconciliation Acts.
       While the resolution only reconciles changes in revenue for 
     the second reconciliation bill, it includes authority for the 
     Budget Committee chairman to adjust the reconciliation 
     instructions, the Committee on Ways and Means' allocations 
     and other appropriate levels to accommodate outlays (largely 
     related to certain refundable tax provisions). The authority 
     may only be exercised for a reconciliation bill that does not 
     cost more in total outlay increases and revenue reductions 
     than the underlying reconciliation instruction. The second 
     reconciliation bill has a reporting deadline of October 1, 
     2004.
       Section 202: Submission of report on defense savings
       This section requires the House Armed Services Committee to 
     submit to the Budget Committee a set of findings that 
     identify $2

[[Page 10071]]

     billion dollars in savings from activities that are 
     determined to be of low priority or wasteful or unnecessary 
     to national defense. These savings then can be used to 
     accommodate other priorities such as force protection, 
     munitions and surveillance capabilities. The report must be 
     submitted by May 15, 2004. Its submission would not be 
     considered under reconciliation procedures and it is assumed 
     the savings would be discretionary. The Budget Committee 
     chairman is then required to submit the report for inclusion 
     in the Congressional Record by no later than May 21, 2004.
     Conference Agreement
       Section 201: Reconciliation in the Senate
       The conference agreement contains two instructions for 
     reconciliation in the Senate. Section 201(a) instructs the 
     Finance Committee to report a reconciliation bill (not later 
     than September 30, 2004) that reduces revenues by not more 
     than $22.9 billion and that increases outlays by not more 
     than $4.6 billion. This is an amount sufficient to 
     accommodate a permanent extension of the $1,000 child credit, 
     the marriage penalty relief, and the 10 percent marginal tax 
     rate bracket. The outlay instruction is included to allow for 
     a fungibility adjustment between outlays and revenues, so 
     that the Finance Committee may include legislation affecting 
     refundable credits in the legislation they report.
       Section 201(b) instructs the Finance Committee to report a 
     reconciliation bill (not later than September 10, 2004) that 
     increases the statutory debt limit by $689.946 billion.
       Section 211: Reconciliation in the House
       The conference agreement contains one instruction for 
     reconciliation in the House. Section 211(a) instructs the 
     House Committee on Ways and Means to report a measure by 
     September 30, 2004 that will reduce taxes by $22.9 billion 
     and increase outlays by $4.6 billion.
       Section 211(b) also authorizes the chairman of the House 
     Committee on the Budget to make deficit-neutral adjustments 
     in the allocations and aggregates for a reconciliation bill 
     that complies with the so-called 20 percent fungibility rule 
     under section 310 of the Congressional Budget Act. This 
     authority is consistent with section 310(c)(2) of the Budget 
     Act, which allows the chairman of the Senate Committee on the 
     Budget to conform the budget resolution to a reconciliation 
     bill that satisfies the 20 percent rule under section 310(c) 
     in the Senate.

                     RESERVE FUNDS AND ADJUSTMENTS

       A budget resolution does not become law and cannot amend 
     law. However, pursuant to section 301(b)(4) of the 
     Congressional Budget Act, some provisions in the resolution 
     may affect the consideration of legislation in order to 
     implement and enforce the policy assumptions underlying such 
     resolution. The conference agreement contains a number of 
     provisions which may affect the consideration of legislation 
     implementing the policies assumed in this resolution.


                Title III: Reserve Funds and Adjustments

       In general, a reserve fund (or discretionary adjustment) 
     permits the chairman of the Committee on the Budget to 
     increase the section 302 allocation and other appropriate 
     levels set out in this resolution (including, in the Senate, 
     the discretionary spending limits) once certain conditions 
     have been met. The authority to make these adjustments is 
     solely within the discretion of the chairman and may be made 
     when the committee of jurisdiction reports a measure that 
     satisfies all the conditions set in the reserve funds.
     Senate Resolution
       During Senate consideration of the Committee-reported 
     resolution, six additional deficit-neutral reserve funds were 
     adopted in the Senate by voice vote. All envision the 
     committee of jurisdiction reporting a specific measure (or in 
     the case of three of the reserve funds, the Committee on 
     Appropriations reporting an appropriations measure) for which 
     the chairman of the Committee on the Budget may then make 
     appropriate budgetary adjustments. These six are discussed 
     below:

                       Subtitle A: Reserve Funds

       Section 301: Reserve fund for health insurance for the 
           uninsured
       The Senate resolution provides a deficit-neutral reserve 
     fund for the period of fiscal years 2005 through 2009 for 
     legislation that addresses access to health care services and 
     health insurance for the uninsured. The chairman of the 
     Committee on the Budget may adjust the applicable allocations 
     and aggregates to accommodate this legislation so long as the 
     total cost of the legislation does not increase the deficit 
     for fiscal year 2005 or for the sum of fiscal year 2005 
     through 2009. The adjustment may be made only if the 
     Committee on Finance or the Committee on Health, Education, 
     Labor and Pensions reports a bill that provides health 
     insurance for the uninsured (including a measure providing 
     for tax deductions for the purchase of health insurance or 
     other measures) or that increases access to health insurance 
     through lowering costs; provided that any such measure does 
     not increase the costs of current health insurance coverage.
       An amendment (SA 2699) offered by Senator Kennedy was 
     adopted by voice vote that expands the purposes of the 
     reserve fund to include ``legislation to reallocate and 
     maintain expiring SCHIP funds rather than allowing such funds 
     to revert to the Treasury.''
       Section 302: Reserve fund for higher education
       The Senate resolution provides additional resources to the 
     Committee on Health, Education, Labor and Pensions for 
     reauthorization of the Higher Education Act. The mechanism 
     will make available an additional $1 billion for fiscal year 
     2005 and $5 billion for fiscal years 2005 through 2009 for 
     reauthorization of the Higher Education Act of 1965. This 
     section also makes available an additional $3.7 billion for 
     fiscal year 2005 in budget authority only in order to permit 
     the authorizing committee to rectify an accumulated short 
     fall in the federal Pell Grant account.
       Section 303: Reserve fund for energy legislation
       The Senate resolution provides a mechanism to make 
     additional resources available for a measure setting out a 
     national energy policy (including a bill, joint resolution, 
     amendment, motion, or conference report), that is 
     predominately within the jurisdiction of the Committee on 
     Energy and Natural Resources. Such measure may also include 
     revenue reductions. Unlike most reserve funds, this one is 
     not dependent upon the committee of jurisdiction reporting 
     new legislation. Section 303 is intended to facilitate the 
     consideration of S. 2095, the Energy Policy Act, or a similar 
     measure in any number of different procedural situations.
       Regardless of the procedural posture in which such a 
     measure comes before the Senate, the chairman of the 
     Committee on the Budget may make adjustments to committee 
     allocations and relevant budgetary aggregates provided that 
     the cost of the measure does not exceed $261 million in new 
     budget authority and $221 million in outlays for fiscal year 
     2005 and $1.5 billion in new budget authority and $1.5 
     billion in outlays for fiscal year 2005 through 2009 and the 
     revenue reductions do not exceed $1.8 billion for fiscal year 
     2005 and $15.1 billion for fiscal year 2005 through 2009. 
     Note that these revenue reductions are assumed in the Senate 
     resolution and thus section 303 does not provide any 
     authority for changing the revenue aggregate. Rather, it 
     makes not exceeding the maximum revenue reduction a condition 
     of making the spending-related adjustments.
       Section 304: Reserve fund for Guard and Reserve health care
       An amendment (SA 2731) offered by Senators Graham (of South 
     Carolina) and Bunning was adopted by voice vote that would 
     make additional resources (not to exceed $5.6 billion for the 
     period fiscal year 2005 through 2009) available to either the 
     Committee on Armed Services or the Committee on 
     Appropriations to expand access to health care for members of 
     the reserve component.
       Section 305: Reserve fund for Montgomery GI bill benefits
       An amendment (SA 2731) offered by Senators Graham (of South 
     Carolina) and Bunning was adopted by voice vote that would 
     make additional resources (not to exceed $1.2 billion for the 
     period fiscal year 2005 through 2009) available to either the 
     Committee on Armed Services or the Committee on 
     Appropriations to increase benefit levels under the 
     Montgomery GI bill for members of the Selected Reserves.
       Section 306: Reserve for funding of Hope Credit
       An amendment (SA 2820) offered by Senator Mikulski was 
     adopted by voice vote that would make additional resources 
     available to the Committee on Finance to increase the Hope 
     Credit to $4,000, makes the Credit available for 4 years, and 
     make the Credit refundable.
       Section 307: Reserve fund for expansion of pediatric 
           vaccine distribution program
       An amendment (SA 2833) offered by Senator Bingaman was 
     adopted by voice vote that would make additional resources 
     available to the Committee on Finance to expand the pediatric 
     vaccine distribution program established under section 1928 
     of the Social Security Act to include coverage for children 
     administered a vaccine at a public health clinic or Indian 
     clinic and repels the price cap for pre-1993 vaccines.
       Section 308: Reserve fund for addressing minority health 
           disparities
       An amendment (SA 2780) offered by Senator Clinton was 
     adopted by voice vote that would make additional resources 
     (not to exceed $400 million for fiscal year 2005) available 
     to the Committee on Appropriations for legislation that 
     addresses minority health disparities through activities 
     including those at the HHS Office of Minority Health, the 
     Office of Civil Rights, the National Center on Minority 
     Health and Health Disparities, the Minority HIV/AIDS 
     initiative, health professions training, and through the 
     Racial and Ethnic Approaches to Community Health at the 
     Centers for Disease Control. This amendment would more 
     properly be classified as an adjustment to the discretionary 
     spending limits rather than a reserve fund for additional 
     mandatory spending.
       Section 309: Reserve for Postal Service reform
       An amendment (SA 2852) offered by Senator Collins was 
     adopted by voice vote that

[[Page 10072]]

     would make additional resources available to the Committee on 
     Governmental Affairs for legislation that reforms the United 
     States Postal Service to improve its economic viability.

