[Senate Report 106-251]
[From the U.S. Government Publishing Office]





                                                       Calendar No. 482

-----------------------------------------------------------------------
106th Congress                                                   Report
  2d Session                       SENATE                       106-251
_______________________________________________________________________




 
              CONCURRENT RESOLUTION ON THE BUDGET FY 2001              

                               ----------                              

                              R E P O R T

                                 of the

                        COMMITTEE ON THE BUDGET
                          UNITED STATES SENATE

                              to accompany

                            S. Con. Res. 101

                             together with

                     ADDITIONAL AND MINORITY VIEWS





Setting forth the congressional budget for the United States Government 
 for fiscal years 2001 through 2005 and revising the budgetary levels 
                          for fiscal year 2000

                 March 31, 2000.--Ordered to be printed
   Filed under authority of the order of the Senate of March 30, 2000





                                                       Calendar No. 482

-----------------------------------------------------------------------
106th Congress                                                   Report
  2d Session                     SENATE                         106-251
_______________________________________________________________________





                       CONCURRENT RESOLUTION ON


                              THE BUDGET


                                FY 2001

                               __________

                              R E P O R T

                                 of the

                        COMMITTEE ON THE BUDGET

                          UNITED STATES SENATE

                              to accompany

                            S. Con. Res. 101

                             together with

                     ADDITIONAL AND MINORITY VIEWS





Setting forth the congressional budget for the United States Government 
 for fiscal years 2001 through 2005 and revising the budgetary levels 
                          for fiscal year 2000

                 March 31, 2000.--Ordered to be printed
   Filed under authority of the order of the Senate of March 30, 2000

                                -------                                

                    U.S. GOVERNMENT PRINTING OFFICE
63-493                     WASHINGTON : 2000       





                        COMMITTEE ON THE BUDGET

                 PETE V. DOMENICI, New Mexico, Chairman

CHARLES E. GRASSLEY, Iowa            FRANK R. LAUTENBERG, New Jersey
DON NICKLES, Oklahoma                ERNEST F. HOLLINGS, South Carolina
PHIL GRAMM, Texas                    KENT CONRAD, North Dakota
CHRISTOPHER S. BOND, Missouri        PAUL S. SARBANES, Maryland
SLADE GORTON, Washington             BARBARA BOXER, California
JUDD GREGG, New Hampshire            PATTY MURRAY, Washington
OLYMPIA J. SNOWE, Maine              RON WYDEN, Oregon
SPENCER ABRAHAM, Michigan            RUSSELL D. FEINGOLD, Wisconsin
BILL FRIST, Tennessee                TIM JOHNSON, South Dakota
ROD GRAMS, Minnesota                 RICHARD J. DURBIN, Illinois
GORDON SMITH, Oregon

                  G. William Hoagland, Staff Director
              Bruce King, Staff Director for the Minority




                            C O N T E N T S

                              ----------                              
                                                                   Page
   I. Concurrent Resolution on the Budget: Fiscal Year 2001 Overview   1
  II. Economics.....................................................   7
 III. Spending and Revenues.........................................  10
           Baseline.................................................  10
               A. Spending by Function..............................  12
               B. Revenues..........................................  40
               C. Debt Levels.......................................  41
               D. Tax Expenditures..................................  42
  IV. Summary Tables................................................  48
   V. Budget Resolutions: Enforcement, Other Provisions and 
      Reconciliation................................................  52
           Enforcement..............................................  52
           Other Provisions.........................................  52
           Reconciliation...........................................  62
  VI. Committee Views and Estimates.................................  62
 VII. Committee Votes............................................... 253
VIII. Additional and Minority Views................................. 266

                               I. Summary

                   Senate Budget Resolution for 2001


                     committee-reported resolution


    The Committee-reported resolution for the 2001 Concurrent 
Budget Resolution represents a fiscal blueprint for the next 
five years. The latter quarter of the 20th century was one 
marked by federal fiscal imbalances. The fiscal deficits of the 
recent past are now surpluses. This positive budget outlook 
provides Congress and the President with a unique opportunity 
to structure fiscal policies that address the challenges that 
lie ahead--both domestic and international.
    It is acknowledged, however, that the budget year for which 
this resolution provides specific fiscal guidance (FY 2001) 
will be administered by a new President and a new Congress. 
Therefore, this budget resolution can only serve as the first 
step in completing the work of the 106th Congress and closing 
out the Clinton Presidency. The next Congress and the next 
President will have an opportunity to add more definitive 
direction to the country's future fiscal policy path, and 
indeed could, and likely will, propose modifications to this 
budget blueprint.
    The Committee-reported resolution, nonetheless, establishes 
some general principles and an outline for that future path:
    Preserve and protect the social security trust fund 
balances.
    Balance the budget every year not counting social security.
    Reduce the level of debt held by the public.
    Establish responsible funding levels for national security 
and domestic spending programs that will be followed through 
the annual appropriation process this year and that will 
provide realistic planning estimates for the next five years. 
For FY 2001 this level of spending would be set at $596.6 
billion in budget authority, a 4.7% increase over the enacted 
FY 2000 level.
    Reform federal assistance to elementary and secondary 
education programs, provide bonus incentive payments to states 
for good performance, while providing funding (both 
discretionary and mandatory) to the Department of Education 
equivalent to President Clinton's five year request.
    Establish new procedures in the budget resolution that 
would better enforce the fiscal policy guidance outlined in 
this resolution.
    Provide $40 billion over the next five years for the 
development of a Medicare prescription drug benefit. For FY 
2001-2003, $20 billion would provide for an unrestricted 
prescription drug benefit; the remaining $20 billion would be 
available for FY 2004-2005 conditional upon legislation that 
would extend the solvency of the Medicare program.
    Provide $5.5 billion in emergency funds immediately in FY 
2000 to depressed agriculture producers and their families and 
$11.0 billion in longer term funds for reform of current 
programs.
    Return to working Americans estimated tax overpayments of 
over $150 billion, of which $13.2 billion would be provided in 
FY 2001.
    The Committee-reported resolution sets out benchmark 
spending and revenue levels for the next five years. Federal 
spending under the Committee-reported resolution will increase 
from $1.8 trillion in 2000 to nearly $2.1 trillion in 2005. 
After providing for $150 billion in tax reductions, federal 
revenues would still increase from $1.9 trillion in 2000 to 
$2.3 trillion in 2005. The budget, excluding social security, 
will maintain balance throughout the five-year projection 
period, and approximately $19.5 billion in federal resources 
are projected to remain available as on-budget surpluses, 
thereby further reducing debt held by the public--if not needed 
for emergency funding. Should the resolution's tax reduction or 
Medicare reform expenditures not become law, additional debt 
reduction of over $190 billion--for a total of $210 billion--
would result.
    In more detail, the Committee-reported resolution would:
    1. Preserve and Protect Social Security Trust Fund 
Balances.
          The resolution protects social security trust fund 
        balances estimated to total nearly $1 trillion over the 
        projection period. The resolution assumes that the 
        trust fund balances are used to retire debt held by the 
        public and for no other purposes. Debt held by the 
        public would decline from $3.6 trillion at the end of 
        1999 to $2.5 trillion by the end of the five-year 
        projection period.
    2. Modify the 1997 Bipartisan Budget Agreement for 
Discretionary Spending.
          The Committee-reported resolution, as required by 
        law, allocates discretionary spending totals to the 
        Committee on Appropriations consistent with the 
        statutory levels established in the historic 1997 
        Budget Agreement. However, deliberations surrounding 
        the FY 2001 budget reflect the fact that the 
        President's budget for the last three years has 
        proposed to increase domestic discretionary spending 
        above these statutory levels and that the Congress has 
        exceeded these levels the past two years by the use of 
        various budget devices, which have called into question 
        the integrity of the budget process.
          The Committee-reported resolution abides by the 2001 
        spending limits of $541 billion in BA and $579 billion 
        in outlays, but establishes a mechanism to adjust these 
        statutory caps to more realistic levels of $596.6 
        billion in BA and $622.6 billion in outlays.\1\
---------------------------------------------------------------------------
    \1\ Aggregate and functional numbers in this report assume the 
statutory spending limits will be adjusted to the higher levels. The 
resolution remains in compliance with Sec. 251(c) of the Deficit 
Control Act of 1985, as amended.
---------------------------------------------------------------------------
          The Congress would be required to set priorities for 
        spending programs within the new 2001 spending levels. 
        Final decisions on how these priorities will be 
        determined lie with the Committee on Appropriations and 
        ultimately the Congress and President. Function-by-
        function details appear later in this report.
          The following highlights key discretionary policies 
        assumed in the functional aggregates of this 
        resolution:
          First, the Committee-reported resolution does assume 
        that an additional $5.4 billion in federal resources 
        will be made available in FY 2000 for specific items 
        requested by the President related to Kosovo/East 
        Timor, Colombia international narcotics intervention, 
        and continued emergency funding for Hurricane Floyd 
        victim assistance.
          The Committee-reported resolution has assumed that, 
        within the new caps, funding for national security will 
        grow from $289.9 billion in 2000 to $306.8 billion in 
        2001, a $16.9 billion increase.
          Funding for the Department of Education programs, 
        including federal assistance to elementary and 
        secondary education, would increase $4.5 billion in BA, 
        compared to the 2001 baseline. Special education 
        funding would increase $1 billion. Funding for Head 
        Start would increase $155 million next year.
          The Committee-reported resolution assumes fully 
        funding highway and mass transit programs as required 
        in 2001 under the Transportation Equity Act (TEA-21). 
        Further, the resolution assumes increased funding at 
        the authorized levels in the recently enacted aviation 
        legislation. In total, funding for transportation 
        programs would increase nearly $4.3 billion in outlays 
        between 2000 and 2001.
          The resolution assumes $1.1 billion increased funding 
        for veterans discretionary health programs, and 
        increased funding for the National Institutes of Health 
        of $1.1 billion next year.
          The resolution assumes an increase of nearly $500 
        million for embassy security, construction, and 
        maintenance of these deteriorating U.S. facilities 
        overseas.
          The resolution assumes a $215 million increase in 
        funding for the Export Import Bank to help address the 
        widening and historic U.S. trade gap.
          The resolution assumes an increase in funding of $152 
        million for the National Science Foundation and a 
        similar increase for NASA.
          An increase of nearly $250 million in funding is 
        assumed for the operations of our National Park 
        Service, Bureau of Land Management, and Forest Service 
        management.
          For nuclear waste disposal activities, the resolution 
        assumes $90 million increased funding over 2000 levels.
          Funds are assumed to fully renew annually all Section 
        8 housing contracts in place at the end of 2000. The 
        resolution assumes $50 million in increased funding for 
        the Women, Infants, and Children program. The 
        Committee-reported resolution also assumes $230 million 
        in increased funding for the Indian Health Service.
          Within these spending limits the Committee-reported 
        resolution does not assume a continuation of funding 
        for emergency spending programs adopted at the end of 
        the last Congress. Although if emergency spending 
        becomes necessary in the future, the Committee-reported 
        resolution contemplates that such designations could 
        continue to be made. However, the resolution assumes a 
        change in budget procedures that would require a super-
        majority vote to maintain an emergency designation.
          The Committee-reported resolution assumes the leasing 
        of the Alaska National Wildlife Reserve, which would 
        provide $1.2 billion in offsets to discretionary 
        spending in 2005.
          The Committee-reported resolution was developed based 
        on specific programmatic assumptions that may or may 
        not come to pass. When aggregated over time, however, 
        discretionary spending would increase from $623 billion 
        in 2001 to over $675 billion in 2005--an annual rate of 
        growth of over 2.0 percent--a realistic rate only 
        slightly slower than the 3.1 percent experienced over 
        the last five years.
    3. Changes to Certain Mandatory Spending Programs.
          The Committee-reported resolution assumes increased 
        mandatory spending over current law assumptions of 
        nearly $61.9 billion for the five-year projection 
        period.
          Included within this level of increased mandatory 
        spending: $40.0 billion for Medicare prescription drug 
        benefits; $10.1 billion for agriculture risk management 
        and income support reform; $5.2 billion for the effects 
        on the Earned Income Tax Credit program resulting from 
        the marriage penalty tax reform; $3.9 billion for child 
        care payments to states; $3.2 billion for Social 
        Services Block Grant payments; $1.1 billion for 
        payments to rural states and counties for education and 
        roads associated with the loss of federal timber 
        receipts; $0.3 billion for the health care of children 
        with disabilities; and a new Department of Education 
        performance bonus fund that, while authorized in 2001, 
        would not result in any significant outlays until after 
        2005 as states qualify for bonus payments.
          The Committee-reported resolution rejects the 
        President's proposals to reduce Medicare spending by 
        $17 billion over the next five years. The Committee-
        reported resolution also rejects the President's 
        regressive proposal to increase taxes on tobacco by $37 
        billion.
          The resolution rejects the President's five-year $600 
        million cut in Impact Aid to the States. The resolution 
        rejects the nearly $2.0 billion cut in the student loan 
        program proposed by the President.
          The Committee-reported resolution assumes that, 
        within the funds made available to federal agencies, 
        the historic pay parity between federal civilian and 
        military employees will be maintained. The resolution 
        assumes the President's proposed 3.7% pay raise for all 
        federal workers next year and the repeal of a temporary 
        0.5% federal employees retirement contribution enacted 
        in 1997.
    4. Return to Working Americans' projected tax overpayments.
          While maintaining the discipline of a balanced budget 
        excluding social security surpluses, the Committee-
        reported resolution assumes that overpayment of taxes 
        not needed to fund the general government should be 
        returned to taxpayers in the form of tax reductions. 
        The exact nature of how such overpayments would be 
        returned would be left to the Committee of jurisdiction 
        through a reconciliation instruction--the Finance 
        Committee. Again ultimately the nature of these tax 
        cuts would be determined by the Congress and the 
        President.
          The Committee-reported resolution would instruct a 
        reduction in federal taxes not to exceed net $150 
        billion over the next five years. The Committee-
        reported resolution assumes that, within the aggregate 
        $150 billion tax cut, legislation will be enacted to 
        provide marriage penalty tax relief, tax relief for 
        affordable education, health care and small businesses. 
        Tax reductions over and above these levels would have 
        to be offset by the tax writing Committee in order to 
        maintain fiscal balance.
          Further, within the aggregate $150 billion tax 
        reduction figure, the Committee-reported resolution 
        could accommodate, but does not require, repeal of any 
        or all of the 4.3 cents per gallon gasoline tax as 
        early as July 1, 2000, or greater amounts thereafter. 
        However, the resolution also assumes that any reduction 
        in receipts to the Highway Trust Fund that might result 
        from any reduction in the gasoline tax, and therein 
        cause a future reduction in highway spending, would be 
        made whole.
          The Committee-reported resolution includes a reserve 
        fund in 2001 and beyond for additional on-budget 
        surpluses. The reserve fund allows the Chairman of the 
        Budget Committee to adjust the revenue aggregates and 
        the balances on the pay-go scorecard in the resolution 
        if CBO revises its forecast later this summer to show 
        additional on-budget surpluses. This update would also 
        revise reconciliation instructions to the tax writing 
        committees to permit additional tax reductions in 2001 
        and beyond based on the amount of the reestimated on-
        budget surplus.
    5. Additional On-Budget Surpluses.
          All budget estimates are subject to change and 
        uncertainty--particularly when made over an extended 
        period of time. Therefore, the Committee-reported 
        resolution, showing caution, assumes that not all of 
        the projected on-budget surplus after 2001 would 
        necessarily be allocated to spending or tax reductions. 
        It is estimated, at this time, that nearly $20 billion 
        in on-budget surpluses could result if the Committee-
        reported resolution were fully implemented. These 
        additional funds, if estimates prove accurate, would 
        further retire debt held by the public.
    6. Enforcement Provisions.
          The Committee-reported resolution includes provisions 
        designed to provide greater discipline on the decision-
        making process governing Congressional fiscal policy.
          These various enforcement provisions include: limits 
        on future advanced appropriations, limits on delayed 
        obligations, and emergency spending limitations similar 
        to last year's budget resolution. Procedures would be 
        included in the resolution to stop the President's 
        proposed gimmick of using off-budget Federal Reserve 
        revenues to offset discretionary spending. The 
        Committee-reported resolution reaffirms current rules 
        that prohibit the scoring of revenues as offsets in an 
        appropriation bill.
          The Committee-reported resolution creates a new 
        super-majority point of order against any future budget 
        resolution that would result in an on-budget deficit--
        the Social Security Lockbox. The resolution establishes 
        a mechanism for additional debt reduction should the 
        assumed tax reduction or Medicare prescription drug 
        legislation not become law.
          The Committee-reported resolution proposes to 
        establish a discretionary defense and nondefense 
        firewall for 2001 appropriations to ensure compliance 
        with the resolution's aggregate spending assumptions 
        for these categories.
          In addition, similar to past budget resolutions, 
        various reserve fund mechanisms are included in the 
        resolution that would authorize spending and revenue 
        allocations to Committees of jurisdiction for specific 
        fiscal policy assumptions included in the resolution's 
        assumptions.
          Specifically, four special reserve funds are 
        established, one to protect needed agriculture 
        emergency funding in FY 2000, a second reserve fund to 
        provide mandatory spending authority for legislation 
        that would provide funding relief to rural counties for 
        their education and road systems, a third to provide 
        health care funds for children with disabilities, and a 
        fourth to provide funds for a Medicare prescription 
        drug benefit.

