[House Report 105-116]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-116
_______________________________________________________________________


 
        CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 1998

                                _______
                                

                  June 4, 1997.--Ordered to be printed

_______________________________________________________________________


 Mr. Kasich, from the committee of conference, submitted the following

                           CONFERENCE REPORT

                    [To accompany H. Con. Res. 84 ]

                  Conference Report (H. Rept. 105-116)

      The committee of conference on the disagreeing votes of 
the two Houses on the amendment of the Senate to the concurrent 
resolution (H. Con. Res. 84), establishing the congressional 
budget for the United States Government for fiscal year 1998 
and setting forth appropriate budgetary levels for fiscal years 
1999, 2000, 2001, and 2002, having met, after full and free 
conference, have agreed to recommend and do recommend to their 
respective Houses as follows:
      That the House recede from its disagreement to the 
amendment of the Senate to the text of the resolution and agree 
to the same with an amendment as follows:
      In lieu of the matter proposed to be inserted by the 
Senate amendment, insert the following:

SECTION 1. CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 1998.

    (a) Declaration.--The Congress determines and declares that 
this resolution is the concurrent resolution on the budget for 
fiscal year 1998 including the appropriate budgetary levels for 
fiscal years 1999, 2000, 2001, and 2002 as required by section 
301 of the Congressional Budget Act of 1974.
    (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 1998.

                       TITLE I--LEVELS AND AMOUNTS

Sec. 101. Recommended levels and amounts.
Sec. 102. Social security.
Sec. 103. Major functional categories.
Sec. 104. Reconciliation in the Senate.
Sec. 105. Reconciliation in the House of Representatives.

              TITLE II--BUDGETARY RESTRAINTS AND RULEMAKING

Sec. 201. Discretionary spending limits.
Sec. 202. Allowance for the IMF.
Sec. 203. Allowance for section 8 housing assistance.
Sec. 204. Separate environmental allocation.
Sec. 205. Priority Federal land acquisitions and exchanges.
Sec. 206. Allowance for arrearages.
Sec. 207. Intercity passenger rail reserve fund for fiscal years 1998-
          2002.
Sec. 207A. Intercity passenger rail reserve fund in the Senate for 
          fiscal years 1998-2002.
Sec. 208. Mass transit reserve fund in the Senate for fiscal years 1998-
          2002.
Sec. 209. Highway reserve fund in the Senate for fiscal years 1998-2002.
Sec. 210. Deficit--neutral reserve fund in the House for surface 
          transportation.
Sec. 211. Sale of Government assets.
Sec. 212. Determinations of budgetary levels; reversals.
Sec. 213. Exercise of rulemaking powers.

       TITLE III--SENSE OF CONGRESS, HOUSE, AND SENATE PROVISIONS

                    Subtitle A--Sense of the Congress

Sec. 301. Sense of the Congress on repayment of the Federal debt.
Sec. 302. Sense of the Congress on tax cuts.
Sec. 303. Sense of Congress that the 10-year revenue loss from the tax 
          relief package shall not exceed $250,000,000,000.

                     Subtitle B--Sense of the House

Sec. 306. Sense of the House on Commission on Long-Term Budgetary 
          Problems.
Sec. 307. Sense of the House on corporate welfare.
Sec. 308. Sense of the House on baselines.
Sec. 309. Sense of the House on family violence option clarifying 
          amendment.

                     Subtitle C--Sense of the Senate

Sec. 311. Sense of the Senate on long term entitlement reforms, 
          including accuracy in determining changes in the cost of 
          living.
Sec. 312. Sense of the Senate on tactical fighter aircraft programs.
Sec. 313. Sense of the Senate regarding children's health coverage.
Sec. 314. Sense of the Senate on a medicaid per capita cap.
Sec. 315. Sense of the Senate that added savings go to deficit 
          reduction.
Sec. 316. Sense of the Senate on fairness in medicare.
Sec. 317. Sense of the Senate regarding assistance to Lithuania and 
          Latvia.
Sec. 318. Sense of the Senate regarding a National Commission on Higher 
          Education.
Sec. 319. Sense of the Senate on lockbox.
Sec. 320. Sense of the Senate on the earned income credit.
Sec. 321. Sense of the Senate supporting long-term entitlement reforms.
Sec. 322. Sense of the Senate on disaster assistance funding.
Sec. 323. Sense of the Senate on enforcement of bipartisan budget 
          agreement.
Sec. 324. Sense of the Senate regarding the National Institutes of 
          Health.
Sec. 325. Sense of the Senate regarding certain elderly legal aliens.
Sec. 326. Sense of the Senate regarding retroactive taxes.
Sec. 327. Sense of the Senate on social security and balancing the 
          budget.
Sec. 328. Sense of the Senate supporting sufficient funding for veterans 
          programs and benefits.
Sec. 329. Sense of the Senate on family violence option clarifying 
          amendment.
Sec. 330. Sense of the Senate regarding assistance to Amtrak.
Sec. 331. Sense of the Senate regarding the protection of children's 
          health.
Sec. 332. Sense of the Senate on depositing all Federal gasoline taxes 
          into the Highway Trust Fund.
Sec. 333. Sense of the Senate on early childhood education.
Sec. 334. Sense of the Senate concerning Highway Trust Fund.
Sec. 335. Sense of the Senate concerning tax incentives for the cost of 
          post-secondary education.
Sec. 336. Sense of the Senate on additional tax cuts.
Sec. 337. Sense of the Senate regarding truth in budgeting and spectrum 
          auctions.
Sec. 338. Sense of the Senate on highway demonstration projects.
Sec. 339. Sense of the Senate regarding the use of budget savings.
Sec. 340. Sense of the Senate regarding the value of the social security 
          system for future retirees.
Sec. 341. Sense of the Senate on economic growth dividend protection.
Sec. 342. Sense of the Senate supporting Federal, State, and local law 
          enforcement officers.
Sec. 343. Sense of Senate regarding parental involvement in prevention 
          of drug use by children.

                      TITLE I--LEVELS AND AMOUNTS

SEC. 101. RECOMMENDED LEVELS AND AMOUNTS.

    The following budgetary levels are appropriate for the 
fiscal years 1998, 1999, 2000, 2001, and 2002:
    (1) Federal revenues.--For purposes of the enforcement of 
this resolution--
            (A) The recommended levels of Federal revenues are 
        as follows:
                    Fiscal year 1998: $1,199,000,000,000.
                    Fiscal year 1999: $1,241,900,000,000.
                    Fiscal year 2000: $1,285,600,000,000.
                    Fiscal year 2001: $1,343,600,000,000.
                    Fiscal year 2002: $1,407,600,000,000.
            (B) The amounts by which the aggregate levels of 
        Federal revenues should be changed are as follows:
                    Fiscal year 1998: $-7,400,000,000.
                    Fiscal year 1999: $-11,100,000,000.
                    Fiscal year 2000: $-22,000,000,000.
                    Fiscal year 2001: $-22,800,000,000.
                    Fiscal year 2002: $-19,900,000,000.
            (C) The amounts for Federal Insurance Contributions 
        Act revenues for hospital insurance within the 
        recommended levels of Federal revenues are as follows:
                    Fiscal year 1998: $113,500,000,000.
                    Fiscal year 1999: $119,100,000,000.
                    Fiscal year 2000: $125,100,000,000.
                    Fiscal year 2001: $130,700,000,000.
                    Fiscal year 2002: $136,800,000,000.
    (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 1998: $1,386,700,000,000.
                    Fiscal year 1999: $1,440,100,000,000.
                    Fiscal year 2000: $1,486,400,000,000.
                    Fiscal year 2001: $1,520,200,000,000.
                    Fiscal year 2002: $1,551,600,000,000.
    (3) Budget outlays.--For purposes of the enforcement of 
this resolution, the appropriate levels of total budget outlays 
are as follows:
                    Fiscal year 1998: $1,372,000,000,000.
                    Fiscal year 1999: $1,424,100,000,000.
                    Fiscal year 2000: $1,468,800,000,000.
                    Fiscal year 2001: $1,500,700,000,000.
                    Fiscal year 2002: $1,515,900,000,000.
    (4) Deficits.--For purposes of the enforcement of this 
resolution, the amounts of the deficits are as follows:
                    Fiscal year 1998: $-173,000,000,000.
                    Fiscal year 1999: $-182,200,000,000.
                    Fiscal year 2000: $-183,200,000,000.
                    Fiscal year 2001: $-157,100,000,000.
                    Fiscal year 2002: $-108,300,000,000.
    (5) Public debt.--The appropriate levels of the public debt 
are as follows:
                    Fiscal year 1998: $5,593,500,000,000.
                    Fiscal year 1999: $5,841,000,000,000.
                    Fiscal year 2000: $6,088,600,000,000.
                    Fiscal year 2001: $6,307,300,000,000.
                    Fiscal year 2002: $6,481,200,000,000.
    (6) Direct loan obligations.--The appropriate levels of 
total new direct loan obligations are as follows:
                    Fiscal year 1998: $34,000,000,000.
                    Fiscal year 1999: $33,400,000,000.
                    Fiscal year 2000: $34,900,000,000.
                    Fiscal year 2001: $36,100,000,000.
                    Fiscal year 2002: $37,400,000,000.
    (7) Primary loan guarantee commitments.--The appropriate 
levels of new primary loan guarantee commitments are as 
follows:
                    Fiscal year 1998: $315,700,000,000.
                    Fiscal year 1999: $324,900,000,000.
                    Fiscal year 2000: $328,200,000,000.
                    Fiscal year 2001: $332,200,000,000.
                    Fiscal year 2002: $335,300,000,000.

SEC. 102. SOCIAL SECURITY.

    (a) Social Security Revenues.--For purposes of Senate 
enforcement under sections 302, 602, 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 1998: $402,800,000,000.
                    Fiscal year 1999: $422,300,000,000.
                    Fiscal year 2000: $442,600,000,000.
                    Fiscal year 2001: $461,600,000,000.
                    Fiscal year 2002: $482,800,000,000.
    (b) Social Security Outlays.--For purposes of Senate 
enforcement under sections 302, 602, 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 1998: $317,600,000,000.
                    Fiscal year 1999: $330,600,000,000.
                    Fiscal year 2000: $343,600,000,000.
                    Fiscal year 2001: $358,100,000,000.
                    Fiscal year 2002: $372,500,000,000.

SEC. 103. MAJOR FUNCTIONAL CATEGORIES.

    The Congress determines and declares that the appropriate 
levels of new budget authority, budget outlays, new direct loan 
obligations,and new primary loan guarantee commitments for 
fiscal years 1998 through 2002 for each major functional category are:
    (1) National Defense (050):
            Fiscal year 1998:
                    (A) New budget authority, $268,200,000,000.
                    (B) Outlays, $266,000,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $600,000,000.
            Fiscal year 1999:
                    (A) New budget authority, $270,800,000,000.
                    (B) Outlays, $265,800,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $800,000,000.
            Fiscal year 2000:
                    (A) New budget authority, $274,800,000,000.
                    (B) Outlays, $268,400,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $1,100,000,000.
            Fiscal year 2001:
                    (A) New budget authority, $281,300,000,000.
                    (B) Outlays, $270,100,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $1,100,000,000.
            Fiscal year 2002:
                    (A) New budget authority, $289,100,000,000.
                    (B) Outlays, $272,600,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $1,100,000,000.
    (2) International Affairs (150):
            Fiscal year 1998:
                    (A) New budget authority, $15,900,000,000.
                    (B) Outlays, $14,600,000,000.
                    (C) New direct loan obligations, 
                $2,000,000,000.
                    (D) New primary loan guarantee commitments, 
                $12,800,000,000.
            Fiscal year 1999:
                    (A) New budget authority, $14,900,000,000.
                    (B) Outlays, $14,600,000,000.
                    (C) New direct loan obligations, 
                $2,000,000,000.
                    (D) New primary loan guarantee commitments, 
                $13,100,000,000.
            Fiscal year 2000:
                    (A) New budget authority, $15,800,000,000.
                    (B) Outlays, $15,000,000,000.
                    (C) New direct loan obligations, 
                $2,100,000,000.
                    (D) New primary loan guarantee commitments, 
                $13,400,000,000.
            Fiscal year 2001:
                    (A) New budget authority, $16,100,000,000.
                    (B) Outlays, $14,800,000,000.
                    (C) New direct loan obligations, 
                $2,100,000,000.
                    (D) New primary loan guarantee commitments, 
                $13,800,000,000.
            Fiscal year 2002:
                    (A) New budget authority, $16,400,000,000.
                    (B) Outlays, $14,800,000,000.
                    (C) New direct loan obligations, 
                $2,200,000,000.
                    (D) New primary loan guarantee commitments, 
                $14,200,000,000.
    (3) General Science, Space, and Technology (250):
            Fiscal year 1998:
                    (A) New budget authority, $16,200,000,000.
                    (B) Outlays, $16,900,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 1999:
                    (A) New budget authority, $16,200,000,000.
                    (B) Outlays, $16,500,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2000:
                    (A) New budget authority, $15,900,000,000.
                    (B) Outlays, $16,000,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2001:
                    (A) New budget authority, $15,800,000,000.
                    (B) Outlays, $15,900,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2002:
                    (A) New budget authority, $15,600,000,000.
                    (B) Outlays, $15,700,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
    (4) Energy (270):
            Fiscal year 1998:
                    (A) New budget authority, $3,100,000,000.
                    (B) Outlays, $2,200,000,000.
                    (C) New direct loan obligations, 
                $1,100,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 1999:
                    (A) New budget authority, $3,500,000,000.
                    (B) Outlays, $2,400,000,000.
                    (C) New direct loan obligations, 
                $1,100,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2000:
                    (A) New budget authority, $3,200,000,000.
                    (B) Outlays, $2,300,000,000.
                    (C) New direct loan obligations, 
                $1,100,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2001:
                    (A) New budget authority, $2,900,000,000.
                    (B) Outlays, $2,000,000,000.
                    (C) New direct loan obligations, 
                $1,100,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2002:
                    (A) New budget authority, $2,800,000,000.
                    (B) Outlays, $1,900,000,000.
                    (C) New direct loan obligations, 
                $1,200,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
    (5) Natural Resources and Environment (300):
            Fiscal year 1998:
                    (A) New budget authority, $23,900,000,000.
                    (B) Outlays, $22,400,000,000.
                    (C) New direct loan obligations, 
                $100,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 1999:
                    (A) New budget authority, $23,200,000,000.
                    (B) Outlays, $22,700,000,000.
                    (C) New direct loan obligations, 
                $100,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2000:
                    (A) New budget authority, $22,600,000,000.
                    (B) Outlays, $23,000,000,000.
                    (C) New direct loan obligations, 
                $100,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2001:
                    (A) New budget authority, $22,200,000,000.
                    (B) Outlays, $22,700,000,000.
                    (C) New direct loan obligations, 
                $100,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2002:
                    (A) New budget authority, $22,100,000,000.
                    (B) Outlays, $22,300,000,000.
                    (C) New direct loan obligations, 
                $100,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
    (6) Agriculture (350):
            Fiscal year 1998:
                    (A) New budget authority, $13,100,000,000.
                    (B) Outlays, $11,900,000,000.
                    (C) New direct loan obligations, 
                $9,600,000,000.
                    (D) New primary loan guarantee commitments, 
                $6,400,000,000.
            Fiscal year 1999:
                    (A) New budget authority, $12,800,000,000.
                    (B) Outlays, $11,300,000,000.
                    (C) New direct loan obligations, 
                $11,000,000,000.
                    (D) New primary loan guarantee commitments, 
                $6,400,000,000.
            Fiscal year 2000:
                    (A) New budget authority, $12,200,000,000.
                    (B) Outlays, $10,700,000,000.
                    (C) New direct loan obligations, 
                $11,100,000,000.
                    (D) New primary loan guarantee commitments, 
                $6,500,000,000.
            Fiscal year 2001:
                    (A) New budget authority, $11,000,000,000.
                    (B) Outlays, $9,500,000,000.
                    (C) New direct loan obligations, 
                $11,000,000,000.
                    (D) New primary loan guarantee commitments, 
                $6,600,000,000.
            Fiscal year 2002:
                    (A) New budget authority, $10,700,000,000.
                    (B) Outlays, $9,100,000,000.
                    (C) New direct loan obligations, 
                $11,000,000,000.
                    (D) New primary loan guarantee commitments, 
                $6,700,000,000.
    (7) Commerce and Housing Credit (370):
            Fiscal year 1998:
                    (A) New budget authority, $6,600,000,000.
                    (B) Outlays, -$900,000,000.
                    (C) New direct loan obligations, 
                $4,700,000,000.
                    (D) New primary loan guarantee commitments, 
                $245,500,000,000.
            Fiscal year 1999:
                    (A) New budget authority, $11,100,000,000.
                    (B) Outlays, $4,300,000,000.
                    (C) New direct loan obligations, 
                $1,900,000,000.
                    (D) New primary loan guarantee commitments, 
                $253,500,000,000.
            Fiscal year 2000:
                    (A) New budget authority, $15,200,000,000.
                    (B) Outlays, $9,800,000,000.
                    (C) New direct loan obligations, 
                $2,200,000,000.
                    (D) New primary loan guarantee commitments, 
                $255,200,000,000.
            Fiscal year 2001:
                    (A) New budget authority, $16,100,000,000.
                    (B) Outlays, $12,100,000,000.
                    (C) New direct loan obligations, 
                $2,600,000,000.
                    (D) New primary loan guarantee commitments, 
                $258,000,000,000.
            Fiscal year 2002:
                    (A) New budget authority, $16,700,000,000.
                    (B) Outlays, $12,500,000,000.
                    (C) New direct loan obligations, 
                $2,700,000,000.
                    (D) New primary loan guarantee commitments, 
                $259,900,000,000.
    (8) Transportation (400):
            Fiscal year 1998:
                    (A) New budget authority, $46,400,000,000.
                    (B) Outlays, $40,900,000,000.
                    (C) New direct loan obligations, 
                $200,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 1999:
                    (A) New budget authority, $46,600,000,000.
                    (B) Outlays, $41,300,000,000.
                    (C) New direct loan obligations, 
                $100,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2000:
                    (A) New budget authority, $47,100,000,000.
                    (B) Outlays, $41,400,000,000.
                    (C) New direct loan obligations, 
                $100,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2001:
                    (A) New budget authority, $48,100,000,000.
                    (B) Outlays, $41,300,000,000.
                    (C) New direct loan obligations, 
                $100,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2002:
                    (A) New budget authority, $49,200,000,000.
                    (B) Outlays, $41,200,000,000.
                    (C) New direct loan obligations, 
                $100,000,000.
                    (D) New primary loan guarantee commitments, 
                $0.
    (9) Community and Regional Development (450):
            Fiscal year 1998:
                    (A) New budget authority, $8,800,000,000.
                    (B) Outlays, $10,400,000,000.
                    (C) New direct loan obligations, 
                $2,900,000,000.
                    (D) New primary loan guarantee commitments, 
                $2,400,000,000.
            Fiscal year 1999:
                    (A) New budget authority, $8,500,000,000.
                    (B) Outlays, $10,900,000,000.
                    (C) New direct loan obligations, 
                $2,900,000,000.
                    (D) New primary loan guarantee commitments, 
                $2,400,000,000.
            Fiscal year 2000:
                    (A) New budget authority, $7,800,000,000.
                    (B) Outlays, $11,000,000,000.
                    (C) New direct loan obligations, 
                $3,000,000,000.
                    (D) New primary loan guarantee commitments, 
                $2,400,000,000.
            Fiscal year 2001:
                    (A) New budget authority, $7,800,000,000.
                    (B) Outlays, $11,400,000,000.
                    (C) New direct loan obligations, 
                $3,100,000,000.
                    (D) New primary loan guarantee commitments, 
                $2,500,000,000.
            Fiscal year 2002:
                    (A) New budget authority, $7,800,000,000.
                    (B) Outlays, $8,400,000,000.
                    (C) New direct loan obligations, 
                $3,200,000,000.
                    (D) New primary loan guarantee commitments, 
                $2,500,000,000.
    (10) Education, Training, Employment, and Social Services 
(500):
            Fiscal year 1998:
                    (A) New budget authority, $60,000,000,000.
                    (B) Outlays, $56,100,000,000.
                    (C) New direct loan obligations, 
                $12,300,000,000.
                    (D) New primary loan guarantee commitments, 
                $20,700,000,000.
            Fiscal year 1999:
                    (A) New budget authority, $60,500,000,000.
                    (B) Outlays, $59,300,000,000.
                    (C) New direct loan obligations, 
                $13,100,000,000.
                    (D) New primary loan guarantee commitments, 
                $21,900,000,000.
            Fiscal year 2000:
                    (A) New budget authority, $61,700,000,000.
                    (B) Outlays, $60,700,000,000.
                    (C) New direct loan obligations, 
                $13,900,000,000.
                    (D) New primary loan guarantee commitments, 
                $23,300,000,000.
            Fiscal year 2001:
                    (A) New budget authority, $63,000,000,000.
                    (B) Outlays, $61,900,000,000.
                    (C) New direct loan obligations, 
                $14,700,000,000.
                    (D) New primary loan guarantee commitments, 
                $24,500,000,000.
            Fiscal year 2002:
                    (A) New budget authority, $63,300,000,000.
                    (B) Outlays, $62,300,000,000.
                    (C) New direct loan obligations, 
                $15,400,000,000.
                    (D) New primary loan guarantee commitments, 
                $25,700,000,000.
    (11) Health (550):
            Fiscal year 1998:
                    (A) New budget authority, $137,800,000,000.
                    (B) Outlays, $137,800,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $100,000,000.
            Fiscal year 1999:
                    (A) New budget authority, $145,000,000,000.
                    (B) Outlays, $144,900,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2000:
                    (A) New budget authority, $154,100,000,000.
                    (B) Outlays, $153,900,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2001:
                    (A) New budget authority, $163,400,000,000.
                    (B) Outlays, $163,100,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2002:
                    (A) New budget authority, $172,200,000,000.
                    (B) Outlays, $171,700,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
    (12) Medicare (570):
            Fiscal year 1998:
                    (A) New budget authority, $201,600,000,000.
                    (B) Outlays, $201,800,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 1999:
                    (A) New budget authority, $212,100,000,000.
                    (B) Outlays, $211,500,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2000:
                    (A) New budget authority, $225,500,000,000.
                    (B) Outlays, $225,500,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2001:
                    (A) New budget authority, $239,600,000,000.
                    (B) Outlays, $238,800,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2002:
                    (A) New budget authority, $251,500,000,000.
                    (B) Outlays, $250,800,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
    (13) Income Security (600):
            Fiscal year 1998:
                    (A) New budget authority, $239,000,000,000.
                    (B) Outlays, $247,800,000,000.
                    (C) New direct loan obligations, 
                $100,000,000.
                    (D) New primary loan guarantee commitments, 
                $100,000,000.
            Fiscal year 1999:
                    (A) New budget authority, $254,100,000,000.
                    (B) Outlays, $258,100,000,000.
                    (C) New direct loan obligations, 
                $100,000,000.
                    (D) New primary loan guarantee commitments, 
                $100,000,000.
            Fiscal year 2000:
                    (A) New budget authority, $269,600,000,000.
                    (B) Outlays, $268,200,000,000.
                    (C) New direct loan obligations, 
                $100,000,000.
                    (D) New primary loan guarantee commitments, 
                $100,000,000.
            Fiscal year 2001:
                    (A) New budget authority, $275,100,000,000.
                    (B) Outlays, $277,300,000,000.
                    (C) New direct loan obligations, 
                $100,000,000.
                    (D) New primary loan guarantee commitments, 
                $100,000,000.
            Fiscal year 2002:
                    (A) New budget authority, $286,900,000,000.
                    (B) Outlays, $285,200,000,000.
                    (C) New direct loan obligations, 
                $200,000,000.
                    (D) New primary loan guarantee commitments, 
                $100,000,000.
    (14) Social Security (650):
            Fiscal year 1998:
                    (A) New budget authority, $11,400,000,000.
                    (B) Outlays, $11,500,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 1999:
                    (A) New budget authority, $12,100,000,000.
                    (B) Outlays, $12,200,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2000:
                    (A) New budget authority, $12,800,000,000.
                    (B) Outlays, $12,900,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2001:
                    (A) New budget authority, $13,000,000,000.
                    (B) Outlays, $13,000,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2002:
                    (A) New budget authority, $14,400,000,000.
                    (B) Outlays, $14,400,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
    (15) Veterans Benefits and Services (700):
            Fiscal year 1998:
                    (A) New budget authority, $40,500,000,000.
                    (B) Outlays, $41,300,000,000.
                    (C) New direct loan obligations, 
                $1,000,000,000.
                    (D) New primary loan guarantee commitments, 
                $27,100,000,000.
            Fiscal year 1999:
                    (A) New budget authority, $41,500,000,000.
                    (B) Outlays, $41,700,000,000.
                    (C) New direct loan obligations, 
                $1,100,000,000.
                    (D) New primary loan guarantee commitments, 
                $26,700,000,000.
            Fiscal year 2000:
                    (A) New budget authority, $41,700,000,000.
                    (B) Outlays, $41,900,000,000.
                    (C) New direct loan obligations, 
                $1,200,000,000.
                    (D) New primary loan guarantee commitments, 
                $26,200,000,000.
            Fiscal year 2001:
                    (A) New budget authority, $42,100,000,000.
                    (B) Outlays, $42,200,000,000.
                    (C) New direct loan obligations, 
                $1,200,000,000.
                    (D) New primary loan guarantee commitments, 
                $25,600,000,000.
            Fiscal year 2002:
                    (A) New budget authority, $42,300,000,000.
                    (B) Outlays, $42,400,000,000.
                    (C) New direct loan obligations, 
                $1,300,000,000.
                    (D) New primary loan guarantee commitments, 
                $25,100,000,000.
    (16) Administration of Justice (750):
            Fiscal year 1998:
                    (A) New budget authority, $24,800,000,000.
                    (B) Outlays, $22,600,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 1999:
                    (A) New budget authority, $25,100,000,000.
                    (B) Outlays, $24,500,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2000:
                    (A) New budget authority, $24,200,000,000.
                    (B) Outlays, $25,200,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2001:
                    (A) New budget authority, $24,400,000,000.
                    (B) Outlays, $25,900,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2002:
                    (A) New budget authority, $24,900,000,000.
                    (B) Outlays, $24,900,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
    (17) General Government (800):
            Fiscal year 1998:
                    (A) New budget authority, $14,700,000,000.
                    (B) Outlays, $14,000,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 1999:
                    (A) New budget authority, $14,400,000,000.
                    (B) Outlays, $14,400,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2000:
                    (A) New budget authority, $14,000,000,000.
                    (B) Outlays, $14,700,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2001:
                    (A) New budget authority, $13,700,000,000.
                    (B) Outlays, $14,100,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2002:
                    (A) New budget authority, $13,100,000,000.
                    (B) Outlays, $13,100,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
    (18) Net Interest (900):
            Fiscal year 1998:
                    (A) New budget authority, $296,500,000,000.
                    (B) Outlays, $296,500,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 1999:
                    (A) New budget authority, $304,600,000,000.
                    (B) Outlays, $304,600,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2000:
                    (A) New budget authority, $305,100,000,000.
                    (B) Outlays, $305,100,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2001:
                    (A) New budget authority, $303,800,000,000.
                    (B) Outlays, $303,800,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2002:
                    (A) New budget authority, $303,700,000,000.
                    (B) Outlays, $303,700,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
    (19) Allowances (920):
            Fiscal year 1998:
                    (A) New budget authority, $0.
                    (B) Outlays, $0.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 1999:
                    (A) New budget authority, $0.
                    (B) Outlays, $0.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2000:
                    (A) New budget authority, $0.
                    (B) Outlays, $0.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2001:
                    (A) New budget authority, $0.
                    (B) Outlays, $0.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2002:
                    (A) New budget authority, $0.
                    (B) Outlays, $0.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
    (20) Undistributed Offsetting Receipts (950):
            Fiscal year 1998:
                    (A) New budget authority, -$41,800,000,000.
                    (B) Outlays, -$41,800,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 1999:
                    (A) New budget authority, -$36,900,000,000.
                    (B) Outlays, -$36,900,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2000:
                    (A) New budget authority, -$36,900,000,000.
                    (B) Outlays, -$36,900,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2001:
                    (A) New budget authority, -$39,200,000,000.
                    (B) Outlays, -$39,200,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.
            Fiscal year 2002:
                    (A) New budget authority, -$51,100,000,000.
                    (B) Outlays, -$51,100,000,000.
                    (C) New direct loan obligations, $0.
                    (D) New primary loan guarantee commitments, 
                $0.

SEC. 104. RECONCILIATION IN THE SENATE.

    (a) Reconciliation of Spending Reductions.--Not later than 
June 13, 1997, the committees named in this subsection shall 
submit their recommendations to the Committee on the Budget of 
the Senate. After receiving those recommendations, the 
Committee on the Budget shall report to the Senate a 
reconciliation bill carrying out all such recommendations 
without any substantive revision.
            (1) Committee on agriculture, nutrition, and 
        forestry.--The Senate Committee on Agriculture, 
        Nutrition, and Forestry shall report changes in laws 
        within its jurisdiction that provide direct spending 
        (as defined in section 250(c)(8) of the Balanced 
Budgetand Emergency Deficit Control Act of 1985) to increase outlays by 
not more than $300,000,000 in fiscal year 2002 and by not more than 
$1,500,000,000 for the period of fiscal years 1998 through 2002.
            (2) Committee on banking, housing, and urban 
        affairs.--The Senate Committee on Banking, Housing, and 
        Urban Affairs shall report changes in laws within its 
        jurisdiction that reduce the deficit $434,000,000 in 
        fiscal year 2002 and $1,590,000,000 for the period of 
        fiscal years 1998 through 2002.
            (3) Committee on commerce, science, and 
        transportation.--The Senate Committee on Commerce, 
        Science, and Transportation shall report changes in 
        laws within its jurisdiction that reduce the deficit 
        $14,849,000,000 in fiscal year 2002 and $26,496,000,000 
        for the period of fiscal years 1998 through 2002.
            (4) Committee on energy and natural resources.--The 
        Senate Committee on Energy and Natural Resources shall 
        report changes in laws within its jurisdiction that 
        provide direct spending (as defined in section 
        250(c)(8) of the Balanced Budget and Emergency Deficit 
        Control Act of 1985) to reduce outlays $6,000,000 in 
        fiscal year 2002 and $13,000,000 for the period of 
        fiscal years 1998 through 2002.
            (5) Committee on finance.--The Senate Committee on 
        Finance shall report changes in laws within its 
        jurisdiction--
                    (A) that provide direct spending (as 
                defined in section 250(c)(8) of the Balanced 
                Budget and Emergency Deficit Control Act of 
                1985) to reduce outlays $40,911,000,000 in 
                fiscal year 2002 and $100,646,000,000 for the 
                period of fiscal years 1998 through 2002; and
                    (B) to increase the statutory limit on the 
                public debt to not more than 
                $5,950,000,000,000.
            (6) Committee on governmental affairs.--The Senate 
        Committee on Governmental Affairs shall report changes 
        in laws within its jurisdiction that reduce the deficit 
        $1,769,000,000 in fiscal year 2002 and $5,467,000,000 
        for the period of fiscal years 1998 through 2002.
            (7) Committee on labor and human resources.--The 
        Senate Committee on Labor and Human Resources shall 
        report changes in laws within its jurisdiction that 
        provide direct spending (as defined in section 
        250(c)(8) of the Balanced Budget and Emergency Deficit 
        Control Act of 1985) to reduce outlays $1,057,000,000 
        in fiscal year 2002 and $1,792,000,000 for the period 
        of fiscal years 1998 through 2002.
            (8) Committee on veterans' affairs.--The Senate 
        Committee on Veterans' Affairs shall report changes in 
        laws within its jurisdiction that provide direct 
        spending (as defined in section 250(c)(8) of the 
        Balanced Budget and Emergency Deficit Control Act of 
        1985) to reduce outlays $681,000,000 in fiscal year 
        2002 and $2,733,000,000 for the period of fiscal years 
        1998 through 2002.
    (b) Reconciliation of Revenue Reductions.--Not later than 
June 20, 1997, the Senate Committee on Finance shall report to 
the Senate a reconciliation bill proposing changes in laws 
within its jurisdiction necessary to reduce revenues by not 
more than $20,500,000,000 in fiscal year 2002 and 
$85,000,000,000 for the period of fiscal years 1998 through 
2002.
    (c) Treatment of Congressional Pay-As-You-Go.--For purposes 
of section 202 of House Concurrent Resolution 67 (104th 
Congress), legislation which reduces revenues pursuant to a 
reconciliation instruction contained in subsection (b) shall be 
taken together with all other legislation passed pursuant to 
the reconciliation instructions contained in this resolution 
when determining the deficit effect of such legislation.
    (d) Children's Health Initiative.--
            (1) Deficit neutral adjustments.--After the 
        reporting of reconciliation legislation pursuant to 
        subsection (a), or after the submission of a conference 
        report thereon, and if the Committee on Finance reduces 
        outlays by an amount greater than the outlay reduction 
        that is required by subsection (a)(5)(A), the Chairman 
        of the Committee on the Budget of the Senate, with the 
        concurrence and agreement of the ranking minority 
        member, may submit in writing appropriately revised (A) 
        reconciliationinstructions to the Committee on Finance 
to reduce the deficit, (B) allocations, (C) limits, and (D) aggregates.
            (2) Flexibility on adjustments.--The adjustments 
        made pursuant to this subsection shall not exceed 
        $2,300,000,000 in fiscal year 1998 and $16,000,000,000 
        for the period of fiscal years 1998 through 2002 and 
        shall not cause an increase in the deficit levels in 
        this resolution.

SEC. 105. RECONCILIATION IN THE HOUSE OF REPRESENTATIVES.