     Subtitle B: Adjustments With Respect to Discretionary Spending

       Section 311: Adjustment for surface transportation
       The Senate resolution provides a mechanism (reinforcing the 
     intent of a comparable mechanism in the 2004 budget 
     resolution) to make additional contract authority and outlay 
     allocations available to the relevant committees for highway 
     and transit programs for the reauthorization of and 
     appropriation for surface transportation programs, provided 
     that the reauthorization (by virtue of a title reported by 
     the Committee on Finance) makes available new net resources 
     for the highway trust fund that offset the resulting 
     outlays--without increasing the deficit.
       Section 312: Adjustment for supplemental appropriations for 
           activities in Afghanistan and Iraq
       The Senate resolution provides a mechanism to make 
     available to the Committee on Appropriations additional 
     resources for supplemental appropriations for military 
     activities in Iraq and Afghanistan. This mechanism requires 
     that the President transmit a budget request for such funds 
     and limits the adjustment to $30 billion in new budget 
     authority for fiscal year 2005 or the President's request--
     whichever is lower. This mechanism is intended to accommodate 
     incremental expenditures associated with ongoing military 
     operations in Iraq and Afghanistan.
       Section 313: Adjustment for emergency fire suppression 
           activities
       The Senate resolution provides a mechanism to make 
     available up to $500 million per year in additional resources 
     to the Committee on Appropriations for supplemental 
     appropriations for fire suppression activities for fiscal 
     years 2004 through 2006. Such additional resources will only 
     be made available if the regular appropriation for that year 
     has been enacted and is not less than the 10-year average for 
     those accounts and the severity of the fire season 
     necessitates providing additional funding in a timely manner.
       The resolution permits the chairman of the Committee on the 
     Budget to adjust the discretionary spending limits, the 
     committee allocation and other appropriate budgetary 
     aggregates by not more than $400 million each year for fiscal 
     years 2005 and 2006 for the Forest Service and not more than 
     $100 million each year for fiscal years 2005 and 2006 for the 
     Department of the Interior. With respect to fiscal year 2004, 
     the 10-year average has already been appropriated in the 
     regular 2004 appropriations bills. If additional resources 
     are required for fire suppression in fiscal year 2004, rather 
     than making an adjustment to the fiscal year 2004 levels, the 
     chairman has the authority to hold harmless a measure that 
     provides up to $400 million for the Forest Service and up to 
     $100 million for the Department of the Interior for fire 
     suppression activities.
       These funds can be made available on any appropriations 
     bill, amendment, joint resolution or conference report, and 
     are only available for fire suppression. The Senate 
     resolution anticipates that the Forest Service and Department 
     of Interior will work with Congress to develop cost 
     containment measures for fire suppression operation and 
     encourages the Forest Service and Department of the Interior 
     to report to Congress how the funds above the 10-year average 
     were used.
       Section 314: Reserve fund for eliminating survivor benefit 
           plan-Social Security offset
       During Senate consideration of the Committee-reported 
     resolution, an amendment (SA 2775) offered by Senator 
     Landrieu was adopted by voice vote that would make additional 
     resources (not to exceed $2.757 billion for the period of 
     fiscal years 2005 through 2009) available to either the 
     Committee on Armed Service or the Committee on Appropriations 
     to provide an increase to the minimum Survivor Benefit Plan 
     basic annuity for surviving spouses age 62 or older. The 
     amendment does not require that the increased spending be 
     deficit-neutral.
       Section 514: Reserve fund for homeland security grant 
           program, assistance to firefighter grants and port 
           security grants
       During Senate consideration of the Committee-reported 
     resolution, an amendment (SA 2817) offered by Senators Levin 
     and Collins was adopted by a vote of 52 to 43 that would make 
     additional resources (not to exceed $1.545 billion for fiscal 
     year 2005) for programs at the Department of Homeland 
     Security. A sense of the Senate provision that was also part 
     of this amendment stated that this increase in funding is to 
     come from the cancellation of planned future deliveries of 
     oil to the Strategic Petroleum Reserve.
     House Amendment

    Subtitle A: Reserve Funds for Legislation Assumed in the Budget 
                               Aggregates

       Section 301: Deficit-neutral reserve fund for health 
           insurance for the uninsured
       This section of the House Amendment allows adjustments to 
     be made in the allocations and aggregates for certain 
     deficit-neutral legislation. If a committee reports 
     legislation that provides health insurance for the uninsured, 
     the chairman of the Budget Committee may adjust the levels in 
     the allocations and aggregates to the extent such legislation 
     is deficit-neutral in fiscal year 2005, and the period of 
     fiscal years 2005 through 2009.
       Section 302: Deficit-neutral reserve fund for the Family 
           Opportunity Act
       This section of the House Amendment allows adjustments to 
     be made in the allocations and aggregates for certain 
     deficit-neutral legislation. If the Energy and Commerce 
     Committee reports legislation that provides Medicaid coverage 
     for children with special needs (the Family Opportunity Act), 
     the chairman of the Budget Committee may adjust the levels in 
     the allocations and aggregates to the extent such legislation 
     is deficit-neutral in fiscal year 2005, and the period of 
     fiscal years 2005 through 2009. This section allows these 
     initiatives to come to the floor with offsets, as long as 
     that initiative is deficit-neutral in the first year and over 
     the 5-year period.
       Section 303: Deficit-neutral reserve fund for the Military 
           Survivors Benefit Plan
       This section of the House Amendment establishes a deficit-
     neutral reserve fund should legislation be reported, an 
     amendment offered, or conference report submitted which 
     increases military survivor's benefits. The purpose of this 
     section is to encourage an examination of existing mandatory 
     spending accounts so that appropriate reductions may be used 
     to offset a potential survivor benefit expansion.
       Section 304: Reserve fund for pending legislation
       This section of the House Amendment allows an adjustment to 
     be made for any bill, including a bill that provides for the 
     safe importation of FDA-approved prescription drugs or places 
     limits on medical malpractice litigation, that has been 
     adopted by the House in the first session of the 108th 
     Congress and enacted into law. The adjustment may be made by 
     the chairman of the Committee on the Budget to the 
     allocations and aggregates to reflect any resulting savings 
     from any such measure. The effect of any adjustment would be 
     to lock in the savings for deficit reduction. The chairman of 
     the Budget Committee would consult with the committees of 
     jurisdiction before making any adjustments pursuant to this 
     section.

                   Subtitle B: Contingency Procedure

       Section 311: Contingency procedure for surface 
           transportation
       This section of the House Amendment permits the chairman of 
     the Committee on the Budget to adjust the appropriate levels 
     in the budget resolution to accommodate legislation 
     increasing spending for highway and transit programs above 
     the levels in the budget resolution to the extent there are 
     offsets for the additional spending. This contingency is 
     essentially identical to that included in the conference 
     report on the budget resolution for fiscal year 2004.
       Subsection (a) permits the chairman of the Committee on the 
     Budget to increase the Committee on Transportation and 
     Infrastructure's allocation for legislation that increases 
     mandatory contract authority for highway and transit programs 
     financed out of the Highway Trust Fund. In order to make the 
     adjustment, the additional spending must be offset by a 
     reduction in mandatory outlays out of the Fund or receipts 
     appropriated to the Fund.
       Since any additional contract authority provided pursuant 
     to subsection (b) would be made available for obligation 
     through a change in obligation limitations, subsection (c) 
     permits the chairman of the Committee on the Budget to 
     increase the appropriate committee's allocation of 
     discretionary outlays to the extent legislation increases the 
     obligation limits for the highway and transit programs above 
     the levels assumed in the budget resolution. In order to make 
     the adjustment, legislation must first be enacted in 
     compliance with subsection (a).
     Conference Agreement

                       Subtitle A: Reserve Funds

       In general, the reserve funds set out in subtitle A of 
     title III of the Conference Report permit the appropriate 
     chairman of the Committee on the Budget to adjust committee 
     allocations for the named authorizing committees, the 
     spending and revenue aggregates and functional levels in the 
     budget resolution if legislation is considered that satisfies 
     the conditions set out in each particular reserve fund. 
     Adjustments may only be made for reported bills, amendments 
     thereto (including motions to recommit with amendment) and 
     conference reports thereon.
       Note that, in the Senate, this language is not intended to 
     permit revisions or adjustments to the pay-as-you-go 
     scorecard. In both the House and Senate, to the extent a 
     reserve fund for an authorizing committee is required to be 
     deficit-neutral and it is offset through a reduction in 
     spending, such reduction within the committee's jurisdiction 
     to achieve deficit neutrality must be in mandatory outlays. 
     These ``reserve funds'' are not intended to accommodate floor 
     amendments offered to unrelated measures. All (except for 
     section 307) are required to be deficit-neutral in order for 
     any adjustments to be made.