                          SUMMARY OF COMMITTEE REPORTED RESOLUTION: LEVELS OF SPENDING
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                              2000      2001      2002      2003      2004      2005     2001-05
----------------------------------------------------------------------------------------------------------------
Discretionary:\1\
  Defense:
    BA....................................     292.6     306.8     310.0     316.4     324.0     332.3    1589.5
    OT....................................     289.1     295.1     303.2     310.3     318.3     328.7    1555.5
  Nondefense:
    BA....................................     282.2     289.8     300.0     306.2     310.6     313.5    1520.1
    OT....................................     322.5     327.6     337.4     342.4     344.0     346.6    1698.0
  Subtotal:
    BA....................................     574.8     596.6     610.1     622.6     634.6     645.8    3109.6
    OT....................................     611.7     622.6     640.6     652.7     662.2     675.3    3253.5
  Mandatory:
    OT....................................     943.8     987.4    1037.0    1100.3    1169.2    1244.8    5538.8
  Net interest:
    OT....................................     224.7     219.3     210.7     196.7     182.1     166.5     975.3
  Total outlays:
    OT....................................    1780.1    1829.4    1888.3    1949.7    2013.5    2086.7    9767.6
  Revenues................................    1944.3    2003.2    2071.4    2146.0    2225.0    2318.0   10763.5
    Unified surplus.......................     164.1     173.8     183.1     196.2     211.5     231.3     995.9
    On-budget.............................      11.2       8.1       1.0       1.1       2.8       6.5      19.5
    Off-budget............................     152.9     165.7     182.0     195.2     208.7     224.8     976.4
----------------------------------------------------------------------------------------------------------------
\1\ Discretionary spending in this summary reflects the levels that will apply once new discretionary limits aer
  enacted.


                       SUMMARY OF COMMITTEE REPORTED RESOLUTION: CHANGES FROM SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                              2000      2001      2002      2003      2004      2005     2001-05
----------------------------------------------------------------------------------------------------------------
SBC Baseline:
  Unified surplus.........................     179.4     192.4     236.7     273.0     314.7     357.7    1374.5
  On-budget...............................      26.5      26.5      54.3      77.5     105.6     132.5     396.4
  Off-budget..............................     152.9     165.9     182.4     195.5     209.0     225.2     978.0
  Discretionary \1\.......................       8.6      -1.9      13.9      24.3      39.0      50.3     125.7
  Mandatory...............................       5.5       6.0      11.4      14.6      14.9      15.0      61.9
  Net interest............................       0.3       1.4       3.5       7.1      11.7      17.6      41.2
  Tax cuts (net)..........................      -0.9     -13.2     -24.9     -30.8     -37.6     -43.4    -149.8
  Total change............................     -15.3     -18.6     -53.6     -76.8    -103.2    -126.4    -378.6
  Resolution Total:
    Unified surplus.......................     164.1     173.8     183.1     196.2     211.5     231.3     995.9
    On-budget.............................      11.2       8.1       1.0       1.1       2.8       6.5      19.5
    Off-budget............................     152.9     165.7     182.0     195.2     208.7     224.8    976.4
----------------------------------------------------------------------------------------------------------------
\1\ Discretionary spending in this summary reflects the levels that will apply once new discretionary limits aer
  enacted.

                        II. Economic Assumptions

    The Committee-reported resolution is built upon CBO's 
assumptions about the future path of the US economy. CBO 
prepares economic forecasts for 2000 and 2001, which reflect 
the current state of the economy and relative position in the 
business cycle. The out year projections are based upon longer-
term trends in the economy.

Overview

    The present expansion is now the longest on record, yet it 
shows few signs of infirmity--real GDP grew in excess of 4 
percent last year, while the unemployment rate fell to its 
lowest level in 30 years. Despite this robust performance, 
inflation was remarkably well contained. While higher oil 
prices boosted the headline inflation figures, core CPI growth 
(which excludes volatile food and energy components) remained 
steady. Furthermore, unit labor costs remained in check, as 
accelerating productivity growth tempered wage increases.
    Surging productivity growth was one of the more notable 
aspects of the economy's performance last year. Productivity 
grew at a 3.0 percent pace, nearly double its annual average 
growth rate from 1973-1995. This improvement reflected the 
expanded capital stock, technological advances and CPI/GDP 
measurement changes.
    In recent months, however, the Federal Reserve has become 
concerned that this productivity surge may exacerbate 
inflationary pressures down the road. Although it has boosted 
potential aggregate supply sharply, it has increased aggregate 
demand even more via the ``wealth effect'' (i.e., productivity 
improvements fueled equity market gains, which made households 
feel wealthier and led them to demand more goods than the 
economy could produce).
    Up to now, this imbalance has not been inflationary, since 
imports provided a needed safety valve. However, with the 
current account deficit now at a record as a share of GDP, it 
is unclear how much more this valve can alleviate. As such, the 
Fed is concerned that inflationary pressures could emerge going 
forward. For these reasons, financial markets expect the Fed to 
hike interest rates by an additional 75 basis points by this 
fall.
    Such Fed tightening need not spell the end of the 
expansion. The Fed embarked on a similar effort in 1994/95 and 
was successful in engineering a soft landing that prolonged the 
duration of the expansion.

Summary of CBO's forecasts

    Consistent with most private forecasters, CBO expects that 
the Fed will engineer a gradual slowdown in the economy over 
the next five years, which preempts a continued rise in 
inflationary pressures and reduces labor market imbalances.
    CBO expects real GDP growth to slow from its 1999 pace of 
4.1 percent to 3.3 percent in 2000. Growth is expected to 
average 2.9 percent over the five year budget window.
    This average growth rate is 0.4 percentage points higher 
than what was assumed in CBO's July forecast. Despite these 
upward revisions, CBO's (and OMB's) real GDP growth assumptions 
are still more conservative than the private forecasters.

Forecasts for Real GDP Growth 1999-2005

                [Average annual growth rates in percent]

CBO--Jan00........................................................  2.85
OMB--Feb00........................................................  2.8 
Blue Chip--Mar00..................................................  3.2 
DRI--Mar00 \1\....................................................  3.3 
Macro Advisers--Mar00.............................................  3.0 
WEFA--Mar00.......................................................  3.6 

\1\ DRI forecasts are for 1999-2004.

    CBO assumes that inflation picks up in 2000, before edging 
down slightly in the wake of Federal Reserve rate hikes. The 
unemployment rate is expected to bottom at 4.1 percent (annual 
average) in 2000 and climb gradually to 5.0 percent by the end 
of the five year budget window.
    While CBO does not forecast a recession in 2000 or 2001, it 
assumes that the risks of recession and the risks of continued 
economic boom are roughly balanced in their 2002-2005 
projections.

Comparison of CBO's economics versus OMB's

    OMB's and CBO's economic forecasts are similar and are 
within the range of error on these forecasts. Both look for the 
economy to slow below its potential growth rate over the next 
few years, while inflation increases slightly. Neither expects 
a recession in the near-term. OMB and CBO have essentially the 
same average real GDP growth over the next five years. However, 
OMB projects slightly faster nominal GDP growth, higher 
interest rates and smaller highly-taxed income shares than CBO 
over this same period. Over the five year budget window, CBO's 
economics are slightly more favorable than OMB's as far as 
their budgetary impact--CBO's economics generate $51 billion 
more than OMB's over this period.

Growth

    CBO and OMB have roughly the same assumptions of real GDP 
growth from 1999-2005--CBO expects 2.85 percent average annual 
growth versus 2.81 percent for OMB. Within this period, CBO 
expects slightly faster growth in 2001-03 than OMB, and 
slightly slower from 2004-2005.
    Despite having nearly identical real GDP projections, OMB 
assumes higher nominal GDP than CBO--OMB's is $182 billion 
higher by 2005. As a consequence, OMB's nominal GDP growth rate 
is 0.3 percentage points faster than CBO's. While this 
assumption helps OMB's revenue projections, this revenue effect 
is offset by OMB's more pessimistic income share assumptions 
(discussed below).

Inflation

    Both OMB and CBO expect that inflation will pick-up 
slightly from this year's pace, in deference to tight labor 
markets and a waning of temporary factors that had been 
restraining prices up to this point (i.e., the strengthening 
dollar and plunging commodity prices).
    Both OMB and CBO project largely the same CPI growth over 
the budget window--OMB expects 2.6 percent, while CBO expects 
2.5 percent. There is greater difference on their GDP deflator 
projections. CBO looks for the deflator to be 1.7 percent from 
2002-2005, while OMB expects it to be 2 percent over the same 
period. This is why OMB has higher nominal GDP projections than 
CBO.

Income shares

    Income shares are a less publicized portion of the 
forecasts, although they can have key budgetary effects. Income 
shares depict the breakdown of national income between wages 
and salaries, benefits, corporate profits, proprietors' income, 
rental income and net interest. They are expressed as a share 
of GDP.
    If all of the above were taxed the same, the division 
between income categories would make little budgetary 
difference. Yet, this is not the case. Wages & salaries and 
corporate profits are taxed at a higher effective tax rate--as 
such, the higher they are relative to the other income 
categories, the higher the projected revenue stream. These 
latter two categories are termed the highly taxed shares.
    OMB and CBO both expect the highly taxed share to decline 
over the budget window, due to expected rapid growth of 
depreciation, higher interest rates and an increase in benefit 
costs. However, OMB expects a steeper decline. The lower the 
income share, the lower the revenues. OMB's more pessimistic 
income share assumptions tend to offset the beneficial effects 
of their higher nominal GDP stream from a revenues perspective.

Interest rates

    Both OMB and CBO expect higher interest rates over the next 
few years, given expected Fed tightening in coming months. CBO 
assumes slightly higher short and long term interest rates than 
OMB until 2002, after which CBO assumes interest rates trend 
down toward their 1999 level. In contrast, OMB assumes that 
interest rates remain at elevated levels throughout the five 
year window, thus ensuring that their rates are slightly higher 
than CBO's from 2003-2005. Higher interest rates erode surplus 
projections since they raise debt service costs.

Implications of recent data for the economic assumptions

    Since CBO's forecasts were compiled in December, there have 
been several notable developments in the economy. Fourth 
quarter GDP grew at a 6.9 percent pace, well above what CBO and 
private forecasters had anticipated. Furthermore, Y2K proved to 
be an economic non-event. As a result, Blue Chip revised up its 
forecast for 2000 real GDP growth by 0.6 percentage points from 
December to February.
    Given the improved growth outlook, financial markets now 
expect 50 basis points more Federal Reserve tightening than is 
currently priced into CBO's assumptions. Lastly, the price of 
oil has spiked to $30/barrel, which if sustained, would tend to 
boost 2000 inflation by several tenths of a percent.
    Were such developments to be reflected in budget forecasts, 
surplus estimates would likely rise slightly over the five year 
window--the positive revenue effects of higher growth would be 
expected to more than offset the negative effects of the 
increase in interest rates and inflation.

                                         ECONOMIC PROJECTIONS COMPARISON
                                         [Level in billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                          Calender years--
                                                  --------------------------------------------------------------
                                                     1999     2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Nominal GDP:
    CBO..........................................    9,235    9,692   10,154   10,610   11,069   11,544   12,054
    Administration...............................    9,232    9,685   10,156   10,621   11,105   11,644   12,236

          PERCENT CHANGE (YEAR TO YEAR)
Real GDP:
    CBO..........................................      3.9      3.3      3.1      2.8      2.6      2.6      2.7
    Administration...............................      3.9      3.3      2.7      2.5      2.5      2.8      3.0
    Blue Chip....................................      3.9      4.1      3.1      2.8      2.8      3.3      3.3
Consumer Price Index:
    CBO..........................................      2.2      2.5      2.4      2.5      2.5      2.5      2.5
    Administration...............................      2.2      2.6      2.4      2.6      2.6      2.6      2.6
    Blue Chip....................................      2.2      2.6      2.6      2.6      2.6      2.5      2.4
GDP Price Index:
    CBO..........................................      1.4      1.6      1.6      1.7      1.7      1.7      1.7
    Administration...............................      1.4      1.6      2.0      2.0      2.0      2.0      2.0
    Blue Chip....................................      1.4      1.8      2.0      2.0      2.1      2.1      2.0

                   ANNUAL RATE
Unemployment:
    CBO..........................................      4.2      4.1      4.2      4.4      4.7      4.8      5.0
    Administration...............................      4.2      4.2      4.5      5.0      5.2      5.2      5.2
    Blue Chip....................................      4.2      4.0      4.2      4.5      4.7      4.7      4.7
Three-Month T-Bill:
    CBO..........................................      4.6      5.4      5.6      5.3      4.9      4.8      4.8
    Administration...............................      4.7      5.2      5.2      5.2      5.2      5.2      5.2
    Blue Chip....................................      4.6      5.8      5.9      5.5      5.4      5.4      5.2
Ten-Year T-Note:
    CBO..........................................      5.6      6.3      6.4      6.1      5.8      5.7      5.7
    Administration...............................      5.6      6.1      6.1      6.1      6.1      6.1      6.1
    Blue Chip....................................      5.6      6.5      6.4      6.2      6.1      6.1      5.9

                   SHARE OF GDP

Corporate Profits (Book Profits) + Wages and
 Salaries:
    CBO..........................................     57.6     57.4     57.0     56.7     56.5     56.3     56.2
    Administration...............................     57.6     57.3     56.9     56.4     55.9     55.6     55.5
----------------------------------------------------------------------------------------------------------------
Sources: CBO January 2000, OMB February 2000, Blue Chip Economic Indicators March 2000.