    (a) Purpose.--The purpose of this section is to provide for 
two separate reconciliation bills: the first for entitlement 
reform and the second for tax relief.
    (b) Submissions.--
            (1) Entitlement reforms.--Not later than June 13, 
        1997, the House committees named in subsection (c) 
        shall submit their recommendations to the House 
        Committee on the Budget. After receiving those 
        recommendations, the House Committee on the Budget 
        shall report to the House a reconciliation bill 
        carrying out all such recommendations without any 
        substantive revision.
            (2) Tax relief and miscellaneous reforms.--Not 
        later than June 14, 1997, the House committees named in 
        subsection (d) shall submit their recommendations to 
        the House Committee on the Budget. After receiving 
        those recommendations, the House Committee on the 
        Budget shall report to the House a reconciliation bill 
        carrying out all such recommendations without any 
        substantive revision.
    (c) Instructions Relating to Entitlement Reforms.--
            (1) Committee on agriculture.--The House Committee 
        on Agriculture shall report changes in laws within its 
        jurisdiction that provide direct spending such that the 
        total level of direct spending for that committee does 
        not exceed: $34,571,000,000 in outlays for fiscal year 
        1998, $37,008,000,000 in outlays for fiscal year 2002, 
        and $179,884,000,000 in outlays in fiscal years 1998 
        through 2002.
            (2) Committee on banking and financial services.--
        The House Committee on Banking and Financial Services 
        shall report changes in laws within its jurisdiction 
        that provide direct spending such that the total level 
        of direct spending for that committee does not exceed: 
        -$8,435,000,000 in outlays for fiscal year 1998, 
        -$5,091,000,000 in outlays for fiscal year 2002, and 
        -$32,743,000,000 in outlays in fiscal years 1998 
        through 2002.
            (3) Committee on commerce.--The House Committee on 
        Commerce shall report changes in laws within its 
        jurisdiction that provide direct spending such that the 
        total level of direct spending for that committee does 
        not exceed: $393,533,000,000 in outlays for fiscal year 
        1998, $507,150,000,000 in outlays for fiscal year 2002, 
        and $2,259,294,000,000 in outlays in fiscal years 1998 
        through 2002.
            (4) Committee on education and the workforce.--The 
        House Committee on Education and the Workforce shall 
        report changes in laws within its jurisdiction that 
        provide direct spending such that the total level of 
        direct spending for that committee does not exceed: 
        $17,222,000,000 in outlays for fiscal year 1998, 
$17,673,000,000 in outlays for fiscal year 2002, and $89,528,000,000 in 
outlays in fiscal years 1998 through 2002.
            (5) Committee on government reform and oversight.--
        (A) The House Committee on Government Reform and 
        Oversight shall report changes in laws within its 
        jurisdiction that provide direct spending such that the 
        total level of direct spending for that committee does 
        not exceed: $68,975,000,000 in outlays for fiscal year 
        1998, $81,896,000,000 in outlays for fiscal year 2002, 
        and $375,722,000,000 in outlays in fiscal years 1998 
        through 2002.
            (B) The House Committee on Government Reform and 
        Oversight shall report changes in laws within its 
        jurisdiction that would reduce the deficit by: $0 in 
        fiscal year 1998, $621,000,000 in fiscal year 2002, and 
        $1,829,000,000 in fiscal years 1998 through 2002.
            (6) Committee on transportation and 
        infrastructure.--The House Committee on Transportation 
        and Infrastructure shall report changes in laws within 
        its jurisdiction that provide direct spending such that 
        the total level of direct spending for that committee 
        does not exceed: $18,087,000,000 in outlays for fiscal 
        year 1998, $17,283,000,000 in outlays for fiscal year 
        2002, and $88,711,000,000 in outlays in fiscal years 
        1998 through 2002.
            (7) Committee on veterans' affairs.--The House 
        Committee on Veterans' Affairs shall report changes in 
        laws within its jurisdiction that provide direct 
        spending such that the total level of direct spending 
        for that committee does not exceed: $22,444,000,000 in 
        outlays for fiscal year 1998, $24,563,000,000 in 
        outlays for fiscal year 2002, and $117,959,000,000 in 
        outlays in fiscal years 1998 through 2002.
            (8) Committee on ways and means.--(A) The House 
        Committee on Ways and Means shall report changes in 
        laws within its jurisdiction such that the total level 
        of direct spending for that committee does not exceed: 
        $397,581,000,000 in outlays for fiscal year 1998, 
        $506,522,000,000 in outlays for fiscal year 2002, and 
        $2,257,912,000,000 in outlays in fiscal years 1998 
        through 2002.
            (B) The House Committee on Ways and Means shall 
        report changes in laws within its jurisdiction such 
        that the total level of revenues for that committee is 
        not less than: $1,172,136,000,000 in revenues for 
        fiscal year 1998, $1,382,679,000,000 in revenues for 
        fiscal year 2002, and $6,358,388,000,000 in revenues in 
        fiscal years 1998 through 2002.
            (C) The House Committee on Ways and Means shall 
        report changes in laws within its jurisdiction to 
        increase the statutory limit on the public debt to not 
        more than $5,950,000,000,000.
    (d) Instructions Relating to Tax Relief and Miscellaneous 
Reforms.--
            (1) Committee on agriculture.--The House Committee 
        on Agriculture shall report changes in laws within its 
        jurisdiction that provide direct spending such that the 
        total level of direct spending for that committee does 
        not exceed: $34,571,000,000 in outlays for fiscal year 
        1998, $37,008,000,000 in outlays for fiscal year 2002, 
and $179,884,000,000 in outlays in fiscal years 1998 through 2002.
            (2) Committee on banking and financial services.--
        The House Committee on Banking and Financial Services 
        shall report changes in laws within its jurisdiction 
        that provide direct spending such that the total level 
        of direct spending for that committee does not exceed: 
        -$8,435,000,000 in outlays for fiscal year 1998, 
        -$5,091,000,000 in outlays for fiscal year 2002, and 
        -$32,743,000,000 in outlays in fiscal years 1998 
        through 2002.
            (3) Committee on commerce.--The House Committee on 
        Commerce shall report changes in laws within its 
        jurisdiction that provide direct spending such that the 
        total level of direct spending for that committee does 
        not exceed: $393,533,000,000 in outlays for fiscal year 
        1998, $507,150,000,000 in outlays for fiscal year 2002, 
        and $2,259,294,000,000 in outlays in fiscal years 1998 
        through 2002.
            (4) Committee on education and the workforce.--The 
        House Committee on Education and the Workforce shall 
        report changes in laws within its jurisdiction that 
        provide direct spending such that the total level of 
        direct spending for that committee does not exceed: 
        $17,222,000,000 in outlays for fiscal year 1998, 
        $17,673,000,000 in outlays for fiscal year 2002, and 
        $89,528,000,000 in outlays in fiscal years 1998 through 
        2002.
            (5) Committee on government reform and oversight.--
        (A) The House Committee on Government Reform and 
        Oversight shall report changes in laws within its 
        jurisdiction that provide direct spending such that the 
        total level of direct spending for that committee does 
        not exceed: $68,975,000,000 in outlays for fiscal year 
        1998, $81,896,000,000 in outlays for fiscal year 2002, 
        and $375,722,000,000 in outlays in fiscal years 1998 
        through 2002.
            (B) The House Committee on Government Reform and 
        Oversight shall report changes in laws within its 
        jurisdiction that would reduce the deficit by: $0 in 
        fiscal year 1998, $621,000,000 in fiscal year 2002, and 
        $1,829,000,000 in fiscal years 1998 through 2002.
            (6) Committee on transportation and 
        infrastructure.--The House Committee on Transportation 
        and Infrastructure shall report changes in laws within 
        its jurisdiction that provide direct spending such that 
        the total level of direct spending for that committee 
        does not exceed: $18,087,000,000 in outlays for fiscal 
        year 1998, $17,283,000,000 in outlays for fiscal year 
        2002, and $88,711,000,000 in outlays in fiscal years 
        1998 through 2002.
            (7) Committee on veterans' affairs.--The House 
        Committee on Veterans' Affairs shall report changes in 
        laws within its jurisdiction that provide direct 
        spending such that the total level of direct spending 
        for that committee does not exceed: $22,444,000,000 in 
        outlays for fiscal year 1998, $24,563,000,000 in 
        outlays for fiscal year 2002, and $117,959,000,000 in 
        outlays in fiscal years 1998 through 2002.
            (8) Committee on ways and means.--(A) The House 
        Committee on Ways and Means shall report changes in 
        laws within its jurisdiction such that the total level 
of direct spending for that committee does not exceed: $397,581,000,000 
in outlays for fiscal year 1998, $506,522,000,000 in outlays for fiscal 
year 2002, and $2,257,912,000,000 in outlays in fiscal years 1998 
through 2002.
            (B) The House Committee on Ways and Means shall 
        report changes in laws within its jurisdiction such 
        that the total level of revenues for that committee is 
        not less than: $1,164,736,000,000 in revenues for 
        fiscal year 1998, $1,362,179,000,000 in revenues for 
        fiscal year 2002, and $6,273,388,000,000 in revenues in 
        fiscal years 1998 through 2002.
            (C) The House Committee on Ways and Means shall 
        report changes in laws within its jurisdiction to 
        increase the statutory limit on the public debt to not 
        more than $5,950,000,000,000.
    (e) Definition.--For purposes of this section, the term 
``direct spending'' has the meaning given to such term in 
section 250(c)(8) of the Balanced Budget and Emergency Deficit 
Control Act of 1985.1.
    (f) Children's Health Initiative.--If the Committees on 
Commerce and Ways and Means report recommendations pursuant to 
their reconciliation instructions that, combined, provide an 
initiative for children's health that would increase the 
deficit by more than $2.3 billion for fiscal year 1998, by more 
than $3.9 billion for fiscal year 2002, and by more than $16 
billion for the period of fiscal years 1998 through 2002, the 
committees shall be deemed to not have complied with their 
reconciliation instructions pursuant to section 310(d) of the 
Congressional Budget Act of 1974.

             TITLE II--BUDGETARY RESTRAINTS AND RULEMAKING

SEC. 201. DISCRETIONARY SPENDING LIMITS.

    (a) Discretionary Limits.--In the Senate, in this section 
and for the purposes of allocations made for the discretionary 
category pursuant to section 302(a) or 602(a) of the 
Congressional Budget Act of 1974, the term ``discretionary 
spending limit'' means--
            (1) with respect to fiscal year 1998--
                    (A) for the defense category 
                $269,000,000,000 in new budget authority and 
                $266,823,000,000 in outlays; and
                    (B) for the nondefense category 
                $257,857,000,000 in new budget authority and 
                $286,445,000,000 in outlays;
            (2) with respect to fiscal year 1999--
                    (A) for the defense category 
                $271,500,000,000 in new budget authority and 
                $266,518,000,000 in outlays; and
                    (B) for the nondefense category 
                $261,499,000,000 in new budget authority and 
                $292,803,000,000 in outlays;
            (3) with respect to fiscal year 2000, for the 
        discretionary category $537,193,000,000 in new budget 
        authority and $564,265,000,000 in outlays;
            (4) with respect to fiscal year 2001, for the 
        discretionary category $542,032,000,000 in new budget 
        authority and $564,396,000,000 in outlays; and
            (5) with respect to fiscal year 2002, for the 
        discretionary category $551,074,000,000 in new budget 
        authority and $560,799,000,000 in outlays;
as adjusted for changes in concepts and definitions and 
emergency appropriations.
    (b) Point of Order in the Senate.--
            (1) In general.--Except as provided in paragraph 
        (2), it shall not be in order in the Senate to 
        consider--
                    (A) a revision of this resolution or any 
                concurrent resolution on the budget for fiscal 
                years 1999, 2000, 2001, or 2002 (or amendment, 
                motion, or conference report on such a 
                resolution) that provides discretionary 
                spending in excess of the discretionary 
                spending limit or limits for such fiscal year; 
                or
                    (B) any bill or resolution (or amendment, 
                motion, or conference report on such bill or 
                resolution) for fiscal year 1998, 1999, 2000, 
                2001, or 2002 that would cause any of the 
                limits in this section (or suballocations of 
                the discretionary limits made pursuant to 
                section 602(b) of the Congressional Budget Act 
                of 1974) to be exceeded.
            (2) Exception.--
                    (A) In general.--This section shall not 
                apply if a declaration of war by the Congress 
                is in effect or if a joint resolution pursuant 
                to section 258 of the Balanced Budget and 
                Emergency Deficit Control Act of 1985 has been 
                enacted.
                    (B) Enforcement of discretionary limits in 
                fiscal year 1998.--Until the enactment of 
                reconciliation legislation pursuant to 
                subsections (a) and (b) of section 104 of this 
                resolution--
                            (i) subparagraph (A) of paragraph 
                        (1) shall not apply; and
                            (ii) subparagraph (B) of paragraph 
                        (1) shall apply only with respect to 
                        fiscal year 1998.
    (c) 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.
    (d) 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 concurrent 
resolution, 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 in the Senate to 
sustain an appeal of the ruling of the Chair on a point of 
order raised under this section.
    (e) Determination of Budget Levels.--For purposes of this 
section, the levels of new budget authority, outlays, new 
entitlement authority, revenues, and deficits for a fiscal year 
shall be determined on the basis of estimates made by the 
Committee on the Budget of the Senate.

SEC. 202. ALLOWANCE FOR THE IMF.

    (a) Adjustments.--In the Senate, for fiscal year 1998, 
1999, 2000, 2001, or 2002, and in the House of Representatives, 
for fiscal year 1998 or 1999, after the reporting of an 
appropriations measure (or after the submission of a conference 
report thereon) that includes an appropriation with respect to 
paragraph (1) or (2), the chairman of the Committee on the Budget shall 
increase the appropriate allocations, budgetary aggregates, and, in the 
Senate only, discretionary limits, by the amount of budget authority in 
that measure that is the dollar equivalent, in terms of Special Drawing 
Rights, of--
            (1) an increase in the United States quota as part 
        of the International Monetary Fund Eleventh General 
        Review of Quotas (United States Quota); or
            (2) any increase in the maximum amount available to 
        the Secretary of the Treasury pursuant to section 17 of 
        the Bretton Woods Agreement Act, as amended from time 
        to time (New Arrangements to Borrow).
    (b) Committee Suballocations.--The Committee on 
Appropriations may report to its House appropriately revised 
suballocations pursuant to sections 302(b)(1) and 602(b)(1) of 
the Congressional Budget Act of 1974 following the adjustments 
made pursuant to subsection (a).

SEC. 203. ALLOWANCE FOR SECTION 8 HOUSING ASSISTANCE.

    (a) Adjustment for Discretionary Spending.--For fiscal year 
1998, after the reporting of an appropriation measure (or after 
the submission of a conference report thereon) that includes an 
appropriation for the renewal of expiring contracts for tenant- 
and project-based housing assistance under section 8 of the 
United States Housing Act of 1937, the chairman of the 
Committee on the Budget may increase the appropriate 
allocations in this resolution by the amount provided in that 
appropriation measure for that purpose, but not to exceed 
$9,200,000,000 in budget authority and the appropriate amount 
of outlays.
    (b) Committee Suballocations.--The Committee on 
Appropriations may report to its House appropriately revised 
suballocations pursuant to sections 302(b)(1) and 602(b)(1) of 
the Congressional Budget Act of 1974 following the adjustments 
made pursuant to subsection (a).

SEC. 204. SEPARATE ENVIRONMENTAL ALLOCATION.

    (a) Committee Allocations.--After the Committee on Commerce 
and the Committee on Transportation and Infrastructure report a 
bill (or after the submission of a conference report thereon) 
or in the Senate, after the Committee on Environment and Public 
Works reports a bill (or after the submission of a conference 
report thereon) to reform the Superfund program to facilitate 
the cleanup of hazardous waste sites that does not exceed--
            (1) $200,000,000 in budget authority for fiscal 
        year 1998,
            (2) $200,000,000 in outlays for fiscal year 2002, 
        and
            (3) $1,000,000,000 in budget authority for the 
        period of fiscal years 1998 through 2002,
the chairman of the Committee on the Budget of that House may 
increase the appropriate allocations of budget authority in 
this resolution by the amounts provided in that bill for that 
purpose and the outlays flowing in all years from such budget 
authority.
    (b) Prior Surplus.--In the Senate, for the purposes of 
section 202 of House Concurrent Resolution 67 (104th Congress), 
legislation reported (or the submission of a conference report 
thereon) pursuant to subsection (a) shall be taken together 
with all other legislation passed pursuant to section 104 of this 
resolution.

SEC. 205. PRIORITY FEDERAL LAND ACQUISITIONS AND EXCHANGES.

    (a) Adjustment for Discretionary Spending.--For fiscal year 
1998, after the reporting of an appropriation measure (or after 
the submission of a conference report thereon) that provides 
$700 million in budget authority for fiscal year 1998 for 
Federal land acquisitions and to finalize priority Federal land 
exchanges, the Chairman of the Committee on the Budget of each 
House shall increase the appropriate allocations by that amount 
of budget authority and the outlays flowing from such budget 
authority to the Committee on Appropriations of that House.
    (b) Committee Suballocations.--The Committee on 
Appropriations may report to its House appropriately revised 
suballocations pursuant to sections 302(b)(1) and 602(b)(1) of 
the Congressional Budget Act of 1974 following the adjustments 
made pursuant to subsection (a).

SEC. 206. ALLOWANCE FOR ARREARAGES.

    (a) Adjustment for Discretionary Spending.--(1) In the 
Senate, for the period of fiscal years 1998 through 2002, or in 
the House of Representatives, for the period of fiscal years 
1998 and 1999, after the reporting of an appropriations measure 
(or after the submission of a conference report thereon) that 
includes an appropriation for arrearages for international 
organizations, international peacekeeping, and multilateral 
development banks during that fiscal year, the Chairman of the 
Committee on the Budget shall increase the appropriate 
allocations, aggregates, and, in the Senate only, discretionary 
spending limits, in this resolution by an amount provided for 
that purpose in that appropriation measure.
    (2) In the Senate, the adjustments described in paragraph 
(1) for the period of fiscal years 1998 through 2002 may not 
exceed $1,884,000,000 in budget authority and the outlays 
flowing in all years from such budget authority.
    (b) Committee Suballocations.--The Committee on 
Appropriations shall report to its House appropriately revised 
suballocations pursuant to sections 302(b)(1) and 602(b)(1) of 
the Congressional Budget Act of 1974 following the adjustments 
made pursuant to subsection (a).

SEC. 207. INTERCITY PASSENGER RAIL RESERVE FUND FOR FISCAL YEARS 1998-
                    2002.

    (a) In General.--If legislation is enacted which generates 
revenue increases or direct spending reductions to finance an 
intercity passenger rail fund and to the extent that such 
increases or reductions are not included in this concurrent 
resolution on the budget, the appropriate budgetary levels and 
limits may be adjusted if such adjustments do not cause an 
increase in the deficit in this resolution. Necessary 
authorizing reforms and additional funding contained in this 
reserve fund for intercity passenger rail should both occur in 
this Session, and if such funds are appropriated before the 
enactment of such reforms, such appropriated funds shall not be 
made available until the enactment of such reforms.
    (b) Establishing a Reserve.--
            (1) Adjustments to capture savings.--After the 
        enactment of legislation described in subsection (a), 
        the Chairman of the Committee on the Budget may submit 
        revisions to the appropriate allocations and aggregates 
        by the amount that provisions in such legislation 
        generates revenue increases or direct spending 
        reductions.
            (2) Determination of maximum discretionary 
        allowance.--Upon the submission of such revisions, the 
        Chairman of the Committee on the Budget shall also 
        submit the amount of revenue increases or direct 
        spending reductions such legislation generates and the 
        maximum amount available each year for adjustments 
        pursuant to subsection (c).
    (c) Adjustments for Discretionary Spending.--
            (1) Revisions to allocations and aggregates.--After 
        either--
                    (A) the reporting of an appropriations 
                measure, or after a conference committee 
                submits a conference report thereon, that 
                appropriates funds for the National Railroad 
                Passenger Corporation and funds from the 
                intercity passenger rail fund; or
                    (B) the reporting of an appropriations 
                measure, or after a conference committee 
                submits a conference report thereon, that 
                appropriates funds from the intercity passenger 
                rail fund (funds having previously been 
                appropriated for the National Railroad 
                Passenger Corporation for that same fiscal 
                year),
        the Chairman of the Committee on the Budget may submit 
        increased budget authority allocations, aggregates, 
        and, in the Senate only, discretionary limits, for the 
        amount appropriated for authorized expenditures from 
        the intercity passenger rail fund and the outlays in 
        all years flowing from such budget authority.
            (2) Revisions to suballocations.--The Committee on 
        Appropriations may submit appropriately revised 
        suballocations pursuant to sections 302(b)(1) and 
        602(b)(1) of the Congressional Budget Act of 1974.
    (d) Limitations.--
            (1) In general.--The revisions made pursuant to 
        subsection (b) shall not be made--
                    (A) with respect to direct spending 
                reductions, unless the committee that generates 
                the direct spending reductions is within its 
                allocations under sections 302(a) and 602(a) of 
                the Budget Act in this resolution (not 
                including the direct spending reductions 
                envisioned in subsection (b)); and
                    (B) with respect to revenue increases, 
                unless revenues are at or above the revenue 
                aggregates in this resolution (not including 
                the revenue increases envisioned in subsection 
                (b)).
            (2) Budget authority.--The budget authority 
        adjustments made pursuant to subsection (c) shall not 
        exceed the amounts specified in subsection (b)(2) for a 
        fiscal year.

SEC. 207A. INTERCITY PASSENGER RAIL RESERVE FUND IN THE SENATE FOR 
                    FISCAL YEARS 1998-2002.

    (a) In General.--In the Senate, if legislation is enacted 
which generates revenue increases or direct spending reductions 
to finance an intercity passenger rail fund and to the extent 
that such increases or reductions are not included in this 
concurrent resolution on the budget, the appropriate budgetary 
levels and limits may be adjusted if such adjustments do not 
cause an increase in the deficit in this resolution.
    (b) Establishing a Reserve.--
            (1) Adjustments to capture savings.--After the 
        enactment of legislation described in subsection (a), 
        the Chairman of the Committee on the Budget of the 
        Senate may submit revisions to the appropriate 
        allocations and aggregates by the amount that 
        provisions in such legislation generates revenue 
        increases or direct spending reductions.
            (2) Determination of maximum discretionary 
        allowance.--Upon the submission of such revisions, the 
        Chairman of the Committee on the Budget of the Senate 
        shall also submit the amount of revenue increases or 
        direct spending reductions such legislation generates 
        and the maximum amount available each year for 
        adjustments pursuant to subsection (c).
    (c) Adjustments for Discretionary Spending.--
            (1) Revisions to allocations and aggregates.--After 
        either--
                    (A) the reporting of an appropriations 
                measure, or after a conference committee 
                submits a conference report thereon, that 
                appropriates funds for the National Railroad 
                Passenger Corporation and funds from the 
                intercity passenger rail fund; or
                    (B) the reporting of an appropriations 
                measure, or after a conference committee 
                submits a conference report thereon, that 
                appropriates funds from the intercity passenger 
                rail fund (funds having previously been 
                appropriated for the National Railroad 
                Passenger Corporation for that same fiscal 
                year),
        the Chairman of the Committee on the Budget of the 
        Senate may submit increased budget authority 
        allocations, aggregates, and discretionary limits, for 
        the amount appropriated for authorized expenditures 
        from the intercity passenger rail fund and the outlays 
        in all years flowing from such budget authority.
            (2) Revisions to suballocations.--The Committee on 
        Appropriations of the Senate may submit appropriately 
        revised suballocations pursuant to sections 302(b)(1) 
        and 602(b)(1) of the Congressional Budget Act of 1974.
    (d) Limitations.--
            (1) In general.--The revisions made pursuant to 
        subsection (b) shall not be made--
                    (A) with respect to direct spending 
                reductions, unless the committee that generates 
                the direct spending reductions is within its 
                allocations under sections 302(a) and 602(a) of 
                the Budget Act in this resolution (not 
                including the direct spending reductions 
                envisioned in subsection (b)); and
                    (B) with respect to revenue increases, 
                unless revenues are at or above the revenue 
                aggregates in this resolution (not including 
                the revenue increases envisioned in subsection 
                (b)).
            (2) Budget authority.--The budget authority 
        adjustments made pursuant to subsection (c) shall not 
        exceed the amounts specified in subsection (b)(2) for a 
        fiscal year.

SEC. 208. MASS TRANSIT RESERVE FUND IN THE SENATE FOR FISCAL YEARS 
                    1998-2002.

    (a) In General.--In the Senate, if legislation generates 
revenue increases or direct spending reductions to finance mass 
transit and to the extent that such increases or reductions are 
not included in this concurrent resolution on the budget, the 
appropriate budgetary levels and limits may be adjusted if such 
adjustments do not cause an increase in the deficit in this 
resolution.
    (b) Adjustment for Budget Authority.--After the reporting 
of legislation (the offering of an amendment thereto or 
conference report thereon) that reduces non-mass transit direct 
spending or increases revenues for a fiscal year or years, the 
Chairman of the Committee on the Budget of the Senate may 
submit appropriately revised allocations and aggregates by an 
amount that equals the amount such legislation reduces direct 
spending or increases revenues for a fiscal year or years.
    (c) Establishing a Reserve.--
            (1) Revisions.--After the enactment of legislation 
        described in subsection (a), the Chairman of the 
        Committee on the Budget of the Senate may submit 
        revisions to the appropriate allocations and aggregates 
        by the amount that provisions in such legislation 
        generates revenue increases or direct nonhighway 
        spending reductions.
            (2) Revenue increases or direct spending 
        reductions.--After the submission of such revisions, 
        the Chairman of the Committee on the Budget of the 
        Senate shall also submit the amount of revenue 
        increases or non-mass transit direct spending 
        reductions such legislation generates and the maximum 
        amount available each year for adjustments pursuant to 
        subsection (d).
    (d) Adjustments for Discretionary Spending.--
            (1) Revisions to allocations and aggregates.--After 
        the reporting of an appropriations measure, or after a 
        conference committee submits a conference report 
        thereon, that makes available funds for mass transit, 
        the Chairman of the Committee on the Budget of the 
        Senate shall submit increased outlay allocations, 
        aggregates, and discretionary limits for the amount of 
        outlays flowing from the additional obligational 
        authority provided in such bill.
            (2) Revisions to suballocations.--The Committee on 
        Appropriations of the Senate may submit appropriately 
        revised suballocations pursuant to sections 302(b)(1) 
        and 602(b)(1) of the Congressional Budget Act of 1974.
    (e) Limitations.--
            (1) In general.--The revisions made pursuant to 
        subsection (c) shall not be made--
                    (A) with respect to non-mass transit direct 
                spending reductions, unless the committee that 
                generates the direct spending reductions is 
                within its allocations under sections 302(a) 
                and 602(a) of the Budget Act in this resolution 
                (not including the non-mass transit direct 
                spending reductions envisioned in subsection 
                (c)); and
                    (B) with respect to revenue increases, 
                unless revenues are at or above the revenue 
                aggregates in this resolution (not including 
                the revenue increases envisioned in subsection 
                (c)).
            (2) Outlays.--The outlay adjustments made pursuant 
        to subsection (d) shall not exceed the amounts 
        specified in subsection (c)(2) for a fiscal year.

SEC. 209. HIGHWAY RESERVE FUND IN THE SENATE FOR FISCAL YEARS 1998-
                    2002.

    (a) In General.--In the Senate, if legislation generates 
revenue increases or direct spending reductions to finance 
highways and to the extent that such increases or reductions 
are not included in this concurrent resolution on the budget, 
the appropriate budgetary levels and limits may be adjusted if 
such adjustments do not cause an increase in the deficit in 
this resolution.
    (b) Adjustments for Budget Authority.--After the reporting 
of legislation (the offering of an amendment thereto or 
conference report thereon) that reduces nonhighway direct 
spending or increases revenues for a fiscal year or years, the 
Chairman of the Committee on the Budget of the Senate may 
submit appropriately revised allocations and aggregates by an 
amount that equals the amount such legislation reduces direct 
spending or increases revenues for a fiscal year or years.
    (c) Establishing a Reserve.--
            (1) Revisions.--After the enactment of legislation 
        described in subsection (a), the Chairman of the 
        Committee on the Budget of the Senate may submit 
        revisions to the appropriate allocations and aggregates 
        by the amount that provisions in such legislation 
        generates revenue increases or non-highway direct 
        spending reductions.
            (2) Revenue increases or direct spending 
        reductions.--Upon the submission of such revisions, the 
        Chairman of the Committee on the Budget of the Senate 
        shall also submit the amount of revenue increases or 
        direct nonhighway spending reductions such legislation 
        generates and the maximum amount available each year 
        for adjustments pursuant to subsection (d).
    (d) Adjustments for Discretionary Spending.--
            (1) Revisions to allocations and aggregates.--After 
        the reporting of an appropriations measure, or after a 
        conference committee submits a conference report 
        thereon, that makes available funds for highways, the 
        Chairman of the Committee on the Budget of the Senate 
        shall submit increased outlay allocations, aggregates, 
        and discretionary limits for the amount of outlays 
        flowing from the additional obligational authority 
        provided in such measure.
            (2) Revisions to suballocations.--The Committee on 
        Appropriations of the Senate may submit appropriately 
        revised suballocations pursuant to sections 302(b)(1) 
and 602(b)(1) of the Congressional Budget Act of 1974.
    (e) Limitations.--
            (1) In general.--The revisions made pursuant to 
        subsection (c) shall not be made--
                    (A) with respect to nonhighway direct 
                spending reductions, unless the committee that 
                generates the direct spending reductions is 
                within its allocations under section 302(a) and 
                602(a) of the Budget Act in this resolution 
                (not including the nonhighway direct spending 
                reductions envisioned in subsection (c)); and
                    (B) with respect to revenue increases, 
                unless revenues are at or above the revenue 
                aggregates in this resolution (not including 
                the revenue increases envisioned in subsection 
                (c)).
            (2) Outlays.--The outlay adjustments made pursuant 
        to subsection (d) shall not exceed the amounts 
        specified in subsection (c)(2) for a fiscal year.

SEC. 210. DEFICIT-NEUTRAL RESERVE FUND IN THE HOUSE FOR SURFACE 
                    TRANSPORTATION.

    (a) Purpose.--In the House, the purpose of this section is 
to adjust the appropriate budgetary levels to accommodate 
legislation increasing spending from the highway trust fund on 
surface transportation and highway safety above the levels 
assumed in this resolution if such legislation is deficit 
neutral.
    (b) Deficit Neutrality Requirement.--(1) In order to 
receive the adjustments specified in subsection (c), a bill 
reported by the Committee on Transportation and Infrastructure 
of the House that provides new budget authority above the 
levels assumed in this resolution for programs authorized out 
of the highway trust fund must be deficit neutral.
    (2) A deficit-neutral bill must meet the following 
conditions:
            (A) The amount of new budget authority provided for 
        programs authorized out of the highway trust fund must 
        be in excess of $25.949 billion in new budget authority 
        for fiscal year 1998, $25.464 billion in new budget 
        authority for fiscal year 2002, and $127.973 billion in 
        new budget authority for the period of fiscal years 
        1998 through 2002.
            (B) The outlays estimated to flow from the excess 
        new budget authority set forth in subparagraph (A) must 
        be offset for fiscal year 1998, fiscal year 2002, and 
        for the period of fiscal years 1998 through 2002. For 
        the sole purpose of estimating the amount of outlays 
        flowing from excess new budget authority under this 
        section, it shall be assumed that such excess new 
        budget authority would have an obligation limitation 
        sufficient to accommodate that new budget authority.
            (C) The outlays estimated to flow from the excess 
        new budget authority must be offset by (i) other direct 
        spending or revenue provisions within that 
        transportation bill, (ii) the net reduction in other 
        direct spending and revenue legislation (for purposes 
        of such offset) that is enacted during this Congress 
        after the date of adoption of this resolution and 
        before such transportation bill is reported (in excess 
        of the levels assumed in this resolution), or (iii) a 
combination of the offsets specified in clauses (i) and (ii).
            (D) As used in this section, the term ``direct 
        spending'' has the meaning given to such term in 
        section 250(c)(8) of the Balanced Budget and Emergency 
        Deficit Control Act of 1985.
    (c) Revised Levels.--(1) After the Committee on 
Transportation and Infrastructure of the House reports a bill 
(or after the submission of a conference report thereon) 
meeting the conditions set forth in subsection (b)(2), the 
chairman of the Committee on the Budget of the House shall 
increase the allocation of new budget authority to that 
committee by the amount of new budget authority provided in 
that bill (and that is above the levels set forth in subsection 
(b)(2)(A)) for programs authorized out of the highway trust 
fund.
    (2) After the enactment of the transportation bill 
described in paragraph (1) and after the reporting of a 
general, supplemental, or continuing resolution making 
appropriations by the Committee on Appropriations of the House 
(or after the submission of a conference report thereon) 
establishing an obligation limitation above the levels 
specified in subsection (b)(2)(A) (at a level sufficient to 
obligate some or all of the budget authority specified in 
paragraph (1)), the chairman of the Committee on the Budget of 
the House shall increase the allocation and aggregate levels of 
outlays to that committee for the appropriate fiscal years.
    (d) Offsetting Adjustments.--Upon the enactment of 
legislation providing offsets pursuant to subsection (c), the 
chairman of the Committee on the Budget shall make offsetting 
adjustments in the appropriate allocations and aggregates.
    (e) Definition.--As used in this section, the term 
``highway trust fund'' refers to the following budget accounts 
(or any successor accounts):
            (1) 69-8083-0-7-401 (Federal-Aid Highways).
            (2) 69-8191-0-7-401 (Mass Transit Capital Fund).
            (3) 69-8350-0-7-401 (Mass Transit Formula Grants).
            (4) 69-8016-0-7-401 (National Highway Traffic 
        Safety Administration-Operations and Research).
            (5) 69-8020-0-7-401 (Highway Traffic Safety 
        Grants).
            (6) 69-8048-0-7-401 (National Motor Carrier Safety 
        Program).

SEC. 211. SALE OF GOVERNMENT ASSETS.