[[Page 10073]]


       Section 301: Deficit-neutral reserve fund for health 
           insurance for the uninsured
       The conference agreement retains both the Senate (section 
     301(a)) and House (section 301(b)) reserve funds for 
     legislation relating to health insurance for the uninsured. 
     There are modest differences between the House and Senate 
     with respect to the policies required for any adjustments. 
     Both reserve funds are deficit-neutral.
       Section 302: Deficit-neutral reserve fund for higher 
           education
       The conference agreement includes a reserve fund for both 
     the Committee on Health, Education, Labor and Pensions in the 
     Senate and the Committee on Education and the Workforce in 
     the House for legislation reauthorizing the Higher Education 
     Act. Similar language was contained in section 302 of the 
     Senate resolution.
       Section 303: Deficit-neutral reserve fund for Montgomery GI 
           benefits
       The conference agreement includes a deficit-neutral reserve 
     fund for the committees of jurisdiction for legislation that 
     increases benefits under the Montgomery GI bill for members 
     of the Selected Reserves. Substantially similar language was 
     contained in section 305 of the Senate resolution.
       Section 304: Deficit-neutral reserve fund for Postal 
           Service reform
       The conference agreement includes a deficit-neutral reserve 
     fund for the Senate Governmental Affairs Committee and the 
     House Committee on Government Reform for legislation that 
     reforms the U.S. Postal Service. Substantially similar 
     language was contained in section 309 of the Senate 
     resolution.
       Section 305: Deficit-neutral reserve fund for the Family 
           Opportunity Act
       The conference agreement includes a deficit-neutral reserve 
     fund for the Senate Finance Committee and the House Energy 
     and Commerce Committee for legislation that provides Medicaid 
     coverage for children with special needs. Substantially 
     similar language was contained in section 302 of the House 
     amendment.
       Section 306: Deficit-neutral reserve fund for eliminating 
           survivor benefit plan--Social Security offset
       The conference agreement includes a deficit-neutral reserve 
     fund for both the Senate and the House Armed Services 
     Committees for legislation that increases the minimum 
     Survivor Benefit Plan basis annuity for surviving spouses age 
     62 and older. Substantially similar language was contained in 
     section 314 of the Senate resolution.
       Section 307: Reserve fund for pending legislation
       The conference agreement includes a reserve fund for 
     certain House-passed legislation, with modifications. It 
     permits the House Budget Committee chairman to ensure that 
     the savings resulting from the enactment of certain measures 
     would go to deficit reduction. The reserve fund allows the 
     chairman to make adjustments in the budget resolution 
     aggregates and allocations upon the enactment of legislation 
     providing for the safe importation of FDA-approved 
     prescription drugs and legislation imposing limits on medical 
     malpractice litigation.

     Subtitle B: Adjustments With Respect to Discretionary Spending

       In general, the adjustments set out in subtitle B of title 
     III of the Conference Report permit the appropriate chairman 
     of the Committee on the Budget to adjust committee 
     allocations for the Committees on Appropriations and the 
     spending aggregates and functional levels in the budget 
     resolution if the particular requirements of each section are 
     satisfied. In the Senate, this includes the discretionary 
     spending limits set out in section 404. Note that no 
     adjustment made under this subtitle is intended to permit 
     resources or adjustments to the pay-go-you-go scorecard for 
     the Senate's paygo point of order.
       Section 311: Adjustment for surface transportation
       Section 311 of the conference agreement is similar to 
     section 311 of the House amendment and section 311 of the 
     Senate resolution. However, the chairmen of the Budget 
     Committees will not make any adjustment for fiscal year 2004, 
     which is not revised in this conference agreement.
       Section 312: Adjustment for wildland fire suppression
       The conference agreement retains the language from section 
     313 of the Senate resolution, extends it to the House, and 
     makes a number of minor modifications. Subsection (a) states 
     that the intent of this section is to accommodate additional 
     appropriations for wildland fire suppression if such 
     activities are funded at the 10-year average, there are 
     insufficient funds available in the wildland fire suppression 
     account, and the fire season is of sufficient severity to 
     merit additional appropriations.
       Subsection (b)(1) clarifies that CBO will calculate the 
     ten-year average of obligations for wildland fire 
     suppression, defined as the ``base amount'', in consultation 
     with the Committees on the Budget and on Appropriations.
       Under subsection (b)(2) the chairmen of the Committees on 
     the Budget of the House and the Senate would accommodate 
     additional spending by the Committees on Appropriations for 
     any appropriation for wildland fire suppression above the 
     base amount by increasing the Committees' allocation and 
     other appropriate aggregates for fiscal year 2005.
       Under subsection (b)(3) there is a special rule for fiscal 
     year 2004 that allows the chairman of the Committee on the 
     Budget of the House to accommodate additional spending by the 
     Committee on Appropriations for additional appropriations for 
     wildland fire suppression by increasing the Committee's 
     allocation and other appropriate aggregates, but not to 
     exceed $500 million. In the Senate, for fiscal year 2004, the 
     chairman of the Committee on the Budget may hold the 
     Committee on Appropriations harmless (by not scoring) for any 
     additional appropriations for wildland fire suppression, only 
     to the extent such amounts do not to exceed $500 million.
       Section 313: Mechanism for adjusting appropriate 
           discretionary levels
       Subsection (a) establishes a mechanism to increase the 
     discretionary levels from the discretionary limits that are 
     binding in the Senate (by virtue of section 504 of the fiscal 
     year 2004 budget resolution) to the levels envisioned by this 
     conference agreement. It is similar to the mechanism set out 
     in section 203 of the fiscal year 2002 budget resolution (H. 
     Con. Res. 83, 107th Cong.).
       Subsection (a) provides the chairmen of the Committees on 
     the Budget the authority to increase the section 302(a) 
     allocation to the Committees on Appropriations (as well as 
     the discretionary spending limits set out in section 404 and 
     other levels in this conference agreement) when the first 
     regular appropriations bill for fiscal year 2005 is reported 
     in its respective House. The conference agreement will 
     provide an additional $4.630 billion in new budget authority 
     and $14.240 billion in outlays to the Committee on 
     Appropriations. The functional levels in this conference 
     agreement, including a necessary adjustment in function 920 
     envision an ultimate level of discretionary spending of 
     $821.419 billion in new budget authority and $905.328 billion 
     in outlays for fiscal year 2005.
       Subsection (b) establishes a procedure to adjust the 
     allocation to the Committees on Appropriations by the amount 
     of the advance appropriation for fiscal year 2005 for Project 
     Bioshield (already enacted in the fiscal year 2004 bill 
     making appropriations for the Department of Homeland 
     Security). It would provide $2.528 billion in budget 
     authority and $0.276 billion in outlays. This adjustment is 
     necessary to achieve comparability between the President's 
     budget request and this conference agreement with respect to 
     the budgetary treatment of Project Bioshield. This adjustment 
     will be made at the same time as the adjustment made pursuant 
     to subsection (a).


                Items dropped from the Senate Resolution

       The following provisions from the Senate resolution were 
     not retained in any form in the conference agreement:

     Section 303--Reserve Fund for Energy Legislation
     Section 304--Reserve Fund for Guard and Reserve Health Care
     Section 306--Reserve Fund for Funding of Hope Credit
     Section 307--Reserve Fund for Expansion of Pediatric Vaccine 
         Distribution Program
     Section 308--Reserve Fund for Addressing Minority Health 
         Disparities
     Section 514--Reserve Fund for Homeland Security Grants

                           BUDGET ENFORCEMENT

       Under section 301 of the Budget Act, the budget resolution 
     may include special procedures to enforce the spending and 
     revenue levels contained in the resolution and the 
     allocations found in the accompanying joint statement of 
     managers.


                      Title IV: Budget Enforcement

     Senate Resolution
       Section 401: Restriction on advance appropriations in the 
           Senate
       The Senate resolution includes language limiting the use of 
     advance appropriations. This restriction was first included 
     in the fiscal year 2001 budget resolution and was included 
     and revised in the fiscal year 2002 and fiscal year 2004 
     resolutions as well. The Senate resolution continues to 
     restrict advance appropriations to an annual limit of $23.158 
     billion with respect to both the fiscal years 2005 and 2006 
     appropriations bills and to those programs that are listed in 
     the statement of managers accompanying the conference report 
     on the budget resolution. The resolution also continues the 
     exception for advances with respect to the Corporation for 
     Public Broadcasting.
       The list of permissible advances in the respective 
     appropriations bill is as follows:

             Accounts Identified for Advance Appropriations

     Interior: Elk Hills

     Labor, HHS:
       Corporation for Public Broadcasting
       Employment and Training Administration
       Education for the Disadvantaged
       School Improvement

[[Page 10074]]

       Children and Family Services (Head Start)
       Special Education
       Vocational and Adult Education