            III. Spending and Revenues Baseline Assumptions

    A baseline is the indispensable starting point for 
constructing a budget resolution. Some object to the term and 
concept of baseline, even though it is a common term found in 
everyday life--whether in a visit to your doctor, in school 
testing of your child, or perhaps in your own household 
budget--that is used to denote a reference point from which you 
can measure changes. Every congressional budget resolution has 
started with a baseline.
    A budget resolution is a statement of dollar aggregates 
that represent the set of spending and tax policies that the 
Congress agrees to pursue over some time in the future, but it 
does not exist in a vacuum. The way we have come to explain a 
budget resolution is to describe how it would change these 
aggregates compared to what the budget would look like if 
current law were to remain in place. Such a comparison point is 
called a budget baseline. (Congressional budget law--the Budget 
Enforcement Act of 1990--acknowledges the utility of a baseline 
by providing details about how a particular baseline is to be 
constructed).
    For federal revenues and mandatory spending programs, 
creating a baseline is straightforward because one can estimate 
the budgetary effects of current laws relating to those items 
continuing on into the future unchanged. In all except a very 
few cases, no new laws need be enacted to trigger continued 
revenues and mandatory spending. For discretionary spending, 
however, 13 appropriation bills must be enacted every year 
before we can understand what such spending will look like in 
the future. So the baseline construction for discretionary 
spending has typically been more subjective.
    The baseline described in this markup book and used in the 
development of the FY2001 Budget Resolution, while called the 
``SBC Baseline,'' is identical in concept to the ``freeze'' 
alternative as updated by CBO in its preliminary analysis of 
the President's budget released on March 9, 2000 (see The 
Economic and Budget Outlook: Fiscal Years 2001-2010, p. 4). For 
discretionary spending, the freeze ``combines budget authority 
for discretionary spending enacted in 2000 with the advance 
appropriations enacted for 2001,'' and maintains that same 
nominal amount for each year.
    For direct spending, which is all spending authority 
provided by law other than appropriations acts, the baseline 
assumes full funding of current law, including cost-of-living 
adjustments. Direct spending includes entitlements and other 
mandatory programs such as social security, medicare, and 
federal retirement, where spending levels are controlled by 
eligibility rules, benefit calculations, participation levels, 
and other non-discretionary cost factors. The baseline assumes 
that all programs greater than $50 million a year will 
continue, even if their authorization expires. Net interest 
spending, which is another subset of direct spending, is driven 
by the size of the annual and cumulative unified cash surpluses 
or deficits, as well as interest rates.
    The SBC baseline assumes the CBO baseline for both on- and 
off-budget revenues. The baseline takes into account that some 
provisions are scheduled to change or expire during the 2001-
2005 period. Overall, the baseline assumes that those changes 
and expirations occur on schedule. One category, excise taxes 
dedicated to trust funds, is the sole exception to this rule. 
The baseline assumes that those taxes will be extended to be 
consistent with the spending assumptions (in this baseline, 
there are three such cases: excise taxes for the Highway Trust 
Fund, the Airport and Airway Trust Fund, and the Leaking 
Underground Storage Tank Trust Fund.)

                        A. Spending by Function


                     Function 050: NATIONAL DEFENSE


                   senate budget resolution for 2001

    Under current law, spending for function 050, National 
Defense, will total $288.9 billion in BA and $282.5 billion in 
outlays for 2000. The President has requested $2.3 billion for 
additional 2000 appropriations (assumed in the Committee-
reported resolution) for military operations in Kosovo, for 
counter drug operations, and for storm damage to DoD 
facilities. This function includes funding for the Department 
of Defense (approximately 95 percent of function total), 
defense activities of the Department of Energy (about 5 
percent), and small amounts expended by the Selective Service, 
the General Services Administration, the Departments of 
Transportation and Justice, and other federal agencies (less 
than 1 percent).

Discretionary

    The Committee-reported resolution assumes discretionary 
spending for Function 050 would total $306.8 billion in BA and 
$295.1 billion in outlays for 2001. This represents an increase 
of $16.9 billion in BA and $5.4 billion in outlays over the 
levels enacted for 2000. With the President's $2.3 billion 
supplemental requested for 2000 added to the 2000 level, the 
Committee-reported resolution is a BA increase of $14.6 
billion. The Committee-reported resolution is also an increase 
of $24.9 billion in BA and $24.3 billion in outlays over the 
amounts assumed by the Balanced Budget Act for 2001, and it is 
an increase of $2.1 billion in BA and $7.9 billion in outlays 
over the amount assumed for 2001 in the 2000 congressional 
budget resolution.
    Compared to the President's request, the Committee-reported 
resolution assumes a BA increase of $400 million in 2000, $500 
million in 2001, and $100 million for each of the four years 
thereafter. For outlays, the Committee-reported resolution 
assumes an increase over the President of $485 million in 2001, 
$220 million in 2002, and $100 million in each year thereafter.
    The Committee-reported resolution is the first time since 
1988 that a congressional budget resolution exceeds the 
President's request in both BA and outlays in every year for 
the years assumed in the resolution. In the recent past, 
spending assumed in budget resolutions has exceeded the 
President's request for the budget year, but not for all of the 
``outyears.''
    It is also notable that the President's request is the 
first request of any President since 1985 to request real 
growth in National Defense spending. This dramatic departure 
from President Clinton's track record in past National Defense 
budget requests explains in large part why the Committee-
reported resolution does not increase BA more dramatically in 
the budget year, as was done by this Committee and the rest of 
Congress in past years of this Administration.
    The Committee-reported resolution fully funds outlays as 
scored by CBO. OMB and DoD outlay estimates have not fulfilled 
assurances of accuracy, continue to undercount outlays, and 
continue to be less reliable than CBO scoring.
    The Committee-reported resolution re-establishes a 
``firewall'' between defense and non-defense discretionary 
spending. As in the past, this firewall is enforceable by a 60-
vote point of order. Such firewalls have been a key element in 
maintaining budgetary discipline in past years, and they 
obviate pressure that might otherwise occur to expend national 
security funds for non-defense purposes.
    The Committee-reported resolution assumes that $4.8 billion 
in outlays originally ``shifted'' from 2000 to 2001 to achieve 
delays in obligation of salary and contractual payments is 
realigned and scored to the appropriate fiscal year--2000.
    Need to Address Continuing and Serious Readiness 
Deficiencies: The Committee-reported resolution takes 
particular note of the continued deterioration of combat 
capabilities of U.S. military forces. Despite DoD rhetoric that 
their budgets have adequately addressed training, weapons and 
facility maintenance, spare parts supplies, and other key 
elements of readiness, there has been measurable and 
significant deterioration of such measures in each of the 
military services. Since at least 1995, training has been 
truncated, mission capable rates of aircraft have declined, 
cannibalization has increased, the backlog of equipment and 
facilities repairs has climbed, and a shortage of spare parts 
has become a virtual drought. The deterioration has been 
directly observed and measured in field surveys by the staff of 
this Committee, GAO reports, and--belatedly--in DoD reports to 
Congress. For several years in succession, improvement has been 
promised, but each new year brings only even more disturbing 
revelations.
    While multiple, valid criticisms have been made of DoD 
management for the past several years--such as the continuing 
failure to address chaotic financial management, inadequate 
support for scientific research, anemic procurement budgets, 
poorly researched personnel policies, and the lack of candor in 
assurances that all is--or will soon be--well, none of the 
manifest failures in DoD policy should be considered more 
troubling than a demonstrated willingness to send the men and 
women of our Armed Forces into danger without better training 
and material support. The adequacy of budgets for national 
defense should not be judged just for their total amount, but 
more cogently for the amounts devoted solely to readiness and 
for the results of that spending in the form of expanded 
training, full spare parts inventories, and small backlogs for 
weapons and facilities repairs. The Committee-reported 
resolution assumes that more meaningful metrics of the adequacy 
of defense budgets will be adopted in DoD in the future and 
that they will be closely scrutinized in the relevant 
Committees of Congress, including this Committee. Accordingly, 
aside from funding specifically assumed for other purposes, the 
Committee-reported resolution assumes that funding increases 
for readiness will be DoD's first priority until training 
assets and tempo, spare parts inventories, and maintenance 
backlogs achieve levels prevalent in the early years of the 
1990s.
    The 2002 budget will necessarily be prepared by a new 
President and a new national security team. The Committee-
reported resolution welcomes such change and assumes 
significant budget increases for national defense in the years 
2002-2005 to support that team. However, should a new national 
defense budget request fail to adopt a plan to stem and reverse 
current readiness inadequacies--and fully fund any such plan 
over the long and the short term--the budget increases assumed 
in this Committee-reported resolution will be reconsidered.
    Chinese Embassy Bombing Compensation: During markup, the 
Committee adopted an amendment offered by Senator Feingold. The 
amendment stated the sense of the Senate that the Committee-
reported resolution assumes that ``funds designated to 
compensate the People's Republic of China for the damage 
inadvertently done to their embassy in Belgrade by NATO forces 
in May, 1999 should not be appropriated from the international 
affairs budget.'' The Committee determined that the funds in 
question, $28 million, should be paid out of the appropriate 
portions of the National Defense budget function. In as much as 
the unintended damage to the embassy has been attributed to an 
intelligence failure, it would seem appropriate for the funds 
to be apportioned from the intelligence funding portions of the 
Department of Defense budget in subfunction 051.
    Security and Safety in DoE Defense Activities: For 
Department of Energy Defense Activities, increases of $400 
million in BA, and commensurate outlays, are assumed in 2000 
and 2001 to support increased security requirements, newly 
discovered stockpile safety and reliability issues, and 
recapitalization and modernization investments to provide 
plants and laboratories with the facilities to meet scheduled 
military requirements for weapons refurbishment and 
certification.

Mandatory programs

    The Committee-reported resolution assumes such National 
Defense Stockpile asset sales that have been approved in 
previous years.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................    291.6    305.8    309.1    315.5    323.2    331.5
    Outlays...............................................    288.1    294.1    302.3    309.4    317.5    327.9
President's Budget:
    Budget Authority......................................    291.2    305.3    309.0    315.4    323.1    331.4
    Outlays...............................................    287.8    293.6    302.1    309.3    317.4    327.8
SBC Baseline:
    Budget Authority......................................    288.9    288.9    289.0    289.0    289.1    289.1
    Outlays...............................................    282.5    288.7    287.5    287.8    287.9    290.6
Resolution compared to:
    President's Budget:
        Budget Authority..................................      0.4      0.5      0.1      0.1      0.1      0.1
        Outlays...........................................      0.3      0.5      0.2      0.1      0.1      0.1
    SBC Baseline:
        Budget Authority..................................      2.7     16.9     20.1     26.5     34.1     42.4
        Outlays...........................................      5.6      5.4     14.8     21.6     29.6     37.4
----------------------------------------------------------------------------------------------------------------

                  Function 150: INTERNATIONAL AFFAIRS


                   SENATE BUDGET RESOLUTION FOR 2001

    Under current law, spending for Function 150, International 
Affairs, will total $20.1 billion in BA and $15.5 billion in 
outlays for 2000. This function includes funding for the 
operation of the foreign affairs establishment including 
embassies and other diplomatic missions abroad, foreign aid 
loan and technical assistance activities in developing 
countries, security assistance to foreign governments, 
activities of the Foreign Military Sales Trust Fund, U.S. 
contributions to international financial institutions, the 
Export-Import Bank and other trade promotion activities, and 
refugee assistance.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending would total $20.4 billion in BA and $22.6 billion in 
outlays for 2001. This represents an increase of $0.4 billion 
in BA and $1.3 billion in outlays from the 2000 level adjusted 
for emergencies and other one-time spending.
    The Committee-reported resolution assumes the additional 
resources requested by the President for 2000, amounting to 
$1.7 billion. In addition, the Committee-reported resolution 
assumes the requested 2001 funding for Colombia, $0.3 billion, 
in 2000.
    The Committee-reported resolution assumes the following 
increases in 2001 over enacted 2000 levels of funding: $340 
million for the Department of State's embassy security and 
construction as requested by the President, $156 million for 
Department of State security upgrades as requested in the 
Diplomatic and Consular Affairs programs, $16 million as 
requested by the President for the Department of State's 
Capital Investment Fund, $215 million for the Export-Import 
Bank as requested by the President, $77 million as requested 
for Assistance to Eastern Europe and the Baltic States, $49 
million for Non-proliferation, anti-terrorism, and demining and 
$57 million for Child Survival and disease programs that 
includes the President's request for AIDS/HIV health 
activities.
    In addition to the increases in funding levels, the 
Committee-reported resolution assumes the President's FY2001 
appropriations language for Foreign Military Financing and the 
resulting outlay impact in 2001.
    The Committee-reported resolution assumes the President's 
requested program decreases as well as abolition of the Inter-
American Foundation and the African Development Foundation.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
increases or decreases in this function.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................     22.0     20.1     20.9     21.4     21.9     22.6
    Outlays...............................................     16.0     18.6     17.9     17.6     17.7     17.9
President's Budget:
    Budget Authority......................................     21.7     22.5     23.2     23.5     24.0     24.7
    Outlays...............................................     15.9     19.5     19.4     19.4     19.9     20.2
SBC Baseline:
    Budget Authority......................................     20.1     22.0     22.2     22.2     22.2     22.4
    Outlays...............................................     15.5     17.7     18.1     18.5     18.7     18.5
Resolution compared to:
    President's Budget:
        Budget Authority..................................      0.3     -2.4     -2.3     -2.1     -2.1     -2.0
        Outlays...........................................      0.1     -0.9     -1.5     -1.8     -2.1     -2.3
    SBC Baseline:
        Budget Authority..................................      1.9     -1.9     -1.3     -0.8     -0.3      0.3
        Outlays...........................................      0.5      0.9     -0.2     -0.9     -0.9     -0.7
----------------------------------------------------------------------------------------------------------------

          Function 250: GENERAL SCIENCE, SPACE AND TECHNOLOGY


                   SENATE BUDGET RESOLUTION FOR 2001

    Under current law, spending for Function 250, General 
Science, Space and Technology, will total $19.3 billion in BA 
and $18.4 billion in outlays for 2000. This function includes 
the National Aeronautics and Space Administration (NASA) 
civilian space program and basic research programs of the 
National Science Foundation (NSF) and Department of Energy 
(DOE).