    (a) Limitation.--Subsections (b) through (d) of this 
section shall not apply to the sale of any asset resulting from 
the enactment of any reconciliation bill referred to in section 
104 or 105 of this resolution.
    (b) Budgetary Treatment.--
            (1) In general.--For the purpose of this concurrent 
        resolution on the budget and the Congressional Budget 
        Act of 1974, no amounts realized from the sale of an 
        asset shall be scored with respect to the level of 
        budget authority, outlays, or revenues if such sale 
        would cause an increase in the deficit as calculated 
        pursuant to paragraph (2).
            (2) Calculation of net present value.--The deficit 
        estimate of an asset sale shall be the net present 
        value of the cash flow from--
                    (A) proceeds from the asset sale;
                    (B) future receipts that would be expected 
                from continued ownership of the asset by the 
                Government; and
                    (C) expected future spending by the 
                Government at a level necessary to continue to 
                operate and maintain the asset to generate the 
                receipts estimated pursuant to subparagraph 
                (B).
    (c) Definition.--For purposes of this section, the term 
``sale of an asset'' shall have the same meaning as under 
section 250(c)(21) of the Balanced Budget and Emergency Deficit 
Control Act of 1985.
    (d) Treatment of Loan Assets.--For the purposes of this 
section, the sale of loan assets or the prepayment of a loan 
shall be governed by the terms of the Federal Credit Reform Act 
of 1990.
    (e) Intent.--The asset sale rule may be revisited when the 
Budget Enforcement Act of 1990 is extended.

SEC. 212. DETERMINATIONS OF BUDGETARY LEVELS; REVERSALS.

    (a) Determinations.--For purposes of this title, budgetary 
levels shall be determined on the basis of estimates made by 
the Committee on the Budget.
    (b) Reversals and Adjustments.--(1) In the House of 
Representatives, if any legislation referred to in this title 
is not enacted into law, then the chairman of the Committee on 
the Budget shall, as soon as practicable, reverse adjustments 
made under this title for such legislation and have such 
adjustments published in the Congressional Record.
    (2) In the Senate, the adjustments and revisions to 
allocations, aggregates, and limits made by the Chairman of the 
Committee on the Budget pursuant to this title for legislation 
shall only apply while such legislation is under consideration 
in the Senate and shall only permanently take effect upon the 
enactment of such legislation.
    (c) Effect of Revisions.--Any revisions made by the 
chairman of the Committee on the Budget under this title, and 
in the Senate, under section 104(d), shall be considered for 
purposes of the Congressional Budget Act of 1974 as the 
allocations and aggregates, and in the Senate, the 
discretionary spending limits, contained in this resolution, 
and the chairman shall have such revisions published in the 
Congressional Record.

SEC. 213. EXERCISE OF RULEMAKING POWERS.

    The Congress adopts the provisions of this title--
            (1) as an exercise of the rulemaking power of the 
        Senate and the House of Representatives, 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 III--SENSE OF CONGRESS, HOUSE, AND SENATE PROVISIONS

                   Subtitle A--Sense of the Congress

SEC. 301. SENSE OF THE CONGRESS ON REPAYMENT OF THE FEDERAL DEBT.

    (a) Findings.--The Congress finds the following:
            (1) The Congress and the President have a basic 
        moral and ethical responsibility to future generations 
        to repay the Federal debt, including the money borrowed 
        from the Social Security Trust Fund.
            (2) The Congress and the President should enact a 
        law which creates a regimen for paying off the Federal 
        debt within 30 years.
            (3) If spending growth were held to a level one 
        percentage point lower than projected growth in 
        revenues, then the Federal debt could be repaid within 
        30 years.
    (b) Sense of the Congress Regarding President's Submission 
to Congress.--It is the sense of the Congress that--
            (1) the President's annual budget submission to 
        Congress should include a plan for repayment of Federal 
        debt beyond the year 2002, including the money borrowed 
        from the Social Security Trust Fund; and
            (2) the plan should specifically explain how the 
        President working with Congress would cap spending 
        growth at a level one percentage point lower than 
        projected growth in revenues.

SEC. 302. SENSE OF THE CONGRESS ON TAX CUTS.

    It is the sense of the Congress that this resolution 
assumes that--
            (1) a substantial majority of the tax cut benefits 
        provided in the tax reconciliation bill will go to 
        middle class working families earning less than 
        approximately $100,000 per year; and
            (2) the tax cuts in the tax reconciliation bill 
        will not cause revenue losses to increase significantly 
        in years after 2007.

SEC. 303. SENSE OF CONGRESS THAT THE 10-YEAR REVENUE LOSS FROM THE TAX 
                    RELIEF PACKAGE SHALL NOT EXCEED $250,000,000,000.

    (a) Findings.--Congress finds that--
            (1) a May 15, 1997 letter from the Speaker of the 
        House of Representatives and the Majority Leader of the 
        Senate to the President of the United States, 
        representing the agreement on the tax package in the 
        Bipartisan Budget Agreements, states that, ``It was 
        agreed that the net tax cut shall be $85 billion 
        through 2002 and not more than $250 billion through 
        2007.'';
            (2) a May 15, 1997 letter from the Speaker of the 
        House of Representatives and the Majority Leader of the 
        Senate to the Chief of Staff to the President, 
        contained in the same Bipartisan Budget Agreement and 
        referring to the tax package, states that ``The 
        proposal shall not cause costs to explode in the 
        outyears.''; and
            (3) the text of the Bipartisan Budget Agreement 
        issued on May 15, 1997 states that ``If bills, 
        resolutions or conference reports are deemed to be 
        inconsistent, remedial efforts shall be made by all 
        parties to assure consistency. Such efforts shall 
        include bipartisan Leadership consultation and 
        concurrence on amendments and scheduling as 
        necessary.''.
    (b) Sense of Congress.--
            (1) 10-year cost.--The 10-year cost of the tax 
        reconciliation bill resulting from this resolution 
        shall not exceed $250,000,000,000 and any revenue loss 
        shall be certified by the Joint Committee on Taxation 
        in consultation and cooperation with the Office of Tax 
        Analysis of the Department of Treasury.
            (2) 5-year cost.--The 5-year cost of the tax 
        reconciliation bill resulting from this resolution 
        shall be $85,000,000,000 and any revenue loss shall be 
        certified by the Joint Committee on Taxation in 
        consultation and cooperation with the Office of Tax 
        Analysis of the Department of Treasury.

                     Subtitle B--Sense of the House

SEC. 306. SENSE OF THE HOUSE ON COMMISSION ON LONG-TERM BUDGETARY 
                    PROBLEMS.

    (a) Findings.--The House finds that--
            (1) achieving a balanced budget by fiscal year 2002 
        is only the first step necessary to restore our 
        Nation's economic prosperity;
            (2) the imminent retirement of the baby-boom 
        generation will greatly increase the demand for 
        government services;
            (3) this burden will be borne by a relatively 
        smaller work force resulting in an unprecedented 
        intergenerational transfer of financial resources;
            (4) the rising demand for retirement and medical 
        benefits will quickly jeopardize the solvency of the 
        medicare, social security, and Federal retirement trust 
        funds; and
            (5) the Congressional Budget Office has estimated 
        that marginal tax rates would have to increase by 50 
        percent over the next 5 years to cover the long-term 
        projected costs of retirement and health benefits.
    (b) Sense of the House.--It is the sense of the House that 
legislation should be enacted to create a commission to assess 
long-term budgetary problems, their implications for both the 
baby-boom generation and tomorrow's workforce, and make such 
recommendations as it deems appropriate to ensure our Nation's 
future prosperity.

SEC. 307. SENSE OF THE HOUSE ON CORPORATE WELFARE.

    (a) Findings.--The House finds that the functional levels 
and aggregates in this budget resolution assume that--
            (1) the Federal Government supports profit-making 
        enterprises and industries through billions of dollars 
        in payments, benefits, and programs;
            (2) many of these subsidies do not serve a clear 
        and compelling public interest;
            (3) corporate subsidies frequently provide unfair 
        competitive advantages to certain industries and 
        industry segments; and
            (4) at a time when millions of Americans are being 
        asked to sacrifice in order to balance the budget, the 
        corporate sector should bear its share of the burden.
    (b) Sense of the House.--It is the sense of the House that 
legislation should be enacted to--
            (1) eliminate the most egregious corporate 
        subsidies; and
            (2) create a commission to recommend the 
        elimination of Federal payments, benefits, and programs 
        which predominantly benefit a particular industry or 
        segment of an industry, rather than provide a clear and 
        compelling public benefit, and include a fast-track 
        process for the consideration of those recommendations.

SEC. 308. SENSE OF THE HOUSE ON BASELINES.

    (a) Findings.--The House finds that--
            (1) baselines are projections of future spending if 
        existing policies remain unchanged;
            (2) under baseline assumptions, spending 
        automatically rises with inflation even if such 
        increases are not mandated under existing law;
            (3) baseline budgeting is inherently biased against 
        policies that would reduce the projected growth in 
        spending because such policies are portrayed as 
        spending reductions from an increasing baseline; and
            (4) the baseline concept has encouraged Congress to 
        abdicate its constitutional obligation to control the 
        public purse for those programs which are automatically 
        funded.
    (b) Sense of House.--It is the sense of the House that 
baseline budgeting should be replaced with a budgetary model 
that requires justification of aggregate funding levels and 
maximizes congressional and executive accountability for 
Federal spending.

SEC. 309. SENSE OF THE HOUSE ON FAMILY VIOLENCE OPTION CLARIFYING 
                    AMENDMENT.

    (a) Findings.--The House finds the following:
            (1) Domestic violence is the leading cause of 
        physical injury to women. The Department of Justice 
        estimates that over 1,000,000 violent crimes against 
        women are committed by intimate partners annually.
            (2) Domestic violence dramatically affects the 
        victim's ability to participate in the workforce. A 
        University of Minnesota survey reported that one 
        quarter of battered women surveyed had lost a job 
        partly because of being abused and that over half of 
        these women had been harassed by their abuser at work.
            (3) Domestic violence is often intensified as women 
        seek to gain economic independence through attending 
        school or training programs. Batterers have been 
        reported to prevent women from attending these programs 
        or sabotage their efforts at self-improvement.
            (4) Nationwide surveys of service providers 
        prepared by the Taylor Institute of Chicago, Illinois, 
        document, for the first time, the interrelationship 
        between domestic violence and welfareby showing that 
from 34 percent to 65 percent of AFDC recipients are current or past 
victims of domestic violence.
            (5) Over half of the women surveyed stayed with 
        their batterers because they lacked the resources to 
        support themselves and their children. The surveys also 
        found that the availability of economic support is a 
        critical factor in poor women's ability to leave 
        abusive situations that threaten them and their 
        children.
            (6) The restructuring of the welfare programs may 
        impact the availability of the economic support and the 
        safety net necessary to enable poor women to flee abuse 
        without risking homelessness and starvation for their 
        families.
            (7) In recognition of this finding, the House 
        Committee on the Budget unanimously passed a sense of 
        Congress amendment on domestic violence and Federal 
        assistance to the fiscal year 1997 budget resolution. 
        Subsequently, Congress passed the family violence 
        option amendment to last year's welfare reform 
        reconciliation bill.
            (8) The family violence option gives States the 
        flexibility to grant temporary waivers from time limits 
        and work requirements for domestic violence victims who 
        would suffer extreme hardship from the application of 
        these provisions. These waivers were not intended to be 
        included as part of the permanent 20 percent hardship 
        exemption.
            (9) The Department of Health and Human Services has 
        been slow to issue regulations regarding this 
        provision. As a result, States are hesitant to fully 
        implement the family violence option fearing it will 
        interfere with the 20 percent hardship exemption.
            (10) Currently 15 States have opted to include the 
        family violence option in their welfare plans, and 13 
        other States have included some type of domestic 
        violence provisions in their plans.
    (b) Sense of the House.--It is the sense of the House 
that--
            (1) States should not be subject to any numerical 
        limits in granting domestic violence good cause waivers 
        to individuals receiving assistance for all 
        requirements where compliance with such requirements 
        would make it more difficult for individuals receiving 
        assistance to escape domestic violence; and
            (2) any individuals granted a domestic violence 
        good cause waiver by States should not be included in 
        the States' 20 percent hardship exemption.

                    Subtitle B--Sense of the Senate

SEC. 311. SENSE OF THE SENATE ON LONG TERM ENTITLEMENT REFORMS, 
                    INCLUDING ACCURACY IN DETERMINING CHANGES IN THE 
                    COST OF LIVING.

    (a) Findings.--
            (1) Entitlement reforms.--The Senate finds that 
        with respect to long term entitlement reforms--
                    (A) entitlement spending continues to grow 
                dramatically as a percent of total Federal 
                spending, rising fromfifty-six percent of the 
budget in 1987 to an estimated seventy-three percent of the budget in 
2007;
                    (B) this growth in mandatory spending poses 
                a long-term threat to the United States economy 
                because it crowds out spending for investments 
                in education, infrastructure, defense, law 
                enforcement and other programs that enhance 
                economic growth;
                    (C) in 1994, the Bipartisan Commission on 
                Entitlement and Tax Reform concluded that if no 
                changes are made to current entitlement laws, 
                all Federal revenues will be spent on 
                entitlement programs and interest on the debt 
                by the year 2012;
                    (D) the Congressional Budget Office has 
                also recently issued a report that found that 
                pressure on the budget from demographics and 
                rising health care costs will increase 
                dramatically after 2002; and
                    (E) making significant entitlement changes 
                will significantly benefit the economy, and 
                will forestall the need for more drastic tax 
                and spending decisions in future years.
            (2) CPI.--The Senate finds that with respect to 
        accuracy in determining changes in the cost of living--
                    (A) the Final Report of the Senate Finance 
                Committee's Advisory Commission to study the 
                CPI has concluded that the Consumer Price Index 
                overstates the cost of living in the United 
                States by 1.1 percentage points;
                    (B) the overstatement of the cost of living 
                by the Consumer Price Index has been recognized 
                by economists since at least 1961, when a 
                report noting the existence of the 
                overstatement was issued by a National Bureau 
                of Economic Research Committee, chaired by 
                Professor George J. Stigler;
                    (C) Congress and the President, through the 
                indexing of Federal tax brackets, social 
                security benefits, and other Federal program 
                benefits, have undertaken to protect taxpayers 
                and beneficiaries of such programs from the 
                erosion of purchasing power due to inflation; 
                and
                    (D) the overstatement of the cost of living 
                increases the deficit and undermines the 
                equitable administration of Federal benefits 
                and tax policies.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the provisions in this resolution assume that--
            (1) Congress and the President should continue 
        working to enact structural entitlement reforms in the 
        1997 budget agreement and in subsequent legislation;
            (2) Congress and the President must find the most 
        accurate measure of the change in the cost of living in 
        the United States, and should work in a bipartisan 
        manner to implement any changes that are necessary to 
        achieve an accurate measure; and
            (3) Congress and the President must work to ensure 
        that the 1997 budget agreement not only keeps the 
        unified budget in balance after 2002, but that 
        additional measures should be taken to begin to achieve 
        substantial surpluses which will improve the economy 
        and allow our nation to be ready for the retirement of 
        the baby boom generation in the year 2012.

SEC. 312. SENSE OF THE SENATE ON TACTICAL FIGHTER AIRCRAFT PROGRAMS.

    (a) Findings.--The Senate finds that--
            (1) the Department of Defense has proposed to 
        modernize the United States tactical fighter aircraft 
        force through three tactical fighter procurement 
        programs, including the F/A-18 E/F aircraft program of 
        the Navy, the F-22 aircraft program of the Air Force, 
        and the Joint Strike Fighter aircraft program for the 
        Navy, Air Force, and Marine Corps;
            (2) the General Accounting Office, the 
        Congressional Budget Office, the Chairman of the Joint 
        Chiefs of Staff, the Under Secretary of Defense for 
        Acquisition and Technology, and several Members of 
        Congress have publicly stated that, given the current 
        Department of Defense budget for procurement, the 
        Department of Defense's original plan to buy over 4,400 
        F/A-18 E/F aircraft, F-22 aircraft, and Joint Strike 
        Fighter aircraft at a total program cost in excess of 
        $350,000,000,000 was not affordable;
            (3) the F/A-18 E/F, F-22, and the Joint Strike 
        Fighter tactical fighter programs will be competing for 
        a limited amount of procurement funding with numerous 
        other aircraft acquisition programs, including the 
        Comanche helicopter program, the V-22 Osprey aircraft 
        program, and the C-17 aircraft program, as well as for 
        the necessary replacement of other aging aircraft such 
        as the KC-135, the C-5A, the F-117, and the EA-6B 
        aircraft; and
            (4) the 1997 Department of Defense Quadrennial 
        Defense Review has recommended reducing the F/A-18 E/F 
        program buy from 1,000 aircraft to 548, and reducing 
        the F-22 program buy from 438 to 339.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the provisions of this resolution assume that, within 30 
days, the Department of Defense should transmit to Congress 
detailed information pertaining to the implementation of this 
revised acquisition strategy so that the Congress can 
adequately evaluate the extent to which the revised acquisition 
strategy is tenable and affordable given the projected spending 
levels contained in this budget resolution.

SEC. 313. SENSE OF THE SENATE REGARDING CHILDREN'S HEALTH COVERAGE.

    (a) Findings.--The Senate finds that--
            (1) of the estimated 10 million uninsured children 
        in the United States, over 1.3 million have at least 
        one parent who is self-employed and all other uninsured 
        children are dependents of persons who are employed by 
        another, or unemployed;
            (2) these 1.3 million uninsured kids comprise 
        approximately 22 percent of all children with self-
        employed parents, and they are a significant 13 percent 
        of all uninsured children;
            (3) the remaining uninsured children are in 
        families where neither parent is self-employed and 
        comprise 13 percent of all children in families where 
        neither parent is self-employed;
            (4) children in families with a self-employed 
        parent are therefore more likely to be uninsured than 
        children in families where neither parent is self-
        employed; and
            (5) the current disparity in the tax law reduces 
        the affordability of health insurance for the self-
        employed and their families, hindering the ability of 
        children to receive essential primary and preventive 
        care services.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the provisions of this resolution assume that from 
resources available in this budget resolution, a portion should 
be set aside for an immediate 100 percent deductibility of 
health insurance costs for the self-employed. Full-
deductibility of health expenses for the self-employed would 
make health insurance more attractive and affordable, resulting 
in more dependents being covered. The government should not 
encourage parents to forgo private insurance for a government-
run program.

SEC. 314. SENSE OF THE SENATE ON A MEDICAID PER CAPITA CAP.

    It is the sense of the Senate that in order to meet deficit 
reduction targets in this resolution with respect to medicaid--
            (1) the per capita cap will not be used as a method 
        for meeting spending targets; and
            (2) the per capita cap could represent a 
        significant structural change that might jeopardize the 
        quality of care for children, the disabled, and senior 
        citizens.

SEC. 315. SENSE OF THE SENATE THAT ADDED SAVINGS GO TO DEFICIT 
                    REDUCTION.

    (a) Findings.--The Congress finds that--
            (1) balancing the budget will bring numerous 
        economic benefits for the United States economy and 
        American workers and families, including improved 
        economic growth and lower interest rates;
            (2) the fiscal year 1998 budget resolution crafted 
        pursuant to an agreement reached between the Congress 
        and the Administration purports to achieve balance in 
        the year 2002;
            (3) the deficit estimates contained in this 
        resolution may not conform to the actual deficits in 
        subsequent years, which make it imperative that any 
        additional savings are realized be devoted to deficit 
        reduction;
            (4) the Senate's ``pay-as-you-go'' point of order 
        prohibits crediting savings from updated economic or 
        technical data as an offset for legislation that 
        increases the deficit, and ensures these savings are 
        devoted to deficit reduction; and
            (5) Congress and the Administration must ensure 
        that the deficit levels contained in this budget are 
        met and, if actual deficits prove to be lower than 
        projected, the additional savings are used to balance 
        the budget on or before the year 2002.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the provisions of this resolution assume that--
            (1) legislation enacted pursuant to this resolution 
        must ensure that the goal of a balanced budget is 
        achieved on or before fiscal year 2002; and
            (2) if the actual deficit is lower than the 
        projected deficit in any upcoming fiscal year, the 
        added savings should be devoted to further deficit 
        reduction.

SEC. 316. SENSE OF THE SENATE ON FAIRNESS IN MEDICARE.

    (a) Findings.--The Congress finds that--
            (1) the Trustees of the Medicare Trust Funds 
        recently announced that medicare's Hospital Insurance 
        (HI) Trust Fund is headed for bankruptcy in 2001, and 
        in 1997, HI will run a deficit of $26,000,000,000 and 
        add $56,000,000,000 annually to the Federal deficit by 
        2001;
            (2) the Trustees also project that Supplementary 
        Medical Insurance (SMI), will grow twice as fast as the 
        economy and the taxpayers' subsidy to keep the SMI from 
        bankruptcy will grow from $58,000,000,000 to 
        $89,000,000,000 annually from 1997 through 2001;
            (3) the Congressional Budget Office reports that 
        when the baby-boom generation begins to receive social 
        security benefits and is eligible for medicare in 2008, 
        the Federal budget will face intense pressure, 
        resulting in mounting deficits and erosion of future 
        economic growth;
            (4) long-term solutions to address the financial 
        and demographic problems of medicare are urgently 
        needed to preserve and protect the medicare trust 
        funds;
            (5) these solutions to address the financial and 
        demographic problems of medicare are urgently needed to 
        preserve and protect the medicare trust funds;
            (6) reform of the medicare program should ensure 
        equity and fairness for all medicare beneficiaries, and 
        offer beneficiaries more choice of private health 
        plans, to promote efficiency and enhance the quality of 
        health care;
            (7) all Americans pay the same payroll tax of 2.9 
        percent to the medicare trust funds, and they deserve 
        the same choices and services regardless of where they 
        retire;
            (8) however, under the currently adjusted-average-
        per-capita cost (AAPCC), some counties receive 2.5 
        times more in medicare reimbursements than others;
            (9) this inequity in medicare reimbursement 
        jeopardizes the quality of medicare services of rural 
        beneficiaries and penalizes the most efficient and 
        effective medicare service providers;
            (10) in some states, the result has been the 
        absence of health care choices beyond traditional, fee-
        for-service medicine for medicare beneficiaries, which 
        in other counties and states plan providers may be 
        significantly over-compensated, adding to medicare's 
        fiscal instability; and
            (11) ending the practice of basing payments to risk 
        contract plans on local fee-for-service medical costs 
        will help correct these inequities, mitigate 
        unnecessary cost in the program, and begin the serious, 
        long-term restructuring of medicare.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the provisions of this resolution assume that the Finance 
Committee should strongly consider the following elements for 
medicare reform--
            (1) any medicare reform package should include 
        measures to address the inequity in medicare 
        reimbursement to risk contract plans;
            (2) medicare should use a national update framework 
        rather than local fee-for-service spending increases to 
        determine the annual changes in risk plan payment 
        rates;
            (3) an adequate minimum payment rate should be 
        provided for health plans participating in medicare 
        risk contract programs;
            (4) the geographic variation in medicare payment 
        rates must be reduced over time to raise the lower 
        payment areas closer to the average while taking into 
        account actual differences in input costs that exist 
        from region to regional;
            (5) medicare managers in consultation with plan 
        providers and patient advocates should pursue 
        competitive bidding programs in communities where data 
        indicate risk contract payments are substantially 
        excessive and when plan choices would not diminish by 
        such a bidding process; and
            (6) medicare should phase in the use of risk 
        adjusters which take account of health status so as to 
        address overpayment to some plans.

SEC. 317. SENSE OF THE SENATE REGARDING ASSISTANCE TO LITHUANIA AND 
                    LATVIA.

    (a) Findings.--The Senate finds that--
            (1) Lithuania and Latvia reestablished democracy 
        and free market economies when they regained their 
        freedom from the Soviet Union;
            (2) Lithuania and Latvia, which have made 
        significant progress since regaining their freedom, are 
        still struggling to recover from the devastation of 50 
        years of communist domination;
            (3) the United States, which never recognized the 
        illegal incorporation of Lithuania and Latvia into the 
        Soviet Union, has provided assistance to strengthen 
        democratic institutions and free market reforms in 
        Lithuania and Latvia since 1991;
            (4) the people of the United States enjoy close and 
        friendly relations with the people of Lithuania and 
        Latvia;
            (5) the success of democracy and free market reform 
        in Lithuania and Latvia is important to the security 
        and economic progress of the United States; and
            (6) the United States as well as Lithuania and 
        Latvia would benefit from the continuation of 
        assistance which helps Lithuania and Latvia to 
        implement commercial and trade law reform, sustain 
        private sector development, and establish well-trained 
        judiciaries.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the provisions of this resolution assume that--
            (1) adequate assistance should be provided to 
        Lithuania and Latvia in fiscal year 1998 to continue 
        the progress they have made; and
            (2) assistance to Lithuania and Latvia should be 
        continued beyond fiscal year 1998 as they continue to 
        build democratic and free market institutions.

SEC. 318. SENSE OF THE SENATE REGARDING A NATIONAL COMMISSION ON HIGHER 
                    EDUCATION.

    It is the sense of the Senate that the provisions of this 
resolution assure that a national commission should be 
established to study and make specific recommendations 
regarding the extent to which increases in student financial 
aid, and the extent to which Federal,State, and local laws and 
regulations, contribute to increases in college and university tuition.

SEC. 319. SENSE OF THE SENATE ON LOCKBOX.

    It is the Sense of the Senate that the provisions of this 
resolution assume that to ensure all savings from medicare 
reform are used to keep the medicare program solvent, the 
Treasury Secretary should credit the Medicare Hospital 
Insurance Trust Fund (Part A) with government securities equal 
to any savings from Medicare Supplemental Medical Insurance 
(Part B) reforms enacted pursuant to the reconciliation 
instructions contained in this budget resolution.

SEC. 320. SENSE OF THE SENATE ON THE EARNED INCOME CREDIT.

    (a) Findings.--The Senate finds that--
            (1) an April 1997 study by the Internal Revenue 
        Service of Earned Income Credit (EIC) filers for tax 
        year 1994 revealed that over $4,000,000,000 of the 
        $17,000,000,000 spent on the EIC for that year was 
        erroneously claimed and paid by the IRS, resulting in a 
        fraud and error rate of 25.8 percent;
            (2) the IRS study further concluded that EIC 
        reforms enacted by the One Hundred Fourth Congress will 
        only lower the fraud error rate to 20.7 percent, 
        meaning over $23,000,000,000 will be wasted over the 
        next five years; and
            (3) the President's recent proposals to combat EIC 
        fraud and error contained within this budget resolution 
        are estimated to save $124,000,000 in scoreable savings 
        over the next five years and additional savings from 
        deterrent effects.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the provisions of this resolution assume that the 
President should propose and Congress should enact additional 
programmatic changes sufficient to ensure that the primary 
purpose of the EIC to encourage work over welfare is achieved 
without wasting billions of taxpayer dollars on fraud and 
error.

SEC. 321. SENSE OF THE SENATE SUPPORTING LONG-TERM ENTITLEMENT REFORMS.

    (a) Findings.--The Senate finds that this resolution 
assumes that--
            (1) entitlement spending has risen dramatically 
        over the last thirty-five years;
            (2) in 1963, mandatory spending (i.e., entitlement 
        spending and interest on the debt) made up 29.6 percent 
        of the budget, this figure rose to 61.4 percent by 1993 
        and is expected to reach 70 percent shortly after the 
        year 2000;
            (3) this mandatory spending is crowding out 
        spending for the traditional ``discretionary'' 
        functions of Government like clean air and water, a 
        strong national defense, parks and recreation, 
        education, our transportation system, law enforcement, 
        research and development and other infrastructure 
        spending; and
            (4) taking significant steps sooner rather than 
        later to reform entitlement spending will not only 
        boost economic growth in this country, it will also 
        prevent the need for drastic tax and spending decisions 
        in the next century.
    (b) Sense of the Senate.--It is the Sense of the Senate 
that the levels in this budget resolution assume that Congress 
and thePresident should work to enact structural reforms in 
entitlement spending in 1997 and beyond which sufficiently restrain the 
growth of mandatory spending in order to keep the budget in balance 
over the long term, extend the solvency of the Social Security and 
Medicare Trust Funds, avoid crowding out funding for basic Government 
functions and that every effort should be made to hold mandatory 
spending to no more than 70 percent of the budget.

SEC. 322. SENSE OF THE SENATE ON DISASTER ASSISTANCE FUNDING.

    (a) Findings.--The Senate finds that--
            (1) emergency spending adds to the deficit and 
        total spending;
            (2) the Budget Enforcement Act of 1990 exempts 
        emergency spending from the discretionary spending caps 
        and pay-go requirements;
            (3) the Budget Enforcement Act of 1990 expires in 
        1998 and needs to be extended;
            (4) since the enactment of the Budget Enforcement 
        Act, Congress and the President have approved an 
        average of $5,800,000,000 per year in emergency 
        spending; and
            (5) a natural disaster in any particular State is 
        unpredictable, by the United States is likely to 
        experience a natural disaster almost every year.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the functional totals underlying this concurrent 
resolution on the budget assume that the Congress should 
consider in the extension of the Budget Enforcement Act and in 
appropriations Acts--
            (1) provisions that budget for emergencies or that 
        require emergency spending to be offset;
            (2) provisions that provide flexibility to meet 
        emergency funding requirements associated with natural 
        disasters;
            (3) Congress and the President should consider 
        appropriating at least $5,000,000,000 every year to 
        provide for natural disaster relief; and
            (4) Congress and the President should not designate 
        any emergency spending for natural disaster relief 
        until such amounts provided in regular appropriations 
        are exhausted.

SEC. 323. SENSE OF THE SENATE ON ENFORCEMENT OF BIPARTISAN BUDGET 
                    AGREEMENT.

    (a) Findings.--The Senate finds that--
            (1) the bipartisan budget agreement is contingent 
        upon--
                    (A) favorable economic conditions for the 
                next 5 years;
                    (B) accurate estimates of the fiscal 
                impacts of assumptions in this resolution; and
                    (C) enactment of legislation to reduce the 
                deficit; and
            (2) if any of the conditions in paragraph (1) are 
        not met, our ability to achieve a balanced budget by 
        2002 will be jeopardized.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the functional totals and limits in this resolution assume 
that--
            (1) reconciliation legislation should include 
        legislation to enforce the targets set forth in the 
        bipartisan budget agreement and to ensure the balanced 
        budget goal is met; and
            (2) such legislation shall--
                    (A) establish procedures to ensure the 
                agreement is enforced in every year;
                    (B) require that the President's annual 
                budget and annual Congressional concurrent 
                resolutions on the budget comply the agreement 
                in every year;
                    (C) consider provisions which provide that 
                if the deficit is below or the surplus is above 
                the deficits projected in the agreement in any 
                year, such savings are locked in for deficit 
                and debt reduction; and
                    (D) consider provisions which budget for 
                and control emergency spending in order to 
                prevent the use of emergencies to evade the 
                budget agreement.

SEC. 324. SENSE OF THE SENATE REGARDING THE NATIONAL INSTITUTES OF 
                    HEALTH.

    (a) Findings.--Congress finds that--
            (1) heart disease was the leading cause of death 
        for both men and women in every year from 1970 to 1993;
            (2) mortality rates for individuals suffering from 
        prostate cancer, skin cancer, and kidney cancer 
        continue to rise;
            (3) the mortality rate for African American women 
        suffering from diabetes is 134 percent higher than the 
        mortality rate of Caucasian women suffering from 
        diabetes;
            (4) asthma rates for children increased 58 percent 
        from 1982 to 1992;
            (5) nearly half of all American women between the 
        ages of 65 and 75 reported having arthritis;
            (6) AIDS is the leading cause of death for 
        Americans between the ages of 24 and 44;
            (7) the Institute of Medicine has described United 
        States clinical research to be ``in a state of crisis'' 
        and the National Academy of Sciences concluded in 1994 
        that ``the present cohort of clinical investigators is 
        not adequate'';
            (8) biomedical research has been shown to be 
        effective in saving lives and reducing health care 
        expenditures;
            (9) research sponsored by the National Institutes 
        of Health has contributed significantly to the first 
        overall reduction in cancer death rates since record 
        keeping was instituted;
            (10) research sponsored by the National Institutes 
        of Health has resulted in the identification of genetic 
        mutations for osteoporosis; Lou Gehrig's Disease, 
        cystic fibrosis, and Huntington's Disease; breast, skin 
        and prostate cancer; and a variety of other illnesses;
            (11) research sponsored by the National Institutes 
        of Health has been key to the development of Magnetic 
        Resonance Imaging (MRI) and Positron Emission 
        Tomography (PET) scanning technologies;
            (12) research sponsored by the National Institutes 
        of Health has developed effective treatments for Acute 
        Lymphoblastic Leukemia (ALL). Today, 80 percent of 
        children diagnosed with Acute Lymphoblastic Leukemia 
        are alive and free of the disease after 5 years; and
            (13) research sponsored by the National Institutes 
        of Health contributed to the development of a new, 
        cost-saving cure for peptic ulcers.
    (b) Sense of the Senate.--It is the sense of the Senate 
that this Resolution assumes that--
            (1) appropriations for the National Institutes of 
        Health should be increased by 100 percent over the next 
        5 fiscal years; and
            (2) appropriations for the National Institutes of 
        Health should be increased by $2,000,000,000 in fiscal 
        year 1998 over the amount appropriated in fiscal year 
        1997.

SEC. 325. SENSE OF THE SENATE REGARDING CERTAIN ELDERLY LEGAL ALIENS.

    It is the sense of the Senate that the provisions of this 
resolution assume that--
            (1) the Committee on Finance will include in its 
        recommendations to the Committee on the Budget of the 
        Senate changes in laws within the jurisdiction of the 
        Committee on Finance that allow certain elderly, legal 
        immigrants who will cease to receive benefits under the 
        supplemental security income program as a result of the 
        Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 (Public Law 104-193; 110 
        Stat. 2105) to continue to receive benefits during a 
        redetermination or reapplication period to determine if 
        such aliens would qualify for such benefits on the 
        basis of being disabled; and
            (2) the Committee on Finance in developing these 
        recommendations should offset the additional cost of 
        this proposal out of other programs within the 
        jurisdiction of the Committee on Finance.

SEC. 326. SENSE OF THE SENATE REGARDING RETROACTIVE TAXES.

    (a) Findings.--The Senate finds that--
            (1) in general, the practice of increasing a tax 
        retroactively is fundamentally unfair to taxpayers; and
            (2) retroactive taxation is disruptive to families 
        and small business in their ability to plan and budget.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the levels in this budget resolution assume that--
            (1) except for closing tax loopholes, no revenues 
        should be generated from any retroactively increased 
        tax; and
            (2) the Congress and the President should work 
        together to ensure that any revenue generating proposal 
        contained within reconciliation legislation pursuant to 
        this concurrent resolution proposal, except those 
        proposals closing tax loopholes, should take effect 
        prospectively.