     Transportation, Treasury: Payment to Postal Service

     Veterans, HUD: Section 8 Renewals
       Section 402: Emergency legislation
       In general, the Senate's emergency rule addresses two 
     issues with respect to emergency spending: the ability to 
     designate spending as an emergency and the restatement of the 
     Senate point of order with respect to the use of that 
     designation.
       Section 402 of the Senate resolution is virtually identical 
     to section 502(c) of the 2004 resolution, which sets out the 
     Senate's rule with respect to emergency legislation. 
     Subsection (a) states the general purpose for the rule, and 
     subsection (b) sets out the rule as it is applied in the 
     House of Representatives and thus is appropriately not 
     addressed in the Senate-passed 2005 resolution. The only 
     change to the current Senate rule (set out in section 502(c) 
     of the 2004 resolution) is of a technical nature and makes 
     clear that the adjustment authority provided in section 402 
     of the 2005 resolution is applicable to all future budget 
     resolutions as well. The following is a review of the history 
     of this provision.
       The authority to designate spending as an ``emergency'' 
     existed as a part of the statutory discretionary spending 
     limits and the pay-as-you-go rules set out in sections 251 
     and 252 of the Balanced Budget and Emergency Deficit Control 
     Act of 1985. The purpose of the designation was to create a 
     ``safety valve'' for unexpected, emergency expenditures that 
     would be exempt from sequestration, which served as the 
     enforcement mechanism for the caps and PAYGO. With the 
     expiration of section 251 on September 30, 2002 and the de 
     facto expiration of section 252 (by virtue of setting the 
     scorecard to zero for all fiscal years), section 502 of the 
     2004 resolution reestablished the authority of the Senate to 
     designate spending and revenue changes as an emergency. In 
     doing so, section 502 codified the criteria used in the 
     definition of an emergency and required committee reports and 
     statements of managers to justify the use of emergency 
     designations with these criteria. The criteria are as set out 
     in subsection (c)(3)(B).
       If an item of discretionary spending is accompanied by an 
     emergency designation, the discretionary spending limit and 
     the allocation to the Committee on Appropriations (as well as 
     all other levels in the most recently adopted budget 
     resolution) is held harmless for the costs associated with 
     that spending. If a revenue reduction or mandatory spending 
     increase is accompanied by an emergency designation, then the 
     committee allocation and the Senate's pay-go scorecard is 
     also be held harmless accordingly (again, as well as all 
     other appropriate levels in the resolution).
       Section 402 of the 2005 Senate resolution restates (with a 
     technical correction) the Senate's emergency designation 
     point of order. This point of order was first included in the 
     fiscal year 2000 budget resolution. This point of order 
     allows any member to question the use of an emergency 
     designation while the bill, amendment or conference report 
     containing the designation is before the Senate (except for 
     defense appropriations). Once the point of order is made, it 
     requires 60 votes to waive the point of order and retain the 
     designation. If the motion to waive is not successful, the 
     designation would be removed from the measure, and the 
     spending item would remain, in all likelihood making the bill 
     (or amendment) subject to a Budget Act point of order, which 
     would also require 60 votes to overcome. The removal of the 
     designation is accomplished by the same method as provided 
     for in the Byrd Rule (section 313 of the Congressional Budget 
     Act of 1974).
       Section 403: Discretionary spending limits in the Senate
       Section 504 of the 2004 budget resolution set out 
     discretionary spending limits for fiscal years 2003, 2004, 
     and 2005. These limits are enforced in the Senate with a 60-
     vote point of order. The limits set out with respect to 
     fiscal year 2005 are applicable during consideration of the 
     budget resolution in the Senate. Therefore, any amendment 
     that would increase the level of discretionary spending over 
     the level set out in the 2004 resolution would also be 
     subject to a 60-vote point of order.
       Section 402 of the Senate resolution sets out congressional 
     discretionary spending limits for the first two years covered 
     by the 2005 budget resolution (fiscal years 2005 and 2006) 
     with respect to both budget authority and outlays. Since the 
     advent of statutory discretionary spending limits in 1990, a 
     majority of budget resolution conference reports have 
     included language dealing with ``congressional caps.''\1\
---------------------------------------------------------------------------
     \1\See: section 12(b) of H. Con. Res. 64 (103rd Cong.) the 
     fiscal year 1994 Concurrent Resolution on the Budget; section 
     24 of H. Con. Res. 218 (103rd Cong.) the fiscal year 1995 
     Concurrent Resolution on the Budget; Section 201 of H. Con. 
     Res. 67 (104th Cong.) the fiscal year 1996 Concurrent 
     Resolution on the Budget; Section 301 of H. Con. Res. 178 
     (104th Cong.) the fiscal year 1997 Concurrent Resolution on 
     the Budget; Section 201 of H. Con. Res. 84 (105th Cong.) the 
     fiscal year 1998 Concurrent Resolution on the Budget (all 
     establishing multiyear caps); Section 206 of H. Con. Res. 290 
     (106th Cong.) the fiscal year 2001 Concurrent Resolution on 
     the Budget; Section 203 of H. Con. Res. 83 (107th Cong.) the 
     fiscal year 2002 Concurrent Resolution on the Budget (both 
     providing a mechanism to accommodate an increase to the 
     current year's statutory cap); section 504 of H. Con. Res. 95 
     (108th Cong.) the fiscal year 2004 Concurrent Resolution on 
     the Budget.
---------------------------------------------------------------------------
       During debate of the Committee-reported resolution, an 
     amendment (SA 2742, offered by Senator Warner) to increase 
     discretionary spending for fiscal year 2005 through 2009 in 
     order to provide full funding of the President's request for 
     national defense was adopted by a vote of 95 to 4. The 
     amendment also called for an explicit increase to the 
     discretionary limits set out in the Committee-reported 
     resolution of $6.900 billion in budget authority and $5.409 
     billion in outlays for 2005 and $1.594 billion in outlays for 
     2006. No point of order was raised during consideration of 
     this amendment. As passed, the Senate resolution sets the 
     following amounts as the discretionary spending limits:
       For fiscal year 2005: $819.673 billion in new budget 
     authority and $823.694 billion in outlays for the 
     discretionary category; $33.393 billion in outlays for the 
     highway category, and $1.488 billion in new budget authority 
     and $6.726 billion in outlays for the transit category, for a 
     total of $821.161 billion in new budget authority and 
     $863.813 billion in outlays.
       For fiscal year 2006: $852.257 billion in new budget 
     authority and $885.860 billion in outlays for the 
     discretionary category. The Senate resolution sets out only 
     one unified category for 2006.
       The Senate resolution also provides for a number of so-
     called cap adjustments. The cap adjustments permit the 
     chairman of the Committee on the Budget to increase the 
     discretionary spending limit, the section 302(a) allocation 
     to the Committee on Appropriations, and any other appropriate 
     levels in the resolution if an appropriations bill provides 
     additional resources for the programs specified in the 
     adjustment. These are set out in title III of the resolution.
       These discretionary spending limits would continue to be 
     enforced by a 60-vote point of order on two fronts: (1) there 
     would be a point of order against the fiscal year 2006 budget 
     resolution if it exceeds the limits for that year set in the 
     2005 resolution (or against any revision to the fiscal year 
     2005 resolution that does so) and (2) there would be a point 
     of order against any appropriations bill that causes any of 
     the discretionary limits to be exceeded.
       Section 404: Scoring rules
       Section 404 of the Senate resolution includes a number of 
     ``scorekeeping rules.'' Pursuant to section 312(a) of the 
     Congressional Budget Act, the chairmen of the Committees on 
     the Budget of the House and Senate are responsible for 
     determining the costs of legislative proposals in their 
     respective chambers. From time to time, new scoring issues 
     arise as Congress responds to various fiscal needs. The rules 
     set forth in this section will serve as guidance to the 
     chairman of the Committee on the Budget, and the Senate as a 
     whole, in evaluating the cost of legislative proposals and 
     applying the budgetary discipline set out in budget 
     resolutions and the Congressional Budget Act of 1974.
       As originally reported from the Committee on the Budget, 
     section 404(a) had set out a scoring rule (similar to the 
     President's proposal) intended to equalize the scoring 
     treatment of budget authority and outlays for the Pell Grant 
     program. Amendment 2851 was adopted by voice vote that 
     eliminated this provision in its entirety.
       Subsection (a)--Bioshield. As reported from the Committee 
     on the Budget, section 404(b) had set out a scoring rule with 
     respect to possible changes in the availability of funding 
     already provided for Project Bioshield. The Bioshield program 
     was proposed in the President's fiscal year 2004 budget as a 
     new mandatory program. The fiscal year 2004 budget resolution 
     contained a ``reserve fund'' in the Senate in order to 
     accommodate the spending for this new proposal. In the 
     absence of authorization language, the Bioshield program was 
     funded, in its entirety, in the fiscal year 2004 
     appropriations act for the Department of Homeland Security. 
     Full funding (for the period requested by the President) was 
     accomplished by means of an advance appropriation. This 
     provision provided budget authority as follows: $0.890 
     billion in new budget authority for fiscal year 2004, $2.528 
     billion in new budget authority for fiscal year 2005 and 
     $2.175 billion in new budget authority for fiscal year 2009. 
     The amounts for 2005 and 2009 are advance appropriations and, 
     when combined with all the usual advance appropriations, 
     exceeded the cap on advance appropriations set by section 501 
     of the 2004 budget resolution. Section 501 contains both a 
     dollar limit for fiscal year 2005 and an exclusive list of 
     programs for which permissible advances may be made. The 
     Bioshield advance also violated the program list. This new 
     scoring rule, proposed under section 404(b) of the Committee 
     reported-resolution, provided that any legislative change in 
     the availability of these funds (such as a recission) would 
     not be scored for the purposes of budgetary enforcement. 
     Consequently, recissions of budget authority would not be 
     available as an offset for spending on other programs.