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function totaling $19.6 billion in BA and 
$19.2 billion in outlays for 2001. Over the next five years the 
Committee-reported resolution provides $99.6 billion in BA and 
$97.7 billion in outlays for programs in this function. The 
2001 assumption represents an increase of $445 million in BA 
and $818 million in outlays above the 2000 level.
    The Committee-reported resolution rejects the President's 
unsustainable proposals for 2001. The President's budget 
includes one-time increases in 2001, with little or no growth 
thereafter. In addition to these increases, the President's 
proposal also assumes $2.1 billion in advance appropriations in 
2002. This approach does not represent a responsible method of 
sustaining federal funding for basic research in the long term.
    The Committee-reported resolution assumes that increases in 
basic science are needed, but that they should be done in a 
responsible manner with continuing support beyond 2001. Within 
Function 250, the Committee-reported resolution assumes annual 
increases in research and development funding, including the 
areas of NSF research, DOE science, and NASA science and 
technology.
    In 2001, the Committee-reported resolution assumes an 
increase in budget authority of $385 million for basic 
research. This accounts for 87 percent of the $445 million 
increase assumed in 2001. For the fiscal years 2001-2005, basic 
research increases $4.7 billion in funding compared to the 
baseline. It is also assumed that none of these funds will be 
provided as advance appropriations.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
increases or decreases in this function.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................     19.3     19.7     19.9     19.8     20.1     20.3
    Outlays...............................................     18.4     19.2     19.6     19.5     19.7     19.9
President's Budget:
    Budget Authority......................................     19.3     20.8     21.2     21.5     22.1     22.5
    Outlays...............................................     18.4     19.7     20.7     21.0     21.5     22.0
SBC Baseline:
    Budget Authority......................................     19.3     19.3     19.2     19.2     19.2     19.2
    Outlays...............................................     18.4     19.1     19.1     19.1     19.1     19.1
Resolution compared to:
    President's Budget:
        Budget Authority..................................  .......     -1.1     -1.3     -1.7     -2.1     -2.2
        Outlays...........................................  .......     -0.4     -1.1     -1.5     -1.8     -2.1
    SBC Baseline:
        Budget Authority..................................      0.0      0.4      0.6      0.6      0.8      1.1
        Outlays...........................................      0.0      0.2      0.5      0.5      0.6      0.8
----------------------------------------------------------------------------------------------------------------

         Function 270: ENERGY SENATE BUDGET RESOLUTION FOR 2001

    Under current law, spending for Function 270, Energy, will 
total $1.1 billion in BA and -$0.6 billion in outlays for 2000. 
This function includes civilian activities of the Department of 
Energy, the Rural Utilities Service, the power programs of the 
Tennessee Valley Authority (TVA), and the Nuclear Regulatory 
Commission (NRC). Mandatory spending in this function contains 
large levels of offsetting receipts, resulting in net mandatory 
spending of -$1.5 billion in BA and -$3.6 billion in outlays 
for 2000. Congress provided $2.6 billion in discretionary BA 
for 2000.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $3.1 billion in BA and 
outlays for 2001. Over the next five years, discretionary 
spending in this function will total $14.0 billion in BA and 
$14.3 billion in outlays. The resolution represents an increase 
of $0.5 billion in BA and $0.1 billion in outlays from the 2000 
level.
    Specifically, the Committee-reported resolution assumes 
increased spending in energy supply, energy conservation, 
uranium enrichment decontamination and decommissioning, and 
from the Nuclear Waste Disposal Fund. The Committee-reported 
resolution assumes that a net of $19 million in additional 
funds requested by the President for 2000 will be appropriated 
before the end of this year.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes mandatory savings 
of $1.0 billion in BA and outlays over 2001-2005 from the sale 
of unspecified assets assumed to occur at the end of 2002.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
increases or decreases in this function.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................      1.1      1.5     -0.3      1.2      1.2      1.2
    Outlays...............................................     -0.6      0.2     -1.4     -0.0     -0.1     -0.1
President's Budget:
    Budget Authority......................................      1.1      1.4      1.5      1.3      1.4      1.5
    Outlays...............................................     -0.6      0.3      0.2      0.1      0.0      0.1
SBC Baseline:
    Budget Authority......................................      1.1      1.4      0.9      1.0      1.0      0.9
    Outlays...............................................     -0.6      0.1     -0.2     -0.3     -0.4     -0.3
Resolution compared to:
    President's Budget:
        Budget Authority..................................      0.0      0.1     -1.7     -0.1     -0.2     -0.2
        Outlays...........................................      0.0     -0.1     -1.5     -0.1     -0.1     -0.2
    SBC Baseline:
        Budget Authority..................................      0.0      0.1     -1.2      0.2      0.2      0.3
        Outlays...........................................      0.0      0.1     -1.2      0.2      0.2      0.3
----------------------------------------------------------------------------------------------------------------

            Function 300: NATURAL RESOURCES AND ENVIRONMENT


                   SENATE BUDGET RESOLUTION FOR 2001

    Under current law, spending for Function 300, Natural 
Resources and the Environment, will total $24.5 billion in BA 
and $24.2 billion in outlays for 2000. This function includes 
funding for water resources, conservation and land management, 
recreation resources, and pollution control and abatement. 
Agencies with major program activities within the function 
include the Environmental Protection Agency (EPA), the Army 
Corps of Engineers, the National Oceanic and Atmospheric 
Administration (NOAA), the Forest Service (within the 
Department of Agriculture), and the Department of the Interior, 
including the National Park Service, the Fish and Wildlife 
Service, the U.S. Geological Survey, the Bureau of Land 
Management and the Bureau of Reclamation, among others.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $24.1 billion in BA and 
$24.0 billion in outlays for 2001. Over the next five years, 
the resolution assumes an allocation of $125 billion for 
programs in this function. For 2001, there is a decrease of 
$101 million in BA and an increase of $260 million in outlays 
from the 2000 level.
    The Committee-reported resolution for function 300 assumes 
increases in spending over the 2000 level for several important 
conservation and land management programs including: $90 
million in 2001 for the operation of the National Park Service 
and a total of $450 million over 5 years; $71 million in FY 
2001 for management of land resources for the Bureau of Land 
Management and $355 million over 5 years; $59 million in 2001 
for wildland fire management in the Forest service and $295 
million over 5 years; $102 million in 2001 for NOAA's Pacific 
coastal salmon recovery program and $510 million over 5 years.
    The Committee-reported resolution also includes 
approximately $165 million in additional spending for 2000 for 
NOAA, the Army Corps of Engineers, the Bureau of Land 
Management and several other agencies.
    The Committee-reported resolution does not accept the 
President's cut of $539 million in 2001 and $2.4 billion over 5 
years in the EPA State and Tribal Assistance grants. The 
Committee-reported resolution also rejects the President's 
proposal for a new discretionary spending cap for the Lands 
Legacy program. The committee believes that the appropriations 
level of $3.9 billion provided in 2000 for the accounts that 
comprise the President's Land Legacy proposal is sufficient to 
fund the activities included in the President's proposal if the 
Congress and the President choose to do so.

Mandatory used for discretionary offsets

    The 2001 Committee-reported resolution for function 300 
assumes no mandatory funds used as discretionary offsets.

Mandatory PAYGO

    The resolution assumes two changes in mandatory spending 
for function 300. The function assumes an increase in mandatory 
spending of up to $200 million in FY 2001 for payments to 
counties for schools and roads and up to $1.1 billion over the 
5 year period. It also assumes the extension of recreational 
fee demonstration programs for the Bureau of Land Management, 
National Park Service, Fish and Wildlife Service, and the 
Forest Service at a total cost of $89 million in 2001.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................     24.5     24.9     25.0     25.0     25.1     25.1
    Outlays...............................................     24.2     24.9     25.0     25.2     25.1     24.9
President's Budget:
    Budget Authority......................................     24.5     26.4     26.2     25.9     26.5     27.0
    Outlays...............................................     24.2     25.6     26.2     26.0     26.2     26.4
SBC Baseline:
    Budget Authority......................................     24.3     24.8     24.7     24.7     24.7     24.7
    Outlays...............................................     24.2     24.7     24.8     25.0     24.8     24.5
Resolution compared to:
    President's Budget:
        Budget Authority..................................  .......     -1.5     -1.1     -0.8     -1.5     -2.0
        Outlays...........................................      0.0     -0.7     -1.2     -0.8     -1.1     -1.5
    SBC Baseline:
        Budget Authority..................................      0.2      0.2      0.3      0.3      0.3      0.3
        Outlays...........................................      0.1      0.2      0.2      0.2      0.3      0.3
----------------------------------------------------------------------------------------------------------------

                       Function 350: AGRICULTURE


                   SENATE BUDGET RESOLUTION FOR 2001

    Under current law, spending for Function 350, Agriculture, 
will total $29.7 billion in BA and $28.3 billion in outlays for 
2000. This function includes funding for federal programs 
intended to promote the economic stability of agriculture 
through direct assistance and loans to food and fiber 
producers, provide regulatory, inspection and reporting 
services for agricultural markets, and promote research and 
education in agriculture and nutrition.
    Farm income support programs operated by the Commodity 
Credit Corporation (CCC), and risk management programs under 
the Federal Crop Insurance Corporation (FCIC) make up most of 
the spending in this function. Over the past 25 years, CCC 
spending has ranged from $0.6 billion in 1975 to $26 billion in 
1986. This year, total outlays for the CCC are expected to be a 
record $27.6 billion, and FCIC outlays are expected to be $2.2 
billion.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $4.5 billion in BA and 
outlays for 2001. Over the next five years, discretionary 
spending in this function would total $23.1 billion in BA and 
$22.8 billion in outlays. The resolution represents a increase 
of $0.1 billion in BA over the enacted 2000 level.
    Specifically, the Committee-reported resolution assumes 
substantial program increases within the Farm Service Agency, 
the Agricultural Research Service, the Animal and Plant Health 
Inspection Service, and research, education and extension 
activities funded under the Cooperative State Research, 
Education, and Extension Service. The Committee-reported 
resolution also assumes sufficient funding to implement a 
program within USDA to upgrade and integrate outdated 
department-wide computing systems. The Committee-reported 
resolution assumes $94 million in additional funds requested by 
the President for 2000 will be appropriated before the end of 
this year.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes mandatory savings 
of $30 million in BA in 2001 and $90 million in BA over the 
next five years from the Fund for Rural America program.

Mandatory PAYGO

    The Committee-reported resolution recognizes that 
legislation will likely be enacted later this year to help 
agricultural producers manage risk. For this purpose, the 
Committee-reported resolution provides for a mandatory spending 
adjustment of $8.0 billion in this function for the 2001 
through 2005 period.
    In addition, the resolution recognizes the likely need for 
additional assistance for agriculture producers, and that 
legislation for this purpose falls under the jurisdiction of 
the Committee on Agriculture, Nutrition, and Forestry. The 
Committee-reported resolution provides a mandatory spending 
adjustment of $5.5 billion in BA and outlays for 2000, and $3.0 
billion for the 2001 through 2005 period upon that committee's 
reporting of legislation that provides assistance for producers 
of program crops and specialty crops, and enhancements for 
agriculture conservation programs.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................     35.3     20.9     19.0     18.0     17.4     16.1
    Outlays...............................................     33.9     18.8     17.2     16.4     15.9     14.6
President's Budget:
    Budget Authority......................................     29.7     21.7     19.8     16.1     15.5     14.2
    Outlays...............................................     28.4     19.9     18.6     14.6     13.9     12.6
SBC Baseline:
    Budget Authority......................................     29.7     17.7     16.9     15.9     15.1     13.8
    Outlays...............................................     28.3     16.4     15.3     14.3     13.8     12.4
Resolution compared to:
    President's Budget:
        Budget Authority..................................      5.5     -0.8     -0.9      1.9      1.9      1.9
        Outlays...........................................      5.5     -1.1     -1.3      1.7      2.0      2.0
    SBC Baseline:
        Budget Authority..................................      5.6      3.2      2.0      2.1      2.2      2.3
        Outlays...........................................      5.6      2.4      1.9      2.0      2.1      2.2
----------------------------------------------------------------------------------------------------------------

               Function 370: COMMERCE AND HOUSING CREDIT


                   SENATE BUDGET RESOLUTION FOR 2001

    Under current law, spending for Function 370, Commerce and 
Housing Credit, will total about $8.5 billion in BA and $4.1 
billion in outlays for 2000. This budget function includes 
funding for 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 census, and small business; and 
mandatory spending for deposit insurance activities related to 
banks, savings and loans, and credit unions.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending would total $2.5 billion in BA and $2.8 billion in 
outlays for 2001. This represents a decrease of $4.5 billion in 
both BA and outlays from the 2000 level, due almost entirely to 
the fact that funding for the decennial census and certain 
construction projects of the National Institute of Standards 
and Technology need not be provided again for 2001 (as 
indicated in the President's budget). The Committee-reported 
resolution also assumes the funding for the small amounts of 
the President's requests for 2000 and for the e-commerce 
statistics initiative. The Committee-reported resolution 
assumes that the Patent and Trademark Office (PTO) will be 
allowed to retain its resources, as assumed in the freeze 
baseline, so the federal government can fulfill its obligation 
to the innovators who keep this economy going and who pay for 
PTO's expenses. The resolution rejects the President's proposed 
continuation of deferment of federal responsibilities at PTO. 
The Committee-reported resolution assumes reduction of certain 
corporate welfare spending, such as requiring beneficiaries of 
the International Trade Administration's trade promotion 
activities to either pay for or forgo those activities, saving, 
ultimately, $0.2 billion annually.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes mandatory savings 
of $0.9 billion in BA and outlays in 2001 and $1.9 billion in 
BA and outlays over the five-year period, 2001-2005. In 2001, 
the majority of savings ($0.7 billion) stem from assuming a 
provision passed by the Senate last year in the Commerce, 
Justice, State appropriations bill for 2000 (but not, 
ultimately, enacted into law) dealing with spectrum licenses 
issued by the FCC to licensees that have since declared 
bankruptcy. The provision would clarify that licenses cancel 
automatically for nonpayment, notwithstanding a pending 
bankruptcy case.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
changes in this function.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................      8.6      6.7      8.9     10.2     13.4     13.4
    Outlays...............................................      4.1      2.6      5.2      5.5      8.4      9.3
President's Budget:
    Budget Authority......................................      8.6      7.4      9.3     10.5     14.1     14.2
    Outlays...............................................      4.1      3.3      5.4      5.8      9.1     10.1
SBC Baseline:
    Budget Authority......................................      8.5     12.0     13.7     14.9     18.3     18.2
    Outlays...............................................      4.1      7.5      9.9     10.2     13.2     14.2
Resolution compared to:
    President's Budget:
        Budget Authority..................................      0.0     -0.7     -0.4     -0.4     -0.7     -0.8
        Outlays...........................................      0.0     -0.7     -0.2     -0.3     -0.7     -0.7
    SBC Baseline:
        Budget Authority..................................      0.1     -5.3     -4.8     -4.8     -4.9     -4.9
        Outlays...........................................      0.0     -4.9     -4.7     -4.7     -4.8     -4.8
----------------------------------------------------------------------------------------------------------------