SEC. 327. SENSE OF THE SENATE ON SOCIAL SECURITY AND BALANCING THE 
                    BUDGET.

    (a) Findings.--The Senate finds that--
            (1) this budget resolution is projected to balance 
        the unified budget of the United States in fiscal year 
        2002;
            (2) section 13301 of the Budget Enforcement Act of 
        1990 requires that the deficit be computed without 
        counting the annual surpluses of the Social Security 
        Trust Funds; and
            (3) if the deficit were calculated according to the 
        requirements of section 13301, this budget resolution 
        would be projectedto result in a deficit of 
$108,700,000,000 in fiscal year 2002.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the assumptions underlying this budget resolution assume 
that after balancing the unified Federal budget, the Congress 
should continue efforts to reduce the on-budget deficit, so 
that the Federal budget will be balanced without counting 
social security surpluses.

SEC. 328. SENSE OF THE SENATE SUPPORTING SUFFICIENT FUNDING FOR 
                    VETERANS PROGRAMS AND BENEFITS.

    (a) Findings.--The Senate finds that--
            (1) veterans and their families represent 
        approximately 27 percent of the United States 
        population;
            (2) more than 20 million of our 26 million living 
        veterans served during wartime, sacrificing their 
        freedom so that we may have ours; and
            (3) veterans have earned the benefits promised to 
        them.
    (b) Sense of the Senate.--It is the sense of the Senate 
that--
            (1) the assumptions underlying this Budget 
        Resolution assume that the 602(b) allocation to the 
        Department of Veterans Affairs will be sufficient in 
        fiscal year 1998 to fully fund all discretionary 
        veterans programs, including medical care; and
            (2) funds collected from legislation to improve the 
        Department of Veterans Affairs' ability to collect and 
        retain reimbursement from third-party payers ought to 
        be used to supplement, not supplant, an adequate 
        appropriation for medical care.

SEC. 329. SENSE OF THE SENATE ON FAMILY VIOLENCE OPTION CLARIFYING 
                    AMENDMENT.

    (a) Findings.--The Senate finds the following:
            (1) Domestic violence is the leading cause of 
        physical injury to women. The Department of Justice 
        estimates that over 1,000,000 violent crimes against 
        women are committed by intimate partners annually.
            (2) Domestic violence dramatically affects the 
        victim's ability to participate in the workforce. A 
        University of Minnesota survey reported that \1/4\ of 
        battered women surveyed had lost a job partly because 
        of being abused and that over \1/2\ of these women had 
        been harassed by their abuser at work.
            (3) Domestic violence is often intensified as women 
        seek to gain economic independence through attending 
        school or training programs. Batterers have been 
        reported to prevent women from attending these programs 
        or sabotage their efforts at self-improvement.
            (4) Nationwide surveys of service providers 
        prepared by the Taylor Institute of Chicago, Illinois, 
        document, for the first time, the interrelationship 
        between domestic violence and welfare by showing that 
        from 34 percent to 65 percent of AFDC recipients are 
        current or past victims of domestic violence.
            (5) Over \1/2\ of the women surveyed stayed with 
        their batterers because they lacked the resources to 
        support themselves and their children. The surveys also 
        found that the availability of economic support is a 
        critical factor in poor women's ability to leave 
        abusive situations that threaten them and their 
        children.
            (6) The restructuring of the welfare programs may 
        impact the availability of the economic support and the 
        safety net necessary to enable poor women to flee abuse 
        without risking homelessness and starvation for their 
        families.
            (7) In recognition of this finding, the Committee 
        on the Budget of the Senate in considering the 1997 
        Resolution on the Budget of the United States 
        unanimously adopted a sense of the Congress amendment 
        concerning domestic violence and Federal assistance. 
        Subsequently, Congress adopted the family violence 
        option amendment as part of the Personal Responsibility 
        and Work Opportunity Reconciliation Act of 1996.
            (8) The family violence option gives States the 
        flexibility to grant temporary waivers from time limits 
        and work requirements for domestic violence victims who 
        would suffer extreme hardship from the application of 
        these provisions. These waivers were not intended to be 
        included as part of the permanent 20 percent hardship 
        exemption.
            (9) The Department of Health and Human Services has 
        been slow to issue regulations regarding this 
        provision. As a result, States are hesitant to fully 
        implement the family violence option fearing that it 
        will interfere with the 20 percent hardship exemption.
            (10) Currently 15 States have opted to include the 
        family violence option in their welfare plans, and 13 
        other States have included some type of domestic 
        violence provisions in their plans.
    (b) Sense of Senate.--It is the sense of the Senate that 
the provisions of this resolution assume that--
            (1) States should not be subject to any numerical 
        limits in granting domestic violence good cause waivers 
        under section 402(a)(7)(A)(iii) of the Social Security 
        Act (42 U.S.C. 602(a)(7)(A)(iii)) to individuals 
        receiving assistance, for all requirements where 
        compliance with such requirements would make it more 
        difficult for individuals receiving assistance to 
        escape domestic violence; and
            (2) any individual who is granted a domestic 
        violence good cause waiver by a State shall not be 
        included in the States' 20 percent hardship exemption 
        under section 408(a)(7) of the Social Security Act (42 
        U.S.C. 608(a)(7)).

SEC. 330. SENSE OF THE SENATE REGARDING ASSISTANCE TO AMTRAK.

    (a) Findings.--The Senate finds that--
            (1) Amtrak is in a financial crisis, with growing 
        and substantial debt obligations approaching 
        $2,000,000,000;
            (2) Amtrak has not been authorized since 1994;
            (3) the Senate Committee on Commerce, Science, and 
        Transportation favorably reported legislation to reform 
        Amtrak during the last two Congresses, but no 
        legislation was enacted;
            (4) the Finance Committee favorably reported 
        legislation in the last Congress that created a 
        dedicated trust fund for Amtrak, but no legislation was 
        enacted;
            (5) in 1997 Amtrak testified before the Congress 
        that it cannot survive beyond 1998 without 
        comprehensive legislative reforms and a dedicated 
        source of capital funding; and
            (6) Congress is obligated to invest Federal tax 
        dollars responsibly and to reduce waste and 
        inefficiency in Federal programs, including Amtrak.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the provisions of this resolution assume that--
            (1) legislative reform is urgently needed to 
        address Amtrak's financial and operational problems;
            (2) Congress should allocate additional Federal 
        dollars to Amtrak in conjunction with reforms requested 
        by Amtrak to address its precarious financial 
        situation; and
            (3) the distribution of money from any new fund to 
        finance an intercity rail passenger fund should be 
        implemented in conjunction with legislation to 
        reauthorize and reform the National Rail Passenger 
        Corporation.

SEC. 331. SENSE OF THE SENATE REGARDING THE PROTECTION OF CHILDREN'S 
                    HEALTH.

    (a) Findings.--The Senate makes the following findings:
            (1) Today's children and the next generation of 
        children are the prime beneficiaries of a balanced 
        Federal budget. Without a balanced budget, today's 
        children will bear the increasing burden of the Federal 
        debt. Continued deficit spending would doom future 
        generations to slower economic growth, higher taxes, 
        and lower living standards.
            (2) The health of children is essential to the 
        future economic and social well-being of the Nation.
            (3) The medicaid program provides health coverage 
        for over 17,000,000 children, or 1 out of every 4 
        children.
            (4) While children represent \1/2\ of all 
        individuals eligible for medicaid, children account for 
        less than 25 percent of expenditures under the medicaid 
        program.
            (5) Disproportionate share hospital (DSH) funding 
        under the medicaid program has allowed States to 
        provide health care services to thousands of uninsured 
        pregnant women and children. DSH funding under the 
        medicaid program is critical for these populations.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the provisions of this resolution assume that the health 
care needs of low-income pregnant women and children should be 
a top priority. Careful study must be made of the impact of 
medicaid disproportionate share hospital (DSH) reform proposals 
on children's health and on vital sources of care, including 
children's hospitals. Any restrictions on DSH funding under the 
medicaid program should not harm State medicaid coverage of 
children and pregnant women.

SEC. 332. SENSE OF THE SENATE ON DEPOSITING ALL FEDERAL GASOLINE TAXES 
                    INTO THE HIGHWAY TRUST FUND.

    (a) Findings.--The Senate makes the following findings:
            (1) Since 1956, Federal gasoline excise tax 
        revenues have generally been deposited in the Highway 
        Trust Fund and reserved for transportation uses.
            (2) In 1993, Congress and the President enacted the 
        first permanent increase in the Federal gasoline excise 
        tax which was dedicated to general revenues, not the 
        Highway Trust Fund.
            (3) Over the next five years, approximately 
        $7,000,000,000 per year in Federal gasoline excise tax 
        revenues will be deposited in the general fund of the 
        Treasury, rather than the Highway Trust Fund.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the provisions in this resolution assume that Congress 
should in the extension of the Budget Enforcement Act, ISTEA 
reauthorization, appropriations Acts, and in any revenue bills, 
consider dedicating all revenues from Federal gasoline excise 
taxes, including amounts dedicated to general revenues in 1993, 
to the Highway Trust Fund so that such taxes may be used for 
the purpose to which they have historically been dedicated, 
promoting transportation infrastructure and building roads.

SEC. 333. SENSE OF THE SENATE ON EARLY CHILDHOOD EDUCATION.

    (a) Findings.--The Senate finds the following:
            (1) Scientific research on the development of the 
        brain has confirmed that the early childhood years, 
        particularly from birth to the age of 3, are critical 
        to children's development.
            (2) Studies repeatedly have shown that good quality 
        child care helps children develop well, enter school 
        ready to succeed, improve their skills, cognitive 
        abilities and socioemotional development, improve 
        classroom learning behavior, and stay safe while their 
        parents work. Further, quality early childhood programs 
        can positively affect children's long-term success in 
        school achievement, higher earnings as adults, decrease 
        reliance on public assistance and decrease involvement 
        with the criminal justice system.
            (3) The first of the National Education Goals, 
        endorsed by the Nation's governors, passed by Congress 
        and signed into law by President Bush, stated that by 
        the year 2000, every child should enter school ready to 
        learn and that access to a high quality early childhood 
        education program was integral to meeting this goal.
            (4) According to data compiled by the RAND 
        Corporation, while 90 percent of human brain growth 
        occurs by the age of 3, public spending on children in 
        that age range equals only 8 percent of spending on all 
        children. A vast majority of public spending on 
        children occurs after the brain has gone through its 
        most dramatic changes, often to correct problems that 
        should have been addressed during early childhood 
        development.
            (5) According to the Department of Education, of 
        $29,400,000,000 in current estimated education 
        expenditures, only $1,500,000,000, or 5 percent, is 
        spent on children from birth to age 5. The vast 
        majority is spent on children over age 5.
            (6) A new commitment to quality child care and 
        early childhood education is a necessary response to 
        the fact that children from birth to the age of 3 are 
        spending more time in care away from their homes. 
        Almost 60 percent of women in the workforce have 
        children under the age of 3 requiring care.
            (7) Many States and communities are currently 
        experimenting with innovative programs directed at 
        early childhood care and education in a variety of care 
        settings, including the home. States and local 
        communities are best able to deliver efficient,cost-
effective services, but while such programs are long on demand, they 
are short on resources. Additional Federal resources should not create 
new bureaucracy, but build on successful locally driven efforts.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the budget totals and levels in this resolution assume 
that funds ought to be directed toward increasing the supply of 
quality child care, early childhood education, and teacher and 
parent training for children from birth through age 3.

SEC. 334. SENSE OF THE SENATE CONCERNING HIGHWAY TRUST FUND.

    (a) Findings.--The Senate finds that--
            (1) there is no direct linkage between the fuel 
        taxes deposited in the Highway Trust Fund and the 
        transportation spending from the Highway Trust Fund;
            (2) the Federal budget process has severed this 
        linkage by dividing revenues and spending into separate 
        budget categories with--
                    (A) fuel taxes deposited in the Highway 
                Trust Fund as revenues; and
                    (B) most spending from the Highway Trust 
                Fund in the discretionary category;
            (3) each budget category referred to in paragraph 
        (2) has its own rules and procedures; and
            (4) under budget rules in effect prior to the date 
        of adoption of this resolution, an increase in fuel 
        taxes permits increased spending to be included in the 
        budget, but not for increased Highway Trust Fund 
        spending.
    (b) Sense of the Senate.--It is the sense of the Senate 
that--
            (1) in this session of Congress, Congress should, 
        within a unified budget, consider changing the Federal 
        budget process to establish a linkage between the fuel 
        taxes deposited in the Highway Trust Fund, including 
        any fuel tax increases that may be enacted into law 
        after the date of adoption of this resolution, and the 
        spending from the Highway Trust Fund; and
            (2) changes to the budgetary treatment of the 
        Highway Trust Fund should not result in total program 
        levels for highways or mass transit that is 
        inconsistent with those assumed under the resolution.

SEC. 335. SENSE OF THE SENATE CONCERNING TAX INCENTIVES FOR THE COST OF 
                    POST-SECONDARY EDUCATION.

    It is the sense of the Senate that the provisions of this 
resolution assume that any revenue reconciliation bill should 
include tax incentives for the cost of post-secondary 
education, including expenses of workforce education and 
training at vocational schools and community colleges.

SEC. 336. SENSE OF THE SENATE ON ADDITIONAL TAX CUTS.

    It is the sense of the Senate that nothing in this 
resolution shall be construed as prohibiting Congress in future 
years from providing additional tax relief if the cost of such 
tax relief is offset by reductions in spending or increases in 
revenue from alternative sources.

SEC. 337. SENSE OF THE SENATE REGARDING TRUTH IN BUDGETING AND SPECTRUM 
                    AUCTIONS.

    (a) Findings.--The Senate finds that--
            (1) the electromagnetic spectrum is the property of 
        the American people and is managed on their behalf by 
        the Federal Government;
            (2) the spectrum is a highly valuable and limited 
        natural resource;
            (3) the auctioning of spectrum has raised billions 
        of dollars for the Treasury;
            (4) the estimates made regarding the value of 
        spectrum in the past have proven unreliable, having 
        previously understated and now overstating its worth; 
        and
            (5) because estimates of spectrum value depend on a 
        number of technological, economic, market forces, and 
        other variables that cannot be predicted or completely 
        controlled, it is not possible to reliably estimate the 
        value of a given segment of spectrum; therefore,
    (b) Sense of the Senate.--It is the sense of the Senate 
that as auctions occur as assumed by this resolution, the 
Congress shall take such steps as necessary to reconcile the 
difference between actual revenues raised and estimates made 
and shall reduce spending and make other appropriate 
adjustments accordingly if such auctions raise less revenue 
than projected.

SEC. 338. SENSE OF THE SENATE ON HIGHWAY DEMONSTRATION PROJECTS.

    (a) Findings.--The Senate finds that--
            (1) 10 demonstration projects totaling $362,000,000 
        were listed for special line-item funding in the 
        Surface Transportation Assistance Act of 1982;
            (2) 152 demonstration projects totaling 
        $1,400,000,000 were named in the Surface Transportation 
        and Uniform Relocation Assistance Act of 1987;
            (3) 64 percent of the funding for the 152 projects 
        had not been obligated after 5 years and State 
        transportation officials determined the projects added 
        little, if any, to meeting their transportation 
        infrastructure priorities;
            (4) 538 location specific projects totaling 
        $6,230,000,000 were included in the Intermodal Surface 
        Transportation Efficiency Act of 1991;
            (5) more than $3,300,000,000 of the funds 
        authorized for the 538 location-specific projects 
        remained unobligated as of January 31, 1997;
            (6) the General Accounting Office determined that 
        31 States plus the District of Columbia and Puerto Rico 
        would have received more funding if the Intermodal 
        Surface Transportation Efficiency Act location-specific 
        project funds were redistributed as Federal-aid highway 
        program apportionments;
            (7) this type of project funding diverts Highway 
        Trust Fund money away from State transportation 
        priorities established under the formula allocation 
        process and under the Intermodal Surface Transportation 
        and Efficiency Act of 1991;
            (8) on June 20, 1995, by a vote of 75 yeas to 21 
        nays, the Senate voted to prohibit the use of Federal 
        Highway Trust Fund money for future demonstration 
        projects;
            (9) the Intermodal Surface Transportation and 
        Efficiency Act of 1991 expires at the end of fiscal 
        year 1997; and
            (10) hundreds of funding requests for specific 
        transportation projects in Congressional Districts have 
        been submitted in the House of Representatives.
    (b) Sense of the Senate.--It is the sense of the Senate 
that--
            (1) notwithstanding different views on existing 
        Highway Trust Fund distribution formulas, funding for 
        demonstration projects or other similarly titled 
        projects diverts Highway Trust Fund money away from 
        State priorities and deprives States of the ability to 
        adequately address their transportation needs;
            (2) States are best able to determine the 
        priorities for allocating Federal-Aid-To-Highway monies 
        within their jurisdiction;
            (3) Congress should not divert limited Highway 
        Trust Fund resources away from State transportation 
        priorities by authorizing new highway projects; and
            (4) Congress should not authorize any new 
        demonstration projects or other similarly-titled 
        projects.

SEC. 339. SENSE OF THE SENATE REGARDING THE USE OF BUDGET SAVINGS.

    (a) Findings.--The Senate makes the following findings:
            (1) Poverty rates among the elderly are at the 
        lowest level since our Nation began to keep poverty 
        statistics, due in large part to the social security 
        system and the medicare program.
            (2) Twenty-two percent of every dollar spent by the 
        Federal Government goes to the social security system.
            (3) Eleven percent of every dollar spent by the 
        Federal Government goes to the medicare program.
            (4) Currently, spending on the elderly accounts for 
        \1/3\ of the Federal budget and more than \1/2\ of all 
        domestic spending other than interest on the national 
        debt.
            (5) Future generations of Americans must be 
        guaranteed the same value from the social security 
        system as past covered recipients.
            (6) According to the 1997 report of the Managing 
        Trustee for the social security trust funds, the 
        accumulated balance in the Federal Old-Age and 
        Survivors Insurance Trust Fund is estimated to fall to 
        zero by 2029, and the estimated payroll tax at that 
        time will be sufficient to cover only 75 percent of the 
        benefits owed to retirees at that time.
            (7) The accumulated balance in the Federal Hospital 
        Insurance Trust Fund is estimated to fall to zero by 
        2001.
            (8) While the Federal budget deficit has shrunk for 
        the fourth straight year to $67,000,000,000 in 1997, 
        measures need to be taken to ensure that trend 
        continues.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the provisions of this resolution assume that budget 
savings in the mandatory spending area should be used--
            (1) to protect and enhance the retirement security 
        of the American people by ensuring the long-term future 
        of the social security system;
            (2) to protect and enhance the health care security 
        of senior citizens by ensuring the long-term future of 
        the medicare program under title XVIII of the Social 
        Security Act (42 U.S.C. 1395 et seq.); and
            (3) to restore and maintain Federal budget 
        discipline to ensure that the level of private 
        investment necessary for long-term economic growth and 
        prosperity is available.

SEC. 340. SENSE OF THE SENATE REGARDING THE VALUE OF THE SOCIAL 
                    SECURITY SYSTEM FOR FUTURE RETIREES.

    (a) Findings.--The Senate makes the following findings:
            (1) The social security system has allowed a 
        generation of Americans to retire with dignity. Today, 
        13 percent of the population is 65 or older and by 
        2030, 20 percent of the population will be 65 or older. 
        More than \1/2\ of the elderly do not receive private 
        pensions and more than \1/3\ have no income from 
        assets.
            (2) For 60 percent of all senior citizens, social 
        security benefits provide almost 80 percent of their 
        retirement income. For 80 percent of all senior 
        citizens, social security benefits provide over 50 
        percent of their retirement income.
            (3) Poverty rates among the elderly are at the 
        lowest level since the United States began to keep 
        poverty statistics, due in large part to the social 
        security system.
            (4) Seventy-eight percent of Americans pay more in 
        payroll taxes than they do in income taxes.
            (5) According to the 1997 report of the Managing 
        Trustee for the social security trust funds, the 
        accumulated balance in the Federal Old-Age and 
        Survivors Insurance Trust Fund is estimated to fall to 
        zero by 2029, and the estimated payroll tax at that 
        time will be sufficient to cover only 75 percent of the 
        benefits owed to retirees at that time.
            (6) The average American retiring in the year 2015 
        will pay $250,000 in payroll taxes over the course of 
        his or her working career.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the provisions of this resolution assume that no change in 
the social security system should be made that would reduce the 
value of the social security system for future generations of 
retirees.

SEC. 341. SENSE OF THE SENATE ON ECONOMIC GROWTH DIVIDEND PROTECTION.

    (a) Findings.--The Senate finds that with respect to the 
revenue levels established under this resolution--
            (1) according to the President's own economists, 
        the tax burden on Americans is the highest ever at 31.7 
        percent;
            (2) according to the National Taxpayers Union, the 
        average American family now pays almost 40 percent of 
        their income in State, local, and Federal taxes;
            (3) between 1978 and 1985, while the top marginal 
        rate on capital gains was cut almost in half--from 35 
        to 20 percent--total annual Federal receipts from the 
        tax almost tripled from $9,100,000,000 annually to 
        $26,500,000,000 annually;
            (4) conversely, when Congress raised the rate in 
        1986, revenues actually fell well below what was 
        anticipated;
            (5) economists across-the-board predict that 
        cutting the capital gains rate will result in a revenue 
        windfall for the Treasury; and
            (6) while a USA Today poll from this March found 70 
        percent of the American people believe that they need a 
        tax cut, under this resolution Federal spending will 
        grow 17 percent over five years while the net tax cuts 
        are less than 1 percent of the total tax burden.
    (b) Sense of Senate.--It is the sense of the Senate that 
with respect to the revenue levels established under this 
resolution, to the extent that actual revenues exceed the 
revenues projected under this resolution due to higher than 
anticipated economic growth, that revenue windfall should be 
reserved exclusively for additional tax cuts and/or deficit 
reduction.

SEC. 342. SENSE OF THE SENATE SUPPORTING FEDERAL, STATE, AND LOCAL LAW 
                    ENFORCEMENT OFFICERS.

    (a) Findings.--The Senate makes the following findings:
            (1) Our Federal, State, and local law enforcement 
        officers provide essential services that preserve and 
        protect our freedoms and security, and with the support 
        of Federal assistance, State and local law enforcement 
        officers have succeeded in reducing the national 
        scourge of violent crime, as illustrated by a murder 
        rate in 1996 that is projected to be the lowest since 
        1971 and a violent crime total in 1996 that is the 
        lowest since 1990.
            (2) Through a comprehensive effort to attack 
        violence against women mounted by State and local law 
        enforcement, and dedicated volunteers and professionals 
        who provide victim services, shelter, counseling, and 
        advocacy to battered women and their children, 
        important strides have been made against the national 
        scourge of violence against women, illustrated by the 
        decline in the murder rate for wives, ex-wives, and 
        girlfriends at the hands of their ``intimates'' fell to 
        a 19-year low in 1995.
            (3) Federal, State, and local law enforcement 
        efforts need continued financial commitment from the 
        Federal Government for funding and financial assistance 
        to continue their efforts to combat violent crime and 
        violence against women.
            (4) Federal, State and local law enforcement also 
        face other challenges which require continued financial 
        commitment from the Federal Government, including 
        regaining control over the Southwest Border, where drug 
        trafficking and illegal immigration continue to 
        threaten public safety and menace residents on the 
        border and throughout the Nation.
            (5) The Violent Crime Reduction Trust Fund 
        established in section 310001 the Violent Crime Control 
        and Law Enforcement Act of 1994 (42 U.S.C. 14211) fully 
        funds the Violent Crime Control and Law Enforcement Act 
        of 1994, including the Violence Against Women Act, 
        without adding to the Federal budget deficit.
    (b) Sense of the Senate.--It is the sense of the Senate 
that the provisions and the functional totals underlying this 
resolution assume that--
            (1) the Federal Government's commitment to fund 
        Federal law enforcement programs and programs to assist 
        State and local efforts to combat violent crime, 
        including violence against women, will be maintained; 
        and
            (2) funding for the Violent Crime Reduction program 
        will continue as authorized by the Violent Crime 
        Control and Law Enforcement Act of 1994.

SEC. 343. SENSE OF SENATE REGARDING PARENTAL INVOLVEMENT IN PREVENTION 
                    OF DRUG USE BY CHILDREN.

    It is the sense of the Senate that the provisions of this 
resolution assume that, from resources available in this budget 
resolution, a portion should be set aside for a national 
grassroots volunteer effort to encourage parental education and 
involvement in youth drug prevention and to create a drug-
intolerant culture for our children.

      And the Senate agree to the same.
                                   John R. Kasich,
                                   David L. Hobson,
                                   John M. Spratt, Jr.,
                                 Managers on the Part of the House.

                                   Pete V. Domenici,
                                   Chuck Grassley,
                                   Frank R. Lautenberg,
                                Managers on the Part of the Senate.
       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

      The managers on the part of the Senate and the House at 
the conference on the disagreeing votes of the two Houses on 
the amendment of the Senate to the concurrent resolution (House 
Concurrent Resolution 84), setting forth the congressional 
budget for the United States for fiscal years 1998, 1999, 2000, 
2001, and 2002, 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 recommend in the accompanying 
conference report:
      The Senate amendment struck out all of the House 
resolution after the resolving clause and inserted a substitute 
text.
      The House recedes from its disagreement to the amendment 
of the Senate with an amendment which is a substitute for the 
House resolution and the Senate amendment.

                Explanation of the Conference Agreement

            principal components of the conference agreement

      The conference report on the Concurrent Budget Resolution 
on the Budget for Fiscal Year 1998 represents the first major 
legislative step in implementing the Bipartisan Budget 
Agreement announced by President Clinton and the Bipartisan 
Congressional Leadership on the May 2 and finalized on May 15, 
1997. That agreement called on both Houses to pass a 1998 
budget resolution with reconciliation instructions fully 
reflecting the Bipartisan Budget Agreement. This conference 
agreement represents the good faith effort of the Congress to 
implement the Agreement.
      This conference report--built on the parameters of the 
Agreement and the economic projections of the Congressional 
Budget Office--when implemented through the directed statutory 
legislation called for in the conference report, will balance 
the federal budget by 2002, reduce federal spending, reduce the 
size of the federal government relative to the national 
economy, extend the solvency of the Medicare trust fund for at 
least a decade, reduce the burden of federal taxes on American 
families, and protect federal priority spending programs.
      This conference report projects a balanced unified 
federal budget in the year 2002, as compared to deficits 
exceeding $150 billion a year, if current spending and tax 
policies were left unchanged.
      This conference report will result in a reduction in the 
rate of growth of federal government spending from the current 
projected annual rate of 4.4 percent over the next five years, 
to 3.1 percent a year. In addition, the conference report when 
fully implemented, will reduce the scope of federal spending. 
Measured with respect to the size of a growing national economy 
resulting from a balanced federal budget, federal spending will 
decline from 20.8 percent of GDP in 1996 to 18.9 percent in 
2002, the lowest level since 1974.
      This conference report achieves a balanced federal budget 
while also reducing taxes on American families and businesses. 
The annual growth rate of federal taxes will decline and by the 
year 2002, federal tax receipts will balance spending at 18.9 
percent of GDP, down from 19.4 percent in 1996. The Agreement 
provides that a net tax cut of $85 billion over the next five 
years will be achieved; with not more than $250 billion in net 
tax cuts through 2007.
      This conference report also provides for an increased 
allocation of federal resources to the Appropriation Committees 
for some priority spending programs over the next five years. 
These include programs for: education, environment, 
transportation, crime fighting and international affairs. 
However, even with these increased resources, total federal 
spending for all appropriated nondefense programs will increase 
at less than a 0.5 percent annual average rate over the next 
five years. The conference report also implements the 
Agreement's child health insurance initiative, modifications to 
last year's welfare reform legislation, and other initiatives 
that could total $33.6 billion over the next five years.
      Finally, the conference report begins the process of 
enforcing the Agreement through the existing budget process 
rules--the reconciliation process, committee spending 
allocations, and existing pay-go procedures. Additional 
enforcement mechanisms will be included in substantive law to 
extend and revise the Budget Enforcement Act of 1990.

                          displays and amounts

      The contents of concurrent budget resolutions are set 
forth in section 301(a) of the Congressional Budget Act of 
1974.
House resolution
      The House budget resolution includes all of the items 
required as part of a concurrent budget resolution under 
section 301(a) of the Congressional Budget Act other than the 
spending and revenue levels for Social Security (which are used 
to enforce a point of order applicable only in the Senate).
Senate amendment
      The Senate amendment includes all of the items required 
under section 301(a) of the Congressional Budget Act. In 
addition, it includes the revenue and outlay levels for Social 
Security for the purpose of enforcing points of order in the 
Senate.

Conference agreement

      The House recedes to the Senate amendment.

                     aggregates and function levels

Conference agreement

                          1998 BUDGET RESOLUTION CONFERENCE AGREEMENT--FUNCTION TOTALS                          
                                              [Dollars in billions]                                             
----------------------------------------------------------------------------------------------------------------
                                                        1997      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
050: National Defense.............  BA                   264.9     268.2     270.8     274.8     281.3     289.1
                                    OT                   266.6     266.0     265.8     268.4     270.1     272.6
150: International Affairs........  BA                    15.3      15.9      14.9      15.8      16.1      16.4
                                    OT                    14.5      14.6      14.6      15.0      14.8      14.8
250: Science, Space and Technology  BA                    16.7      16.2      16.2      15.9      15.8      15.6
                                    OT                    17.0      16.9      16.5      16.0      15.9      15.7
270: Energy.......................  BA                     2.6       3.1       3.5       3.2       2.9       2.8
                                    OT                     1.9       2.2       2.4       2.3       2.0       1.9
300: Natural Resources and          BA                    22.2      23.9      23.2      22.6      22.2      22.1
 Environment.                                                                                                   
                                    OT                    22.4      22.4      22.7      23.0      22.7      22.3
350: Agriculture..................  BA                    11.8      13.1      12.8      12.2      11.0      10.7
                                    OT                     9.9      11.9      11.3      10.7       9.5       9.1
  370: Commerce and Housing                                                                                     
 Credit:                                                                                                        
    On-budget.....................  BA                     4.6       6.6      11.1      15.2      16.1      16.7
                                    OT                   -11.0      -0.9       4.3       9.8      12.1      12.5
    Off-budget....................  BA                     1.4       2.7      -1.0      -1.3      -0.5       0.2
                                    OT                     1.4       2.7      -1.0      -1.3      -0.5       0.2
    Total.........................  BA                     6.0       9.3      10.1      13.9      15.6      16.9
                                    OT                    -9.6       1.8       3.3       8.5      11.6      12.7
400: Transportation...............  BA                    43.9      46.4      46.6      47.1      48.1      49.2
                                    OT                    39.5      40.9      41.3      41.4      41.3      41.2
450: Community and Regional         BA                    10.2       8.8       8.5       7.8       7.8       7.8
 Development.                                                                                                   
                                    OT                    12.1      10.4      10.9      11.0      11.4       8.4
500: Education, Training,           BA                    54.2      60.0      60.5      61.7      63.0      63.3
 Employment and Social Services.                                                                                
                                    OT                    50.5      56.1      59.3      60.7      61.9      62.3
550: Health.......................  BA                   125.3     137.8     145.0     154.1     163.4     172.2
                                    OT                   127.4     137.8     144.9     153.9     163.1     171.7
570: Medicare.....................  BA                   190.8     201.6     212.1     225.5     239.6     251.5
                                    OT                   191.3     201.8     211.5     225.5     238.8     250.8
600: Income Security..............  BA                   228.8     239.0     254.1     269.6     275.1     286.9
                                    OT                   237.8     247.8     258.1     268.2     277.3     285.2
  650: Social Security:                                                                                         
    On-budget.....................  BA                    11.0      11.4      12.1      12.8      13.0      14.4
                                    OT                    11.0      11.5      12.2      12.9      13.0      14.4
    Off-budget....................  BA                   352.1     369.4     387.3     406.6     427.1     449.1
                                    OT                   355.4     372.6     390.6     409.9     430.9     452.4
    Total.........................  BA                   363.1     380.8     399.4     419.4     440.1     463.5
                                    OT                   366.4     384.1     402.8     422.8     443.9     466.8
700: Veterans Benefits............  BA                    39.1      40.5      41.5      41.7      42.1      42.3
                                    OT                    39.4      41.3      41.7      41.9      42.2      42.4
750: Administration of Justice....  BA                    23.5      24.8      25.1      24.2      24.4      24.9
                                    OT                    20.7      22.6      24.5      25.2      25.9      24.9
800: General Government...........  BA                    14.0      14.7      14.4      14.0      13.7      13.1
                                    OT                    13.9      14.0      14.4      14.7      14.1      13.1
  900: Net Interest:                                                                                            
    On-budget.....................  BA                   291.1     296.5     304.6     305.1     303.8     303.7
                                    OT                   291.1     296.5     304.6     305.1     303.8     303.7
    Off-budget....................  BA                   -43.5     -48.0     -52.5     -57.2     -61.9     -66.9
                                    OT                   -43.5     -48.0     -52.5     -57.2     -61.9     -66.9
    Total.........................  BA                   247.6     248.5     252.1     247.9     241.9     236.8
                                    OT                   247.6     248.5     252.1     247.9     241.9     236.8
920: Allowances...................  BA                ........  ........  ........  ........  ........  ........
                                    OT                ........  ........  ........  ........  ........  ........
  950: Undistributed Offsetting                                                                                 
 Receipts:                                                                                                      
    On-budget.....................  BA                   -41.0     -41.8     -36.9     -36.9     -39.2     -51.1
                                    OT                   -41.0     -41.8     -36.9     -36.9     -39.2     -51.1
    Off-budget....................  BA                    -6.5      -7.0      -7.5      -91.     -10.9     -13.0
                                    OT                    -6.5      -7.0      -7.5      -91.     -10.9     -13.0
    Total.........................  BA                   -47.5     -48.8     -44.4     -46.0     -501.     -64.1
                                    OT                   -47.5     -48.8     -44.4     -46.0     -501.     -64.1
  Total Spending:                                                                                               
    On-budget.....................  BA                 1,329.0   1,386.7   1,440.1   1,486.4   1,520.2   1,551.6
                                    OT                 1,315.0   1,372.0   1,424.1   1,468.8   1.500.7   1,515.9
    Off-budget....................  BA                   303.5     317.1     326.3     339.0     353.8     369.4
                                    OT                   306.8     320.3     329.6     342.3     357.6     372.7
    Total.........................  BA                 1,632.5   1,703.8   1,766.4   1,825.4   1,874.0   1,921.0
                                    OT                 1,621.8   1,692.3   1,753.7   1,811.1   1,858.3   1,888.6
  Revenues:                                                                                                     
    On-budget.....................  ................   1,166.9   1,199.0   1,241.9   1,285.6   1,343.6   1,407.6
    Off-budget....................  ................     388.0     402.8     422.3     442.6     461.6     482.8
                                                     -----------------------------------------------------------
    Total.........................  ................   1,554.9   1,601.8   1,664.2   1,728.2   1,805.2   1,890.4
                                                     ===========================================================
  Deficit:                                                                                                      
    On-budget.....................  ................    -148.1    -173.0    -182.2    -183.2    -157.1    -108.3
    Off-budget....................  ................      81.2      82.5      92.7     100.3     104.0     110.1
                                                     -----------------------------------------------------------
    Total.........................  ................     -66.9     -90.5     -89.5     -82.9     -53.1       1.8
----------------------------------------------------------------------------------------------------------------