[[Page 10075]]

       The Senate adopted an amendment (SA 2848 offered by Senator 
     Byrd, adopted by voice vote), that deleted the Committee-
     reported Bioshield rule and replaced it with an entirely new 
     rule. The new rule, (now found in subsection (a)) requires 
     the chairman of the Committee on the Budget to revise the 
     allocations and other budgetary aggregates by $2.528 billion 
     (the amount of the advance appropriation already enacted for 
     Project Bioshield for fiscal year 2005) when the 2005 
     Homeland Security appropriations bill is reported. This would 
     hold the Committee on Appropriations harmless with respect to 
     the discretionary caps and the Committee's section 302(a) 
     allocation for the cost of the 2005 advance appropriation for 
     Bioshield that was made in the 2004 appropriations bill.
       Subsection (b)--Energy Savings Performance Contracts. The 
     Senate also adopted an amendment (SA 2823 offered by Senator 
     Inhofe, adopted by voice vote) that provides a directed-
     scoring rule with respect to energy savings performance 
     contracts [ESPCs]. This new rule is now found in subsection 
     (b) of section 404. The rule would permit ESPCs to be 
     reauthorized without recognizing (scoring) the costs. Current 
     authority of federal agencies to enter into obligations for 
     ESPCs has expired (their cost has recently been about $250 
     million per year). The conference report on the Energy bill 
     (H.R. 6) included a provision to reauthorize ESPCs, which CBO 
     estimated would cost $267 million in 2005 and $1.4 billion 
     over 10 years.
       Section 405: Adjustments to reflect changes in concepts and 
           definitions
       Section 405(a) of the Senate resolution is virtually 
     identical to section 508 of the 2004 budget resolution. It 
     provides that upon enactment of legislation that changes 
     funding of an existing program from discretionary to 
     mandatory (or vice versa) the chairman of the Committee on 
     the Budget will adjust the levels in this budget resolution 
     (including the discretionary spending limits) to reflect such 
     a change.
       Section 405(b) of the Senate resolution provides a similar 
     rule for reported legislation that addresses changes in the 
     nature of offsetting receipts from the Power Marketing 
     Administration.
       Section 406: Application and effect of changes in 
           allocations and aggregates
       The Senate resolution retains language from previous 
     resolutions clarifying the process for implementing any 
     adjustment made pursuant to the reserve funds and 
     discretionary adjustments and the status of these adjusted 
     levels. It also clarifies that the Budget Committee 
     determines scoring for purposes of points of order.
       Section 407: Rulemaking authority
       The Senate resolution includes language identical to 
     section 222 of the fiscal year 2002 budget resolution, which 
     simply states Congress' authority to legislate rules of 
     procedure for either chamber.
       Section 408: Pay as you go point of order in the Senate
       The Committee-reported resolution did not contain any 
     language with respect to the pay-as-you-go rule because the 
     current rule (set out in section 505 of H. Con. Res. 95, the 
     fiscal year 2004 budget resolution) would not have expired 
     until September 30, 2008. The original Senate pay-as-you-go 
     point of order first appeared in the fiscal year 1994 budget 
     resolution. The previous version expired in its entirety on 
     September 30, 2002. The point of order was revised and 
     extended through April 15, 2003 when the Senate adopted S. 
     Res. 304 (107th Congress) on October 16, 2002. S. Res. 304 
     included a new provision of the pay-as-you-go rule making the 
     rule applicable to mandatory spending in appropriations bills 
     in order to prevent the exploitation of the fact that there 
     were no limits on discretionary spending for fiscal year 2003 
     due to the expiration of the discretionary spending limits 
     and the lack of a fiscal year 2003 budget resolution.
       The section 505 pay-as-you-go rule did not retain the 
     expanded application temporarily applied to appropriation 
     bills in S. Res. 304. Rather it resembles the previous 
     versions of the rule with one change: it applies on a post-
     budget resolution policy basis. To accomplish this, a 
     scorecard is maintained by the chairman of the Committee on 
     the Budget that sets out the total level of change to the 
     deficit assumed by the most recently adopted budget 
     resolution. Subsequent legislation is to be measured against 
     these balances.
       But the current section 505 paygo rule was replaced by an 
     amendment to the 2005 budget resolution (SA 2748 offered by 
     Senator Feingold; adopted by a vote of 51 to 48). The 
     amendment reinstates the Senate's pay-as-you-go rule as it 
     was in effect prior to its expiration on September 30, 2002: 
     any increases in mandatory spending or reductions in revenues 
     must be fully offset (i.e. deficit-neutral) for the 1st year, 
     the sum of years 1 through 5, and the sum of years 6 through 
     10 with respect to the most recently agreed to concurrent 
     resolution on the budget. The Feingold rule would remain in 
     effect through September 30, 2009.
     House Amendment
       Section 401: Restrictions on advance appropriations
       Section 401 imposes a limitation on advance appropriations 
     similar to a provision included in the last several budget 
     resolutions. It effectively limits which programs may receive 
     an advance appropriation and establishes an overall amount of 
     advanced appropriations. The section includes a general 
     restriction that limits the programs that may receive an 
     advance appropriation and the total level of such 
     appropriations. Advance appropriations may be provided for 
     the accounts in appropriation bills identified under the 
     section ``Accounts Identified for Advanced Appropriations'' 
     in the Joint Statement of Managers on the Conference Report 
     on the Budget Resolution. The list is expected to be the same 
     as that which appears in this report in the section 
     ``Additional Report Language'' and with the same heading. 
     Total advance appropriations for these accounts may not 
     exceed $23.568 billion in budget authority. The amount is 
     essentially the same as provided in previous budget 
     resolutions, but it was adjusted to reflect total advance 
     appropriations provided for fiscal years 2006 and 2007 (and 
     any subsequent fiscal years, if applicable). The section 
     defines an ''advance appropriation'' as any new discretionary 
     budget authority making general appropriations or continuing 
     appropriations for fiscal year 2005 that first becomes 
     available for any fiscal year after 2005.
       The limitation may be enforced by any member making a point 
     of order at the appropriate time against any advance 
     appropriations not falling within an exception or exceeding 
     the overall limit. The effect of a point of order under this 
     section, if sustained by the Chair, is to cause the 
     appropriation(s) to be stricken from the bill or joint 
     resolution. The bill itself, however, would still be 
     considered in the House.
       Section 402: Emergency legislation
       Section 402 provides the House with the authority to 
     designate spending provisions as ``emergencies.'' It adopts 
     criteria for evaluating emergency spending. It also exempts 
     from Congressional budgetary controls supplemental 
     appropriations for the Department of Defense for contingency 
     operations related to the global war on terrorism.
       Subsection (a) provides a special exemption from budget 
     controls for a supplemental spending measure for the 
     Department of Defense for ``contingency operations related to 
     the global war on terrorism.'' Though $50 billion has been 
     budgeted for fiscal year 2005 in the budget resolution for 
     this purpose, the exact final amount has yet to be 
     determined. The final level of the supplemental will depend 
     on the President's request and the response of the 
     Appropriations Committees of the House and the Senate.
       In order to trigger the exemption, the House must 
     specifically designate the appropriations as ``contingency 
     operations'' under section 402(a) of H. Con. Res. 393. As in 
     an emergency designation, such designated amounts will not be 
     counted in the determination of the cost of measures and 
     hence will not trigger a point of order under sections 302, 
     303, and 401 of the Congressional Budget Act.
       Subsection (b) exempts spending designated as an emergency 
     under this section from the budget resolution and, as such, 
     spending would not trigger a point of order. This is largely 
     the same procedure as was included in the budget resolution 
     from fiscal year 2004, H. Con. Res. 95. Instead of adjusting 
     the allocations and budget aggregates by the amount 
     designated as an emergency, as was the case prior to the 
     expiration of the emergency designation at the end of fiscal 
     year 2002, subsection (b) provides that the spending (or 
     receipts) resulting from such a provision will not be counted 
     for purposes of determining whether a measure complies with 
     the budget resolution. This is consistent with the 
     congressional scoring conventions prior to the Balanced 
     Budget Act of 1997. Assuming a measure that includes this 
     emergency designation is otherwise in compliance with the 
     budget resolution, it would not be subject to a point of 
     order under sections 302(f), 303(a), 311(a) or 401 of the 
     Congressional Budget Act of 1974.
       Committees reporting a measure that designates spending as 
     an emergency should include in the accompanying report, or 
     the conference committee in the joint statement of managers, 
     a statement justifying the emergency designation on the basis 
     of certain criteria. The criteria for designating a 
     legitimate emergency is that the underlying situation to 
     which the provision applies must pose a threat to life, 
     property, or national security and is also: sudden, quickly 
     coming into being, and not building up over time; an urgent, 
     pressing, and compelling need requiring immediate action; 
     unforeseen, unpredictable, unanticipated, and not permanent.
       This definition was adapted from criteria developed by 
     previous administrations as part of an OMB Circular (A-11) on 
     the preparation and submission of budget estimates. The 
     subsection continues the practice of allowing the provisions 
     designated as emergencies to be exempt from the budget 
     controls and points of orders of the Congressional Budget 
     Act.