                      Function 400: TRANSPORTATION


                   SENATE BUDGET RESOLUTION FOR 2001

    Under current law, spending for Function 400, 
Transportation, will total about $51.8 billion in BA and $46.6 
billion in outlays for 2000. The function primarily comprises 
funding for the Department of Transportation, including ground 
transportation programs, such as the federal-aid highway 
program, mass transit, motor carrier safety, and the National 
Rail Passenger Corporation (Amtrak); air transportation through 
the Federal Aviation Administration (FAA) airport improvement 
program, facilities and equipment program, research, and 
operation of the air traffic control system; water 
transportation through the Coast Guard and Maritime 
Administration; the Surface Transportation Board; the National 
Transportation Safety Board; and related transportation safety 
and support activities within the Department of Transportation. 
In addition, funds for air transportation programs under the 
auspices of NASA are included within this function.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $15.8 billion in BA and 
$48.8 billion in outlays for 2001. This represents an increase 
of $1.3 billion in BA and $4.4 billion in outlays from the 2000 
level adjusted for additional appropriation requests. The 
majority of the growth in 2001 is due to increases related to 
the Transportation Equity Act for the 21st Century (TEA-21) and 
the Wendell H. Ford Aviation Investment Act for the 21st 
Century (FAIR-21).
    The Committee-reported resolution does not make any changes 
to the obligation limitations or programs under TEA-21, except 
as required by the Motor Carrier Safety Improvement Act of 
1999. Further, it does not assume the President's proposal to 
change the distribution of revenue aligned budget authority 
(RABA)--additional highway revenues resulting from increases in 
gas tax receipts--under TEA-21. In addition, it rejects the 
President's proposed increases in contract authority for 
specific programs above that provided in TEA-21.
    As part of a five-year, $150 billion tax reduction package, 
the Committee-reported resolution could accommodate a 
suspension or repeal of the Clinton/Gore 4.3 cent tax increase 
on fuel. This tax was initially imposed on motor fuels 
(gasoline, diesel, and other special fuels) for deficit 
reduction purposes, and receipts originally were deposited into 
the general fund; however, the majority of the tax receipts are 
now deposited into various trust funds. The 4.3 cents tax paid 
by rail and barge operators is still deposited in the general 
fund, and therefore, continues to be used for deficit 
reduction.
    If the full Congress enacted such a suspension or repeal, a 
total of 80 percent of the 4.3 cents collected on non-rail, 
ground transportation (cars, trucks, and buses) would reduce 
tax receipts into the highway account of the highway trust 
fund. Any suspension or repeal assumption would not affect the 
highway category in 2001. In addition, the Committee-reported 
resolution does not assume any spending reductions in the 
highway category in 2002 and 2003 that would result from any 
suspension or repeal of the 4.3 cent tax.
    With any suspension or repeal, revenues into the transit 
account of the highway trust fund would be reduced by the 
remaining 20 percent collected on non-rail ground 
transportation in 2000 and 2001. Since total authorizations and 
obligation limitations for transit programs are not directly 
linked to transit account revenues, any suspension or repeal 
would not affect the transit program levels.
    For aviation program funding, the Committee-reported 
resolution assumes funding at the levels contained in FAIR-21. 
Discretionary budget authority for FAA programs in 2001 is 
assumed at $9.5 billion, almost $1.4 billion over 2000 levels. 
This, added to an obligation limitation assumption of $3.2 
billion for the airport improvement program, results in total 
budget resources of $12.7 billion in 2001, $2.7 billion more 
than 2000 budget resource levels.
    Like the transit program, the aviation authorizations and 
obligation limitations are not directly linked to airports and 
airways trust fund tax revenue. Therefore, any suspension or 
repeal of the Clinton/Gore 4.3 cent tax and the resulting 
reduction in aviation tax revenue deposits would not lead to a 
reduction in budget authority or obligation limitation for 
aviation. Although not explicitly stated, the Committee-
reported resolution assumes that air traffic control systems 
and services will undergo significant structural reforms and 
will be funded fully by user fees as soon as possible.
    The Committee-reported resolution assumes the President's 
level of funding in 2001 for pipeline safety.

Mandatory PAYGO

    The Committee-reported resolution assumes $43.5 billion in 
mandatory budget authority and outlays of $2.1 billion in 2001, 
reflecting changes from 2000 levels of $3.6 billion and -$0.2 
billion, respectively. The increase in mandatory budget 
authority is a result of TEA-21 and FAIR-21.
    The Committee-reported resolution assumes mandatory budget 
authority levels contained in TEA-21. The Committee-reported 
resolution assumes any suspension or repeal of the 4.3 cent tax 
on fuel would not result in a reduction in the mandatory budget 
authority in 2002 and 2003. Mandatory budget authority for mass 
transit programs would not be affected by any suspension or 
repeal assumption.
    The Committee-reported resolution assumes the mandatory 
budget authority level contained in FAIR-21 for the airport 
improvement program in 2001 of $3.2 billion and adjusts 2000 to 
reflect reauthorization of this formerly expired program at 
$2.5 billion. Mandatory budget authority for the aviation 
program would not be reduced by any suspension or repeal of the 
Clinton/Gore 4.3 cents tax on fuel.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................     54.4     59.2     57.5     59.1     59.1     59.2
    Outlays...............................................     46.7     50.8     53.5     55.5     56.1     56.4
President's Budget:
    Budget Authority......................................     53.8     58.8     55.6     57.0     58.4     60.1
    Outlays...............................................     46.7     50.5     52.3     53.7     54.4     55.3
SBC Baseline:
    Budget Authority......................................     51.8     54.7     52.2     53.0     53.0     53.1
    Outlays...............................................     46.6     49.1     50.1     51.4     51.4     51.2
Resolution compared to:
    President's Budget:
        Budget Authority..................................      0.6      0.5      2.0      2.1      0.7     -0.9
        Outlays...........................................      0.0      0.3      1.2      1.8      1.7      1.1
    SBC Baseline:
        Budget Authority..................................      2.5      4.6      5.3      6.1      6.1      6.1
        Outlays...........................................      0.0      1.7      3.4      4.1      4.8      5.2
----------------------------------------------------------------------------------------------------------------

            Function 450: COMMUNITY AND REGIONAL DEVELOPMENT


                   SENATE BUDGET RESOLUTION FOR 2001

    Under current law, spending for Function 450, Community and 
Regional Development, will total $11.3 billion in BA and $10.7 
billion in outlays for 2000. This function includes funding for 
community and regional development and disaster relief. The 
function includes the Appalachian Regional Commission (ARC), 
non-power programs of the Tennessee Valley Authority (TVA), the 
Federal Emergency Management Agency (FEMA), the Economic 
Development Administration (EDA) within the Commerce 
Department, and portions of the Department of Housing and Urban 
Development (most notably the Community Development Block Grant 
program), the Bureau of Indian Affairs, and the Department of 
Agriculture.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending would total $9.0 billion in BA and $11.1 billion in 
outlays for 2001. This represents a decrease of $2.6 billion in 
BA and $401 million in outlays from the 2000 level, due mainly 
to emergency spending. The Committee-reported resolution 
assumes increases in Bureau of Indian Affairs programs of $300 
million in 2001 and $1.5 billion over 5 years. Funding for the 
Brownfields redevelopment program is also increased by $25 
million in 2001 and $125 million over 5 years. The Committee-
reported resolution also assumes an increase of approximately 
$120 million in 2000 for the Economic Development 
Administration, and the Small Business Administration disaster 
loans.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes mandatory savings 
of $30 million in BA in 2001 and $90 million in BA over the 
five-year period, 2001-2005 in the Fund for Rural America 
program.

Mandatory PAYGO

    The Committee-reported resolution assumes two mandatory 
savings proposals. These proposals include: the elimination of 
Pre-firm flood insurance subsidy for savings of $49 million in 
outlays in 2001 and $933 million over 5 years; and the 
elimination of repetitively flooded properties from FEMA flood 
insurance for savings of $58 million in outlays in 2001 and 
$336 million in outlays over the 5 year period 2001-2005.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................     11.3      9.0      8.8      8.7      8.7      8.7
    Outlays...............................................     10.7     10.4      9.8      8.7      8.3      7.9
President's Budget:
    Budget Authority......................................     11.3     12.5     12.5     12.6     12.9     13.3
    Outlays...............................................     10.7     11.4     11.8     11.7     11.8     12.1
SBC Baseline:
    Budget Authority......................................     11.2     11.5     11.4     11.4     11.3     11.4
    Outlays...............................................     10.7     11.2     11.2     10.9     10.8     10.8
Resolution compared to:
    President's Budget:
        Budget Authority..................................      0.0     -3.5     -3.7     -3.9     -4.2     -4.5
        Outlays...........................................  .......     -1.0     -1.9     -3.0     -3.6     -4.2
    SBC Baseline:
        Budget Authority..................................      0.1     -2.5     -2.6     -2.7     -2.7     -2.7
        Outlays...........................................      0.0     -0.8     -1.4     -2.2     -2.6     -2.9
----------------------------------------------------------------------------------------------------------------

   Function 500: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES


                   SENATE BUDGET RESOLUTION FOR 2001

    Under current law, spending for Function 500, Education, 
Training, Employment, and Social Services, will total $57.7 
billion in BA and $61.4 billion in outlays for 2000. This 
function includes funding for elementary and secondary, 
vocation, and higher education; job training; children and 
family services programs; adoption and foster care assistance; 
statistical analysis and research related to these areas; and 
funding for the arts and humanities.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $56.8 billion in BA and 
$52.2 billion in outlays for 2001. This represents an increase 
of $12.3 billion in BA and $3.1 billion in outlays from the 
2000 level. The increase is due to advance appropriations made 
last year and increases for the Department of Education and 
Head Start for 2001.
    The Committee-reported resolution assumes net discretionary 
spending increases for elementary and secondary education of 
$2.6 billion in 2001 and $25 billion over five years 
(Subfunction 501, table follows). The Committee-reported 
resolution assumes total budget authority, discretionary and 
mandatory, for the Department of Education of $47.9 billion, 
$0.6 billion more than the President's request. This represents 
an increase of $12.9 billion in BA and $5.1 billion in outlays 
from the 2000 level.
    The Committee-reported resolution assumes a net increase of 
$19.6 billion over the next 5 years for programs that will be 
reauthorized by the Elementary and Secondary Education Act this 
year. This bill will give states greater flexibility in 
delivering hundreds of elementary and secondary education 
programs and will place more decision-making in the hands of 
states, localities, and families. Such legislation should help 
states and localities emphasize academic achievement and 
accountability.
    The Committee-reported resolution assumes that over the 
next five years an additional $11.3 billion will be dedicated 
to funding our federal commitment to special education under 
IDEA, $9.3 billion more than the President's request. The 
Committee-reported resolution also assumes an increase in 
student financial assistance for expanding the maximum Pell 
Grant award. Finally, the Committee-reported resolution rejects 
the President's 15 percent cut in Impact Aid.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes a repeal of the 
provision delaying obligations for the Social Services Block 
Grant (SSBG) in 2000. The resolution also assumes mandatory 
savings of $35 million in BA and $21 million in outlays in 2001 
and $0.3 billion in BA and $0.2 billion in outlays over the 
2001-2005 period from limiting the high rate of growth in 
administrative expenses of the Department of Education's 
bureaucracy for the student loan program, thereby freeing up 
more resources that can go to students through Pell Grants.
    In addition, the Committee-reported resolution rejects all 
student loan program cuts proposed in the President's Budget. 
While the Department of Education's budget claims that ``the 
Administration is committed to supporting two strong student 
loan delivery systems, allowing individual institutions to 
choose which best meets their needs and the needs of their 
students,'' the budget sets about making guaranteed student 
loans (GSLs) more expensive or less available for students.
    For example, the President proposes to require guaranty 
agencies to pay accelerated and increased funds from their 
federal reserves, which will require them to pass the cost on 
to students, thereby reducing the amount of actual loan 
assistance received by students. Further, the President seeks 
already to reduce the amount paid to lenders (both in interest 
rates and the retention allowance for default collections) who 
supply GSLs even though the current rate was just set little 
more than a year ago after tough negotiations in the 
reauthorization of the Higher Education Act (and the lender 
yield was even more recently marginally reduced in the switch 
to the commercial paper index in a law just signed by the 
President four months ago). This proposal by the President 
would make GSLs harder to obtain because many lenders would not 
be able to participate in the program.

Mandatory PAYGO

    The Committee-reported resolution assumes a new one-time 
grant to the Department of Education of $2.3 billion in 2001 to 
establish a Performance Bonus Fund. The Fund will reward states 
which improve student achievement. In addition, the Committee-
reported resolution assumes a $100 million increase in the SSBG 
in 2001, $25 million more than the President's request. The 
resolution further assumes an increase for SSBG of $3.4 billion 
over the next 5 years and $8.9 billion over the next ten years.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions fo dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................     57.7     75.0     75.7     76.6     77.8     79.1
    Outlays...............................................     61.9     68.6     72.6     75.4     76.8     78.0
President's Budget:
    Budget Authority......................................     57.2     76.8     77.3     78.2     79.6     81.5
    Outlays...............................................     61.4     69.1     74.6     76.8     78.3     80.0
SBC Baseline:
    Budget Authority......................................     57.7     70.4     70.9     71.0     71.0     71.8
    Outlays...............................................     61.4     69.0     70.6     71.0     70.9     71.4
Resolution compared to:
    President's Budget:
        Budget Authority..................................      0.5     -1.8     -1.5     -1.6     -1.9     -2.4
        Outlays...........................................      0.5     -0.5     -2.0     -1.3     -1.5     -1.9
    SBC Baseline:
        Budget Authority..................................     -0.0      4.6      4.8      5.7      6.7      7.4
        Outlays...........................................      0.5     -0.4      2.0      4.4      5.8      6.6
----------------------------------------------------------------------------------------------------------------

          Subfunction 501: ELEMENTARY AND SECONDARY EDUCATION


                   SENATE BUDGET RESOLUTION FOR 2001

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................     16.6     25.5     27.7     28.1     28.7     29.2
    Outlays...............................................     19.5     21.2     24.4     27.0     27.9     28.5
President's Budget:
    Budget Authority......................................     16.6     26.2     26.2     26.4     26.7     27.0
    Outlays...............................................     19.5     21.1     24.3     25.8     26.2     26.6
SBC Baseline:
    Budget Authority......................................     16.6     22.9     22.9     22.9     22.9     22.9
    Outlays...............................................     19.5     21.1     22.4     23.0     22.8     22.8
Resolution compared to:
    President's Budget:
        Budget Authority..................................  .......     -0.7      1.5      1.8      2.0      2.2
        Outlays...........................................  .......      0.1      0.1      1.2      1.7      1.8
    SBC Baseline:
        Budget Authority..................................  .......      2.6      4.8      5.3      5.8      6.4
        Outlays...........................................  .......      0.1      2.0      4.0      5.1      5.6
----------------------------------------------------------------------------------------------------------------

                          Function 550: HEALTH


                   SENATE BUDGET RESOLUTION FOR 2001

    Under current law, spending for Function 550, Health, will 
total $159.3 billion in BA and $152.4 billion in outlays for 
2000. The major programs in this function include Medicaid, the 
State Children's Health Insurance Program, health benefits for 
federal workers and retirees, the National Institutes of 
Health, the Food and Drug Administration, the Health Resources 
and Services Administration, Indian Health Services, the 
Centers for Disease Control and Prevention, and the Substance 
Abuse and Mental Health Services Administration.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending would total $34.4 billion in BA and $32.7 billion in 
outlays for 2001. This represents an increase of $0.8 billion 
in BA and $2.6 billion in outlays from the 2000 level.
    The largest increase in this function is for the National 
Institutes of Health (NIH). The Committee-reported resolution 
assumes an increase of $1.1 billion in BA and $0.3 billion in 
outlays for NIH above the 2000 levels. With the Committee-
reported resolution, the total increase in funding for NIH 
since 1998 is 38 percent.
    The Committee-reported resolution also assumes the 
President's request for Indian Health Services in 2001, which 
is a $0.2 billion increase in BA and outlays above the 2000 
funding level.
    The Committee-reported resolution assumes several 
reductions in spending that were included in the President's 
budget for this function, including removal of temporary Y2K 
funding for the Health Care Financing Administration.