                        1998 BUDGET RESOLUTION CONFERENCE AGREEMENT--DISCRETIONARY TOTALS                       
                                              [Dollars in billions]                                             
----------------------------------------------------------------------------------------------------------------
                                                        1997      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
050: National Defense.............  BA                   265.8     269.0     271.5     275.4     281.8     289.6
                                    OT                   267.5     266.8     266.5     269.0     270.7     273.1
150: International Affairs........  BA                    18.1      19.0      18.6      18.5      18.3      18.2
                                    OT                    19.2      19.2      18.8      18.8      18.5      18.4
250: Science, Space and Technology  BA                    16.6      16.2      16.2      15.9      15.8      15.6
                                    OT                    17.0      16.8      16.5      16.0      15.8      15.6
270: Energy.......................  BA                     4.3       4.8       4.9       4.6       4.4       4.2
                                    OT                     4.9       5.0       5.1       4.8       4.6       4.4
300: Natural Resources and          BA                    21.5      22.8      22.2      21.6      21.2      21.2
 Environment.                                                                                                   
                                    OT                    21.5      21.4      21.7      21.9      21.8      21.5
350: Agriculture..................  BA                     4.2       4.1       4.0       3.9       3.8       3.8
                                    OT                     4.2       4.1       4.1       3.9       3.9       3.8
370: Commerce and Housing Credit..  BA                     2.8       3.1       3.5       5.0       3.0       2.9
                                    OT                     2.8       3.1       3.4       4.6       3.2       2.7
400: Transportation...............  BA                    13.8      13.6      15.0      14.8      15.1      15.3
                                    OT                    36.9      38.3      38.9      39.3      39.4      39.4
450: Community and Regional         BA                     9.3       8.3       8.2       7.5       7.5       7.6
 Development.                                                                                                   
                                    OT                    11.7      10.0      10.9      11.0      11.3       8.4
500: Education, Training,           BA                    42.4      46.7      47.0      47.9      48.5      49.2
 Employment and Social Services.                                                                                
                                    OT                    40.3      43.2      46.1      47.1      47.8      48.6
550: Health.......................  BA                    25.0      24.9      24.7      24.6      24.4      24.2
                                    OT                    23.8      24.6      24.8      24.9      24.6      24.3
570: Medicare.....................  BA                     2.6       2.7       2.7       2.7       2.6       2.6
                                    OT                     2.7       2.7       2.6       2.7       2.7       2.6
600: Income Security..............  BA                    26.6      32.9      35.7      37.7      38.7      39.6
                                    OT                    40.9      41.3      41.6      41.3      41.2      40.8
650: Social Security..............  BA                     3.5       3.3       3.2       3.2       3.2       3.1
                                    OT                     3.4       3.4       3.3       3.3       3.2       3.1
700: Veterans Benefits............  BA                    18.9      18.5      18.4      18.3      18.2      18.0
                                    OT                    19.3      19.3      18.6      18.3      18.2      17.9
750: Administration of Justice....  BA                    22.9      24.4      24.8      23.9      24.1      24.7
                                    OT                    20.4      22.2      24.2      25.0      25.7      24.7
800: General Government...........  BA                    11.8      12.6      12.3      11.8      11.5      11.4
                                    OT                    11.9      11.9      12.2      12.4      11.9      11.4
920: Allowances...................  BA                ........  ........  ........  ........  ........  ........
                                    OT                ........  ........  ........  ........  ........  ........
Total Discretionary...............  BA                   510.1     526.9     533.0     537.2     542.0     551.1
                                    OT                   548.5     553.3     559.3     564.3     564.4     560.8
Defense...........................  BA                   265.8     269.0     271.5     275.4     281.8     289.6
                                    OT                   267.5     266.8     266.5     269.0     270.7     273.1
Nondefense........................  BA                   244.3     257.9     261.5     261.8     260.2     261.5
                                    OT                   281.0     286.4     292.8     295.3     293.7     287.7
----------------------------------------------------------------------------------------------------------------


                          1998 BUDGET RESOLUTION CONFERENCE AGREEMENT--MANDATORY TOTALS                         
                                              [Dollars in billions]                                             
----------------------------------------------------------------------------------------------------------------
                                                        1997      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
050: National Defense.............  BA                    -0.9      -0.8      -0.7      -0.6      -0.5      -0.5
                                    OT                    -1.0      -0.8      -0.7      -0.6      -0.6      -0.5
150: International Affairs........  BA                    -2.8      -3.1      -3.7      -2.8      -2.2      -1.9
                                    OT                    -4.6      -4.6      -4.3      -3.8      -3.8      -3.6
250: Science, Space and Technology  BA                     0.0       0.0       0.0       0.0       0.0       0.0
                                    OT                     0.0       0.0       0.0       0.0       0.0       0.0
270: Energy.......................  BA                    -1.8      -1.6      -1.4      -1.4      -1.5      -1.4
                                    OT                    -3.1      -2.8      -2.6      -2.5      -2.6      -2.6
300: Natural Resources and          BA                     0.7       1.1       1.0       1.0       1.0       0.9
 Environment.                                                                                                   
                                    OT                     0.8       1.0       1.0       1.0       0.9       0.8
350: Agriculture..................  BA                     7.7       9.1       8.8       8.4       7.2       6.9
                                    OT                     5.8       7.7       7.2       6.7       5.6       5.3
370: Commerce and Housing Credit..  BA                     3.2       6.2       6.6       9.0      12.6      14.0
                                    OT                   -12.4      -1.3      -0.0       4.0       8.4      10.1
400: Transportation...............  BA                    30.0      32.8      31.6      32.3      33.1      33.8
                                    OT                     2.6       2.7       2.3       2.0       1.9       1.8
450: Community and Regional         BA                     0.9       0.5       0.3       0.3       0.2       0.2
 Development.                                                                                                   
                                    OT                     0.4       0.3       0.0       0.0       0.0       0.0
500: Education, Training,           BA                    11.8      13.3      13.4      13.8      14.5      14.1
 Employment and Social Services.                                                                                
                                    OT                    10.1      12.9      13.2      13.7      14.2      13.8
550: Health.......................  BA                   100.3     112.9     120.2     129.4     139.0     148.0
                                    OT                   103.6     113.2     120.1     129.1     138.5     147.4
570: Medicare.....................  BA                   188.2     198.9     209.4     222.9     237.0     248.9
                                    OT                   188.6     199.0     208.9     222.8     236.1     248.1
600: Income Security..............  BA                   202.2     206.1     218.4     231.9     236.4     247.4
                                    OT                   197.0     206.5     216.5     226.8     236.1     244.4
650: Social Security..............  BA                   359.7     377.5     396.2     416.2     437.0     460.4
                                    OT                   363.0     380.7     399.5     419.5     440.7     463.7
700: Veterans Benefits............  BA                    20.2      22.1      23.0      23.4      23.9      24.3
                                    OT                    20.1      22.1      23.1      23.6      24.1      24.6
750: Administration of Justice....  BA                     0.6       0.4       0.3       0.3       0.3       0.2
                                    OT                     0.4       0.4       0.3       0.2       0.2       0.2
800: General Government...........  BA                     2.2       2.1       2.1       2.2       2.2       1.7
                                    OT                     2.0       2.1       2.1       2.4       2.2       1.7
900: Net Interest.................  BA                   247.6     248.6     252.0     247.9     241.9     236.9
                                    OT                   247.6     248.6     252.0     247.9     241.9     236.9
920: Allowances...................  BA                ........  ........  ........  ........  ........  ........
                                    OT                ........  ........  ........  ........  ........  ........
950: Undistributed Offsetting       BA                   -47.4     -48.8     -44.4     -46.0     -50.0     -64.1
 Receipts.                                                                                                      
                                    OT                   -47.4     -48.8     -44.4     -46.0     -50.0     -64.1
Total Spending....................  BA                 1,122.4   1,177.1   1,233.2   1,288.2   1,332.0   1,370.0
                                    OT                 1,073.5   1,138.9   1,194.3   1,246.9   1,294.0   1,328.0
----------------------------------------------------------------------------------------------------------------

                               Economics

      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 based 
upon the economic forecasts developed by the Congressional 
Budget Office and presented in CBO's ``The Economic and Budget 
Outlook: Fiscal Years 1998-2007'' (January 1997). These 
economic forecasts assume a balanced budget by 2002. Changes 
were made to CBO's inflation projections, however, to reflect 
expected non-legislated technical CPI changes by the Bureau of 
Labor Statistics (BLS). The baseline also includes CBO's 
technical revenue re-estimate which was released in early May 
1997.

House resolution

      The assumptions of the House Resolution are identical to 
the assumptions of the Senate Amendment listed below.

Senate amendment

      CBO's CPI forecasts were modified to reflect two upcoming 
technical changes that BLS will make in early 1999, namely the 
implementation of geometric means and an improved rotation of 
new goods into the CPI survey. These changes were announced 
after CBO's winter forecast was completed. CBO provided range 
estimates as to the likely impact of these technical changes on 
CPI growth. Based upon these estimates, the Senate Amendment 
reduced CBO's yearly CPI forecasts by 0.3 percentage points 
beginning in 1999. The Senate Amendment also increased CBO's 
taxable income stream by 0.04 percentage points a year, 
following CBO's statement that they may not have fully 
reflected BLS' 1996 reduction in CPI formula bias. Lastly, the 
Senate Amendment also included CBO's technical revenue re-
estimate. In May 1997, CBO suggested that the Budget Committees 
should reduce their 1997-2002 deficits by an amount similar to 
$45 billion each year, partly in response to an increase in FY 
1997 revenue.

Conference agreement

      The conference agreement follows the House resolution and 
the Senate amendment.

                          ECONOMIC ASSUMPTIONS                          
                           [By calendar years]                          
------------------------------------------------------------------------
                                 1997   1998   1999   2000   2001   2002
------------------------------------------------------------------------
  Percent change, year over                                             
 year:                                                                  
    Real GDP growth...........    2.3    2.1    2.2    2.2    2.2    2.1
    Consumer Price Index......    2.9    2.9    2.7    2.7    2.7    2.7
    GDP Price Index...........    2.3    2.5    2.6    2.6    2.6    2.6
  Percent, annual:                                                      
    Unemployment rate.........    5.3    5.6    5.8    5.9    6.0    6.0
    Three-month Treasury bill                                           
     rate.....................    5.0    5.0    4.6    4.2    3.9    3.9
    Ten-year Treasury bond                                              
     rate.....................    6.2    6.1    5.8    5.5    5.5    5.5
  Share of GDP:                                                         
    Wages and salaries........   48.0   47.7   47.6   47.4   47.3   47.3
    Corporate profits (book)..    8.2    8.1    7.9    7.8    7.9    7.8
------------------------------------------------------------------------

                         Spending and Revenues

                        A. Spending by Function

                     Function 050: NATIONAL DEFENSE

Major programs in function

      The National Defense function includes the Department of 
Defense (DOD) in subfunction 051, Atomic Energy Defense 
Activities (AEDA) in the Department of Energy (DOE) in 
subfunction 053, and other defense related activities in the 
Federal Emergency Management Agency, the Select Service, and 
other federal agencies in subfunction 054. More than 94.6 
percent of the 1998 budget authority in the President's Budget 
are for the Department of Defense (051); 5.1 percent of the 
funds are for subfunction 053, and the remaining 0.3 percent is 
for subfunction 054.
            House resolution

                                         FUNCTION 050: NATIONAL DEFENSE                                         
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget authority....................................   264,905   268,197   270,784   274,802   281,305   289,092
Outlays.............................................   266,582   265,978   265,771   268,418   270,110   272,571
----------------------------------------------------------------------------------------------------------------

      The House resolution assumes $268.2 billion in budget 
authority [BA] and $266.0 billion in outlays for fiscal year 
1998. Over the 5-year period from 1998 through 2002, the 
resolution assumes totals of $1,384.2 billion in BA and 
$1,342.8 billion in outlays.
      For discretionary spending in this function, the House 
resolution assumes $269.0 billion in budget authority [BA] and 
$266.8 billion in outlays in fiscal year 1998. Over 5 years, it 
assumes $1,387.3 billion in BA and $1,346.1 billion in outlays.
      The House resolution makes no assumptions concerning 
mandatory spending in this function.
            Senate amendment
      Discretionary spending.--Discretionary spending in this 
function is a priority in the Bipartisan Budget Agreement.
      The table below presents the discretionary spending 
figures for the Senate amendment.

----------------------------------------------------------------------------------------------------------------
                                                                                              Total 98-         
                                    1997      1998      1999      2000      2001      2002       02             
-------------------------------------------------------------------------------------------------------         
Reported budget................  (BA)          265.8     269.0     271.5     275.4     281.8     289.6    1387.3
Resolution.....................  (OT)          267.5     266.8     266.5     269.0     270.7     273.1    1346.1
----------------------------------------------------------------------------------------------------------------

      The Senate amendment is a middle ground between the 
Budget Resolution Baseline and a five year freeze at the final 
1997 appropriated levels. It is an increase over the FY 1997 
Congressional Budget Resolution projections for 1998 to 2002, 
and for the same years it exceeds the President's Budget in 
budget authority and is virtually the same in outlays.
      The 1998-2002 totals of the Senate amendment are: (1) 
$63.0 billion in budget authority and $76.8 billion in outlays 
below the Budget Resolution Baseline; (2) $58.1 billion in 
budget authority and $24.1 billion in outlays above the Freeze 
Baseline; (3) $16.7 billion in budget authority and $5.2 
billion in outlays above the FY 1997 Congressional Budget 
Resolution, and (4) $4.4 billion in budget authority above the 
President's Budget; in outlays it is $200 million lower.
      The Senate amendment assumes non-statutory ``firewalls'' 
for two years, 1998 and 1999. The Balanced Budget Agreement 
includes statutory firewalls to be enacted later.
      When comparing the Senate amendment to the President's 
Budget, one will notice the following differences. For 1998, 
the Senate amendment is $2.6 billion higher in budget authority 
and $1.0 billion higher in outlays. Over the years 1998-2002, 
in budget authority, the Senate amendment is higher or equal to 
the President's Budget for all years; overall it is an increase 
of $4.4 billion. Over the years 1998-2002, in outlays, the 
reported resolution's defense outlays exceed or are equal to 
the President's Budget in the years 1998 through 2001; in 2002, 
the President's Budget is higher. Overall, the Senate amendment 
and the President's Budget are virtually the same; the Senate 
amendment is $200 million lower, a difference of one hundredth 
of one percent.
      Mandatory spending.--For mandatory spending in the 050 
function, $200 million in additional stockpile sales were 
requested by the President in 2002, but they were not scored by 
CBO because no implementing legislation had been requested.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

                  FUNCTION 150: INTERNATIONAL AFFAIRS

Major programs in function

      Function 150 includes the operation of foreign affairs 
establishments including embassies and other diplomatic 
missions abroad; foreign aid loan and technical assistance 
activities in less developed countries; security assistance to 
foreign governments; foreign military sales made through the 
Foreign Military Sales Trust Fund; U.S. contributions to 
international financial institutions; U.S. contributions to 
international organizations; trade promotion activities; and 
refugee assistance.
            House resolution

                                       FUNCTION 150: INTERNATIONAL AFFAIRS                                      
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget authority....................................    15,281    15,909    14,918    15,782    16,114    16,353
Outlays.............................................    14,534    14,558    14,569    14,981    14,751    14,812
----------------------------------------------------------------------------------------------------------------

      The House resolution assumes $15.9 billion in budget 
authority [BA] in fiscal year 1998 and $14.6 billion in 
outlays. Over the 5-year period from 1998 through 2002, the 
resolution assumes totals $79.1 in budget authority and $73.7 
in outlays.
      The House resolution assumes that budget authority for 
discretionary programs will be $19.0 billion in 1998 and total 
$92.7 billion over the next 5 years. Likewise, outlays 
areestimated to be $19.2 billion in 1998 and $93.8 billion over the 
next 5 years. The House resolution assumes a cap adjustment is 
available for exchanges of monetary assets and for international 
organization arrears.
      No changes are envisioned concerning mandatory programs.
            Senate amendment
      Discretionary spending.--Discretionary spending in this 
function is a priority in the Bipartisan Budget Agreement. 
International Affairs discretionary spending in 1998 for this 
function would rise to $19.0 billion in BA and $19.2 billion in 
outlays, an increase of $0.4 billion in BA and $0.04 billion in 
outlays above the Budget Resolution Baseline for FY 1998. Over 
the five year period, spending would drop to a level of $18.2 
billion in BA and $18.4 billion in outlays by 2002.
      In the 1998 budget request, the President proposed 
funding $3.521 billion for the New Arrangements to Borrow 
(NAB), the emergency reserves of the IMF. Funding for the NAB 
is accommodated at the requested level by a provision in the 
Budget Process and Enforcement category providing an allowance 
for an upward adjustment to the budget authority discretionary 
spending limits should Congress act to support the proposal. A 
similar adjustment was provided for the IMF in the 1990 Budget 
Enforcement Act.
      In the 1998 budget request, the President proposed 
funding to pay off the US arrears to the United Nations and 
other international organizations and the multilateral 
development banks over three years. Funding for the arrearages 
is accommodated at the requested level by a provision in the 
Budget Process and Enforcement category providing an allowance 
for an upward adjustment to the discretionary spending limits 
should Congress act to appropriate these funds. The Senate 
amendment intends for this adjustment to provide the committees 
of jurisdiction the necessary flexibility to reach a bipartisan 
resolution. In response to the Administration's proposal to pay 
the UN arrears, the Majority Leader in coordination with the 
chairmen and ranking members of the committees of jurisdiction 
has initiated efforts to meet that objective contingent on 
significant, demonstrable, and achievable reforms at the United 
Nations.
      In order to meet the Bipartisan Budget Agreement's 
discretionary spending limits, savings will be required from 
programs in this function. These savings will be determined by 
the Appropriations Committee. Examples of possible reductions 
include the following:
      The Senate amendment assumes the Administration's 
proposal to cut the 1998 level of funding for the Export Import 
Bank of the United States to a level of $630 million in BA in 
1998, and $85 million decrease from 1997.
      The Senate amendment assumes the Administration request 
of $492 million in BA for the Assistance for Eastern Europe and 
the Baltic States. By 2002 the request falls to $50 million in 
BA, $425 million below the 1997 level.
      Mandatory spending.--Mandatory programs, in 1997, totaled 
-$2.8 billion in BA and -$4.6 billion in outlays. In 1998, 
mandatory accounts total -$3.1 billion in BA and -$4.6 billion 
in outlays and by 2002 total -$1.9 billion in BA and -$3.6 
billion in outlays.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

         Function 250: General Science, Space & Transportation

Major programs in function

      Function 250 includes the National Aeronautics and Space 
Administration (NASA) civilian space program, the National 
Science Foundation (NSF), and basic research programs of the 
Department of Energy (DOE).
      Seventy-five percent of the function is comprised of 
spending for NASA. Nearly 100 percent of the function is 
discretionary, under the jurisdiction of the Appropriations 
subcommittees on VA, HUD and Independent Agencies and Energy 
and Water.
            House amendment

                              FUNCTION 250: GENERAL SCIENCE, SPACE, AND TECHNOLOGY                              
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget Authority....................................    16,667    16,237    16,203    15,947    15,800    15,604
Outlays.............................................    17,038    16,882    16,528    16,013    15,862    15,668
----------------------------------------------------------------------------------------------------------------

      The House resolution assumes $16.2 billion in budget 
authority [BA] and $16.9 billion in outlays for fiscal year 
1998. Over the 5-year period from 1998 through 2002, the 
resolutions assumes totals of $79.8 billion in BA and $81.0 
billion in outlays.
      The House resolution assumes that budget authority for 
discretionary programs will be$16.2 billion in 1998 and total 
$79.6 billion over the next 5 years. Likewise, outlays are estimated to 
be $16.8 billion in 1998 and $80.8 billion over the next 5 years.
      No changes are envisioned concerning mandatory programs.
            Senate amendment
      Discretionary spending.--Discretionary spending in 1998 
for Function 250 would decrease by $0.9 billion in BA and $0.5 
billion in outlays from the Budget Resolution baseline, 
resulting in total 1998 funding of $16.2 billion in BA and 
$16.8 billion in outlays. Over the five year period, budget 
authority would be decreased by $10.6 billion in BA and $9.0 
billion in outlays by 2002 from the Budget Resolution baseline.
      The Senate amendment assumes continued support for basic 
research between 1998 and 2002. National Science Foundation 
(NSF) spending on research and related activities would grow 
from their current level of $2.4 billion to $2.5 billion in 
2002.
      In order to meet the Bipartisan Budget Agreement's 
discretionary spending limits, savings will be required from 
programs in this function. These savings will be determined by 
the Appropriations Committee.
      Examples of possible reductions include the following: 
(1) The Senate amendment assumes the President's budget 
proposal to freeze DOE General Science programs at their 1997 
level of $1.0 billion through 2002. (2) The Senate amendment 
assumes the President's reductions in NASA Science, 
Aeronautics, and Technology programs. Savings are achieved from 
the Budget Resolution baseline by allowing these programs to 
increase by an average of only two percent each year, from 
their current level of $4.8 billion to $5.2 billion in 2002. 
The proposal would result in savings of $0.8 billion over the 
five-year period. (3) The Senate amendment assumes the 
President's budget reductions to NASA Human Space Flight 
accounts. These activities would be reduced from their current 
level of $5.5 billion to $4.7 billion, with much of this 
reduction coming from planned reductions to the Space Station, 
which is scheduled to be funded at $2.1 billion in 1998 and 
fall to $1.5 billion in 2002. The proposal would result in 
savings of $4.2 billion over the five-year period. (4) The 
Senate amendment assumes the President's budget reductions to 
NASA Mission Support activities, which would be frozen at $2.5 
billion per year, saving $1.7 billion over the five-year 
period. (5) The Senate amendment assumes the President's budget 
reductions to NSF spending on education and human resources, 
which would be frozen at their current level of $0.6 billion. 
(6) The President has proposed to reduce these NSF activities 
by $0.1 billion between 1998 and 2002 from the Budget 
Resolution baseline.
      Mandatory spending.--There are no mandatory assumptions 
in Function 250.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

                          function 270: energy

Major programs in function

      Function 270 funds the civilian activities of the 
Department of Energy (DOE), the Rural Utilities Service (RUS), 
the Nuclear Regulatory Commission (NRC), and the net spending 
of the Tennessee Valley Authority (TVA) power program.
            House resolution

                                              FUNCTION 270: ENERGY                                              
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget authority....................................     2,562     3,123     3,469     3,186     2,939     2,846
Outlays.............................................     1,864     2,247     2,446     2,293     2,048     1,867
----------------------------------------------------------------------------------------------------------------

      The House resolution assumes $3.1 billion in budget 
authority [BA] and $2.2 billion in outlays for fiscal year 
1998. Over the 5-year period from 1998 through 2002, the House 
resolution assumes totals of $15.6 billion in BA and $10.9 
billion in outlays.
      The House resolution is consistent with the budget 
agreement. The House resolution assumes that budget authority 
for discretionary programs will be $4.8 billion in 1998 and 
total $22.9 over the next 5 years. Likewise, outlays are 
estimated to be $5.0 in 1998 and $24.0 over the next 5 years.
      Consistent with the budget agreement, it is assumed that 
the Department of Energy [DOE] will be authorized to lease 
excess storage capacity in the Strategic Petroleum Reserve.
            Senate amendment
      Discretionary spending.--The Senate amendment assumes 
spending of $22.9 billion in budget authority and $24.0 billion 
in outlays for the function over the next five years. By 2002 
spending would decrease by $0.5 billion in BA and $0.6 billion 
in outlays as compared to Budget Resolution baseline levels.
      The aggregate numbers in this function will support the 
overall level of spending assumed in the Bipartisan Budget 
Agreement. In order to meet these levels, specific program 
reductions and freezes would be required beyond the President's 
request.
      The Senate amendment places a priority on the Department 
of Energy programs that support science and basic research, 
such as DOE's efforts to map the human genome and the 
activities at the Department of Energy National Laboratories.
      In order to meet the Bipartisan Budget Agreement's 
discretionary spending limits, savings will be required from 
programs in this function. These savings will be determined by 
the Appropriation Committees.
      Examples of possible reductions include the following: 
(1) Naval Petroleum Reserves reductions. The President's Budget 
request proposes to reduce the Naval Petroleum Reserves 
program. The outyear discretionary savings result from the sale 
of Elk Hills Naval Petroleum Reserve scheduled for February 
1998 and the subsequent reduced appropriations requirement. (2) 
Fossil Energy R&D reductions. The President's request would 
reduce fossil (coal, natural gas, and petroleum) technology 
development programs. (3) Other. The President's Budget request 
proposes reductions in the Uranium Enrichment decontamination 
and decommissioning fund and the Power Marketing 
Administrations. The President's request reduces the Rural 
Electrification Administration (REA) and the Energy Information 
Administration (EIA).
      Mandatory spending.--The reported resolution adopts a 
proposal from the 1997 Budget Resolution and the President's 
budget request that authorizes DOE to lease excess SPRO storage 
capacity.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

            Function 300: Environment and natural resources

Major programs in function

      This function includes funding for water resources, 
conservation and land management, recreation resources, and 
pollution control and abatement. Agencies with major programs 
in this function include: the Army Corp of Engineers (CORP), 
Bureau of Reclamation (BOR), Forest Service (USFS), Bureau of 
Land Management (BLM), Fish and Wildlife Service (USFWS), the 
National Park Service (NPS), Environmental Protection Agency 
(EPA), National Oceanic and Atmospheric Administration (NOAA), 
and the U.S. Geological Survey (USGS).
            House resolution

                                 FUNCTION 300: NATURAL RESOURCES AND ENVIRONMENT                                
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget Authority....................................    22,199    23,877    23,227    22,570    22,151    22,086
Outlays.............................................    22,359    22,405    22,702    22,963    22,720    22,313
----------------------------------------------------------------------------------------------------------------

      The House resolution assumes $23.9 billion in budget 
authority [BA] and $22.4 billion in outlays for fiscal year 
1998. Over the 5- year period, from 1998 through 2002, the 
total BA is $113.9 billion and $113.1 billion in outlays.
      The House resolution assumes that budget authority for 
discretionary programs will be $22.8 billion in 1998 and total 
$108.9 over the next 5 years. Likewise, outlays are estimated 
to be $21.4 billion in 1998 and $108.3 billion over the next 5 
years.
      The House resolution assumes that up to $700 million will 
be available for Federal land acquisitions and to finalize 
priority Federal land exchanges, and that Superfund 
appropriations will be at the President's level if policies can 
be worked out.
      The EPA Operating Program, the Operation of the National 
Park System, Land Acquisition and State Assistance, and 
Everglades Restoration Fund (including Corps of Engineers) are 
considered protected domestic, discretionary priorities, 
consistent with the Bipartisan Budget Agreement.
      The House resolution also assumes that the amounts 
provided are sufficient to accommodate $143 million in fiscal 
year 1998 to implement the California Bay-Delta Environmental 
Enhancement and Water Security Act.
      The House resolution assumes that $200 million will be 
reserved annually for an Environmental Reserve Fund, contingent 
upon Superfund reform.
            Senate amendment
      Discretionary spending.--The discretionary spending in 
this function is a priority in the Bipartisan Budget Agreement. 
Discretionary spending in 1998 for this function increases by 
$0.6 billion in BA and increases by $0.3 billion in outlays 
above the Budget Resolution Baseline, to $22.8 billion in BA 
and $21.4 billion in outlays. Over the five year period, 
discretionary spending decreases to $21.2 billion in BA and 
$21.5 billion in outlays in 2002. The Senate amendment assumes 
total discretionary spending of $109.0 billion in BA and $108.3 
billion in outlays over the five year period.
      The Bipartisan Budget Agreement assumes the President's 
request of $1.2 billion in both BA and outlays for National 
Park Service operations, an increase of $66 million in BA and 
$57 million in outlays above 1997. This is an increase of $25 
million in BA and $19 million in outlays above in the 1998 
Budget Resolution Baseline. The Agreement assumes the 
President's funding request within the National Park Service 
and the Corps of Engineers for the restoration of the Florida 
Everglades.
      The Bipartisan Budget Agreement also assumes the 
President's request of $3.5 billion in BA and $3.3 billion in 
outlays for EPA's operating programs, an increase of $0.3 
billion in both BA and outlays above 1997.
      The Bipartisan Budget Agreement assumes the President's 
request of $41 million in 1998, for National Park Service land 
acquisition, an increase of $17 million above 1997 ($162 
million over the five year period). In addition, the Agreement 
assumes an additional $700 million in BA in 1998 and the 
associated outlays for 1998 through 2001 for high priority 
Federal land acquisitions and exchanges. The funding will be 
allocated to function 300 as an allowance exclusively for this 
purpose.
      In 1997, $1.3 billion was provided for the hazardous 
waste Superfund operated through the Environmental Protection 
Agency. The Superfund authorization and the taxes to finance 
the Superfund trust fund expired in 1994 and 1995, 
respectively. Increased funding can be accommodated at the 
President's request of $2.1 billion in 1998 and $8.4 billion 
over five years if policies can be worked out.
      In order to meet the Bipartisan Budget Agreement's 
discretionary spending limits, savings will be required from 
programs in this function. These savings will be determined by 
the Appropriation Committees.
      Examples of possible reductions are: (1) Forest Service 
(FS) and Bureau of Land Management (BLM) Wildfire Management: 
In 1997, approximately $0.6 billion was spent on emergency 
firefighting for both the FS and BLM. The President's budget 
does not include the emergency funding but it does provide $0.8 
billion in both BA and outlays in base funding. (2) FS 
construction and reconstruction: The President's budget 
proposes $0.1 billion in BA and $0.2 billion in outlays, a 
decrease of $34 million in BA and $24 million in outlays below 
the 1997 level. (3) Corps of Engineers: The President's budget 
proposes $3.5 billion for the major programs of the Corps, an 
increase of $0.2 billion in BA above 1997 and a decrease of 
$0.1 billion in outlays below 1997. The Senate amendment does 
not assume the President's proposal for Capital Asset 
Acquisitions.
      Mandatory spending.--The Senate amendment assumes $1.0 
billion over the five year period and $2.0 billion over ten 
years for new mandatory spending for orphan shares at Superfund 
hazardous waste cleanup sites. Orphan shares are portions of 
financial liability at Superfund sites allocated to non-Federal 
parties with limited or no ability to pay. The funds will be 
reserved for this purpose based on the assumption of a policy 
agreement on orphan share spending.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

                       function 350: Agriculture

Major programs in function

      This function includes programs that intend to promote 
economic stability in the agriculture sector. Programs in this 
function include direct assistance and loans to food and fiber 
producers, and market-information and agriculture research. 
Producers are assisted with production flexibility contract 
payment, crop insurance, non-recourse crop loans, operating 
loans and export promotion.
            House resolution

                                                                FUNCTION 350: AGRICULTURE                                                               
                                                                [In millions of dollars]                                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        1997 est.                                                                                       
                                                                            1998             1999             2000             2001             2002    
--------------------------------------------------------------------------------------------------------------------------------------------------------
Budget authority..................................        11,819           13,133           12,790           12,215           10,978           10,670   
Outlays...........................................         9,910           11,892           11,294           10,664            9,494            9,108   
--------------------------------------------------------------------------------------------------------------------------------------------------------