[[Page 10076]]


       Section 403: Compliance with section 13301 of the Budget 
           Enforcement Act of 1990
       This section provides authority to include the 
     administrative expenses related to Social Security in the 
     allocation to the Appropriations Committee. This language is 
     necessary to ensure that the Appropriations Committee retains 
     control of administrative expenses through the Congressional 
     budget process. In the 106th Congress, the joint Leadership 
     of the House and Senate Budget Committees decided to 
     discontinue the practice of including administrative expenses 
     in the budget resolution. This change was intended to make 
     the budget resolution consistent with the Congressional 
     Budget Office's baseline which does not include 
     administrative expenses for Social Security. At the same 
     time, the House Budget Committee believed that these expenses 
     should continue to be reflected in the 302(a) allocations to 
     the Appropriations Committee. Absent a waiver of section 
     302(a) of the Budget Act, the inclusion of these expenses in 
     the allocation is construed as violating 302(a) of the Budget 
     Act which states that the allocations must reflect the 
     discretionary amounts in the budget resolution (and arguably, 
     section 13301 of the Budget Enforcement Act, which states 
     that Social Security benefits and revenues are off-budget).
       Section 404: Application and effects of changes in 
           allocations and aggregates
       This section sets forth the procedures for making 
     adjustments for the reserve funds included in this 
     resolution. Subsection (a)(1) and (2) provide that the 
     adjustments may only be made during the interval that the 
     legislation is under consideration and do not take effect 
     until the legislation is actually enacted. This is consistent 
     with the procedures for making adjustments for various 
     initiatives under section 314 of the Congressional Budget 
     Act.
       Subsection (a)(3) directs the chairman of the House Budget 
     Committee to insert the adjustments authorized by the various 
     reserve funds in the Congressional Record.
       Subsection (b) clarifies that any adjustments made under 
     any of the reserve funds in the resolution have the same 
     effect as if they were part of the original levels set forth 
     in section 101. Therefore the adjusted levels are used to 
     enforce points of order against legislation inconsistent with 
     the allocations and aggregates included in the concurrent 
     resolution on the budget. Spending and tax measures are 
     compared to these adjusted levels to determine if they are 
     consistent with the budget resolution.
       Subsection (c) clarifies that the House Budget Committee 
     determines the levels and estimates used to enforce points of 
     order, as is the case for enforcing budget-related points of 
     order. This section of the Budget Act provides the chairman 
     of the Budget Committee with the authority to advise the 
     chairman of the Committee of the Whole House on the 
     appropriate levels and estimates related to legislation being 
     considered on the floor.
     Conference Agreement
       Section 401: Restriction on advance appropriations
       Section 401 reflects the Senate resolution's overall limit 
     on advance appropriations of $23.158 billion in fiscal year 
     2006 as opposed to the House amendment, which limited total 
     advance appropriations to $23.568 billion over a two-year 
     (fiscal years 2006 and 2007) period. For the House, the 
     language is identical to section 501 in the Fiscal Year 2004 
     budget resolution, H. Con. Res. 95.
       The list of permissible advances is as follows:

      Accounts Identified for Advance Appropriations in the Senate

     Interior: Elk Hills.

     Labor, HHS:
       Corporation for Public Broadcasting
       Employment and Training Administration
       Education for the Disadvantaged
       School Improvement
       Children and Family Services (Head Start)
       Special Education
       Vocational and Adult Education

     Transportation, Treasury: Payment to Postal Service

     Veterans, HUD: Section 8 Renewals

      Accounts Identified for Advance Appropriations in the House


          part a: advance appropriations for fiscal year 2006

     Interior Appropriations: Elk Hills

     Labor, Health and Human Services, Education Appropriations:
       Employment and Training Administration
       Education for the Disadvantaged
       School Improvement
       Child and Family Services [Head Start]
       Special Education
       Vocational and Adult Education

     Treasury, General Government Appropriations: Payment to 
     Postal Service

     Veterans, Housing and Urban Development Appropriations: 
     Section 8 Renewals


          part b: advance appropriations for fiscal year 2007

     Labor, Health and Human Services, Education Appropriations: 
     Corporation for Public Broadcasting
       Section 402: Emergency legislation
       The conference agreement adopts section 402 of the House 
     amendment with respect to the rule on emergency spending. The 
     major difference between the House and Senate language was 
     the Senate requirement that the President explicitly agree to 
     a ``contingent'' designation by the Congress (i.e., a 
     spending item with an emergency designation that originated 
     in the Congress and that was not originally requested by the 
     President). There were also minor differences in the criteria 
     used to evaluate the appropriate use of the emergency 
     designation. In addition, the conference agreement retains, 
     for the Senate only, the current Senate point of order 
     regarding the use of the emergency designation. The 
     conference agreement also adopts the House approach regarding 
     the treatment of supplemental appropriations for Iraq, but 
     includes a level of $50 billion for this purpose. The 
     conference agreement sets out this language in section 403--
     Exemption of Overseas Contingency Operations.
       Section 403: Exemption of overseas contingency operations
       Section 403 of the conference agreement adopts language 
     from section 402(a) of the House amendment with a 
     modification reflecting the $50 billion assumed for overseas 
     contingency operations in the global war on terrorism to be 
     provided in a supplemental appropriations bill. In order to 
     trigger the exemption, funds must be ``designated by the 
     Congress to be contingency operations pursuant to section 403 
     of S. Con. Res. 95.'' As in an emergency designation, such 
     designated amounts will not be counted in the determination 
     of the cost of measures and hence will not trigger a point of 
     order under sections 302, 303, and 401 of the Congressional 
     Budget Act or sections 404 and 407 of the conference 
     agreement. Provisions exempted under this section may be 
     included in any number of measures provided the cumulative 
     total does not exceed $50 billion.
       Section 404: Discretionary spending limits in the Senate
       Section 404 of the conference agreement retains the 
     language from section 403 (except the conference agreement 
     contains no 2006 limit) of the Senate resolution. Virtually 
     identical language was included in section 504 of last year's 
     budget resolution (H. Con. Res. 95, 108th Cong.). Section 403 
     sets out congressional discretionary spending limits for 
     fiscal year 2005 with respect to both budget authority and 
     outlays. Since the advent of statutory discretionary spending 
     limits in 1990, a majority of budget resolution conference 
     reports have included language dealing with ``congressional 
     caps'' (see detailed discussion accompanying description of 
     the Senate resolution). These limits are enforced in the 
     Senate with a 60-vote point of order.
       The limits set out in the conference agreement are as 
     follows:

       With respect to fiscal year 2005: Because the language in 
     section 504 of the fiscal year 2004 resolution still governs 
     the consideration of this conference agreement, the limits 
     for fiscal year 2005 are the same as those set out in that 
     section (as subsequently modified by permissible 
     adjustments). Although an amendment was adopted during 
     consideration in the Senate that increased this level, a 
     waiver was not sought or obtained.

       Section 404 provides the chairman of the Committee on the 
     Budget with the authority to make adjustments to these 
     discretionary limits and the committee allocations for: (A) 
     transportation, (B) wildland fire suppression, and (C) 
     compliance with section 504 of H. Con. Res. 95 and the 
     advance appropriation provided in fiscal year 2004 for 
     Project Bioshield.
       Section 405: Adjustments to reflect changes in concepts and 
           definitions
       The House recedes to the Senate on section 405 of the 
     Senate resolution with an amendment. Subsection (a) 
     authorizes the chairmen of the Committees on the Budget of 
     the House and the Senate to adjust the resolution to take 
     into account changes in budgetary concepts and definitions 
     upon enactment of such legislation.
       Subsection (b)(1) reflects the language from section 405(b) 
     of the Senate resolution permitting the chairman of the 
     Committee on the Budget in the Senate to adjust the budget 
     resolution to accommodate legislation converting Power 
     Marketing Administration customer receipts, which are 
     currently treated as mandatory offsetting receipts, to 
     offsetting collections, which would then be credited against 
     spending in an appropriations measure. The language specifies 
     the intent of the Conferees that the proceeds from these 
     customer receipts would be available only to the Corps of 
     Engineers and the Pick-Sloan Missouri Basin project within 
     the Bureau of Reclamation.
       Subsection (b)(2) permits the House Budget Committee 
     chairman to make deficit neutral adjustments in the 
     appropriate spending and revenue levels in the budget 
     resolution to permit the consideration of legislation (other 
     than reconciliation) that extends the child tax credit.

[[Page 10077]]


       Section 406: Application of changes in allocations and 
           aggregates
       Section 406 of the conference agreement retains the 
     language of section 406 of the Senate Resolution (which is 
     similar to section 404 of the House amendment) clarifying 
     both the process for making adjustments under the reserve 
     funds and the status of the adjusted levels. It also 
     determines scoring for purposes of enforcing budget related 
     points of order.
       Section 407: Pay-as-you-go point of order in the Senate
       The conference agreement retains the Senate's pay-as-you-go 
     provision, with an exemption for legislation considered 
     pursuant to Title II of this resolution. The Senate point of 
     order expires on April 15, 2005.
       Section 408: Compliance with section 13301 of the Budget 
           Enforcement Act of 1990
       Section 408 of the conference agreement retains the 
     language of section 402 of the House amendment regarding the 
     budgetary treatment in the House of discretionary spending 
     for the Social Security Administration.

                     Subtitle B: Report Submissions

       Section 411: Submission of report on defense savings
       Section 411 of the conference agreement retains the 
     language of section 202 of the House amendment, which 
     requires the House Armed Services Committee to submit a set 
     of findings to the House Budget Committee. Section 411 adds a 
     comparable requirement for the Senate Armed Services 
     Committee to submit findings to the Senate Budget Committee. 
     The findings must identify $2 billion dollars in savings from 
     activities that are determined to be of low priority or 
     wasteful or unnecessary to national defense. These savings 
     can be used to accommodate other priorities such as force 
     protection, munitions and surveillance capabilities. The 
     report must be submitted to the respective Budget Committees 
     by June 25, 2004, and included in the Congressional Record.
       Section 412: Submission of report on homeland security
       Section 412 of the conference agreement includes a 
     requirement that, the Senate Governmental Affairs Committee 
     and the House Select Homeland Security Committee submit to 
     the relevant Budget Committees findings that identify $150 
     million dollars in savings from activities that are 
     determined to be of low priority, wasteful or unnecessary to 
     homeland security. The findings must also include 
     recommendations on how to reallocate the savings to programs 
     and activities considered top priority or which directly 
     contribute to enhancing homeland defense. The report must be 
     submitted to the respective Budget Committees by June 25, 
     2004 and included in the Congressional Record.