Mandatory PAYGO

    The Committee-reported resolution assumes a $50 million 
increase in BA and outlays in 2001 and $300 million increase in 
BA and outlays over the five year period 2001 to 2005 to 
accommodate an increase in spending on health care delivered in 
the homes of children with disabilities whose parents are 
employed. The Committee-reported resolution includes a reserve 
fund which allows this additional spending to be allocated to 
the Committee on Finance if the Committee reports a bill 
meeting the conditions of the reserve fund.
    Under current law, mandatory spending in this function, 
which is primarily Medicaid and State Children's Health 
Insurance Program (S-CHIP), will increase from $123.4 billion 
in 2000 to $184.5 billion in 2005, for an average annual 
increase of 8.4 percent.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................    159.2    169.2    178.9    191.0    205.2    221.5
    Outlays...............................................    153.5    165.8    177.8    190.3    204.8    220.3
President's Budget:
    Budget Authority......................................    159.2    170.5    182.9    196.2    211.7    229.8
    Outlays...............................................    153.5    166.0    180.2    193.7    210.7    228.7
SBC Baseline:
    Budget Authority......................................    159.3    168.5    177.8    189.2    202.7    218.4
    Outlays...............................................    152.4    166.8    177.1    189.1    203.0    217.8
Resolution compared to:
    President's Budget:
        Budget Authority..................................  .......     -1.3     -4.0     -5.3     -6.6     -8.3
        Outlays...........................................  .......     -0.2     -2.4     -3.4     -5.2     -8.4
    SBC Baseline:
        Budget Authority..................................     -0.1      0.7      1.1      1.8      2.4      3.1
        Outlays...........................................      1.1     -0.9      0.7      1.2      1.8      2.5
----------------------------------------------------------------------------------------------------------------

                         Function 570: MEDICARE


                   senate budget resolution for 2001

    Under current law, spending for Function 570, Medicare, 
will total $199.6 billion in BA and $199.5 billion in outlays 
for 2000. Medicare, provides health insurance coverage for 
persons over age 65 and qualified disabled workers.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function of $3.1 billion in BA and outlays for 
2001. This represents an increase of $50 million in BA and $32 
million in outlays from the 2000 level. This increase would go 
to improving program administration at the Health Care 
Financing Administration.
    The Committee-reported resolution does not include the 
President's request to increase user fees on Medicare providers 
by $0.4 billion in 2001 to pay for discretionary program 
administration.

Mandatory PAYGO

    The Committee-reported resolution assumes an increase in 
mandatory spending of $40 billion over five years. This 
increase in Medicare spending is intended to improve the 
Medicare program with better prescription drug coverage for 
seniors. The Committee-reported resolution includes reserve 
fund language which would allow $20 billion to be made 
available for a prescription drug benefit in the first three 
years covered by the resolution, and another $20 billion 
available in 2004 and 2005 if legislation is reported that 
improves the solvency of the Medicare program.
    The Committee-reported resolution does not include the 
President's proposal to transfer general funds to the Medicare 
Hospital Insurance (HI) trust fund. These transfers would total 
$32 billion over the period 2001 to 2005, $350 billion over the 
period 2001 to 2010, and approximately $2.1 trillion over the 
period 2001 to 2027. The Administration proposes to make these 
transfers from one government account (the general fund) to 
another (the HI trust fund), and thus they would have no impact 
on the budget spending and revenue totals but would 
substantially increase the public debt, including debt subject 
to the statutory limit. At a later date, as the HI trust fund 
drew down reserves, the new IOUs in the HI trust fund would 
force future taxpayers to pay higher income taxes than they 
would under current law to pay back these IOUs and fund the 
Medicare program.
    The Committee-reported resolution also does not include the 
President's proposals affecting the 2001 through 2005 period 
to:
          cut Medicare payments for hospitals by $6.8 billion;
          cut payments for cancer treatment and other covered 
        outpatient drugs by $1.0 billion;
          cut payments to Medicare+Choice plans by $0.5 
        billion;
          and cut payments for other health care providers and 
        services by approximately $5.7 billion.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................    199.6    218.8    228.6    249.8    265.3    288.7
    Outlays...............................................    199.5    219.0    228.6    249.5    265.5    288.7
President's Budget:
    Budget Authority......................................    199.6    215.0    223.7    239.8    261.4    285.6
    Outlays...............................................    199.5    215.3    223.7    239.6    261.7    285.5
SBC Baseline:
    Budget Authority......................................    199.6    215.7    221.6    239.7    255.3    278.7
    Outlays...............................................    199.5    216.0    221.6    239.5    255.5    278.6
Resolution compared to:
    President's Budget:
        Budget Authority..................................  .......      3.8      4.9     10.0      3.9      3.1
        Outlays...........................................  .......      3.7      4.9     10.0      3.9      3.1
    SBC Baseline:
        Budget Authority..................................  .......      3.1      7.1     10.1     10.1     10.1
        Outlays...........................................  .......      3.0      7.1     10.1     10.1     10.1
----------------------------------------------------------------------------------------------------------------

                     Function 600: INCOME SECURITY


                   senate budget resolution for 2001

    Under current law, spending for Function 600, Income 
Security, will total $238.4 billion in BA and $248 billion in 
outlays for 2000. This function contains: (1) major cash and 
in-kind means-tested entitlements; (2) general retirement, 
disability, and pension programs excluding Social Security and 
Veterans' compensation programs; (3) federal and military 
retirement programs; (4) unemployment compensation; (5) low-
income housing programs; and (6) other low-income support 
programs. Function 600 is the third largest functional category 
after Social Security and defense. Mandatory programs account 
for 87 percent of total spending in this function.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $35.4 billion in BA and 
$42.1 billion in outlays for 2001. This represents increase of 
$5.5 billion in BA and a decrease of -$0.4 billion in outlays 
from the 2000 level.
    The Committee-reported resolution assumes a $600 million 
increase in funding for the Low Income Home Energy Assistance 
program in 2000. The Committee-reported resolution also would 
increase BA for the Supplemental Nutrition Program for Women, 
Infants, and Children by $50 million in 2001 and each year 
thereafter. Finally, the resolution assumes sufficient 
additional funding, relative to the freeze baseline, to renew 
annually all Section 8 contracts in place at the end of 2000.
    The Committee-reported resolution assumes the 3.7 percent 
pay raise for both military and civilian employees proposed in 
the President's budget. In addition, the Committee-reported 
resolution assumes the repeal of a Balanced Budget Act of 1997 
provision that temporarily increases federal employee 
retirement contributions by 0.5 percent (see revenues).

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes a freeze to the 
Supplemental Grants for Population Increases at the 1998 level, 
saving $240 million in BA and $25 million in outlays in 2001. 
The resolution also assumes that Congress will change the date 
that states remit payments to the federal government for 
administering the state supplemental payment.

Mandatory PAYGO

    The Committee-reported resolution assumes mandatory 
increases of $5 million in 2001 and $5.2 billion over five 
years for an expansion of the Earned Income Tax Credit (EITC), 
that would result from the Marriage Penalty Relief Act. 
Although changes to the EITC also affect revenues, the portion 
of the credit that exceeds an individual's tax liability is 
recorded as an outlay in function 600.
    The Committee-reported resolution also would increase the 
Child Care Entitlement to States by $817 million in 2001, to 
$3.4 billion.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee reported resolution:
    Budget Authority......................................    238.9    253.2    264.8    274.8    284.9    297.7
    Outlays...............................................    248.1    255.4    267.3    278.5    288.4    301.2
President's Budget:
    Budget Authority......................................    240.7    258.4    268.8    279.6    291.2    305.1
    Outlays...............................................    250.4    256.3    270.5    282.3    293.9    308.2
SBC Baseline:
    Budget Authority......................................    238.4    251.8    259.5    268.3    277.8    289.9
    Outlays...............................................    248.0    255.0    265.7    274.4    279.5    291.8
Resolution compared to:
President's Budget:
        Budget Authority..................................     -1.8     -5.2     -4.0     -4.8     -6.3     -7.4
        Outlays...........................................     -2.4     -0.9     -3.2     -3.9     -5.6     -7.0
    SBC Baseline:
        Budget Authority..................................      0.5      1.5      5.4      6.5      7.2      7.7
        Outlays...........................................      0.1      0.4      1.5      4.1      8.8      9.4
----------------------------------------------------------------------------------------------------------------

                     Function 650: SOCIAL SECURITY


                   senate budget resolution for 2001

    Under current law, spending for Function 650, Social 
Security, will total $405.0 billion in BA and $405.0 billion in 
outlays for 2000. This function includes Social Security 
benefits and administrative expenses.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending would total $3.5 billion in BA and $3.4 billion in 
outlays for 2001. This represents an increase of $0.3 billion 
in BA and $0.2 billion in outlays from the 2000 level. This 
increase will go to the Social Security Administration to 
improve services for Social Security beneficiaries.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
increases or decreases in this function from current policies.
    The Committee-reported resolution does not include the 
President's proposal to transfer general funds to the Social 
Security trust funds. These transfers would total approximately 
$34 trillion over the period 2011 to 2050.
    These transfers would substantially increase the public 
debt, including debt subject to the statutory limit. At a later 
date, as the Social Security trust funds drew down reserves, 
these transfers would force future taxpayers to pay higher 
income taxes than they would under current law to fund the 
Social Security program.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................    405.0    422.8    443.1    463.8    486.0    510.2
    Outlays...............................................    405.0    422.8    443.1    463.8    486.0    510.1
President's Budget:
    Budget Authority......................................    405.0    422.8    443.2    463.9    486.2    510.4
    Outlays...............................................    405.0    422.8    443.1    463.9    486.1    510.3
SBC Baseline:
    Budget Authority......................................    405.0    422.6    442.8    463.4    485.6    509.7
    Outlays...............................................    405.0    422.6    442.8    463.4    485.6    509.7
Resolution compared to:
    President's Budget:
        Budget Authority..................................  .......  .......     -0.1     -0.1     -0.2     -0.2
        Outlays...........................................  .......  .......     -0.1     -0.1     -0.2     -0.2
    SBC Baseline:
        Budget Authority..................................  .......      0.3      0.3      0.4      0.4      0.4
        Outlays...........................................  .......      0.2      0.3      0.3      0.4      0.4
----------------------------------------------------------------------------------------------------------------

              Function 700: VETERANS BENEFITS AND SERVICES


                   senate budget resolution for 2001

    Under current law, spending for Function 700, Veterans 
Benefits and Services, will total $46.0 billion in BA and $45.1 
billion in outlays for 2000. This budget function includes 
income security needs of disabled veterans, indigent veterans, 
and survivors of deceased veterans through compensation 
benefits, pensions, and life insurance programs. Major 
education, training, and rehabilitation and readjustment 
programs include the Montgomery GI Bill, the Veterans 
Educational Assistance program, and the Vocational 
Rehabilitation and Counseling program. Veterans can also 
receive guarantees on home loans. Roughly half of all spending 
in this function is for the Veterans Health Administration, 
which is comprised of hospitals, nursing homes, domiciliaries, 
and outpatient clinics.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $21.9 billion in BA and 
$21.8 billion in outlays for 2001. This represents an increase 
of $1.0 billion or 4.9 percent in BA and $1.4 billion or 6.9 
percent in outlays from the 2000 level. In addition, the 
Committee-reported resolution is an increase between 2001 and 
2005 of $2.4 billion in BA and outlays or an average annual 
increase of 2.7 percent.
    The increase in discretionary spending for 2001 is for VA 
medical care programs. Net spending for VA medical care in the 
Committee-reported resolution matches the net increase in the 
President's budget. The Committee-reported resolution assumes 
an increase of $1.4 billion in VA's medical care appropriation. 
The additional funds would allow VA to improve access to and 
service delivery of medical care, would allow patient safety 
and oversight initiatives to be expanded, and would allow full 
funding for provisions in the Veterans Millennium Health Care 
and Benefits Act. The funds would also provide more money to 
treat the high prevalence of Hepatitis C among enrollees.
    In addition, the Committee-reported resolution assumes that 
$350 million (or one half of the first $700 million) in VA 
medical care collections in 2001 will be returned to the 
Treasury. This assumption is identical to a legislative 
proposal contained in the President's budget. The Committee-
reported resolution also assumes the extension of VA's 
authority to recover costs through medical care collections 
when that authority expires at the end of 2002.

Mandatory PAYGO

    Both the Committee-reported resolution and the President's 
budget assume that provisions of the 1997 Balanced Budget Act 
expiring after 2002 will be extended. These provisions include: 
extending the VA's authority to round-down monthly compensation 
benefits to the nearest dollar after applying the annual COLA 
in each year, extending the VA's authority to match income 
information submitted by pension beneficiaries with the 
Internal Revenue Service and the Social Security 
Administration, extending the VA's authority to guarantee VA 
securities issued in the secondary market directly, thereby 
enhancing their value, and extending certain fees paid by 
veterans who obtain a government-guaranteed housing loan.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................     46.0     47.6     48.8     50.8     52.1     55.5
    Outlays...............................................     45.1     47.1     48.7     50.5     51.8     55.2
President's Budget:
    Budget Authority......................................     47.8     45.9     48.4     49.9     51.2     54.5
    Outlays...............................................     47.0     45.5     48.4     49.7     50.9     54.2
SBC Baseline:
    Budget Authority......................................     46.0     46.5     47.2     49.0     49.7     52.6
    Outlays...............................................     45.1     46.2     47.2     48.9     49.6     52.4
Resolution compared to:
    President's Budget:
        Budget Authority..................................     -1.8      1.7      0.4      1.0      1.0      1.0
        Outlays...........................................     -1.8      1.6      0.3      0.8      0.9      1.0
    SBC Baseline:
        Budget Authority..................................       --      1.1      1.6      1.9      2.4      2.9
        Outlays...........................................       --      0.9      1.5      1.6      2.3      2.8
----------------------------------------------------------------------------------------------------------------

                Function 750: ADMINISTRATION OF JUSTICE


                   senate budget resolution for 2001

    Under current law, spending for Function 750, 
Administration of Justice, will total $27.4 billion in BA and 
$28.0 billion in outlays for 2000. This function includes 
funding for federal law enforcement activities, including 
criminal investigations by the FBI and the DEA, border 
enforcement and the control of illegal immigration, as well as 
funding for prison construction, drug treatment and crime 
prevention programs, and the federal judiciary.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending would total $26.8 billion in BA and $27.3 billion in 
outlays for 2001. The Committee-reported resolution assumes a 
gross increase of 2.6 percent over the 2000 level to maintain 
and improve justice enforcement and adjudicative and 
correctional activities. Such increases are then offset by 
several savings proposals, some of which were included in the 
President's budget. Over the next five years, the resolution 
provides nearly $142.3 billion in BA for federal law 
enforcement and related activities. The resolution for the 
Administration of Justice function is fiscally responsible 
while still insuring that we meet one of the core 
responsibilities of government.
    Increases in BA are due mainly to increased levels of 
funding for salaries and expenses provided for the major 
federal enforcement, adjudicative, and correctional agencies in 
this function. These include: the Bureau of Alcohol, Tobacco 
and Firearms, Bureau of Prisons, Customs Service, Drug 
Enforcement Agency, Federal Bureau of Investigation, 
Immigration and Naturalization Service, Secret Service, and 
U.S. Marshals Service. Other substantial increases include 
those for federal courts of appeal and district courts, U.S. 
Attorneys, BOP prison construction, and acquisition-
construction costs at the Federal Law Enforcement Training 
Center. The increases in the resolution's BA for these entities 
reflect an Employment Cost Index (ECI) adjustment to their 2000 
levels for salaries and expenses and for the construction of 
federal prisons and federal enforcement officer training sites. 
The resolution also provides an additional $50 million for 
counterterrorism efforts and $200 million annually in BA over 
the next five years for the continued development and 
implementation of the Custom Service's ACE computer system used 
to process U.S. border crossings. Finally, the resolution 
provides an additional $1 million for Civil Rights enforcement 
in 2000.
    The resolution rejects the President's proposed increase 
for the antitrust activities within the Department of Justice 
(DOJ) as well as for general DOJ legal activities thereby 
assuming funding at current law levels. The resolution also 
provides for current funding levels in assistance to state and 
local law enforcement through the following grant programs: the 
Violent Offender Incarceration and Truth in Sentencing 
incentive grants, the Byrne grant program, local law 
enforcement block grants, and juvenile justice. The resolution 
rejects the President's proposed increased level and 
overemphasis on uncertain drug treatment and prevention 
programs at the expense of interdiction and supply-reduction 
programs, as well as for the amount of Violence Against Women 
Program funds allocated to research. The resolution rejects the 
request for COPS funding, and instead provides $200 million for 
law enforcement technology, $25 million for bullet proof vests, 
$35 million for tribal law enforcement, and an additional $100 
million increase for the enforcement of gun laws.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes the repeal of 
windfall fines deposited in the Crime Victims Fund as proposed 
in the President's budget, yet still allows the Fund to spend 
at its high-water mark of $500 million.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................     27.4     27.9     28.5     29.2     31.3     32.1
    Outlays...............................................     28.0     28.2     28.7     29.1     31.0     31.9
President's Budget:
    Budget Authority......................................     27.4     30.3     30.8     30.6     30.8     31.5
    Outlays...............................................     28.0     29.8     30.2     30.4     31.0     31.4
SBC Baseline:
    Budget Authority......................................     27.4     27.8     27.3     27.3     28.7     28.9
    Outlays...............................................     28.0     27.9     27.8     27.4     28.6     28.8
Resolution compared to:
    President's Budget:
        Budget Authority..................................       --     -2.4     -2.3     -1.4      0.5      0.6
        Outlay............................................      0.0     -1.5     -1.5     -1.3      0.0      0.5
    SBC Baseline:
        Budget Authority..................................      0.0      0.1      1.2      1.9      2.6      3.3
        Outlays...........................................      0.0      0.4      0.9      1.7      2.4      3.1
----------------------------------------------------------------------------------------------------------------