      The House resolution assumes $13.1 billion in budget 
authority [BA] and $11.9 billion in outlays for fiscal year 
1998. Over the 5-year period from 1998 through 2002, the House 
resolution assumes totals of $59.8 billion in BA and $52.5 
billion in outlays.
      The House resolution assumes that budget authority for 
discretionary programs will be $4.1 billion in 1998 and total 
$19.4 billion over the next 5 years. Likewise, outlays are 
estimated to be $4.1 billion in 1998 and $19.8 billion over the 
next 5 years.
      The House resolution makes no assumptions concerning 
mandatory programs in this function.
            Senate amendment
      Discretionary spending.--Discretionary spending in 1998 
for this function would decrease by $0.2 billion in BA and $0.1 
billion in outlays below the Budget Resolution Baseline, to 
$4.1 billion in both BA and outlays. Over the five year period, 
discretionary spending would decrease to $3.8 billion in both 
BA and outlays in 2002. The Senate amendment assumes total 
discretionary spending of $19.6 billion in BA and $19.8 billion 
in outlays over the five year period. The aggregate numbers in 
this function will support the overall level of spending 
assumed in the Bipartisan Budget Agreement. In order to meet 
those levels, specific program reductions and freezes may be 
required beyond the President's request.
      The Senate amendment assumes the President's proposal of 
$0.2 billion in discretionary funds to reimburse agent's sales 
commissions and company administrative expenses for private 
delivery. Private sales agents and insurance companies 
administer federal crop insurance on the federal government's 
behalf. In exchange for private delivery, the Department of 
Agriculture reimburses the private companies. Under current 
law, reimbursements are paid from the mandatory Federal Crop 
Insurance Fund and in 1998 and, thereafter, sales commissions 
are discretionary.
      In order to meet the Bipartisan Budget Agreement's 
discretionary spending limits, savings will be required from 
programs in this function. These savings will be determined by 
the Appropriation Committees.
      Examples of possible reductions include the following: 
(1) Farm Service Agency (FSA) salaries and expenses: The 
President's budget proposes $0.7 billion in both BA and outlays 
in 1998 for salaries and expenses, a decrease of $32 million in 
BA and $30 million in outlays, below the Budget Resolution 
Baseline. Over the five year period the President proposes to 
reduce FSA salaries and expenses by $1.1 billion in both BA and 
outlays. (2) Agriculture Credit Insurance Fund (ACIF): The 
President's budget proposes $0.3 billion in both BA and outlays 
for the ACIF in 1998, a decease of $46 million in BA and $40 
million in outlays below the Budget Resolution Baseline. (3) 
Agriculture Research Service (ARS) Buildings and Facilities and 
Cooperative State Research, Education, and Extension Service 
Buildings and Facilities (CSREES): The President's budget 
proposes to terminate CSREES building and facilities and reduce 
ARS buildings and facilities. The proposal saves $76 million in 
BA and $4 million in outlays in 1998 below the Budget 
Resolution Baseline. Over five years, this proposal saves $0.5 
million in BA and $0.3 million in outlays. (4) Agriculture 
Research: The President's budget proposes $1.6 billion in both 
BA and outlays for agriculture research and extension, a 
reduction of $44 million in BA and $27 million in outlays below 
the Budget Resolution Baseline.
      Mandatory spending.--Over the five year period mandatory 
spending decreases from $7.7 billion in 1998 to $5.2 billion in 
2002, a decrease of $2.5 billion. The majority of the decrease 
is associated with a reduction in flexibility contract payments 
and other policy changes enacted in the 1996 Farm Bill. The 
Senate amendment assumes total mandatory spending of $32.6 
billion over the five year period. It does not assume policy 
changes for mandatory programs in this function.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

               function 370: commerce and housing credit

Major programs in function

      Function 370 includes certain discretionary housing 
programs, such as subsidies for single and multifamily housing 
in rural areas and mortgage insurance provided by the Federal 
Housing Administration; net spending by the Postal Service; 
discretionary funding for commerce programs, such as 
international trade and exports, science and technology, the 
periodic census, and small business; and mandatory spending for 
deposit insurance activities related to banks, thrifts, and 
credit unions.
            House resolution

                                    FUNCTION 370: COMMERCE AND HOUSING CREDIT                                   
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget Authority....................................     5,981     9,296    10,127    13,921    15,546    16,902
Outlays.............................................    -9,571     1,769     3,344     8,559    11,601    12,765
----------------------------------------------------------------------------------------------------------------

      The House resolution assumes $9.3 billion in budget 
authority and $1.8 billion in outlays in fiscal year 1998. Over 
the 5-year period from 1998 through 2002, the resolution 
assumes $65.8 billion in BA and $38.0 in outlays.
      The House resolution assumes for discretionary programs 
$3.1 billion in budget authority and outlays in fiscal year 
1998. Over the 5-year period, from 1998 to 2002, the House 
resolution assumes $17.5 billion in BA and $16.9 billion in 
outlays over 5 years.
      The Federal Housing Administration provides mortgage 
insurance to Americans who otherwise might not be able to 
obtain the financing to buy a house. When a home buyer defaults 
on a federally insured mortgage, the FHA must pay the balance 
on the mortgage to the lender, and foreclose on the house. By 
giving the FHA more flexibility to work with homeowners who are 
in default on their mortgages, costs to the FHA insurance fund 
can be avoided. The House resolution assumes continuation of 
current law policy to provide FHA with tools to encourage 
lenders to forbear for only up to 1 year. This would improve 
thetargeting and efficiency of HUD's current program, and allow 
the FHA homeowners experiencing temporary economic distress to stay in 
their homes.
      The House resolution assumes shifting to the Postal 
Service the cost of financing workers compensation benefits for 
pre-1971 postal employees. This produces net savings of $121 
million over 5 years.
            Senate amendment
      Discretionary spending.--Discretionary spending in 1998 
for this function would increase by $0.3 billion in BA and 
outlays over the 1997 level, to $3.1 billion in BA and outlays. 
By 2002, spending would return approximately to 1997 levels of 
$2.9 billion in BA and $2.7 billion in outlays, after having 
peaked at $5 billion in BA and $4.6 billion in outlays in 2000 
to cover the costs of conducting the decennial census.
      The decennial census requires a level of resources that 
is an order of magnitude larger than the baseline amounts based 
on the 1997 appropriation of $0.2 million for the periodic 
census. The Senate amendment includes sufficient funding over 
the next five years to conduct the census, and reflects savings 
from implementing improvements in conducting the census.
      The Bipartisan Budget Agreement provides the President's 
request for the National Institute of Standards and Technology 
(NIST), which is an increase of $0.7 billion in budget 
authority and $0.3 billion in outlays over the Budget 
Resolution Baseline over the next five years.
      In order to meet the Bipartisan Budget Agreement's 
discretionary spending limits, savings will be required from 
programs in this function. These savings will be determined by 
the Appropriations Committees.
      Following are examples of possible reductions. The 
President's Budget proposes to operate a group of programs over 
the next five years at a level of resources generally frozen at 
the 1997 level, including direct rural multifamily housing 
loans and associated administrative expenses (actually a 4.5 
percent reduction in 1998 compared to 1997), SBA business loans 
and salaries and expenses, payment for postal subsidies, FHA 
multifamily housing loan insurance, and salaries and expenses 
for the International Trade Administration (ITA), salaries and 
expenses at NIST, the Census Bureau, and the Federal 
Communications Commission.
      Mandatory spending.--The apparent increase in BA and 
outlays from 1997 to 2002 in the Senate amendment (an $11 
billion BA change and a $22.4 billion outlay change) stems not 
from new policies but from baseline increases in the mandatory 
programs in this function. The primary component of the 
baseline increase is the Universal Service Fund, into which 
telecommunications carriers are required to pay amounts to 
cover the cost of guaranteeing certain levels of service in 
rural and high cost areas. These amounts appear as federal 
revenues on the tax side of the budget, with corresponding 
spending appearing in this budget function. While the fund has 
no net impact on the budget, the BA and outlays for the fund 
grow from $1 billion in 1997 to $12.2 billion in 2002, swamping 
any changes in other mandatory activities in this function.
      The Treasury pays the Postal Service about $30 million 
annually for obligations incurred by the federal government 
before the Postal Service was reorganized and placed off-budget 
in 1971. The Bipartisan Budget Agreement provides for an end to 
these payments, with the costs shifting to postal rate payers 
and save the Treasury $0.1 billion over the next five years.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

                      Function 400: transportation

Major programs in function

      Function 400 includes ground transportation programs, 
such as the federal-aid highway program, mass transit operating 
and capital assistance, rail transportation through AMTRAK and 
other rail programs; air transportation through the Federal 
Aviation Administration (FAA) Airport Improvement Program 
(AIP), aviation facilities and equipment programs, and 
operation of the air traffic control system; water 
transportation through the Coast Guard and the Maritime 
Administration; and related transportation support activities.
            House resolution

                                          FUNCTION 400: TRANSPORTATION                                          
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget Authority....................................    43,869    46,402    46,556    47,114    48,135    49,184
Outlays.............................................    39,544    40,933    41,256    41,357    41,303    41,247
----------------------------------------------------------------------------------------------------------------

      The House resolution assumes budget authority of $46.4 
billion for fiscal year 1998, $49.2 billion for fiscal year 
2002, and $237.4 billion for the 5-year period of fiscal years 
1998-2002. The House resolution assumes outlays of $40.9 
billion for fiscal year 1998, $41.2 billion for fiscal year 
2002, and $206.1 billion for the 5-year period of fiscal years 
1998-2002.
      The House resolution assumes budget authority for 
discretionary programs of $13.6 billion for fiscal year 1998, 
$15.3 billion for fiscal year 2002, and $73.7 billion for the 
5-year period of fiscal years 1998-2002. The House resolution 
assumes outlays of $38.3 billion for fiscal year 1998, $39.4 
billion for fiscal year 2002, and $195.3 billion for the 5-year 
period of fiscal years 1998-2002.
      In mandatory spending, the House resolution assumes the 
permanent extension of vessel tonnage fees.
            Senate amendment
      Discretionary spending.--Discretionary spending in this 
function is a priority in the Bipartisan Budget Agreement. 
Discretionary spending in 1998 for Function 400 would decrease 
by $1.1 billion in BA, while outlays would increase by $0.6 
billion from the Budget Resolution baseline, resulting in total 
1998 spending of $13.6 billion in BA and $38.3 billion in 
outlays. Over the five year period, total discretionary 
spending would decrease by $4.1 billion in BA and $2.3 billion 
in outlays by 2002 below the Budget Resolution baseline.
      The Senate amendment assumes spending of all estimated 
Highway Trust Fund tax receipts between 1998 and 2002. Yearly 
allocations of Highway Trust Fund spending would be equal to 
the current estimates of tax receipts to the Highway Trust 
Fund, with a one-year delay. The proposal would increase total 
highway spending from its current level of $20.8 billion to 
$23.1 billion in 2002.
      The Senate amendment assumes the Budget Resolution 
baseline for FAA Operations, Facilities and Equipment, and 
Research, Engineering, and Development programs. The Senate 
amendment would provide for these programs to grow from their 
1997 level of $7.1 billion to $8.3 billion in 2002. The Senate 
amendment also assumes a freeze in the Airport Improvement 
Program (AIP), through 2002, at its current level of $1.46 
billion. The President's budget had provided for AIP to be 
reduced to $1.0 billion in 1998 and frozen at this figure 
through 2002.
      The Senate amendment assumes the Budget Resolution 
baseline for the Federal Transit Administration (FTA). This 
assumption would allow for total mass transit outlays to rise 
from their current level of $4.3 billion to $4.5 billion in 
2002.
      The Senate amendment assumes the Budget Resolution 
baseline for Amtrak. This proposal would allow Amtrak spending 
to rise from its current level of $0.8 billion to $0.9 billion 
in 2002.
      In order to meet the Bipartisan Budget Agreement's 
discretionary spending limits, savings will be required from 
programs in this function. These savings will be determined by 
the Appropriations Committee.
      Examples of possible reductions include: (1) The 
Department of Transportation Office of the Secretary accounts, 
maritime, and NASA Function 400 aeronautical facilities. (2) 
Coast Guard. Spending could be reduced by $0.8 billion over the 
five year period below the Budget Resolution baseline. Most of 
this reduction is from the President's proposal to freeze Coast 
Guard operations at $2.4 billion from 1998 through 2002.
      Mandatory spending.--The Senate amendment provides for an 
increase in contract authority for highways, highway safety, 
and mass transit above the levels provided in 1997. Total 
highway and highway safety contract authority would rise from 
its current level of $22.6 billion to $25.1 billion in 2002. 
For mass transit, the Senate amendment would increase contract 
authority from its current level of $4.8 billion to $5.5 
billion in 2002.
      The Bipartisan Budget Agreement assumes an extension of 
these fees, set to expire September 30, 1998, raising $0.2 
billion over 1999-2002.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

            function 450: community and regional development

Major programs in function

      This function includes funding for community and regional 
development and disaster relief. The major programs are 
administered through a variety of agencies including the 
Department of Housing and Urban Development (HUD), Appalachian 
Regional Commission (ARC), Tennessee Valley Authority (TVA), 
Economic Development Administration (EDA), Bureau of Indian 
Affairs (BIA), Federal Emergency Management Agency (FEMA), and 
the Department of Agriculture (USDA).
            House resolution

                                FUNCTION 450: COMMUNITY AND REGIONAL DEVELOPMENT                                
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget Authority....................................    10,199     8,768     8,489     7,810     7,764     7,790
Outlays.............................................    12,137    10,387    10,902    10,986    11,350     8,429
----------------------------------------------------------------------------------------------------------------

      The House resolution assumes $8.8 billion in budget 
authority [BA] and $10.4 billion in outlays for fiscal year 
1998. Over the 5-year period, 1998 through 2002, the House 
resolution assumes $40.6 billion in BA and $52.1 in outlays.
      The House resolution assumes $8.3 billion in 
discretionary budget authority [BA] and $10.0 billion in 
outlays in fiscal year 1998. Over the 5-year period, it assumes 
$39.1 in BA and $51.6 in outlays. The resolution assumes the 
Community Development Financial Institution [CDFI] Fund as a 
domestic discretionary priority, as defined in the Bipartisan 
Budget Agreement.
      The House resolution makes no assumptions concerning 
mandatory spending in this function.
            Senate amendment
      Discretionary spending.--Discretionary spending in 1998 
for this function would decrease by $1.3 billion in BA and $1.0 
billion in outlays below the Budget Resolution Baseline, to 
$8.3 billion in BA and $10.0 billion in outlays. Over the five 
year period, discretionary spending would decrease to $7.6 
billion in BA and $8.4 billion in outlays in 2002. The Senate 
amendment assumes total discretionary spending of $39.1 billion 
in BA and $51.6 billion in outlays over the five year period. 
The aggregate numbers in this function will support the overall 
level of spending assumed in the Budget Agreement. In order to 
meet those levels, specific program reductions and freezes may 
be required beyond the President's request.
      The Senate amendment is $8.4 billion in BA and $1.0 
billion in outlays below the President's 1998 request. The 
majority of the difference is due to the President's request of 
$5.8 billion for the emergency contingency fund and the 
President's $2.4 billion request for FEMA disaster relief. The 
Senate amendment does not assume the emergency contingency 
fund. The 1997 emergency supplemental in the Senate-passed bill 
and the House-reported bill includes the President's request of 
$2.4 billion for FEMA disaster relief, thus the Senate 
amendment does not assume the President's FEMA, disaster relief 
request of $2.4 billion in 1998. The Senate amendment does 
assume base non-emergency funding for FEMA disaster relief as 
requested by the President.
      The Bipartisan Budget Agreement assumes the President's 
request of $125 million in BA and $63 million in outlays for 
the community development financial institution fund.
      The Bipartisan Budget Agreement assumes the President's 
request of $0.8 billion for Tribal Priority Allocations, an 
increase of $0.1 billion over 1997. This program provides funds 
directly to tribes for tribal government operations and basic 
services such as law enforcement, child protection, education 
and road maintenance. Funding is also included in functions 300 
and 500.
      In order to meet the Bipartisan Budget Agreement's 
discretionary spending limits, savings will be required from 
programs in this function. These savings will be determined by 
the Appropriation Committees.
      Examples of possible reductions include the following: 
(1) Community Development Block Grants (CDBG): The President's 
budget proposes $4.6 billion in BA and $4.7 billion in outlays, 
a decrease of $115 million in BA below the Budget Resolution 
Baseline and is essentially at a freeze in outlays. (2) 
Appalachian Regional Commission: The President's budget 
proposes $165 million in BA and $185 million in outlays, an 
increase of $5 million above 1997 in BA and a decrease of $9 
million in outlays below 1997. In 1999 through 2002, the 
President's budget proposes $70 million per year.
      Mandatory spending.--The Senate amendment assumes no 
changes in mandatory programs in this function.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

    function 500: education, training, employment & social services

Major programs in function

      This function includes those activities designed to 
promote the acquiring of knowledge and skills, to provide 
social services for needy individuals, and for research 
directly related to these program areas. In general, the 
activities funded by this function are administered through the 
Departments of Labor, Health and Human Services, and Education.
            House resolution

                       FUNCTION 500: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES                       
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget Authority....................................    54,199    60,020    60,450    61,703    62,959    63,339
Outlays.............................................    50,466    56,062    59,335    60,728    61,931    62,316
----------------------------------------------------------------------------------------------------------------

      The House resolution provides $60.0 billion in budget 
authority for function 500 in fiscal year 1998 and $56.1 
billion in outlays. Over 5 years, the resolution provides 
$308.5 billion in budget authority and $300.4 billion in 
outlays.
      For discretionary programs in fiscal year 1998, this 
House resolution assumes $46.7 billion in budget authority [BA] 
and $43.2 billion in outlays. Over 5 years, it assumes $239.3 
billion in BA and $232.7 billion in outlays.
      The resolution assumes funding levels sufficient to meet 
the education priorities of Congress and the President. Among 
these priorities are Education Reform--including the Technology 
Literacy Challenge Fund--Bilingual and Immigrant Education, 
Pell Grant ($300 increase in 1998 maximum award amount to 
$3,000), child literacy initiatives consistent with the goals 
and the concepts of the President's America Reads Program, Head 
Start and Training and Employment Services--including Job 
Corps.
      The largest mandatory program in Function 500 is the 
student loan program. The House resolution assumes savings of 
$1.8 billion in student loans by reducing excess guaranty 
agency reserves in the guaranteed loan program and reducing 
administrative costs in the direct loan program. Students will 
not be affected by these changes. The same number of loans will 
be available to students at no additional cost to the students 
or their parents. The volume of student loans will grow from 
$27 billion in 1997 to $36 billion in 2002. The number of 
student loans will increase from 7,463,000 to 8,605,000.
      The specific policy assumptions are as follows:
      Reduce Section 458 (Direct Loan Administrative Account). 
The plan saves $603 million in outlays from the administration 
of the Direct Loan program. The proposal does not cap the 
direct lending.
      Eliminate $10 Direct Loan Fee. The plan eliminates the 
$10-per-loan subsidy to schools and alternate originators 
participating in the direct loan program.
      Reclaim Excess Guaranty Agency Reserves. This is a 
modified version of the President's proposal to recall excess 
guaranty agency reserves. This proposal would recall $1 billion 
and maintain 98 percent reinsurance levels for guaranty 
agencies. The administration's proposal would recall $2.5 
billion and have the Federal Government pay 100 percent of all 
default claims through direct Federal payments.
            Senate amendment
      Discretionary spending.--Discretionary spending in this 
function is a priority in the Bipartisan Budget Agreement. 
Discretionary spending in 1998 for this function would increase 
by $4.3 billion in BA and $2.8 billion in outlays over the 1997 
level, to $46.7 billion in BA and $43.2 billion in outlays in 
1998. By 2002, discretionary spending would grow by $6.8 
billion in BA and $8.2 billion in outlays over the 1997 level, 
for a total of $49.2 billion in BA and $48.6 billion in outlays 
in 2002. Compared to the Budget Resolution Baseline, spending 
in this function would increase by $9.7 billion in BA and $5.8 
billion in outlays over the next five years.
      In order to work toward the statutory federal goal of 
providing 40 percent of the national average per pupil 
expenditure per disabled child, the Senate amendment assumes a 
$5 billion increase in Special Education over the next five 
years.
      Pell Grants are a critical form of student financial 
assistance in that they target students from low income 
families. The Bipartisan Budget Agreement supports the 
President's request for an additional $8.6 billion for this 
program over the next five years, including bringing the 
maximum grant from $2,700 to $3,000.
      For Head Start, a program which provides pre-school 
programming for disadvantaged children, the Bipartisan Budget 
Agreement provides for the President's request which calls for 
an additional $2.7 billion over the next five years.
      The Bipartisan Budget Agreement provides funding for 
literacy programs consistent with the goals and concepts of the 
President's America Reads program.
      The Bipartisan Budget Agreement provides, as a priority 
item, the President's request for the Technology Literacy 
Challenge Fund, which will provide $946 million over the next 
four years for teacher training; updated computer equipment in 
classrooms; Internet connections; and other online learning 
resources. The program is scheduled to sunset in 2001.
      Bipartisan Budget Agreement provides, as a priority item, 
$446 million increase over the next five years for Bilingual 
and Immigrant Education programs to help limited English-
proficient students and local education agencies with large 
numbers of immigrant students.
      The Bipartisan Budget Agreement, according to the 
President's Budget, provides for growth at the rate of 
inflation for Job Corps, which provides basic education, 
training, work experience, and other support through primarily 
residential settings.
      In order to meet the Bipartisan Budget Agreement's 
discretionary spending limits, savings will be required from 
programs in this function. These savings will be determined by 
the Appropriation Committees.
      Examples of possible reductions include the following: 
(1) Terminate Public Broadcasting Facilities. Funding for this 
program, which provides grants to noncommercial entities for 
the planning and construction of broadcasting facilities 
throughout the United States, would be terminated in the 
President's Budget. (2) School Improvement Programs. The 
President's Budget proposes to terminate the Innovative Program 
Strategies Grant Program. (3)Children and Families Services 
Programs. The President's Budget assumes reductions totaling nearly 
$1.4 billion over the next five years in the following programs: 
Community Services Block Grant, Social Services Research and 
Demonstration, termination of Community Services Discretionary 
Activities, termination of National Youth Sports, and termination of 
the Community Food and Nutrition program. (4) Unemployment Trust Fund 
and Service Operations. Appropriations for this account could be 
reduced by replacing federal funds through the enactment of a new alien 
labor certification fee that was proposed in the President's Budget.
      Mandatory spending.--A significant source of mandatory 
funding within Function 500 includes the student loan programs. 
The subsidy for student loans is expected to grow from $3.9 
billion in 1998 to $4.1 billion in 2002. This federal subsidy 
will support $28.8 billion in student loan volume in 1998, 
growing to $35.8 billion in 2002.
      Proposed savings in student loan programs provided in the 
Bipartisan Budget Agreement would not increase costs, reduce 
benefits, or limit access to loans for students and their 
families. The specific policies assumed in the Bipartisan 
Budget Agreement are intended to achieve an equitable balance 
in savings between the direct student loan program and the 
guaranteed student loan program.
      The Bipartisan Budget Agreement provides for total 
savings in student loan programs of $1.8 billion over the next 
five years. Annual budget authority levels for the Section 458 
Funds for Administrative Expenses account of the Federal Direct 
Student Loan Program, would be reduced for a five year savings 
of $603 million. It would eliminate the $10 per loan federal 
payment to schools and alternate originators who make direct 
loans. Savings of $160 million over five years. This proposal 
would return to the federal government $1 billion in excess 
guarantee agency reserves which are not necessary for guarantee 
agencies to carry out their essential functions, saving $1 
billion over five years. The Bipartisan Budget Agreement would 
eliminate the mandatory vocational education appropriation 
under the Smith-Hughes Act of 1918, as is proposed in the 
President's Budget, for a savings of $29 million over five 
years.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with a technical 
adjustment with respect to function spending levels. The 
Conferees note that the past two budget resolutions have 
included provisions related to the costs of originating and 
servicing Direct Loans as well as FFELP Loans. This conference 
agreement assumes current law provisions related to these 
programs. The Conferees believe further discussion of 
scorekeeping of all federal and direct guarantee programs is 
necessary.

                          function 550: health

Major programs in function

      This function covers all health spending except that for 
Medicare, military health, and veterans' health. The major 
programs include Medicaid, health benefits for federal 
retirees, the National Institutes of Health, the Food and Drug 
Administration, the Health Resources and Services 
Administration, the Indian Health Service, the Centers for 
Disease Control, and the Substance Abuse and Mental Health 
Services Administration.
            House resolution

                                              FUNCTION 550: HEALTH                                              
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget Authority....................................   125,271   137,799   144,968   154,068   163,412   172,171
Outlays.............................................   127,421   137,767   144,944   153,947   163,135   171,727
----------------------------------------------------------------------------------------------------------------

      For fiscal year 1998, the House resolution assumes total 
function 550 budget authority [BA] of $137.8 billion and 
outlays of $137.8 billion. Over the 5-year period 1998-2002, it 
assumes budget authority of $772.4 billion and outlays or 
$771.5 billion.
      The House resolution provides $24.9 billion in budget 
authority and $24.6 billion in outlays in fiscal year 1998 for 
the Federal Government's discretionary health programs. Over 
the 5-year period 1998-2002, for function 550 discretionary 
programs it assumes budget authority of $122.8 billion and 
outlays of $123.2 billion.
      Under the Medicaid reform assumed in the House 
resolution, Medicaid outlays would be $105.3 billion in fiscal 
year 1998 and $604.7 billion over 5 years. There would be no 
per capita cap on Federal Medicaid spending. The plan calls for 
$13.6 billion in Federal Medicaid net savings over 5 years. 
Savings are derived from reduced disproportionate share 
hospital payments and flexibility provisions.
      Key components of the Medicaid reform assumptions are the 
following:
      Disproportionate Share Hospital Payments. Medicaid 
disproportionate share hospital [DSH] payments are additional 
payment adjustments made to hospitals serving a relatively 
large (disproportionate) volume of Medicaid or low-income 
patients. In fiscal year 1997, estimated Medicaid DSH payments 
are $9.8 billion. DSH payments vary greatly across the States, 
with some spending more than $1,000 per low-income resident, 
and others spending much less. This proposal would achieve 
Medicaid savings through DSH reform.
      State Medicaid Flexibility. The plan incorporates an 
unprecedented increase in State Medicaid flexibility. Key 
elements include provisions to allow States more flexibility in 
managing the Medicaid program, including repeal of the Boren 
Amendment, converting managed care and home/community based 
care waiver process to State Plan Amendment, and elimination of 
unnecessary administrative requirements.
      Net Medicaid savings include $919 million for a higher 
Federal Medicaid match rate for the District of Columbia; $250 
million for an inflation adjustment for programs in Puerto Rico 
and other territories; $1.5 billion to cover increased Medicaid 
cost under existing law due to the shift of home health care 
from Part A to Part B of Medicare and due to the maintenance of 
the Medicare Part B premium at 25 percent; and $1.5 billion to 
ease the impact of increasing Medicare premiums on low-income 
beneficiaries.
      The resolution assumes no per-capita cap limits.
      Additional components of mandatory spending include the 
following:
      Children's Health Insurance Initiatives. Under the 
Bipartisan Budget Agreement, Federal financial support to 
increase health insurance coverage for children who are 
uninsured will be provided. The resolution assumes that 
authorizing committees will draft legislation to use the 
Federal funds assumed in this resolution in the most cost-
effective manner possible. Options for their consideration 
would include: (a) modifications to existing programs, such as 
Medicaid, including outreach activities to identify and enroll 
eligible children and providing 12-month continuous 
eligibility; and also to restore Medicaid for current disabled 
children losing SSI because of the new, more strict definitions 
of childhood eligibility; (b) a capped mandatory spending 
program, such as grants to the States; a combination of (a) and 
(b); or other approaches. The resolution assumes that $16 
billion will be spent over the next 5 years to provide up to 5 
million additional children with health insurance coverage by 
2002. These resources will be used in the most cost-effective 
manner possible to expand coverage and services for low-income 
and uninsured children with a goal of up to 5 million currently 
uninsured children being served. These funds may not be used to 
decrease required savings.
            Senate amendment
      Discretionary spending.--The Senate amendment provides 
discretionary spending for this function in 1998 of $24.9 
billion in BA and $24.6 billion in outlays. Compared to 1997, 
BA is $0.1 billion lower, and outlays are $0.8 billion higher. 
Over five years, discretionary spending in this function is 
$13.2 billion in BA and $10.0 billion in outlays below the 
Budget Resolution Baseline. Discretionary spending is $2.2 
billion in BA and $1.4 billion in outlays below a five year 
freeze baseline. The Senate amendment assumes the National 
Institutes of Health will be given priority in terms of funding 
levels throughout the five year period.
      In order to meet the Bipartisan Budget Agreement's 
discretionary spending limits, savings will be required in 
programs in this function. These savings will be determined by 
the Appropriations Committees. The following are examples of 
possible reductions. The President's proposals to reduce 
funding for Health Professions and General Departmental 
Management; and reductions in funding for the Agency for Health 
Care Policy and Research.
      Mandatory spending.--The Senate amendment includes net 
Medicaid savings of $13.6 billion over five years. Net Medicaid 
savings in the Senate amendment include a higher match for 
D.C., an inflation adjustment for programs in Puerto Rico and 
other territories, Part B premium interactions, and $1.5 
billion to ease the impact of increasing Medicare premiums on 
low-income beneficiaries. The $13.6 billion in Medicaid savings 
do not reflect the health care investments for children's 
coverage, protections for legal immigrants under welfare 
reform, or the extension of veterans' Medicaid income 
protections. The Senate amendment includes savings derived from 
reduced disproportionate share payments and flexibility 
provisions. The Senate amendment includes provisions to allow 
States more flexibility in managing the Medicaid program, 
including repeal of the Boren amendment, converting current 
managed care and home/community-based care waivers to State 
Plan Amendment, and elimination of unnecessary administrative 
requirements.
      The Senate amendment $16 billion over five years (to 
provide up to 5 million additional children with health 
insurance coverage by 2002). The funding could be used for one 
or both of the following, and for other possibilities if 
mutually agreeable: (1) Medicaid, including outreach activities 
to identify and enroll eligible children and providing 12-month 
continuous eligibility; and also to restore Medicaid for 
current disabled children losing SSI because of the new, more 
strict definition of childhood eligibility; and (2) A program 
of capped mandatory grants to States to finance health 
insurance coverage for uninsured children. The resources will 
be used in the most cost-effective manner possible to expand 
coverage and services for low-income and uninsured children 
with a goal of up to 5 million currently uninsured children 
being served.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

                         function 570: medicare

Major programs in function

      This function includes only the Medicare program. 
Medicare pays for medical services for 38.1 million senior 
citizens, disabled workers, and persons with end-stage renal 
disease. Medicare is administered by the Health Care Financing 
Administration, part of the Department of Health and Human 
Services.
            House resolution

                                             FUNCTION 570: MEDICARE                                             
                                            [in millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget Authority....................................   190,792   201,620   212,073   225,540   239,636   251,548
Outlays.............................................   191,266   201,764   211,548   225,537   238,781   250,769
----------------------------------------------------------------------------------------------------------------

      The House resolution assumes that spending for this 
function total $201.6 billion in budget authority and $201.8 
billion in outlays for fiscal year 1998. The House resolution 
assumes that spending for this function total $1,130.4 billion 
in budget authority and $1,128.4 billion in outlays for fiscal 
years 1998-2002.
      Function 570 discretionary spending consists of the 
administrative costs of the Medicare Part A and Part B 
programs. The House resolution assumes that discretionary 
spending for this function total $2.7 billion in budget 
authority and $2.7 billion in outlays for fiscal year 1998. The 
House resolution assumes that discretionary spending for this 
function total $13.4 billion in budget authority and $13.3 
billion in outlays for fiscal years 1998-2002.
      In accordance with the budget agreement between the 
administration and the congressional negotiators, this House 
resolution assumes the following:
      Reduce projected Medicare spending by $115 billion over 5 
years;
      Extend the solvency of the Part A Trust Fund for at least 
10 years through a combination of savings and structural 
reforms (including the home health reallocation);
      Structural reforms will include provisions to give 
beneficiaries more choices among competing health plans, such 
as provider sponsored organizations and preferred provider 
organizations;
      The Medicare program reforms provide beneficiaries with 
comparative information about their options, such as now 
provided Federal employees and annuitants in the FEHB program;
      Maintain the Part B premium at 25 percent of program 
costs and phase in over 7 years the inclusion in the 
calculation of the Part B premium the portion cost of home 
health expenditures reallocated to Part B;
      Reform managed care payment methodology to address 
geographic disparities that has limited HMO access in rural 
areas;
      Reform payment methodology by establishing prospective 
payment systems for areas such as home health providers, 
skilled nursing facilities, and outpatient departments; and
      Funding for new health benefits including: (1) expanded 
mammography coverage; (2) coverage for colorectal screenings; 
(3) coverage for diabetes self-management; and (4) higher 
payments to providers for preventive vaccinations to the extent 
it will lead to greater use by beneficiaries. Invest $4 billion 
over 5 years (and $20 billion over 10 years) to limit 
beneficiary copayments for outpatient services, unless there is 
a more cost-effective way to provide such services to 
beneficiaries as mutually agreed.
            Senate amendment
      Discretionary spending.--The Senate amendment assumes 
$2.7 billion in BA and outlays for discretionary spending in 
this function in 1998, which is $0.1 billion higher in BA 
compared to 1997 and essentially a freeze in outlays. Over five 
years, discretionary spending in this function is $1.5 billion 
in BA and $1.4 billion in outlays below the Budget Resolution 
Baseline and $0.4 billion in BA and outlays above a five year 
discretionary freeze.
      Mandatory spending.--Under current law, net Medicare 
mandatory spending is estimated to grow from $188.6 billion in 
1997 to $288.1 billion in 2002, for an average annual growth 
rate of 8.8 percent. On a per capita basis, spending is 
expected to increase from $4,949 in 1997 to $7,114 in 2002, for 
a 7.5 percent average annual growth rate.
      The Bipartisan Budget Agreement includes a reduction of 
projected Medicare spending by $115 billion over five years, 
and by an estimated $434 billion over ten years. As well as an 
extension of solvency of the Part A Trust Fund for at least 10 
years through a combination of savings and structural reforms 
(including the home health reallocation). Under the agreement, 
net Medicare spending will reach $248.1 billion in 2002, for an 
average annual growth rate of 5.6%. On a per capita basis, 
spending will reach $6,127 in 2002, for an average annual 
growth rate of 4.4%.
      Structural reforms, in the Bipartisan Budget Agreement 
will include provisions to give beneficiaries more choices 
among competing private insurance options, such as provider 
sponsored organizations and preferred provider organizations. 
The Medicare program reforms will provide beneficiaries with 
comparative information about their options, such as 
nowprovided Federal employees and annuitants in the FEHB program. These 
proposals are similar to reforms sponsored by Senator Gregg, Senator 
Wyden, and others.
      The Bipartisan Budget Agreement maintains the Part B 
premium permanently at 25 percent of program costs and phase in 
over seven years the inclusion in the calculation of the Part B 
premium the portion of home health expenditures reallocated to 
Part B. It reforms managed care payment methodology to address 
geographic disparities. It also reforms payment methodology by 
establishing prospective payment systems for areas such as home 
health providers, skilled nursing facilities, and outpatient 
departments.
      Funding for new health benefits, in the Bipartisan Budget 
Agreement includes: (1) expanded mammography coverage; (2) 
coverage for colorectal screenings; (3) coverage for diabetes 
self-management; and (4) higher payments to providers for 
preventive vaccinations to the extent it will lead to greater 
use by beneficiaries. Invest $4 billion over five years (and 
$20 billion over ten years) to limit beneficiary copayments for 
outpatient services, unless there is a more cost-effective way 
to provide such services to beneficiaries as mutually agreed.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