               Subtitle C: Exercise of Rulemaking Powers

       Section 421: Exercise of rulemaking powers
       The House recedes to section 425 of the Senate resolution, 
     which affirms that the budget resolution is an act of 
     congressional rulemaking and subject to revisions by either 
     House. Section 421 of the conference agreement states the 
     authority by which Congress adopts the various budgetary 
     enforcement rules and procedures for the consideration of 
     certain legislation set out in the budget resolution.
     Other Provisions
     Senate Resolution
       With respect to section 404 of the Senate resolution 
     (``Scoring Rules''), the conference agreement retains 
     language with respect to Project Bioshield which was set out 
     in 404(a) with some modifications which are discussed in 
     section 313 of the conference agreement. The language of 
     section 404(b) with respect to energy savings performance 
     contracts has not been retained in any form.


           Title V: Required Levels and Amounts For Outyears

       This title reflects budgetary aggregates and function 
     totals for fiscal years 2006-2009, to comply with section 301 
     of the Congressional Budget Act.


          Title VI: Sense of the Senate and Sense of the House

     Senate Resolution
       The Senate resolution contains twenty-two sections dealing 
     with ``Sense of the Senate'' provisions that were adopted 
     either during the markup or during consideration on the 
     Senate floor.
     House Amendment
       The House amendment contains two sections dealing with 
     ``Sense of the House'' provisions.
     Conference Agreement
       The conference agreement contains the following provisions:

                    Subtitle A: Sense of the Senate

       Section 601: Sense of the Senate on budget process reform.
       Section 602: Sense of the Senate on budget process reform 
     with regard to the creation of bipartisan commissions to 
     combat waste, fraud, and abuse and to promote spending 
     efficiency.
       Section 603: Sense of the Senate on the relationship 
     between annual deficit spending and increases in debt service 
     costs.
       Section 604: Sense of the Senate regarding the costs of the 
     medicare prescription drug program.
       Section 605: Sense of the Senate on returning stability to 
     payments under medicare physician fee schedule.
       Section 606: Sense of the Senate supporting funding 
     restoration for agriculture re-search and extension.
       Section 607: Sense of the Senate concerning a national 
     animal identification program.
       Section 608: Sense of the Senate regarding contributions to 
     The Global Fund to Fight AIDS, Tuberculosis, and Malaria.
       Section 609: Sense of the Senate concerning child nutrition 
     funding.
       Section 610: Sense of the Senate regarding compensation for 
     exposure to toxic substances at the Department of Energy.
       Section 611: Sense of the Senate regarding tax incentives 
     for certain rural communities.
       Section 612: Sense of the Senate concerning summer food 
     pilot projects.
       Section 613: Sense of the Senate regarding closing the 
     ``tax gap''.

                     Subtitle B: Sense of the House

       Section 621: Sense of the House on entitlement reform.

                     Subtitle C: Sense of Congress

       Section 631: Sense of Congress on spending accountability.

     ADDITIONAL BUDGET PROCESS AND ENFORCEMENT ITEMS IN THE SENATE

       The Senate resolution was considered with the 
     acknowledgement that a number of provisions from previous 
     budget resolutions remain in effect. For the convenience of 
     the Senate, they are set out below.
     I. Sense of the Senate amendments not germane on floor
       One provision (section 204) of the fiscal year 2001 
     resolution (H. Con. Res. 290 106th Cong., 2nd Sess.) remains 
     in effect. It is discussed and set out below:
       Section 204: Mechanisms for Strengthening Budgetary 
           Integrity (see subsection (g) regarding precatory 
           amendments)
       The intent of subsection (g) was discussed on page 74 of 
     the conference report--explaining the Senate amendment--for 
     the fiscal year 2001 resolution. The conference adopted the 
     Senate language with a minor modification. Page 74 provides 
     in pertinent part:

       Section 210(g) of the Senate amendment provides guidance 
     for interpreting the germaneness requirement found in section 
     305(b)(2) of the Budget Act. Section 305 requires that all 
     amendments offered on the floor to a budget resolution or a 
     reconciliation bill must be germane to the underlying 
     legislation and is enforced by a 60-vote point of order in 
     the Senate. The Senate amendment states that an amendment 
     will be considered not germane if it contains only precatory 
     (non-binding) language. This is designed to place a 60-vote 
     hurdle with respect to what is commonly referred to as a 
     ``sense of the Senate'' amendment. Note that it is not meant 
     to preclude the inclusion of ``purpose'' or ``findings'' 
     language that is part of an otherwise substantive amendment.

       The minor modification adopted by the conferees was the 
     addition of the word ``predominately'' before ``precatory'' 
     to make clear that otherwise substantive provisions would not 
     be subject to 60-vote discipline. The text of subsection (g) 
     is set out below:

     SEC. 204 MECHANISMS FOR STRENGTHENING BUDGETARY INTEGRITY.

                           *   *   *   *   *


       (g) Precatory Amendments.--For purposes of interpreting 
     section 305(b)(2) of the Congressional Budget Act of 1974, an 
     amendment is not germane if it contains predominately 
     precatory language.

       Two provisions (sections 503 and 505) from the fiscal year 
     2004 resolution (H. Con. Res. 95, 108th Cong. 1st Sess.) 
     remain in effect in the Senate. They are set out or described 
     below.
     II. 60-vote points of order through the end of fiscal year 
         2008
       Section 503: Extension of supermajority enforcement
       This section of the 2004 resolution extended for 5 years 
     (until September 30, 2008) the 60-vote requirement for 
     waivers and appeals with respect to those Budget Act points 
     of order. This requirement expired on September 30, 2002 (and 
     was temporarily extended through April 15, 2003 in S. Res. 
     304, 106th Congress).

                              ALLOCATIONS

       As required in section 302 of the Congressional Budget Act, 
     the joint statement of managers includes an allocation, based 
     on the conference agreement, of total budget authority and 
     total budget outlays to each of the appropriate committees. 
     The allocations are as follows:

[[Page 10078]]



  SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET
                                           ACT, BUDGET YEAR TOTAL 2005
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                Direct spending jurisdiction      Entitlements funded in annual
                                             ----------------------------------        appropriations acts
                  Committee                                                    ---------------------------------
                                                   Budget          Outlays           Budget
                                                 authority                         authority         Outlays
----------------------------------------------------------------------------------------------------------------
Appropriations:
    General Purpose Discretionary...........          812,773          850,693                0                0
                                             ===================================================================
        On-budget, regular..................          808,524          814,021                0                0
        Off-budget, regular.................            4,249            4,264                0                0
                                             -------------------------------------------------------------------
          Subtotal, regular.................          812,773          818,285                0                0
        On-budget, emergency................                0           32,408                0                0
    Highways................................                0           33,393                0                0
    Mass Transit............................            1,488            6,726                0                0
    Mandatory...............................          460,008          445,525                0                0
                                             -------------------------------------------------------------------
      Total.................................        1,274,269        1,336,337                0                0
                                             ===================================================================
Agriculture, Nutrition, and Forestry........            4,148           17,218           58,312           44,305
Armed Services..............................           85,814           86,744               41               61
Banking, Housing and Urban Affairs..........           14,425            2,646              175              107
Commerce, Science, and Transportation.......           11,487            6,618              864              860
Energy and Natural Resources................            4,633            3,541               54               59
Environment and Public Works................           35,818            2,279                0                0
Finance.....................................          810,529          811,603          339,533          339,450
Foreign Relations...........................           11,352           11,619              176              176
Governmental Affairs........................           70,453           68,764           18,048           18,048
Judiciary...................................            9,232            8,665              574              575
Health, Education, Labor, and Pensions......           11,028           10,192            2,966            2,928
Rules and Administration....................               77               35              113              112
Intelligence................................                0                0              239              239
Veterans' Affairs...........................            1,247            1,266           38,913           38,605
Indian Affairs..............................              674              668                0                0
Small Business..............................                0                0                0                0
Unassigned to Committee.....................         -385,673         -392,557                0                0
                                             -------------------------------------------------------------------
      Total.................................        1,959,513        1,975,638          460,008          445,525
----------------------------------------------------------------------------------------------------------------


  SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET
                                          ACT, 5-YEAR TOTAL: 2005-2009
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                          Direct spending jurisdiction          Entitlements funded in annual
                                     --------------------------------------          appropriations acts
              Committee                                                    -------------------------------------
                                       Budget authority       Outlays        Budget authority       Outlays
----------------------------------------------------------------------------------------------------------------
Agriculture, Nutrition, and Forestry             29,045            101,509            297,690            224,223
Armed Services......................            470,311            470,952                201                278
Banking, Housing and Urban Affairs..             77,878             12,531                875                476
Commerce, Science, and                           47,046             20,708              4,692              4,671
 Transportation.....................
Energy and Natural Resources........             19,198             17,286                270                281
Environment and Public Works........            187,471             10,026                  0                  0
Finance.............................          4,700,524          4,708,257          2,179,994          2,179,013
Foreign Relations...................             62,368             59,526                870                870
Governmental Affairs................            378,764            370,008             97,537             97,537
Judiciary...........................             33,945             33,977              2,856              2,856
Health, Education, Labor, and                    59,206             55,352             15,521             15,315
 Pensions...........................
Rules and Administration............                374                359                605                604
Intelligence........................                  0                  0              1,275              1,275
Veterans' Affairs...................              6,225              6,500            186,134            185,440
Indian Affairs......................              3,290              3,381                  0                  0
Small Business......................                  0                  0                  0                  0
----------------------------------------------------------------------------------------------------------------


  ALLOCATION OF SPENDING AUTHORITY TO HOUSE COMMITTEES FOR BUDGET YEAR
                    2005--COMMITTEE ON APPROPRIATIONS
                          [Millions of dollars]
------------------------------------------------------------------------
                                                                  2005
------------------------------------------------------------------------
Discretionary Action:
    General Purpose:
        BA....................................................   814,261
        OT....................................................   890,812
    Section 313 Adjustments*:
        BA....................................................     7,158
        OT....................................................    14,516
          Total Discretionary Action: BA......................   821,419
After Section 313 Adjustments: OT.............................   905,328
Current Law Mandatory:
    BA........................................................   459,142
    OT........................................................   444,662
------------------------------------------------------------------------
*To be released by the Chairman of the Committee on the Budget upon
  reporting by the Committee on Appropriations of the first bill or
  joint resolution making regular appropriations for fiscal year 2005.


  ALLOCATIONS OF SPENDING AUTHORITY TO HOUSE COMMITTEES FOR BUDGET YEAR
   2005 AND FUTURE FISCAL YEARS--COMMITTEES OTHER THAN APPROPRIATIONS
                          [Millions of dollars]
------------------------------------------------------------------------
                                                             Total 2005-
                                                    2005         2009
------------------------------------------------------------------------
            Agriculture Committee:
 
Current Law:
    BA........................................       18,219       86,778
    OT........................................       17,297       86,272
Reauthorizations:
    BA........................................  ...........       71,905
    OT........................................  ...........       70,494
Total:
    BA........................................       18,219      158,683
    OT........................................       17,297      156,766
 
           Armed Services Committee
 
Current Law:
    BA........................................       85,817      470,326
    OT........................................       86,748      470,968
 
   Committee on Education and the Workforce
 
Current Law:
    BA........................................        7,097       39,185
    OT........................................        6,105       34,962
Discretionary Action:
    BA........................................           68          236
    OT........................................           56          230
Reauthorizations:
    BA........................................          399       10,479
    OT........................................          397        8,201
Total:
    BA........................................        7,564       49,900
    OT........................................        6,558       43,393
 
         Energy and Commerce Committee
 
Current Law:
    BA........................................      154,932    1,129,671
    OT........................................      155,872    1,134,400
Discretionary Action:
    BA........................................          576        4,350
    OT........................................          483        3,381
Reauthorizations:
    BA........................................  ...........       10,080
    OT........................................  ...........        4,814
Total:
    BA........................................      155,508    1,144,101
    OT........................................      156,355    1,142,595
 
         Financial Services Committee
 
Current Law:
    BA........................................        3,855       17,997
    OT........................................         -361       -4,931
Discretionary Action:
    BA........................................            1           17
    OT........................................            1           17
Total:
    BA........................................        3,856       18,014
    OT........................................         -360       -4,914
 

[[Page 10079]]

 
          Government Reform Committee
 
Current Law:
    BA........................................       69,443      374,624
    OT........................................       67,754      365,868
Discretionary Action:
    BA........................................            1           19
    OT........................................            1           19
Total:
    BA........................................       69,444      374,643
    OT........................................       67,755      365,887
 
       Committee on House Administration
 
Current Law:
    BA........................................           77          374
    OT........................................           35          359
 
       International Relations committee
 
Current Law:
    BA........................................       11,425       62,733
    OT........................................       11,712       59,925
 
              Resources Committee
 
Current Law:
    BA........................................        4,788       20,522
    OT........................................        3,792       18,794
Discretionary Action:
    BA........................................            2           10
    OT........................................            2           10
Total:
    BA........................................        4,790       20,532
    OT........................................        3,794       18,804
 
              Judiciary Committee
 
Current Law:
    BA........................................        9,357       34,610
    OT........................................        8,790       34,642
Discretionary Action:
    BA........................................           15           35
    OT........................................           15           35
Total:
    BA........................................        9,372       34,645
    OT........................................        8,805       34,677
 
  Transportation and Infrastructure Committee
 
Current Law:
    BA........................................       16,755       77,995
    OT........................................       13,788       68,720
Discretionary Action:
    BA........................................        1,737       22,070
    OT........................................            4           12
Reauthorizations:
    BA........................................       41,010      212,450
    OT........................................          330        2,630
Total:
    BA........................................       59,502      312,515
    OT........................................       14,122       71,362
 
               Science Committee
 
Current Law:
    BA........................................           31          159
    OT........................................          112          326
 
           Small Business Committee
 
Current Law:
    BA........................................  ...........  ...........
    OT........................................  ...........  ...........
 
          Veterans' Affairs Committee
 
Current Law:
    BA........................................        1,247        6,225
    OT........................................        1,266        6,500
Reauthorizations:
    BA........................................          467        7,530
    OT........................................          466        7,388
Total:
    BA........................................        1,714       13,755
    OT........................................        1,732       13,888
 
           Ways and Means Committee
 
Current Law:
    BA........................................      641,589    3,782,374
    OT........................................      643,106    3,788,443
Discretionary Action:
    BA........................................        1,368        3,470
    OT........................................          804        3,244
Reconciliation:
    BA........................................  ...........        4,600
    OT........................................  ...........        4,600
Reauthorizations:
    BA........................................       19,606      100,666
    OT........................................       18,606      100,069
Total:
    BA........................................      662,563    3,891,110
    OT........................................      662,516    3,896,356
------------------------------------------------------------------------

                          ECONOMIC ASSUMPTIONS

       Section 301(g)(2) of the Congressional Budget Act requires 
     that the joint explanatory statement accompanying a 
     conference report on a budget resolution set forth the common 
     economic assumptions upon which the joint statement and 
     conference report are based. The conference agreement is 
     built upon the economic forecasts developed by the 
     Congressional Budget Office [CBO] and presented in CBO's 
     ``The Budget and Economic Outlook: Fiscal Years 2005-2014'' 
     (January 2004).
       Senate Resolution.--CBO's economic assumptions were used.
       House Amendment.--CBO's economic assumptions were used.
       Conference Agreement.--CBO's economic assumptions were 
     used.

                                    ECONOMIC ASSUMPTIONS OF BUDGET RESOLUTION
                                           [Calendar Years 2004-2009]
----------------------------------------------------------------------------------------------------------------
                                                              2004     2005     2006     2007     2008     2009
----------------------------------------------------------------------------------------------------------------
Percent Change (Year to Year):
    Real GDP..............................................      4.8      4.2      3.2      2.7      2.8      2.8
    GDP Price Index.......................................      1.1      1.1      1.5      1.8      1.9      1.9
    Consumer Price Index..................................      1.6      1.7      2.0      2.2      2.2      2.2
Annual Rate:..............................................
    Unemployment..........................................      5.8      5.3      5.0      5.1      5.2      5.2
    Three-Month T-Bill....................................      1.3      3.0      4.0      4.6      4.6      4.6
    Ten-Year T-Note.......................................      4.6      5.4      5.5      5.5      5.5      5.5
----------------------------------------------------------------------------------------------------------------
Source: CBO.

 PUBLIC DEBT: AMENDING THE STATUTORY LIMIT PURSUANT TO HOUSE RULE XXVII

       The adoption of this conference agreement by the two Houses 
     would result in the engrossment of a House Joint Resolution 
     adjusting the level of the statutory limit on the public debt 
     pursuant to House Rule XXVII. In consonance with clause 3 of 
     that rule, the conferees contemplate a joint resolution of 
     the following form:

       Resolved, by the Senate and the House of Representatives of 
     the United States of America in Congress assembled, That 
     subsection (b) of section 3101 of title 31, United States 
     Code, is amended by striking out the dollar limitation 
     contained in such subsection and inserting in lieu thereof 
     $8,074,000,000,000.

       If the joint resolution is enacted to raise the debt limit 
     to the level contemplated by this conference agreement, the 
     limit will be increased from $7.384 trillion to $8.074 
     trillion.
       Legislative jurisdiction over the public debt remains with 
     the Finance Committee in the Senate and the Committee on Ways 
     and Means in the House.
     General Considerations
       Rule XXVII in the House, related to amending the statutory 
     public debt level, does not preclude the committees of 
     jurisdiction from originating public debt limit bills 
     whenever necessary. The Senate resolution includes a 
     reconciliation instruction to the Finance Committee to report 
     a bill increasing the statutory limit on the public debt; the 
     House amendment contains no debt limit reconciliation 
     language. The conference agreement contains instructions to 
     the Finance Committee in the Senate to report a bill to 
     increase the statutory debt limit by $690 billion.

     Jim Nussle,
     Rob Portman,
                                Managers on the Part of the House.

     Don Nickles,
     Pete Domenici,
     Chuck Grassley,
     Judd Gregg,
     Managers on the Part of the Senate.

                          ____________________