                     Function 600: INCOME SECURITY

Major programs in function

      Function 600, Income Security, funds a broad range of 
programs including federal retirement programs, the major cash 
and in-kind welfare programs, housing programs and nutrition 
programs. These programs are administered by several agencies 
and departments including the Department of Health and Human 
Services, the Office of Personnel Management, the Social 
Security Administration, the Department of Housing and Urban 
Development and the Department of Agriculture.
            House resolution

                                          FUNCTION 600: INCOME SECURITY                                         
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget Authority....................................   228,802   239,032   254,090   269,566   275,145   286,945
Outlays.............................................   237,822   247,758   258,064   268,161   277,264   285,239
----------------------------------------------------------------------------------------------------------------

      The House resolution assumes $239.0 billion in budget 
authority [BA] and $247.8 billion in outlays for fiscal year 
1998. Over the 5-year period, from 1998 through 2002, the 
resolution assumes a total of $1.3 trillion in BA and $1.4 
trillion in outlays.
      The House resolution assumes that budget authority for 
discretionary programs will be $32.9 billion in 1998 and total 
$184.7 over the next 5 years. Likewise, outlays are estimated 
to be $41.3 billion in 1998 and $206.2 billion over the next 5 
years. Included in these figures is the assumption that the 
requested level in the President's budget ($89 million) is 
provided for Unemployment Insurance [UI] integrity activities 
in addition to continuing integrity activities already funded 
in the base UI administrative grants to obtain these savings.
      The present Section 8 Housing program will require large 
increases in resources just to maintain the system as it is now 
structured. The House resolution assumes adequate funding so 
these obligations can be met. This will entail renewing 
contracts on almost two million apartments for 1998 alone. By 
doing so, the Federal Government will be able to continue to 
provide assistance to those tenants who now receive it. The 
nature of the problem over time worsens, and long term 
structural reforms are needed. The House resolution assumes the 
maintenance of Section 8 assisted housing units at the 1997 
level. Though this will entail an increase in resources, the 
resolution assumes this additional funding for renewals will 
not be used for a net increase in subsidized apartments, except 
for assistance extended to tenants displaced by the demolition 
of a dilapidated building or for other reasons. The House 
resolution also anticipates reforms will be passed by the House 
Banking Committee allowing rents on Section 8 projects to be 
reduced to market levels by reducing mortgages on many of these 
projects. Since these projects have federally insured mortgages 
reducing the rents associated with subsidized apartments, 
mortgage restructuring is essential to avert widespread 
defaults. The House resolution recognizes the need to address 
concerns related to the tax consequences of reducing many of 
these mortgages. When reducing the mortgage amount, many 
project owners may face large tax liabilities. Also, there may 
be a need for reforms of the bankruptcy code related to these 
particular projects. The resolution assumes the necessary 
committees of jurisdiction will work together to produce the 
appropriate legislative language.
      The House resolution assumes several modifications to the 
Personal Responsibility and Work Opportunity Act of 1996, 
welfare reform enacted last year by Congress and the President. 
It restores eligibility for Supplemental Security Income [SSI] 
disability and Medicaid benefits for those noncitizens who 
entered the United States prior to August 23, 1996, or who 
entered after that date but were enrolled in the program by 
June 1, 1997. These individuals will be eligible to receive SSI 
disability benefits if they are now disabled, or if they become 
disabled in the future. The House resolution also assumes 
lengthening the period during which refugees and asylees may 
qualify for public benefits from 5 to 7 years after attaining 
their immigration status. But the balanced budget plan retains 
the ban on noncitizeneligibility for SSI benefits for 
nondisabled noncitizens, and for all noncitizens who entered the 
country after August 23, 1996 and who were not enrolled by June 1, 
1997. Under the House resolution, public benefits remain available to 
noncitizens who have worked in the United States and paid taxes for at 
least 10 years, or who are veterans of the U.S. military or dependents 
of veterans, in addition to persons who become naturalized citizens.
      The House resolution also creates additional workfare 
positions within the Food Stamp Employment and Training Program 
for able-bodied adults subject to new work requirements in the 
Food Stamp law enacted last year. The plan also permits 
Governors to offer hardship exemptions--in addition to other 
waivers under existing law--to 15 percent of those individuals 
in their States who would otherwise lose Food Stamp benefits 
because of their failure to comply with the work requirement. 
Total costs associated with these work slots and additional 
benefits resulting from them and from the new 15 percent 
exemptions are $1.5 billion over 5 years.
      Although the balanced budget plan provides additional 
opportunities for obtaining workfare and adds an additional 
opportunity for governors to waive the work requirement in 
certain cases, the basic structure of the work requirement 
enacted last year remains intact. Under the welfare reform law, 
able bodied adults with no child care responsibilities must 
work at least 20 hours per week to continue eligibility for 
food stamps after they have received 3 months of benefits in 
any 3-year period. If the individual becomes employed and then 
is laid off during the period, they become eligible for another 
3 months worth of benefits without the required 20 hours per 
week of work activity. Governors may request a waiver of the 
requirement for persons who live in areas of high unemployment, 
where jobs are unavailable.
      The balanced budget plan also provides $3 billion in 
capped mandatory spending through 2001 to the Temporary 
Assistance to Needy Families [TANF] block grant, allocated to 
States through a formula and targeted within a state to areas 
with poverty and unemployment rates at least 20 percent higher 
than the state average. A share of funds would go to cities/
counties with large poverty populations commensurate with the 
share of long-term welfare recipients in those jurisdictions.
      These amounts for low-income restorations may not be used 
to decrease required savings.
      The balanced budget plan accepts several recommendations 
made by the administration to address the problem of an 
estimated $5 billion in annual overpayments within the Earned 
Income Credit. Among these recommendations are reallocating IRS 
resources to police the credit, creating demonstration projects 
in four states that will examine alternative methods for 
providing the credit, and requiring ``due diligence'' in the 
preparation of returns claiming the credit on the part of tax 
preparers. Penalties for deliberate fraud will be increased, 
and a greater burden of proof will be required of taxpayers 
claiming the credit who have had their claims denied.
      Together, these reforms are estimated to generate $124 
million in savings over the next 5 years.
      The resolution does not assume any delay in the payment 
of cost-of-living adjustments. Increased agency and employee 
contributions to the Federal retirement system are discussed in 
Function 950 and Revenues.
      The House resolution assumes $624 million in Trust Fund 
savings over 5 years by increasing the ceiling on federal 
administrative Trust Funds to .5 percent of total covered 
benefits. A total of $100 million annually in trust fund 
receipts would still be permitted to flow into state trust fund 
accounts.
      The balanced budget plan also generates $763 million in 
savings over 5 years by conducting more benefit integrity 
activities within the program aimed at detecting fraudulent 
Unemployment Insurance claims and underpayment of Unemployment 
Insurance taxes.
      To provide low income Americans with a chance to obtain 
access to housing, the Federal Government contracts with 
private project owners to provide affordable rental units. The 
project owner receives Federal assistance payments as well as 
rent from the tenant, which is capped at 30 percent of the 
tenant's income. Currently, some low-income project owners 
receive subsidies for their units which are in excess of the 
market rates for comparable buildings. By reducing the annual 
adjustments the project owner receives each year for these 
units, the Federal Government can obtain significant savings.
      This proposal is an extension of current law set to 
expire at the end of fiscal year 1997. It would reduce the 
annual adjustment for projects whose rents are currently above 
120 percent of the fair market rent. It would also reduce the 
annual adjustment for those apartments where there has been no 
tenant turnover. The resolution assumes these reforms should be 
made permanent starting in fiscal year 1999.
            Senate amendment
      Discretionary spending.--Discretionary spending in 1998 
for this function would increase by $6.3 billion in BA and $0.4 
billion in outlays over the 1997 level, to $32.9 billion in BA 
and $41.3 billion in outlays. Comparing 1997 levels to those in 
2002 under the reported resolution, spending would increase by 
$13.0 billion in BA (because of the requirements of additional 
BA to renew expiring section 8 housing contracts in place under 
current law), but would decrease by $0.1 billion in outlays by 
2002 (baseline outlays increase by $5.2 billion from 1997 to 
2002, but the Senate amendment would save $5.3 billion in 
2002).
      The Senate Amendment includes sufficient funding to renew 
all section 8 contracts that expire over the next five years, 
while reflecting savings from policies proposed in the 
President's budget, which will guarantee that all those 
currently receiving assistance (or waiting for an existing unit 
to become available) will continue to receive such assistance.
      The Senate amendment assumes that basic administrative 
funds are frozen, but that additional funds will be available 
for payment integrity and anti-fraud actions. The additional 
payment integrity activities would generate $763 million in 
entitlement unemployment insurance savings. This policy is part 
of the President's 1998 Budget and saves an additional $1.6 
billion in discretionary costs.
      The aggregate numbers in this function will support the 
overall level of spending assumed in the Bipartisan Budget 
Agreement. In order to meet the Bipartisan Budget Agreement's 
discretionary spending limits, savings will be required from 
programs in this function. These savings will be determined by 
the Appropriation Committees.
      Examples of possible reductions include the following: 
(1) Public housing funds and other housing programs. The 
President's Budget would freeze at the 1997 appropriation level 
the funding for public housing. The public housing 
reauthorization changes expected to be passed by the Congress 
would facilitate the operation of public housing programs in a 
freeze environment. (2) Housing preservation. The President's 
Budget would end funding for housing preservation. (3) Other 
housing programs. The President's Budget would reduce funding 
below baseline levels for the HOME program, housing for special 
populations, revitalization of distressed public housing, HUD 
salaries and expenses, homeless assistance grants, drug 
elimination grants, very low income repair grants, mutual self-
help grants, and rural housing preservation grants. (4) Food 
Program Administration. The costs of federal administration of 
food programs--food stamps, child nutrition--would be frozen at 
the 1997 level. These costs can be frozen since most food 
assistance program caseloads have declined over the past three 
years, and actual spending on entitlement nutrition programs in 
1997 will be lower than 1996 spending. This proposal is part of 
the President's Budget and would save $62 million over five 
years. (5) Railroad Retirement. The President's proposals for 
Railroad Retirement Board administrative expenses and for 
windfall benefit funding would yield savings relative to the 
Budget Resolution Baseline of $0.4 billion in BA and outlays 
over the next five years. The windfall benefit funding in the 
President's budget is not a cut in benefits but an adjustment 
to the baseline reflecting the natural decline in the number of 
eligible beneficiaries for this closed-group benefit.
      Mandatory spending.--Of total spending in this function 
for 1997, $197.0 billion (or 83 percent) is spent on mandatory 
programs. Six programs account for $165.9 billion in outlays in 
this function--$90.9 billion funds the major cash and in-kind 
means tested programs of Food Stamps, Supplemental Security 
Income (SSI), Temporary Assistance for Needy Families (TANF) 
and outlays for the Earned Income Tax Credit (EITC). The 
balance of mandatory outlays, $75.0 billion is spent on federal 
retirement programs and $24.5 billion is spent on unemployment 
insurance.
      The Bipartisan Budget Agreement restores SSI and Medicaid 
eligibility for all disabled legal immigrants who are or become 
disabled and who entered the U.S. prior to August 23, 1996. 
Those disabled legal immigrants who entered after the August 
22, 1996, and are on the rolls before June 1, 1997 shall not be 
removed. This policy will cost $9.4 billion which includes $1.6 
billion in Medicaid costs found in function 550.
      The welfare reform bill exempted refugees and asylees 
from the ban on government assistance for five years. The 
agreement extends the refugee and asylee exemption from five 
years to seven years. This policy costs $300 million over five 
years.
      The Bipartisan Budget Agreement $750 million in new 
capped mandatory funding to create additional work slots for 
individuals subject to the time limits. In addition, existing 
food stamps employment and training funds will be redirected to 
fund work slots. The agreement also allows states to exempt up 
to 15 percent of the individuals who would lose benefits 
because of the time limits (beyond current waiver policy) at a 
cost of $500 million over five years.
      The Bipartisan Budget Agreement adds $3 billion over the 
next four years to the Temporary Assistance for Needy Families 
(TANF) block grant. These additional funds will be distributed 
through a formula and targeted to areas with poverty and 
unemployment at least 20 percent higher than the state average. 
A share of the funds would go to cities/counties with large 
poverty populations commensurate with the share of long-term 
welfare recipients in those jurisdictions.
      The Bipartisan Budget Agreement increases the ceilings of 
the Federal FUTA-funded accounts in the Unemployment Trust Fund 
to increase solvency. This policy saves $624 million over five 
years.
      The Bipartisan Budget Agreement includes savings from 
several compliance initiative concurrent with an IRS study 
finding a 23 percent error rate. Other mutually acceptable EITC 
reforms targeted to reducing noncompliance and fraud may also 
be considered. The savings from the President's initiatives are 
approximately $124 million over five years.
      The Senate amendment assumes continuation of proposals in 
the President's Budget to limit certain automatic increases in 
payments made to section 8 landlords from 1999-2002.
      The Bipartisan Budget Agreement assumes the President's 
proposal of a 1.51 percent increase in federal agency 
contributions for all employees in the Civil Service Retirement 
System (CSRS), excluding the Postal Service, for a savings of 
$2.9 billion (shown in Function 950, Undistributed Offsetting 
Receipts).
      The Bipartisan Budget Agreement assumes the President's 
proposal for a 0.5 percentage point increase in the federal 
employee's current retirement contribution rate. Rates for 
employees in the Civil Service Retirement System (CSRS) will 
increase from 7 percent to 7.5 percent, and rates for employees 
in the Federal Employees Retirement System (FERS) will increase 
from 0.8 to 1.3 percent, both on a phased-in basis beginning in 
1999, according to the following schedule: 0.25 percent in 
1999, 0.15 percent in 2000, and 0.10 percent in 2001. Total 
savings would amount to $1.8 billion (shown in Revenues).
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

                     Function 650: Social Security

Major programs in function

      This function includes only Social Security old age, 
survivors, and disability insurance (OASDI). Benefits are paid 
from the Social Security trust funds and financed primarily 
with payroll taxes. For purposes of the Budget Enforcement Act, 
the Social Security trust funds are off-budget. However, the 
administrative expenses of the Social Security Administration 
(SSA) are on-budget and remain within the caps on discretionary 
spending.
            House resolution

                                          FUNCTION 650: SOCIAL SECURITY                                         
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget Authority....................................   363,175   380,781   399,389   419,400   440,113   463,505
Outlays.............................................   366,405   384,102   402,811   422,770   443,893   466,786
----------------------------------------------------------------------------------------------------------------

      The House resolution assumes no changes in Social 
Security benefits.
            Senate amendment
      Discretionary spending.--The Senate amendment provides 
discretionary spending in 1998 for this function at $3.3 
billion in BA and $3.4 billion in outlays, which is $0.2 
billion below the 1997 level for BA and $0.1 billion lower for 
outlays. Over the five year period, discretionary spending is 
$3.2 billion in BA and $2.8 billion in outlays below the Budget 
Resolution Baseline and $1.4 billion in BA and $1.0 billion in 
outlays below a freeze baseline.
      Mandatory Spending.--The Senate amendment assumes no 
changes from current law for mandatory spending in this 
function.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

                     Function 700: Veteran Affairs

Major programs in function

      Function 700 funds the Department of Veteran Affairs 
which oversees programs for veterans of the armed forces. 
Compensation, pension and life insurance programs address the 
income security needs of disabled and indigent veterans as well 
as their survivors. Major education, training and 
rehabilitation and readjustment programs include the Montgomery 
GI bill, Veterans Educational Assistance program and the 
Vocational Rehabilitation and Counseling program. Veterans are 
also eligible for guaranteed home and farm loans. Roughly half 
of all spending on veterans goes to the Veterans Health 
Administration which comprises over 700 hospitals, nursing 
homes, domiciliaries and outpatient clinics.
            House resolution

                                  FUNCTION 700: VETERANS' BENEFITS AND SERVICES                                 
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget Authority....................................    39,125    40,545    41,466    41,740    42,093    42,282
Outlays.............................................    39,445    41,337    41,700    41,908    42,215    42,436
----------------------------------------------------------------------------------------------------------------

      The VA administers a vast health care system for veterans 
who meet certain eligibility criteria. Care is provided largely 
in facilities owned and operated by the VA. In 1996, the VA-
operated facilities included 173 medical centers, 130 nursing 
home care units, 375 outpatient clinics, and 39 domiciliaries. 
In recent years, about 2.8 million veterans used the VA health 
care system, representing just over 10 percent of the total 
veteran population.
      The VA pays monthly cash benefits to veterans who have 
service-connected disabilities. The basic amounts of 
compensation paid are based on percentage-of-disabilityrating 
(multiples of 10 percentage points) assigned to the veteran. In fiscal 
year 1998, about 2.6 million veterans will receive disability 
compensation, with Federal obligations totaling about $16.7 billion. 
The VA pays monthly cash pension benefits to about 714 thousand 
veterans or their survivors. These pension obligations will total about 
$3.0 billion in fiscal year 1998.
      For fiscal year 1998, the House resolution assumes total 
function 700 budget authority of $40.5 billion and outlays of 
$41.3 billion. Over the 5-year period 1998-2002, it assumes 
budget authority of $208.1 billion and outlays of $209.6 
billion.
      The House resolution assumes funding of $18.5 billion in 
budget authority [BA] and $19.3 billion in outlays in fiscal 
year 1998 for the Federal Government's discretionary veteran's 
programs. Over the 5-year period 1998-2002, for Function 700 
discretionary programs it assumes budget authority of $91.4 
billion and outlays of $92.2 billion.
      In addition to these sums, under the Bipartisan Budget 
Agreement, VA medical care will be able to retain third party 
insurance and user fees to partially offset the cost of care 
provided in VA facilities, CBO estimates that this will 
supplement budget authority by $604 million for fiscal year 
1998.
      The House resolution assumes funding of $22.1 billion in 
budget authority and $22.1 billion in outlays in fiscal year 
1998 for the Federal Government's mandatory veteran's programs. 
Over the 5-year period 1998-2002, for Function 700 mandatory 
programs it assumes budget authority of $116.8 billion and 
outlays of $117.4 billion. The following policy assumptions are 
made:
      Round down the VA compensation cola to the nearest whole 
dollar;
      Extend expiring provisions of current law that sunset in 
1998. This assumption assumes permanently extending the 
following provisions of current law that will otherwise expire 
in 1998: income verification for pension eligibility; the 
pension limit for persons in Medicaid nursing homes; and the 
three expiring OBRA provisions of VA housing loan fees and 
default procedures; and
      Other Provisions. The resolution also assumes the 
acceptance of the administration's legislative proposal to 
allow VA Medical Care to retain user fees and third party 
collections to offset the cost of care provided in VA 
facilities starting October 1, 1997. The resolution also 
assumes repeal of the prohibition on home loan debt 
collections, extending real estate mortgage investment 
conduits, and an increase in the fee for non-veterans using 
VA's vendee loan program.
            Senate amendment.
      Discretionary spending.--In 1998, discretionary spending 
is assumed to decrease by $0.4 billion in BA but increase by 
$0.1 billion in outlays over the 1997 level to $18.5 billion in 
BA and $19.3 billion in outlays. Over the next five years, 
spending is assumed to decrease modestly to $18.0 billion in BA 
and outlays. The discretionary funding level will be augmented 
by converting the receipts of the Medical Care Cost Recovery 
fund into additional spending for the Veteran Hospital system. 
The shift of offsetting receipts from mandatory spending to 
discretionary spending has been incorporated into the Budget 
Committee's adjusted baseline. Over the next five years the 
number of veterans will continue to decline and after 1999, the 
over-65 veteran population will decrease.
      The aggregate numbers in this function will support the 
overall level of spending assumed in the Budget Agreement. In 
order to meet the Bipartisan Budget Agreement's discretionary 
spending limits, savings will be required from programs in this 
function. These savings will be determined by the Appropriation 
Committees.
      Examples of possible reductions include the following: 
(1) Medical Administration and Miscellaneous Expenditures. The 
President's Budget proposes $40 million in savings from 
freezing the Medical Administration account from the Budget 
Resolution Baseline. (2) Construction of Medical Facilities. 
Adopting the President's proposal of funding no new major 
construction but providing for renovations and repair of 
existing facilities would save about $800 million over five 
years compared to the baseline. (3) General Operating Expenses. 
Freeze General Operating Expenses (GOE) at the 1997 level. This 
proposal was part of the President's Budget and saves $395 
million over five years from the Budget Resolution Baseline.
      Mandatory spending.--Spending on mandatory veterans 
programs will rise by 23 percent over the next five years 
because of: cost-of-living increases, regulatory expansion of 
eligible populations, and a growing veteran population over the 
short term. Mandatory compensation benefits will peak in 2005 
and gradually decline. Compensation and pension benefits will 
rise with inflation, but the overall veteran population will 
begin declining shortly after 2000. Starting in 1999 the over-
65 veteran population will begin to decline. Finally, there 
have been recent administrative actions that have expanded 
eligibility for compensation, especially the Vietnam-era 
population.
      A provision in both the Senate amendment and the 
Bipartisan Budget Agreement extends expiring provisions of OBRA 
1993: Medical Care. (1) recovery of third party insurance 
costs, a $2 co-pay for prescription drugs and a per diem for 
hospital care, and (2) verification of income for medical care 
determination. The extensions of current law were part of the 
President's Budget and the 1997 budget resolution. Cumulatively 
the extensions add $1 billion to the Medical Care Cost Recovery 
fund which is transferred to discretionary spending. In 
addition the Senate amendment assumes savings from the 
mandatory administrative costs of collecting the co-pays and 
per diems, saving $641 million over five years.
      The Senate amendment and the Bipartisan Budget Agreement 
extend expiring provisions of OBRA 1993: Housing Fees. 
Permanently extends (1) .75% home loan fee, (2) 3% fee on 
multiple use and (3) resale loss formula. In addition the 
Senate amendment and the Bipartisan Budget Agreement includes 
the President's proposal to charge non-veterans a fee when 
buying VA held properties to cover the costs of the program. In 
all the extended fees and new fees save $90 million over five 
years.
      Both the Senate amendment and the Bipartisan Budget 
Agreement extend expiring provisions of OBRA 1993: Pension 
Limitation for Veterans in Medicaid Nursing Homes. Extends an 
expiring provision of law that limits pension benefits to $90 
per month for veterans residing in Medicaid paid nursing homes. 
Saves $677 million over five years net of increased Medicaid 
costs.
      The Secretary of the Veterans' Administration lacks 
authority to withhold compensation payments for veterans' 
delinquent on housing loans. The Senate amendment the Secretary 
to withhold a portion of VA payments for veterans delinquent on 
loan payments. This proposal is part of the President's Budget 
and the 1997 budget resolution and saves $90 million in 1998.
      The Secretary has authority to bundle VA-backed mortgages 
into Real Estate Mortgage Investment Conduits (REMICs). REMICs 
are securities sold to investors which are carry the full faith 
and credit of the United States and command lower interest 
rates. The Senate amendment assumes an extension of current law 
indefinitely, and is part of the President's Budget and the 
1997 Budget Resolution. This proposal saves $5 million per year 
and $25 million over five years.
      Compensation and Pension beneficiaries receive annual 
Cost of Living Allowances which are tied to the Consumer Price 
Index (CPI). The Senate amendment assumes extension of current 
law and rounds down the COLA increase per beneficiary to the 
nearest whole dollar. This proposal is part of the President's 
Budget and the 1997 Budget Resolution. Rounding down COLA's 
saves $391 million over five years.
            Conference agreement.
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

                function 750: administration of justice

Major programs in function

      Function 750 includes funding for federal law enforcement 
activities, including criminal investigations by the Federal 
Bureau of Investigation (FBI) and the Drug Enforcement 
Administration (DEA), border enforcement and the control of 
illegal immigration by the Customs Service and Immigration and 
Naturalization Service (INS), as well as funding for prison 
construction, drug treatment, crime prevention programs and the 
federal Judiciary.
            House resolution.

                                     FUNCTION 750: ADMINISTRATION OF JUSTICE                                    
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget authority....................................    23,506    24,765    25,120    24,178    24,354    24,883
Outlays.............................................    20,744    22,609    24,476    25,240    25,901    24,879
----------------------------------------------------------------------------------------------------------------

      The House resolution assumes $24.8 billion in budget 
authority and $22.6 billion in outlays will be provided in 
fiscal year 1998, and $123.3 billion in budget authority and 
$123.1 billion in outlays for 1998-2002. This amount assumes 
the Bipartisan Budget Agreement.
      For discretionary programs, the House resolution assumes 
$24.4 billion in budget authority and $22.2 billion in outlays 
for fiscal year 1998, and $121.9 billion in budget authority 
and $121.8 billion in outlays for 1998-2002.
      Included in the total discretionary funding for this 
function is the Violent Crime Reduction Trust Fund which, the 
House resolution assumes $5.500 billion in budget authority and 
$3.592 billion in outlays for fiscal year 1998, and $24.7 
billion in budget authority and $24.6 billion in outlays for 
1998-2002. The Bipartisan Budget Agreement assumes the 
President's level for the trust fund.
      The House resolution makes no mandatory assumptions in 
this function.
            Senate amendment.
      Discretionary spending.--Discretionary spending in 
Function 750 Administration of Justice is a priority function 
in the Bipartisan Budget Agreement.
      Discretionary spending in 1998 for this function would 
increase by $1.5 billion in BA and $1.8 in outlays over the 
1997 level, to $24.4 billion in BA and $22.2 billion in 
outlays. Over the five year period, spending would increase to 
$24.7 billion in BA and $25.7 billion in outlays by 2002. The 
Administration of Justice function contains the Violent Crime 
Reduction TrustFund programs which will expire after 2000 under 
current law. The Senate amendment retains current law on separate 
violent crime reduction trust fund caps as assumed in the agreement.
      In general the Bipartisan Budget Agreement assumes 
continued investments in federal and state law enforcement. 
Ongoing programs, including general fund programs, are 
generally assumed to increase with inflation. Several programs 
including the INS, FBI, DEA and Bureau of Justice Assistance 
will receive funds over baseline. The Bipartisan Budget 
Agreement assumes major investments in additional personnel to 
fight illegal immigration especially along the Southwest 
border, increased resources to combat and adjudicate drug 
trafficking and violent crime, additional funding to modernize 
and maintain law enforcement equipment and facilities, 
additional resources to fight juvenile crime, and extra funding 
to combat acts of international and domestic terror.
      The Senate amendment assumes adequate funding for federal 
law enforcement agencies responsible for the control of illegal 
immigration and drugs, especially the Customs Service, the 
Immigration and Naturalization Service and the Drug Enforcement 
Administration. There is a particular emphasis for fully 
funding the Southwest border initiatives, proper staffing 
levels including support staff, and assuring access to the 
latest and best technologies for fighting drugs.
      This program was created by the Violent Crime Reduction 
Act to automate paper-bound state legal systems. The Senate 
amendment assumes the program is terminated once the automation 
goals are complete. This proposal saves roughly $100 million 
after from 2000 to 2002.
      The state prison construction program was created with 
the Violent Crime Trust Fund. States currently receive $750 
million per year. The Senate amendment assumes sufficient 
spending to achieve the prison construction program goals. This 
proposal saves roughly $2.3 billion from 2000 to 2002 compared 
to the baseline.
      The COPS program provides states with seed money to hire 
beat policemen. The goal of the program is to pay for an 
additional 100,000 cops on the beat over five years. The Senate 
amendment provides sufficient funding to meet the goal of 
current law. The Senate amendment also assumes that states will 
continue receiving assistance from the State and Local Law 
Enforcement Block Grant which focuses resources on areas of 
high crime.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

                    function 800: general government

Major programs in function

      Function 800 consists of the activities of the 
Legislative Branch, the Executive Office of the President, U.S. 
Treasury fiscal operations (including the Internal Revenue 
Service), personnel and property management, and general 
purpose fiscal assistance to states, localities, and U.S. 
territories. For 1997 discretionary spending for Function 800 
will be approximately 84 percent of total spending for the 
function. About 60 percent of the discretionary spending is for 
the Internal Revenue Service. Slightly more than half of the 
mandatory spending is attributed to the Treasury claims fund. 
The remainder is primarily payments to states, localities, and 
Puerto Rico.
            House resolution

                                        FUNCTION 800: GENERAL GOVERNMENT                                        
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Budget authority....................................    13,987    14,711    14,444    13,977    13,675    13,105
Outlays.............................................    13,881    13,959    14,363    14,727    14,131    13,100
----------------------------------------------------------------------------------------------------------------

      The House resolution assumes $14.7 billion in total 
budget authority and $14.0 billion in outlays in fiscal year 
1998. Over 5 years, it assumes $69.9 billion in total budget 
authority and $70.3 in outlays.
      The House resolution assumes $12.6 billion in budget 
authority [BA] and $11.9 billion in outlays for discretionary 
programs in fiscal year 1998. Over 5 years, it assumes $59.6 
billion in BA and $59.8 billion in outlays.
      The House resolution assumes $2.1 billion in mandatory 
budget authority [BA] and $2.1 billion in mandatory outlays in 
fiscal year 1998. Over 5 years, it assumes $10.3 billion in 
mandatory budget authority [BA] and $10.5 billion in outlays. 
The resolution assumes unspecified asset sales of $540 million 
in 2002.
            Senate amendment
      Discretionary spending.--Discretionary spending for this 
function will total $59.6 billion in budget authority and $59.8 
billion in outlays from 1998-2002. For 1998, spending will 
increase by $0.8 billion in budget authority from the 1997 
level to $12.6 billion;1998 outlays will remain constant at 
$11.9 billion. Compared to the Budget Resolution Baseline, the Senate 
amendment will save $5.7 billion in budget authority and $5.1 billion 
in outlays over five years.
      In order to meet the Bipartisan Budget Agreement's 
discretionary spending limits, savings will be required from 
programs in this function. These savings will be determined by 
the Appropriation Committees. Following are examples of 
possible reductions.
      The President has proposed aiding the District of 
Columbia through a plan which combines new mandatory spending, 
new tax breaks, and decreased discretionary spending. Mandatory 
spending for increased Medicaid benefits (see Function 550) 
would total $900 million over five years. Targeted tax breaks 
for the District would cost $260 million over five years (see 
Revenues). Finally, discretionary spending for a federal 
takeover of a portion of the District's justice, tax 
collection, and transportation responsibilities would total 
$2.8 billion over five years. In turn, annual payments to the 
District would be terminated, saving $3.9 billion over five 
years. Under this plan, Function 800 discretionary spending 
would decrease by $1.1 billion over five years compared to the 
Budget Resolution Baseline.
      The Federal Buildings Fund is a quasi-revolving fund 
which charges agencies for rent and then uses the proceeds for 
rent, building operations, repairs, and new construction. In 
addition, a relatively small amount is appropriated each year 
to bolster this fund. The President has proposed eliminating 
the annual appropriation by 1999, which would save $2.0 billion 
over five years compared to the baseline.
      The President has proposed holding the GSA, the National 
Archives and Records Administration, and central personnel 
management slightly below or at the 1997 level, which would 
save $362 million over five years compared to the baseline.
      The President has proposed holding the Treasury's 
building repair and restoration appropriation, the Bureau of 
Public Debt, and the salaries and expenses of the Departmental 
Offices (which provide basic support to the Secretary of the 
Treasury) slightly below or at the 1997 level. This would save 
$269 million over five years compared to the baseline.
      The majority of the remaining spending reductions in this 
function could come from the IRS, which will account for 60 
percent of Function 800 discretionary spending in 1997. The IRS 
budget rose 32 percent in real terms from 1985 to 1997, and GAO 
has identified areas where efficiencies can be made.
      Mandatory spending.--Mandatory spending for this function 
will total $10.5 billion from 1998-2002, $0.5 billion below the 
baseline. Of this total, $7.5 billion is for legal payments to 
harmed savings and loans institutions. Last year, the Supreme 
Court ruled that a 1989 federal law broke an agreement between 
the federal government and a savings and loan institution. 
Mandatory spending in this function could be offset by $0.5 
billion by selling unspecified government assets.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

                       function 900: net interest

Major programs in function

      Net interest is the interest paid on the Federal public 
debt, minus the interest income received. Function 900 is a 
mandatory payment, with no discretionary components.
            House resolution

                                           FUNCTION 900: NET INTEREST                                           
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                        1997                                                    
                                                        est.      1998      1999      2000      2001      2001  
----------------------------------------------------------------------------------------------------------------
Budget authority....................................   247,639   248,578   252,029   247,884   241,899   236,877
Outlays.............................................   247,639   248,578   252,029   247,884   241,899   236,877
----------------------------------------------------------------------------------------------------------------

            Senate amendment
      The Senate Resolution assumes the levels provided for in 
the Bipartisan Budget Agreement.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

                        function 920: allowances

            Conference amendment
      Function 920 displays the budgetary effects of proposals 
or assumptions that cannot be easily distributed across other 
budget functions. There are no assumptions in this function.

            function 950: undistributed offsetting receipts

Major programs in function

      Function 950 records offsetting receipts (receipts, not 
federal revenues or taxes, that the budget shows as offsets to 
spending programs) that are too large to record in other budget 
functions. Such receipts 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 type of business transaction with the 
government). The main types of receipts recorded as 
``undistributed'' in this function are--the payments federal 
agencies make to the retirement trust funds for their 
employees, payments made by companies for the right to explore 
and produce oil and gas on the Outer Continental Shelf, and 
payments by those who bid for the right to buy or use the 
public property or resources, such as the electromagnetic 
spectrum.
            House resolution

                                 FUNCTION 950: UNDISTRIBUTED OFFSETTING RECEIPTS                                
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                          1997  est.     1998        1999        2000        2001        2002   
----------------------------------------------------------------------------------------------------------------
Budget Authority........................     -47,436     -48,798     -44,437     -45,996     -50,008     -64,098
Outlays.................................     -47,436     -48,798     -44,437     -45,996     -50,008     -64,098
----------------------------------------------------------------------------------------------------------------

      The budget agreement calls for $26.3 billion in 
additional receipts through actions involving the 
electromagnetic spectrum.
      The budget agreement assumes an increase in Federal 
agency contributions for the Civil Service Retirement System 
[CSRS] (except for the Postal Service and District of Columbia) 
of 1.51 percentage points effective October 1, 1997 through 
September 30, 2002.
            Senate amendment
      Mandatory spending.--The authority (provided for the 
first time by OBRA 93) of the Federal Communications Commission 
(FCC) to auction spectrum in certain instances (mutually-
exclusive, subscription-based services) is about to expire (in 
1998). Thus far, FCC auctions have yielded more than $20 
billion in winning bids that would not have occurred using the 
previous methods of assigning licenses (lottery or comparative 
hearing). The Bipartisan Budget Agreement would extend the FCC 
auction authority and broaden it to include any license sought 
by a private business.
      As assumed in the President's Budget and the 1996 and 
1997 budget resolutions, the Bipartisan Budget Agreement would 
direct the FCC to reallocate 100 megahertz of spectrum reserved 
for private applications as well as 20 megahertz now used by 
the government to new applications and auction it. Bipartisan 
Budget Agreement proposes to auction a portion of channels 60-
69. Because these channels will not be necessary under the 
current FCC plan for the transition from analog to digital 
television, the President's Budget proposes to auction a 
portion of the spectrum covered by these channels (with the 
balance allocated to public safety applications) for new 
commercial applications.
      The President proposes to codify current FCC plans to 
reclaim surplus analog broadcast spectrum after broadcasters 
have migrated to new digital channels that the FCC has given 
broadcasters at no charge.
      The President proposes to require the FCC to award new 
generations of toll-free vanity telephone numbers by auction.
      As authorized by current law, a specific charge would be 
imposed on entities who receive free spectrum for the 
development of digital television but use it for certain other 
purposes.
      The President's Budget proposes to increase the 
contribution of federal agencies to the Civil Service 
Retirement Trust Fund by 1.51 percentage points.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. Because the dollar amounts are 
virtually identical in the House resolution and the Senate 
amendment, the House recedes to the Senate with respect to 
function spending levels.

                              B. Revenues

            House resolution
      Under the House resolution, $1,602 billion in total 
revenues in 1998 will grow by 18.0 percent to $1,890 billion in 
2002, totaling $288 billion over 4 years as determined by the 
Bipartisan Budget Agreement. Absent changes in law, revenues 
will grow instead by 18.7 percent.
      The House resolution assumes that the cost of the tax 
relief package will be offset partially with revenues from 
excise taxes on aviation services. The Committee is aware that 
various options for alternative tax structures in part or all 
of the current aviation excise taxesare being studied. The 
Committee further is aware that the Committee on Ways and Means will 
have to determine any future tax structure. To ensure that the 
underlying assumptions of the House resolution are met, revenues 
resulting from any modification of the current aviation excise taxes 
should be no less than the Federal revenue that would be produced by an 
extension, without change, of the current taxes.
      The committee's recommended baseline revenues are based 
on CBO's March 1997 baseline, corrected for additions to 
revenue to reflect increased actual fiscal year 1997 income tax 
collections, and assumptions on technical price measure 
corrections. (As explained in the section on economic 
assumptions, these are not legislated changes in the CPI).
      The recommended revenues reflect policy changes which are 
a net tax cut package revenue stream, as provided by the Joint 
Committee on Taxation [JCT], offset by revenues from the 
Airport and Airway Trust Fund taxes (which include taxes on 
tickets, departures, cargo and fuel) in current law; a 0.5 
percentage point increase in Federal employee retirement 
contributions phased in over three years and beginning in 
fiscal year 1999; and the revenue portion of Earned Income 
Credit compliance reforms. The last assumption is described 
more fully in Function 600.
            Senate amendment
      Federal revenues are taxes and other collections from the 
public that result from the government's sovereign or 
governmental powers. Federal revenues include individual income 
taxes, corporate income taxes, social insurance 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).

1998 Budget Resolution Revenues 1998-2002

                       [5-year total, $ billions]

Budget Resolution Baseline....................................  $8,772.8
-Net Tax Cut..................................................     -85.0
+Other Provisions Affecting Revenues..........................      +1.9
=Net Revenue Change from Baseline.............................     -83.1
1998 Budget Resolution Revenues...............................   8,689.6

      The Bipartisan Budget Agreement assumes a net tax cut of 
$85 billion over the next five years and not more than $250 
billion over the next ten years, to provide tax relief to 
American families. Under the Agreement, revenues would continue 
to grow, from $1,554.9 billion in 1997 to $1,890.4 billion in 
2002, an increase of $335.5 billion over the five year period.
      As always, the Ways and Means Committee in the House and 
the Finance Committee in the Senate will determine the specific 
amounts and structure of the tax relief package. The tax-
writing committees will be required to balance the interests 
and desires of many parties (while protecting the interests of 
taxpayers generally) in crafting the tax cut within the context 
of the goals adopted by the Bipartisan Budget Agreement. The 
Agreement establishes the following guidelines for the tax 
package:
            The level of tax cuts provide enough room for 
        broad-based capital gains tax reductions, significant 
        estate tax reform, a $500 per child tax credit, and 
        expansion of IRAs;
            The committees of jurisdiction shall include tax 
        relief of roughly $35 billion over five years for post-
        secondary education, including a deduction and a tax 
        credit. The tax package should be consistent with the 
        objectives put forward in the President's HOPE 
        scholarship and tuition tax deduction proposals to 
        assist middle-class parents;
            The House and Senate Leadership will seek to 
        include other proposals from the President's 1998 
        budget (e.g. the welfare-to-work-tax credit, capital 
        gains tax relief for home sales, enterprise zone and 
        enterprise community proposals, brownfields 
        legislation, foreign sales corporation (FSC) treatment 
        of software, and tax incentives designed to spur 
        economic growth in the District of Columbia), as well 
        as various pending congressional tax proposals;
            The tax cuts shall not cause costs to explode in 
        the outyears;
            Reforms to the Earned Income Tax Credit (EITC) or 
        other programs designed to benefit primarily lower-
        income individuals, as well as revenues from extension 
        of the Superfund tax shall not be used to offset the 
        costs of the tax cuts; and,
            The tax estimating staffs at Treasury and the Joint 
        Committee on Taxation shall continue to consult and 
        share information necessary to understand fully the 
        basis of their revenue estimates and to minimize 
        revenue estimating differences.

      Other provisions affecting revenues in the budget resolution

      Revenue effects of the following two assumptions are not 
included in the $85 billion net tax cut number.
      The Agreement assumes the President's April 1997 proposed 
reforms to the EITC to combat fraud and noncompliance, and the 
President's 1998 budget proposal to increase employee 
contributions to CSRS and FERS by 0.5 percent of base pay in 
three steps. Contributions would increase by 0.25 percent of 
base pay on January 1, 1999, another 0.15 percent on January 1, 
2000 and a final 0.10 percent on January 1, 2001. These higher 
contribution rates would be effective through 2002; on January 
1, 2003, contribution rates would return to current law levels.
            Conference agreement
      The conference agreement reflects the provisions of the 
Bipartisan Budget Agreement. The revenue assumptions in the 
conference agreement also incorporate the tax agreements 
spelled out in the following letters.

                              Tax Letter 1

                             Congress of the United States,
                                      Washington, DC, May 15, 1997.
The Honorable William J. Clinton,
President of the United States,
The White House, Washington, DC.
      Dear Mr. President: We would like to take this 
opportunity to confirm important aspects of the Balanced Budget 
Agreement. It was agreed that the net tax cut shall be $85 
billion through 2002 and not more than $250 billion through 
2007. We believe these levels provide enough room for important 
reforms, including broad-based permanent capital gains tax 
reductions, significant death tax relief, $500 per child tax 
credit, and expansion of IRAs.
      In the course of drafting the legislation to implement 
the balanced budget plan, there are some additional areas that 
we want to be sure the committees of jurisdiction consider. 
Specifically, it was agreed that the package must include tax 
relief of roughly $35 billion over five years for post-
secondary education, including a deduction and a tax credit. We 
believe this package should be consistent with the objectives 
put forward in the HOPE scholarship and tuition tax proposals 
contained in the Administration's FY 1998 budget to assist 
middle-class parents.
      Additionally, the House and Senate Leadership will seek 
to include various proposals in the Administration's FY 1998 
budget (e.g., the welfare-to-work tax credit, capital gains tax 
relief for home sales, the Administration's EZ/EC proposals, 
brownfields legislation, FSC software, and tax incentives 
designed to spur economic growth in the District of Columbia), 
as well as various pending congressional tax proposals.
      In this context, it should be noted that the tax-writing 
committees will be required to balance the interests and 
desires of many parties in crafting tax legislation within the 
context of the net tax reduction goals which have been adopted, 
while at the same time protecting the interests of taxpayers 
generally.
      We stand to work with you toward these ends. Thank you 
very much for your cooperation.
            Sincerely,
                                   Newt Gingrich,
                                           Speaker.
                                   Trent Lott,
                                           Senate Majority Leader.

                              Tax Letter 2

                             Congress of the United States,
                                      Washington, DC, May 15, 1997.
Mr. Erskine Bowles,
Chief of Staff to the President,
The White House, Washington, DC.
      Dear Mr. Bowles: We are writing to express our desire for 
continued cooperation between Congressional staff and the staff 
of the various Administration agencies during the development 
of the current budget agreement.
      Much of the most difficult work in connection with the 
budget agreement will involve the development of the revenue 
provisions that will satisfy the parameters of the agreement. 
Historically, the staff of the Joint Committee on Taxation has 
provided technical legal and quantitative support to the House 
and Senate. The Budget Act requires the use of Joint Committee 
on Taxation revenue estimates. Ken Kies and his staff are 
committed to facilitating our work on the tax provisions of 
this budget agreement. You can be assured that they will 
cooperate with Administration counterparts in receiving 
Administration input as they carry out their statutory 
responsibilities.
      The revenue estimating staffs of the Joint Committee on 
Taxation and the Office of Tax Analysis at Treasury have a long 
history of cooperation and communication among analysts. It is 
our understanding that steps have already been taken to insure 
that the cooperative efforts of these two staffs will be 
intensified during the current budget process. It is also our 
understanding that the professional staffs at the Office of Tax 
Analysis at Treasury and the Joint Committee on Taxation will 
consult and share information necessary to understand fully the 
basis of their revenue estimates and to minimize revenue 
estimating differences. The proposal shall not cause costs to 
explode in the outyears.
      Now that we have agreed upon the overall parameters of 
this significant agreement, an inordinate number of details 
concerning specific provisions must be drafted and analyzed by 
the JCT and the committees of jurisdiction. We look forward to 
working with the Administration.
            Sincerely,
                                   Newt Gingrich,
                                           Speaker.
                                   Trent Lott,
                                           Senate Majority Leader.

                              Tax Letter 3

                             Congress of the United States,
                                      Washington, DC, June 4, 1997.
Hon. Pete V. Domenici,
Chairman, Senate Budget Committee,
Washington, DC.

Hon. John R. Kasich,
Chairman, House Budget Committee,
Washington, DC.
      Dear Pete and John: Our Committees will soon begin 
marking up tax legislation to meet the reconciliation 
directives of the 1998 Budget Resolution. We will meet the 
Resolution's instructions of reducing revenues by $85 billion 
over the five year period 1998-2002 and by no more than $20.5 
billion in 2002.
      Furthermore, we can assure you that, consistent with the 
May 15, 1997 letter from the Speaker of the House and the 
Majority Leader of the Senate to the President which stated, 
``It was agreed that the net tax cut shall be $85 billion 
through 2002 and not more than $250 billion through 2007,'' the 
ten year net revenue loss in the tax reconciliation bill will 
not exceed $250 billion.
            Sincerely,
                                   William V. Roth,
                                           Chairman, Finance Committee.
                                   Bill Archer,
                                           Chairman, Ways and Means 
                                               Committee.

                             reconciliation

House resolution

      The House-passed budget resolution includes 
reconciliation directives for House Committees to make changes 
in direct spending and revenues in two separate bills. The 
House resolution also effectively provides the option to 
include both the direct spending, revenue changes, and 
increases in the debt limit in the second reconciliation bill.
      The House resolution includes language providing the 
Committee on Ways and Means flexibility to submit legislation 
incorporating part of the children's health initiative, which 
was reconciled to the Committee on Commerce, as long as the 
combined recommendations for the children's health initiative 
does not exceed $2.3 billion in fiscal year 1998, $3.9 billion 
in fiscal year 2002, and $16 billion over five years.

Senate amendment

      The Senate amendment includes reconciliation directives 
for Senate committees to make changes in direct spending and 
revenues in two separate bills. The Senate adopted a unanimous 
consent agreement with respect to the application of Section 
313(b)(1)(E) of the Budget Act (the ``Byrd Rule'') to allow 
these two bills to be combined only for the purposes of 
determining whether reconciliation legislation would violate 
the Byrd rule by causing a net increase in the deficit in the 
outyears. In addition, the Senate amendment includes a 
provision that allows the two reconciliation bills to be 
combined only for the purposes of determining whether these 
reconciliation bills would violate the Senate's pay-as-you-go 
rule.
      The Senate amendment also includes provisions to allow 
flexibility on a proposed children's initiative. The balanced 
budget agreement included $16 billion in additional spending 
and other possibilities, if mutually agreeable, for a 
children's health initiative. The Senate amendment assumes $16 
billion in additional direct spending for a children's health 
initiative, but provides flexibility in the Senate to modify 
levels in the resolution for other possibilities. These 
modifications only can be made by the Chairman of the Budget 
Committee with the agreement and concurrence of the Ranking 
Minority Member of the Committee.

Conference agreement

      The conference agreement includes the House resolution's 
provisions with respect to reconciliation directives to House 
committees and the Senate amendment's provisions with respect 
to reconciliation directives to Senate and House committees to 
implement the balanced budget agreement. The conference 
agreement also includes technical modifications to these 
provisions.

                    RECONCILIATION BY HOUSE COMMITTEE--ENTITLEMENT REFORMS DUE JUNE 13, 1997                    
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                                                       1998 to  
                          Committee                            1997 Base       1998         2002         2002   
----------------------------------------------------------------------------------------------------------------
  Agriculture:                                                                                                  
    Direct Spending.........................................       31,559       34,571       37,008      179,884
  Banking & Financial Services:                                                                                 
    Direct Spending.........................................      -17,563       -8,435       -5,091      -32,743
  Commerce:                                                                                                     
    Direct Spending.........................................      359,601      393,533      507,150    2,259,294
  Education and the Workforce:                                                                                  
    Direct Spending.........................................       13,581       17,222       17,673       89,528
  Government Reform & Oversight:                                                                                
    Direct Spending.........................................       67,339       68,975       81,896      375,722
    Deficit Reduction.......................................            0            0          621        1,829
  Transportation & Infrastructure:                                                                              
    Direct Spending.........................................       17,904       18,087       17,283       88,711
  Veterans Affairs:                                                                                             
    Direct Spending.........................................       21,175       22,444       24,563      117,959
  Ways & Means:                                                                                                 
    Direct Spending.........................................      363,970      397,581      506,522    2,257,912
    Revenues................................................    1,135,408    1,172,136    1,382,679    6,358,388
----------------------------------------------------------------------------------------------------------------


             RECONCILIATION BY HOUSE COMMITTEE--TAX RELIEF & MISCELLANEOUS REFORMS DUE JUNE 14, 1997            
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                                                       1998 to  
                          Committee                            1997 Base       1998         2002         2002   
----------------------------------------------------------------------------------------------------------------
  Agriculture:                                                                                                  
    Direct Spending.........................................       31,559       34,571       37,008      179,884
  Banking and Financial Services:                                                                               
    Direct Spending.........................................      -17,563       -8,435       -5,091      -32,743
  Commerce:                                                                                                     
    Direct Spending.........................................      359,601      393,533      507,150    2,259,294
  Education and the Workforce:                                                                                  
    Direct Spending.........................................       13,581       17,222       17,673       89,528
  Government Reform and Oversight:                                                                              
    Direct Spending.........................................       67,339       68,975       81,896      375,722
    Deficit Reduction.......................................            0            0          621        1,829
  Transportation and Infrastructure:                                                                            
    Direct Spending.........................................       17,904       18,087       17,283       88,711
  Veterans Affairs:                                                                                             
    Direct Spending.........................................       21,175       22,444       24,563      117,959
  Ways and Means:                                                                                               
    Direct Spending.........................................      363,970      397,581      506,522    2,257,912
    Revenues................................................    1,135,408    1,164,736    1,362,179    6,273,388
----------------------------------------------------------------------------------------------------------------


                                 RECONCILIATION INSTRUCTIONS BY SENATE COMMITTEE                                
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
          Committee                               1998       1999       2000       2001       2002       Total  
----------------------------------------------------------------------------------------------------------------
  First Reconciliation:                                                                                         
    Agriculture, Nutrition    OT.............      0.300      0.300      0.300      0.300      0.300       1.500
     and Forestry.                                                                                              
    Banking, Housing and      DR.............     -0.136     -0.233     -0.365     -0.422     -0.434      -1.590
     Urban Affairs.                                                                                             
    Commerce, Science and     OT.............  .........     -3.549      3.549     -4.549    -14.849     -26.496
     Transportation.                                                                                            
    Energy and Natural        OT.............  .........     -0.001     -0.002     -0.004     -0.006      -0.013
     Resources.                                                                                                 
    Finance.................  OT.............     -1.137    -12.681    -19.079    -26.838    -40.911    -100.646
    Governmental Affairs....  DR.............     -0.632     -0.839     -1.042     -1.185     -1.769      -5.467
    Labor and Human           OT.............     -0.242     -0.247     -0.158     -0.088     -1.057      -1.792
     Resources.                                                                                                 
    Veterans Affairs........  OT.............     -0.247     -0.540     -0.659     -0.606     -0.681      -2.733
    Total First               DR.............     -2.094    -17.790    -24.554    -33.392    -59.407    -137.237
     Reconciliation.                                                                                            
  Second Reconciliation:                                                                                        
    Finance.................  Rev............     -7.400    -11.300    -22.400    -23.400    -20.500    -85.000 
----------------------------------------------------------------------------------------------------------------
NOTE: OT = outlays, DR = deficit reduction, Rev = revenues.                                                     

                  budgetary restraints and rulemaking

House resolution
      Title III of the House-passed budget resolution 
establishes new rules and procedures for implementing the 
budget resolution. The House resolution establishes a reserve 
fund for surface transportation (section 301), a new rule for 
scoring proposed asset sales (section 302), an environmental 
reserve for the superfund program (section 303), and a separate 
allocation for land acquisition (section 304).
Senate amendment
      Title II of the Senate amendment establishes new rules 
and procedures for implementing the budget resolution. Section 
201 establishes limits on discretionary spending through 2002. 
It also establishes separate limits on defense and non-defense 
discretionary spending (``firewalls'') for FY 1998 and 1999. 
The Senate amendment provides that a future budget resolution 
or an appropriations measure that would cause these limits to 
be exceeded would be subject to a 60 vote point of order in the 
Senate. The enforcement of the discretionary limits beyond 1998 
are dependent on the enactment of reconciliation legislation 
called for by the resolution.
      Section 202 of the Senate amendment establishes an 
allowance to provide an upward adjustment to the budget 
authority discretionary spending limits if the Appropriations 
Committee approves of U.S. participation in the International 
Monetary Fund (IMF) New Arrangements to Borrow (NAB) and for a 
potential increase in the U.S. quota subscription. This 
additional budget authority will not increase outlays or the 
deficit.
      Section 203 of the Senate amendment provides an allowance 
that effectively fences the additional funding assumed for 
Section 8 Housing Assistance contract renewals. The agreement 
creates an allowance of $9.2 billion in budget authority with 
an associated, but unspecified, amount of outlays to be 
released by the budget committees when the appropriations 
committees report bills that provide for renewal of Section 8 
housing assistance contracts that expire in 1998. The 
conference agreement assumes that the amount of the allowance 
to be released (estimated to be $3.436 billion for outlays) 
will not be reduced to the extent that the appropriations and 
authorizing committees produce Section 8 savings that were 
proposed in the President's 1998 budget.
      Section 204 of the Senate amendment provides an allowance 
to allow for additional mandatory spending for environmental 
programs as part of legislation to reform the Superfund program 
to facilitate the cleanup of hazardous waste sites.
      Section 205 of the Senate amendment includes an allowance 
that effectively fences $700 million in funding for Federal 
land acquisition and exchanges.
      Section 206 of the Senate amendment includes an allowance 
to provide adjustments to the discretionary caps and other 
levels in the resolution to accommodate appropriations for 
arrearages for international organizations, international 
peacekeeping, and multilateral development banks.
      Sections 207, 208, and 209 of the Senate amendment 
includes reserve funds for an intercity passenger rail fund, 
mass transit programs, and highway programs. These reserve 
funds allow the discretionary caps and the spending levels in 
the resolution to be adjusted for additional spending if 
legislation provides sufficient offsets to ensure this spending 
would not increase the deficit.
      Section 210 of the Senate amendment provides that the 
changes in title II are made under the Congress rulemaking 
authority and recognizes Congress constitutional right to 
modify these rules at any time.
Conference Agreement
      Title II of the conference agreement includes the rules 
and procedures for implementing the budget resolution.
      Section 201 of the conference agreement reflects the 
Senate amendment by establishing discretionary limits through 
2002. These limits only apply in the Senate.

                         1998 BUDGET RESOLUTION CONFERENCE AGREEMENT--DISCRETIONARY CAPS                        
                                              [Dollars in billions]                                             
----------------------------------------------------------------------------------------------------------------
                                                                       1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
  Defense:                                                                                                      
    BA.............................................................    269.0    271.5    275.4    281.8    289.6
    OT.............................................................    266.8    266.5    269.0    270.7    273.1
  Nondefense:                                                                                                   
    BA.............................................................    257.9    261.5    261.8    260.2    261.5
    OT.............................................................    286.4    292.8    295.3    293.7    287.7
  Total discretionary:                                                                                          
    BA.............................................................    526.9    533.0    537.2    542.0    551.1
    OT.............................................................    553.3    559.3    564.3    564.4    560.8
----------------------------------------------------------------------------------------------------------------

      Section 202 of the conference agreement generally 
reflects the Senate amendment by establishing an allowance for 
the International Monetary Fund (IMF) for both the Senate and 
the House. In the House, the IMF allowance only applies for 
fiscal years 1998 and 1999.
      Section 203 of the conference agreement reflects the 
Senate amendment for an allowance for Section 8 Housing 
contract renewals.
      Section 204 of the conference agreement reflects the 
House resolution's language, with modifications, for an 
allowance for additional mandatory spending for legislation 
that reforms the superfund program to facilitate the cleanup of 
hazardous waste sites.
      Section 205 of the conference agreement reflects the 
House resolution's language, with modifications, for an 
allowance for additional spending for land acquisition.
      Section 206 of the conference agreement reflects the 
Senate amendment's language, with modifications, for an 
allowance for arrearages for international organizations. In 
the House, this allowance only applies for fiscal years 1998 
and 1999.
      Section 207 of the conference agreement includes a 
reserve fund for an intercity passenger rail fund and applies 
to the House and Senate. Sections 207A, 208, and 209 of the 
conference agreement provide reserve funds in the Senate for an 
intercity passenger rail fund, mass transit programs, and 
highway programs.
      Section 210 of the conference agreement incorporates the 
House resolution provision establishing a reserve fund for 
highways, highway safety and transit programs in the House.
      Section 211 of the conference agreement includes the 
House resolution's language establishing a new rule for scoring 
proposed asset sales.
      Section 212 of the conference agreement provides general 
authority with respect to the application and effect of 
adjustments made pursuant to title II of the resolution.
      Section 213 of the conference agreement adopts the Senate 
amendment's provisions that the provisions of title II are made 
under Congress rulemaking authority and Congress reserves its 
right to change its rules at any time.

              miscellaneous budget enforcement provisions

        Extension of pay-as-you-go point of order in the Senate

      The Senate Conferees note that in the Fiscal Year 1996 
budget resolution (H. Con. Res. 67, 104th Congress) the pay-as-
you-go point of order in the Senate was extended through the 
end of fiscal year 2002. Consequently it was again determined 
that it is not necessary to include the language in the text of 
this year's resolution. In order to emphasize the overall goal 
of balancing the budget set out in the bipartisan budget 
agreement and this resolution and that the pay-as-you-go 
discipline is still in effect, the text of section 202 from H. 
Con. Res. 67 is provided herein:

SEC. 202. EXTENSION OF PAY-AS-YOU-GO POINT OF ORDER.

      (a) Purpose.--The Senate declares that it is essential 
to--
            (1) ensure continued compliance with the balanced 
        budget plan set forth in this resolution; and
            (2) continue the pay-as-you-go enforcement system.
      (b) 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 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 of the three following periods:
                    (A) The first year covered by the most 
                recently adopted concurrent resolution on the 
                budget.
                    (B) The period of the first five fiscal 
                years covered by the most recently adopted 
                concurrent resolution on the budget.
                    (C) The period of the five fiscal years 
                following the first five 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.
            (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; or
                    (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.
            (5) Baseline.--Estimates prepared pursuant to this 
        section shall--
                    (A) use the baseline 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 deficit when taken 
        individually, then it must also increase the 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 the direct spending or 
revenue effect resulting from legislation enacted pursuant to the 
reconciliation instructions included in that concurrent resolution on 
the budget shall not be available.
      (c) 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.
      (d) 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 in the Senate to sustain an appeal of 
the ruling of the Chair on a point of order raised under this 
section.
      (e) 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.
      (f) Conforming Amendment.--Section 23 of House Concurrent 
Resolution 218 (103rd Congress) is repealed.
      (g) Sunset.--Subsections (a) through (e) of this section 
shall expire September 30, 2002.

     Unanimous consent agreement in the Senate--regarding section 
                     313(b)(1)(E) of the Budget Act

      The Senate Conferees note that because of the two bill 
reconciliation process envisioned by the bipartisan budget 
agreement and this resolution it was necessary in the Senate to 
obtain the following unanimous consent agreement with respect 
to the application of section 313(b)(1)(E) of the Congressional 
Budget Act of 1974 (the Byrd Rule) to the second reconciliation 
bill. The purpose of the consent is to provide that when the 
second reconciliation bill is considered in the Senate no Byrd 
Rule point of order under section 313(b)(1)(E) would lie 
against provisions which reduce revenues in years beyond those 
reconciled. This unanimous consent agreement is contingent upon 
the Senate considering two reconciliation bills pursuant to the 
concurrent resolution on the budget for fiscal year 1998. The 
text of the agreement, which was obtained on May 21, 1997, is 
as follows:
      Ordered, That during the consideration of legislation 
(and the conference report thereon), pursuant to the 
reconciliation instructions set forth in the concurrent 
resolution on the budget for fiscal year 1998, for the purposes 
of section 313(b)(1)(E) of the Congressional Budget Act of 
1974, legislation which reduces revenues pursuant to a 
reconciliation instruction contained in the fiscal year 1998 
resolution (the second reconciliation bill) shall be taken 
together with all other legislation passed in the Senate 
pursuant to the reconciliation instructions contained in that 
resolution (the first reconciliation bill) when determining 
whether any provision of the second reconciliation bill is 
extraneous: Provided, That this unanimous consent agreement is 
contingent upon the Senate considering two reconciliation bills 
pursuant to the concurrent resolution on the budget for fiscal 
year 1998.

          sense of the congress, house, and senate provisions

House resolution

      Title IV of the House-passed budget resolution contains 
sense of the Congress provisions on the following subjects:
            baselines;
            repayment of the federal debt;
            commission on long-term budgetary problems;
            corporate welfare; and
            family violence.

Senate amendment

      Title III of the Senate amendment contains sense of the 
Senate and other provisions on the following subjects:
            long-term entitlement reforms;
            tactical fighter aircraft programs;
            children's health coverage;
            medicaid per capita cap;
            dedication of additional savings to deficit 
        reduction;
            fairness in medicare;
            assistance to Lithuania and Latvia;
            national commission on higher education;
            medicare lockbox;
            earned income credit;
            repayment of the federal debt;
            long-term entitlement reforms;
            disaster assistance funding;
            enforcement of the bipartisan budget agreement;
            national institutes of health;
            elderly legal aliens;
            retroactive taxes;
            social security and balancing the budget;
            veterans programs and benefits;
            family violence;
            tax cuts;
            amtrak;
            children's health;
            gasoline taxes and the highway trust fund;
            early childhood education;
            highway trust fund and the budget;
            airport and airway trust fund and the budget;
            military retirement trust funds and the budget;
            civil service trust funds and the budget;
            unemployment trust funds and the budget;
            highway trust fund;
            tax incentives for post-secondary education;
            additional tax cuts;
            spectrum auctions;
            highway demonstration projects;
            budget savings;
            social security and future retirees;
            economic growth dividend;
            reserve fund for early childhood development;
            law enforcement; and
            prevention of drug use by children.

Conference agreement

      Subtitle A of the conference agreement expresses the 
sense of the Congress on the following subjects:
            repayment of the federal debt, and
            tax cut shall not exceed $250 billion over ten 
        years.
      Subtitle B of the conference agreement contains sense of 
the House provisions on the following subjects:
            commission on long-term budgetary problems;
            corporate welfare;
            baselines; and
            family violence.
      Subtitle C of the conference agreement contains sense of 
the Senate provisions on the following subjects:
            long-term entitlement reforms;
            tactical fighter aircraft programs;
            children's health coverage;
            medicaid per capita cap;
            dedication of additional savings to deficit 
        reduction;
            fairness in medicare;
            assistance to Lithuania and Latvia;
            national commission on higher education;
            medicare lockbox;
            earned income credit;
            repayment of the federal debt;
            long-term entitlement reforms;
            disaster assistance funding;
            enforcement of the bipartisan budget agreement;
            national institutes of health;
            elderly legal aliens;
            retroactive taxes;
            social security and balancing the budget;
            veterans programs and benefits;
            family violence;
            tax cuts;
            amtrak;
            children's health;
            gasoline taxes and the highway trust fund;
            early childhood education;
            highway trust fund;
            tax incentives for post-secondary education;
            additional tax cuts;
            spectrum auctions;
            highway demonstration projects;
            budget savings;
            social security and future retirees;
            economic growth dividend;
            law enforcement;
            prevention of drug use by children.

                              allocations

      As required in sections 302 and 602 of the Budget Act, 
the joint statement of the managers includes an allocation, 
based upon the conference report, of the levels of total budget 
authority, total budget outlays, and--in the House only--total 
entitlement authority, among each of the appropriate House and 
Senate committees.
      As required under sections 302 and 602, the allocations 
are divided between mandatory and otherwise uncontrollable 
amounts and discretionary or otherwise controllable amounts.
      The allocations for each House consist of a set of two 
tables for the House and Senate. The first set of tables shows 
the allocation for the budget year, fiscal year 1998. For the 
House, the amount allocated to each committee is broken down by 
budget function. The second set of tables shows the amounts 
allocated for the totals of the budget year and the four 
succeeding planning years. These allocations serve as the basis 
for congressional enforcement of the budget resolution through 
points of order under the Budget Act.
      The allocations are as follows:
    
    

SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET ACT
                                             BUDGET YEAR TOTAL 1998                                             
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                Direct        Entitlements funded in an annual  
                                                               spending                appropriations           
                                                             jurisdiction --------------------------------------
                         Committee                          --------------                                      
                                                                Budget       Outlays       Budget      Outlays  
                                                               authority                 authority              
----------------------------------------------------------------------------------------------------------------
Appropriations.............................................       788,769      824,665            0            0
Appropriations (violent crime reduction trust fund)........         5,500        3,592            0            0
Agriculture, Nutrition, and Forestry.......................        10,011        7,702        8,502        8,476
Armed Services.............................................        48,152       48,022            0            0
Banking, Housing, and Urban Affairs........................         9,190       -3,203            0            0
Commerce, Science, and Transportation......................         4,922        2,202          637          634
Energy and Natural Resources...............................         1,879        1,848           50           41
Environment and Public Works...............................        25,637        2,915            0            0
Finance....................................................       683,053      681,872      112,893      115,429
Foreign Relations..........................................        13,135       12,945            0            0
Governmental Affairs.......................................        56,248       55,190            0           17
Judiciary..................................................         4,230        4,319          220          215
Labor and Human Resources..................................         7,072        6,478        1,352        1,352
Rules and Administration...................................            93           27            0            0
Veterans' Affairs..........................................         1,111        1,193       21,187       21,106
Indian Affairs.............................................           449          423            0            0
Small Business.............................................           250         -100            0            0
Unassigned to Committee....................................      -273,037     -278,090            0            0
                                                            ----------------------------------------------------
      Total................................................     1,386,700    1,372,000      144,841      147,270
----------------------------------------------------------------------------------------------------------------


SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET ACT
                                             5-YEAR TOTAL: 1998-2002                                            
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                   Direct spending       Entitlements funded in 
                                                                    jurisdiction        an annual appropriations
                          Committee                          ---------------------------------------------------
                                                                 Budget                    Budget               
                                                               authority     Outlays     authority     Outlays  
----------------------------------------------------------------------------------------------------------------
Agriculture, Nutrition, and Forestry........................       44,971       32,871       70,151       46,846
Armed Services..............................................      259,560      258,993            0            0
Banking, Housing, and Urban Affairs.........................       52,169       -4,005            0            0
Commerce, Science, and Transportation.......................       28,448       14,339        3,534        3,516
Energy and Natural Resources................................        9,530        9,528          254          282
Environment and Public Works................................      125,266       11,398            0            0
Finance.....................................................    3,607,033    3,599,663      669,226      672,800
Foreign Relations...........................................       59,220       60,907            0            0
Governmental Affairs........................................      304,950      297,311            0            0
Judiciary...................................................       22,261       21,865        1,100        1,095
Labor and Human Resources...................................       33,475       31,562        7,112        7,112
Rules and Administration....................................          471          444            0            0
Veterans' Affairs...........................................        3,483        4,376      113,589      113,276
Indiana Affairs.............................................        2,278        2,144            0            0
Small Business..............................................          250         -699            0            0
----------------------------------------------------------------------------------------------------------------

                                   John R. Kasich,
                                   David L. Hobson,
                                   John M. Spratt, Jr.,
                                 Managers on the Part of the House.

                                   Pete V. Domenici,
                                   Chuck Grassley,
                                   Frank R. Lautenberg,
                                Managers on the Part of the Senate.