                    Function 800: GENERAL GOVERNMENT


                   SENATE BUDGET RESOLUTION FOR 2001

    Under current law, spending for Function 800, General 
Government, will total $13.9 billion in BA and $14.7 billion in 
outlays for 2000. This function 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. Discretionary spending represents 93 percent of 
total spending in this function. The Internal Revenue Service 
accounts for 62 percent of the discretionary total.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function totals $13.2 billion in BA and $13.1 
billion in outlays for 2001. The resolution represents a 
increase of $0.8 billion in BA over the 2000 level.
    Specifically, the Committee-reported resolution assumes the 
following major discretionary changes:
          An additional $700 million to construct, or site and 
        design, fourteen new courthouses in 2001.
          A total of $20 million increase for the Payment in 
        Lieu of Taxes (PILT) program funding in 2001, and a 
        $100 million increase over five years. PILT compensates 
        local governments for losses to their tax base when the 
        federal government occupies land within their 
        boundaries. Under the current Administration, economic 
        activity on federal land has decreased markedly, 
        placing added stress on the local communities.
    The Committee-reported resolution also assumes three one-
year spending initiatives--a $6 million payment to the DC 
government for Presidential Inauguration expenses, $25 million 
for the construction of a Metro station on New York Avenue and 
$7 million for Presidential transition expenses.

Mandatory

    The Committee-reported resolution assumes $1.2 billion in 
BA for mandatory spending in 2001 and $5.9 billion in BA for 
2001-2005. Mandatory programs funded within this function 
include the Federal Reserve Bank Reimbursement Fund, the Civil 
Service Retirement and Disability Fund, the Presidential 
Election Campaign Fund, as well as certain payments to state 
and local governments and specific legislative functions such 
as Members' salaries and related administrative expenses.
    It has been recently reported that a settlement has been 
reached in a gender discrimination lawsuit filed against the 
Federal government 23 years ago. This case has been settled out 
of court. It has been reported that $508 million will be paid 
out to 1,100 women. Monies for such settlements is paid out of 
the Claims and Judgements account in this function. However, it 
is not known when and how this settlement will be paid. As a 
result, before the completion of the conference on this 
resolution, the mandatory spending for 2001 in this account may 
be adjusted to reflect any additional information concerning 
this settlement.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................     13.7     14.4     13.6     13.6     13.6     13.6
    Outlays...............................................     14.7     14.3     13.9     13.8     13.9     13.6
President's Budget:
    Budget Authority......................................     13.7     15.9     16.1     16.1     16.4     16.6
    Outlays...............................................     14.8     15.2     15.5     15.8     16.5     16.6
SBC Baseline:
    Budget Authority......................................     13.9     13.8     13.7     13.7     13.7     13.7
    Outlays...............................................     14.7     14.3     13.9     13.7     13.7     13.5
Resolution compared to:
    President's Budget:
        Budget Authority..................................     -0.1     -1.5     -2.4     -2.6     -2.8     -3.0
        Outlays...........................................     -0.1     -0.9     -1.6     -2.0     -2.6     -3.0
    SBC Baseline:
        Budget Authority..................................     -0.2      0.6     -0.1     -0.1     -0.1     -0.1
        Outlays...........................................      0.0      0.0     -0.0      0.1      0.2      0.1
----------------------------------------------------------------------------------------------------------------

                        Function 920: ALLOWANCES


                   SENATE BUDGET RESOLUTION FOR 2001

    Function 920, Allowances, usually displays the budgetary 
effects of proposals that cannot be easily distributed across 
other budget functions. In past years, Function 920 has 
included total savings or costs from proposals associated with 
emergency spending or proposals contingent on certain events 
that have uncertain chances of occurring, such as the 
President's proposal for increased discretionary spending from 
the Social Security Surplus contingent on Social Security 
reform.

Discretionary

    The Committee-reported resolution assumes discretionary 
savings in this function would total $4.4 billion in BA and 
$4.2 billion in outlays for 2001. Such savings are possible by 
reversing the nondefense, civilian pay date delay enacted at 
the close of the first session of this Congress and by reducing 
federal costs in certain programs that appear throughout all 
budget functions. Reversal of the pay date delay was proposed 
in the President's budget.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
increases or decreases in this function.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................  .......     -4.4  .......  .......  .......  .......
    Outlays...............................................  .......     -4.2     -1.3     -4.8     -6.8     -6.1
President's Budget:
    Budget Authority......................................  .......      0.0  .......  .......  .......  .......
    Outlays...............................................  .......      0.0  .......  .......  .......  .......
SBC Baseline:
    Budget Authority......................................  .......  .......  .......  .......  .......  .......
    Outlays...............................................     -0.8      0.8  .......  .......  .......  .......
Resolution compared to:
    President's Budget:
        Budget Authority..................................  .......     -4.5  .......  .......  .......  .......
        Outlays...........................................  .......      4.3     -1.3      4.8     -6.8     -6.1
    SBC Baseline:
        Budget Authority..................................  .......     -4.4  .......  .......  .......  .......
         Outlays..........................................      0.8     -5.0     -1.3     -4.8     -6.8     -6.1
----------------------------------------------------------------------------------------------------------------

            Function 950: UNDISTRIBUTED OFFSETTING RECEIPTS


                   SENATE BUDGET RESOLUTION FOR 2001

    Under current law, receipts in Function 950, Undistributed 
Offsetting Receipts, will total about $41.8 billion (negative 
BA and outlays) for 2000. This function 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 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.

Discretionary

    The Committee-reported resolution assumes rare 
discretionary effects in this function that, while netting to 
zero over 2000-2001, reflect the intrabudgetary offsets 
resulting from the pay date shifts included in the President's 
budget.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes mandatory savings 
of $0.1 billion in BA and outlays in 2001 and $3.1 billion in 
BA and outlays over the period 2001-2005. The largest component 
of savings stems from the assumption of allowing leasing for 
oil exploration and production on the coastal plain of the 
Arctic National Wildlife Refuge (ANWR). Bonus bids for such 
leases would, according to CBO, amount to $1.2 billion by 2005. 
Royalties would occur sometime thereafter, and the increased 
domestic production would reduce U.S. dependence on imported 
oil.

Mandatory PAYGO

    The Committee-reported resolution assumes no other 
mandatory changes in this function.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................................    -42.0    -46.6    -50.9    -50.8    -48.5    -51.6
    Outlays...............................................    -42.0    -46.6    -50.9    -50.8    -48.5    -51.6
President's Budget:
    Budget Authority......................................    -42.1    -46.3    -50.1    -49.9    -47.8    -49.5
    Outlays...............................................    -41.2    -46.3    -50.1    -49.9    -47.8    -49.5
SBC Baseline:
    Budget Authority......................................    -41.8    -46.7    -50.3    -50.2    -48.2    -50.1
    Outlays...............................................    -41.8    -46.7    -50.3    -50.2    -48.2    -50.1
Resolution compared to:
    President's Budget:
        Budget Authority..................................      0.1     -0.4     -0.7     -0.9     -0.7     -2.0
        Outlays...........................................      0.1     -0.4     -0.7     -0.9     -0.7     -2.0
    SBC Baseline:
        Budget Authority..................................     -0.2      0.1     -0.6     -0.6     -0.3     -1.5
        Outlays...........................................     -0.2      0.1     -0.6     -0.6     -0.3     -1.5
----------------------------------------------------------------------------------------------------------------

                              B. Revenues

    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, custom duties and miscellaneous 
receipts (which include deposits of earnings by the Federal 
Reserve System, fines, penalties, fees for regulatory services, 
and others).
    The Committee-reported resolution assumes a tax cut of $13 
billion in 2001 and $150 billion over 2001-2005 relative to the 
baseline. The Committee-reported resolution assumes that any 
tax cut adopted by Congress would not return the federal 
government to an unbalanced federal budget and would not dip 
into the Social Security surplus. Under the Committee-reported 
resolution, federal revenues grow at an average annual rate of 
3.6 percent from 2000 through 2005. Under the baseline, federal 
revenues grow at an average annual rate of 3.9 percent from 
2000 through 2005.
    The Committee-reported resolution assumes a substantial tax 
cut package to be determined by the tax-writing committees. The 
revenue levels in the Committee-reported resolution can 
accommodate tax cut legislation that has already begun to move 
in the 106th Congress: marriage penalty tax relief, tax relief 
for education, health care tax relief associated with patients' 
rights, and small business tax relief (including acceleration 
of the 100 percent self-employed health insurance deduction, 
pension provisions, estate tax relief, real estate provisions 
and the American Community Renewal Act). In addition, it is 
possible for the Committee-reported resolution to accommodate a 
suspension or repeal of the 4.3 cents/gallon excise tax on all 
motor fuels enacted in 1993, and other tax cuts.
    The Committee-reported resolution assumes enactment of the 
President's proposal for a roll back to pre-1999 levels of 
Federal employee retirement contributions. The proposal would 
repeal the Balanced Budget Act of 1997 provision that 
temporarily increased federal employee retirement contributions 
by 0.5 percent.
    In its reestimate of the President's budget, the 
Congressional Budget Office (CBO) found that the tax proposals 
in the President's budget result in a net tax increase of $9.5 
billion in 2001 and a net tax cut of $4.9 billion over the 
2001-2005 period. CBO's analysis found that the President's 
budget recommends gross tax increases of $96 billion over the 
2001-2005 period; the Committee-reported resolution rejects all 
of these tax increases.
    Over five years, the Committee-reported resolution reduces 
taxes by $145 billion more than the President's budget.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                        2000      2001      2002      2003      2004      2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution: Revenues.............    1944.3    2003.2    2071.4    2146.0    2225.0    2318.0
President's Budget: Revenues........................    1945.7    2025.9    2097.1    2171.0    2261.9    2352.4
SBC Baseline: Revenues..............................    1945.1    2016.3    2096.2    2176.7    2262.6    2361.4
Resolution compared to:
    President's Budget: Revenues....................      -1.5     -22.7     -25.7     -25.1     -36.9     -34.5
    SBC Baseline: Revenues..........................      -0.9     -13.2     -24.9     -30.8     -37.6     -43.4
----------------------------------------------------------------------------------------------------------------

                             C. Debt Levels


                   SENATE BUDGET RESOLUTION FOR 2001

    The table on the following page compares the levels of debt 
held by the public and debt subject to limit associated with 
the Committee-reported resolution, the President's budget and 
the SBC baseline.
    Under the Committee-reported resolution, debt held by the 
public declines by $1.1 trillion through the budget projection 
period. Debt held by the public under the President's budget 
declines by about the same amount. By the end of 2005, debt 
held by the public under the Committee-reported resolution is 
$57 billion higher than under the President's budget. The 
difference is mostly due to the Committee-reported resolution's 
inclusion of $40 billion for Medicare reform and prescription 
drugs in function 570 and the Committee-reported resolution's 
$150 billion tax cut (compared to the President's $5 billion 
tax cut).
    The statutory debt limit, which now stands at $5.95 
trillion, would not have to be increased until 2004 under the 
Committee-reported resolution. Under the President's budget as 
well, the statutory debt limit would have to be raised in 2004.

              COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                            [In billions of dollars]
----------------------------------------------------------------------------------------------------------------
                           Debt                               2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Held by Public........................................    3,467    3,306    3,129    2,944    2,744    2,522
    Subject to Limit......................................    5,638    5,725    5,815    5,910    5,999    6,082
President's Budget:
    Held by Public........................................    3,464    3,287    3,100    2,903    2,690    2,465
    Subject to Limit......................................    5,622    5,683    5,721    5,746    5,738    5,702
SBC Baseline:
    Held by Public........................................    3,452    3,272    3,041    2,780    2,476    2,128
    Subject to Limit......................................    5,622    5,683    5,721    5,746    5,738    5,702
Resolution compared to:
    President's Budget:
        Held by Public....................................        3       19       29       41       54       57
        Subject to Limit..................................        4       10        6       10       12       -3
    SBC Baseline:
        Held by Public....................................       15       34       88      164      267      394
        Subject to Limit..................................       16       42       94      164      261      380
----------------------------------------------------------------------------------------------------------------

                          D. Tax Expenditures

    The Congressional Budget Act of 1974 requires a listing of 
tax expenditures in the President's budget submission and in 
reports accompanying congressional budget resolutions. Tax 
expenditures are defined by the Act as ``revenue losses 
attributable to provisions of the Federal tax law which allow a 
special exclusion, exemption, or deduction from gross income or 
which provide a special credit, a preferential rate of tax, or 
a deferral of tax liability.'' Under this definition, the 
concept of tax expenditures refers to revenue losses 
attributable exclusively to corporate and individual income 
taxes.
    The estimates presented here are those of the Joint 
Committee on Taxation and are based on the committee's most 
recent report of December 22, 1999 (Estimates of Federal Tax 
Expenditures for Fiscal Years 2000-2004) (JCS-13-99). Because 
of the interaction among provisions, the Joint Committee on 
Taxation warns that it is incorrect to assume that estimates of 
separate tax expenditures can be summed to calculate a total 
revenue effect of a repeal of a group of tax expenditures. The 
tax expenditures in the following list are estimated 
separately, under the assumption that all other tax 
expenditures remain in the code. If two or more tax 
expenditures were estimated simultaneously, the total change in 
tax liability could be smaller or larger than the sum of the 
amounts shown for each item separately.
    Tables follow:

                                     TABLE 1.--TAX EXPENDITURE ESTIMATES BY BUDGET FUNCTION, FISCAL YEARS 2000-2004
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Corporations                             Individuals
                           Function                           --------------------------------------------------------------------------------   Total
                                                                2000    2001    2002    2003    2004    2000    2001    2002    2003    2004   2000-2004
--------------------------------------------------------------------------------------------------------------------------------------------------------
National Defense:
    Exclusion of benefits and allowances to Armed Forces       ......  ......  ......  ......  ......     2.0     1.9     2.0     2.0     2.0       9.9
     personnel...............................................
    Exclusion of military disability benefits................  ......  ......  ......  ......  ......     0.1     0.1     0.1     0.1     0.1       0.4
International Affairs:
    Exclusion of income earned abroad by U.S. citizens.......  ......  ......  ......  ......  ......     2.4     2.6     2.8     3.0     3.3      14.1
    Exclusion of certain allowances for Federal employees      ......  ......  ......  ......  ......     0.2     0.2     0.3     0.3     0.3       1.3
     abroad..................................................
    Exclusion of income of foreign sales corporations (FSCs).     2.7     2.9     3.1     3.3     3.6  ......  ......  ......  ......  ......      15.6
    Deferral of active income of controlled foreign               3.4     3.7     4.0     4.2     4.5  ......  ......  ......  ......  ......      19.8
     corporations............................................
    Inventory property sales source rule exception...........     4.0     4.2     4.4     4.6     4.8  ......  ......  ......  ......  ......      22.0
    Deferral of certain financing income.....................     0.5     0.9     0.4  ......  ......  ......  ......  ......  ......  ......       1.8
General Science, Space, and Technology:
    Tax credit for qualified research expenditures...........  ......     3.0     6.8     3.7     3.8  ......  ......  ......  ......  ......      17.3
    Expensing of research and experimental expenditures......     2.9     2.8     2.9     3.1     3.2  ......  ......  ......  ......  ......      14.9
Energy:
    Expensing of exploration and development costs:
        Oil and gas..........................................     0.4     0.5     0.5     0.5     0.5   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       2.4
        Other fuels..........................................   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.1
    Excess of percentage over cost depletion:
        Oil and gas..........................................     0.5     0.5     0.5     0.5     0.5     0.2     0.2     0.2     0.2     0.2       3.5
        Other fuels..........................................     0.2     0.2     0.2     0.2     0.2     0.1     0.1     0.1     0.1     0.1       1.5
    Tax credit for enhanced oil recovery costs...............     0.1     0.1     0.1     0.1     0.1   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.3
    Tax credit for production of non-conventional fuels......     1.1     1.1     1.2     1.2     1.2     0.2     0.3     0.3     0.3     0.3       7.1
    Tax credits for alcohol fuels (\2\)......................   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)  ......  ......  ......  ......  ......     (\1\)
    Exclusion of interest on State and local government         (\1\)   (\1\)   (\1\)   (\1\)   (\1\)     0.1     0.1     0.1     0.1     0.1       0.6
     industrial development bonds for energy production
     facilities..............................................
    Exclusion of energy conservation subsidies provided by     ......  ......  ......  ......  ......   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.2
     public utilities........................................
    Tax credit for investments in solar and geothermal energy   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.3
     facilities..............................................
    Tax credit for electricity production from wind, biomass,   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)     0.1     0.1     0.1     0.1     0.1       0.4
     and poultry waste.......................................
Natural Resources and Environment:
    Expensing of exploration and development costs, nonfuel     (\1\)     0.1     0.1     0.1     0.1   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.3
     minerals................................................
    Excess of percentage over cost depletion, nonfuel             0.2     0.2     0.2     0.2     0.2     0.1     0.1     0.1     0.1     0.1       1.5
     minerals................................................
    Expensing of multiperiod timber growing costs............     0.1     0.2     0.2     0.2     0.2   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.9
    Exclusion of interest on State and local government           0.1     0.1     0.1     0.1     0.1     0.3     0.3     0.3     0.3     0.3       2.4
     sewage, water, and hazardous waste facilities bonds.....
    Special rules for mining reclamation reserves............   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.2
    Special tax rate for nuclear decommissioning reserve fund     0.1     0.1     0.1     0.2     0.2  ......  ......  ......  ......  ......       0.8
    Exclusion of contributions in aid of construction for       (\1\)   (\1\)   (\1\)   (\1\)   (\1\)  ......  ......  ......  ......  ......       0.1
     water and sewer utilities...............................
Agriculture:
    Expensing of soil and water conservation expenditures....   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.2
    Expensing of fertilizer and soil conditioner costs.......   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)     0.1     0.1     0.1     0.1       0.3
    Expensing of the costs of raising dairy and breeding        (\1\)   (\1\)   (\1\)   (\1\)   (\1\)     0.2     0.2     0.2     0.2     0.2       0.9
     cattle..................................................
    Exclusion of cost-sharing payments.......................   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.1
    Exclusion of cancellation of indebtedness income of        ......  ......  ......  ......  ......   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.2
     farmers.................................................
    Cash accounting for agriculture..........................   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)     0.5     0.6     0.6     0.6     0.6       3.0
    Income averaging for farmers.............................  ......  ......  ......  ......  ......   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.1
    Five-year carryback period for net operating losses         (\1\)   (\1\)   (\1\)   (\1\)   (\1\)     0.1     0.1   (\1\)   (\1\)   (\1\)       0.3
     attributable to farming.................................
Commerce and Housing:
    Financial institutions: Exemption of credit union income.     0.8     0.9     0.9     0.9     1.0  ......  ......  ......  ......  ......       4.5
    Insurance companies:
        Exclusion of investment income on life insurance and      1.3     1.3     1.4     1.4     1.5    22.9    23.6    24.3    25.1    25.9     128.7
         annuity contracts...................................
        Small life insurance company taxable income               0.1     0.1     0.1     0.1     0.1  ......  ......  ......  ......  ......       0.6
         adjustment..........................................
        Special treatment of life insurance company reserves.     1.1     1.2     1.2     1.3     1.3  ......  ......  ......  ......  ......       6.1
        Deduction of unpaid property loss reserves for            2.8     2.9     2.9     3.0     3.1  ......  ......  ......  ......  ......      14.7
         property and casualty insurance companies...........
        Special deduction for Blue Cross and Blue Shield          0.1     0.1     0.1     0.1     01.  ......  ......  ......  ......  ......       0.6
         companies...........................................
    Housing:
        Deduction for mortgage interest on owner-occupied      ......  ......  ......  ......  ......    55.2    57.7    60.2    62.8    65.5     301.4
         residences..........................................
        Deduction for property taxes on owner-occupied         ......  ......  ......  ......  ......    18.9    19.6    20.3    20.9    21.6     101.3
         residences..........................................
        Exclusion of capital gains on sales of principal       ......  ......  ......  ......  ......    12.9    12.9    13.0    13.1    13.2      65.1
         residences..........................................
        Exclusion of interest on State and local government       0.2     0.2     0.2     0.2     0.3     0.6     0.6     0.6     0.6     0.6       4.3
         bonds for owner-occupied housing....................
        Exclusion of interest on State and local government       0.1     0.1     0.1     0.1     0.1     0.1     0.1     0.1     0.1     0.1       0.9
         bonds for rental housing............................
        Depreciation of rental housing in excess of               0.2     0.2     0.2     0.2     0.2     1.5     1.5     1.6     1.7     1.9       9.2
         alternative depreciation system.....................
        Tax credit for low-income housing....................     1.3     1.4     1.4     1.4     1.4     2.5     2.6     2.6     2.7     2.7      20.0
        Tax credit for first-time homebuyers in the District   ......  ......  ......  ......  ......   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.1
         of Columbia.........................................
        Tax credit for rehabilitation of historic structures.     0.3     0.4     0.4     0.4     0.4     0.1     0.1     0.1     0.1     0.1       2.3
    Other business and commerce:
        Reduced rates of tax on long-term capital gains......  ......  ......  ......  ......  ......    36.0    37.8    38.9    40.1    41.8     194.6
        Exclusion of capital gains at death..................  ......  ......  ......  ......  ......    23.7    25.2    26.9    28.2    32.1     136.1
        Carryover basis of capital gains on gifts............  ......  ......  ......  ......  ......     2.3     2.5     2.7     3.0     3.3      13.8
        Deferral of gain on non-dealer installment sales.....     0.2     0.2     0.2     0.2     0.2     0.3     0.3     0.3     0.3     0.3       2.5
        Deferral of gain on like-kind exchanges..............     1.0     1.1     1.2     1.2     1.3     0.4     0.4     0.4     0.4     0.4       7.8
        Deferral of gain on involuntary conversions resulting  ......  ......  ......  ......  ......   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)      0l.1
         from Presidentially-declared disasters..............
        Depreciation of buildings other than rental housing       1.5     1.2     1.2     1.1     0.9     0.7     0.5     0.5     0.4     0.3       8.3
         in excess of alternative depreciation system........
        Depreciation of equipment in excess of alternative       24.9    24.3    23.7    23.3    22.8     6.8     6.6     6.2     5.9     5.6     150.2
         depreciation system.................................
        Expensing of depreciable business property...........     0.2     0.2     0.2     0.1     0.1     0.5     0.6     0.6     0.4     0.2       3.1
        Amortization of business startup costs...............   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)     0.3     0.3     0.4     0.4     0.4       1.8
        Reduced rates on first $10,000,000 of corporate           4.3     4.2     4.4     4.5     4.6  ......  ......  ......  ......  ......      22.0
         taxable income......................................
        Permanent exemption from imputed interest rules......   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)     0.2     0.2     0.2     0.2     0.3       1.2
        Expensing of magazine circulation expenditures.......   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.2
        Special rules for magazine, paperback book, and         (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.1
         record returns......................................
        Completed contract rules.............................     0.2     0.2     0.2     0.2     0.2   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       1.1
        Cash accounting, other than agriculture..............   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)     0.1     0.1     0.1     0.1     0.1       0.6
        Exclusion of interest on State and local government       0.1     0.1     0.1     0.1     0.1     0.2     0.2     0.2     0.2     0.2       1.6
         small-issue industrial development bonds............
        Exception from net operating loss limitations for         0.5     0.5     0.5     0.5     0.5  ......  ......  ......  ......  ......       2.5
         corporations in bankruptcy proceedings..............
        Tax credit for employer-paid FICA taxes on tips......     0.1     0.1     0.1     0.1     0.1     0.2     0.2     0.2     0.2     0.2       1.8
Transportation:
    Deferral of tax on capital construction funds of shipping     0.1     0.1     0.1     0.1     0.1  ......  ......  ......  ......  ......       0.5
     companies...............................................
    Exclusion of employer-paid transportation benefits.......  ......  ......  ......  ......  ......     3.6     3.6     3.7     3.7     3.8      18.4
    Exclusion of interest on State and local government bonds   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.4
     for high-speed rail.....................................
Community and Regional Development:
    Empowerment zone tax incentives..........................     0.1     0.1     0.1     0.1     0.1     0.1     0.2     0.2     0.1     0.1       1.2
    District of Columbia tax incentives......................     0.1     0.1     0.1     0.1     0.1   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.4
    Indian reservation tax incentives........................     0.1     0.1     0.1     0.1   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.4
    Expensing of redevelopment costs in certain                 (\1\)     0.1     0.1   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.3
     environmentally contaminated areas (``Brownfields'')....
    Tax credit for rehabilitation of structures, other than     (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.1
     historic structures.....................................
    Exclusion of interest on State and local government bonds     0.2     0.2     0.2     0.2     0.2     0.4     0.4     0.4     0.4     0.4       2.9
     for private airports, docks, and mass-communiting
     facilities..............................................
Education, Training, Employment, and Social Services:
    Education and training:
        Tax credits for tuition for post-secondary education.  ......  ......  ......  ......  ......     5.4     5.4     5.5     5.6     5.6      27.5
        Deduction for interest on student loans..............  ......  ......  ......  ......  ......     0.3     0.4     0.4     0.4     0.4       1.8
        Exclusion of earnings of trust accounts for higher     ......  ......  ......  ......  ......   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.2
         education (``education IRAs'')......................
        Exclusion of interest on educational savings bonds...  ......  ......  ......  ......  ......   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.1
        Deferral of tax on earnings of qualified State         ......  ......  ......  ......  ......     0.1     0.1     0.1     0.2     0.2       0.7
         tuition programs....................................
        Exclusion of scholarship and fellowship income.......  ......  ......  ......  ......  ......     1.1     1.2     1.3     1.4     1.5       6.5
        Exclusion of employer-provided education assistance    ......  ......  ......  ......  ......     0.3     0.4     0.1  ......  ......       0.8
         benefits............................................
        Parental personal exemption for students age 19 to 23  ......  ......  ......  ......  ......     0.7     0.8     0.8     0.8     0.8       3.9
        Exclusion of interest on State and local government       0.1     0.1     0.1     0.1     0.1     0.2     0.2     0.2     0.2     0.2       1.6
         student loan bonds..................................
        Exclusion of interest on State and local government       0.2     0.2     0.2     0.2     0.2     0.5     0.5     0.5     0.5     0.5       3.7
         bonds for private nonprofit educational facilities..
        Tax credit for holders of qualified zone academy          0.1     0.1     0.1     0.1     0.1  ......  ......  ......  ......  ......       0.3
         bonds...............................................
        Deduction for charitable contributions to educational     0.9     1.0     1.0     1.1     1.2     3.9     4.3     4.6     4.9     5.2      28.2
         institutions........................................
    Employment:
        Exclusion of employee meals and lodging (other than    ......  ......  ......  ......  ......     0.8     0.8     0.8     0.9     0.9       4.2
         military)...........................................
        Exclusion of benefits provided under cafeteria plans   ......  ......  ......  ......  ......     6.9     7.3     7.9     8.4     9.0      39.5
         (3).................................................
        Exclusion of housing allowances for ministers........  ......  ......  ......  ......  ......     0.4     0.4     0.4     0.4     0.4       2.0
        Exclusion of miscellaneous fringe benefits...........  ......  ......  ......  ......  ......     6.5     6.9     7.3     7.8     8.2      36.7
        Exclusion of employee awards.........................  ......  ......  ......  ......  ......     0.1     0.1     0.1     0.1     0.1       0.7
        Exclusion of income earned by voluntary employees'     ......  ......  ......  ......  ......     1.4     1.5     1.6     1.7     1.7       7.9
         beneficiary associations............................
        Special tax provisions for employee stock ownership       0.8     0.8     0.8     0.9     0.9     0.2     0.2     0.2     0.2     0.3       5.3
         plans (ESOPs).......................................
        Work opportunity tax credit..........................     0.4     0.4     0.3     0.1     0.1     0.1     0.1     0.1     (1)     (1)       1.4
        Welfare-to-work tax credit...........................     0.1     0.1     0.1     (1)     (1)     (1)     (1)     (1)     (1)     (1)       0.4
    Social Services:
        Tax credit for children under age 17 (4).............  ......  ......  ......  ......  ......    17.1    17.1    17.0    16.9    16.4      84.5
        Tax credit for child and dependent care expenses.....  ......  ......  ......  ......  ......     2.2     2.2     2.2     2.2     2.1      11.0
        Exclusion of employer-provided child care (5)........  ......  ......  ......  ......  ......     0.4     0.4     0.5     0.5     0.5       2.4
        Exclusion of certain foster care payments............  ......  ......  ......  ......  ......     0.5     0.5     0.5     0.6     0.6       2.7
        Adoption credit and employee adoption benefits         ......  ......  ......  ......  ......     0.2     0.3     0.2     0.1     0.1       0.8
         exclusion...........................................
        Deduction for charitable contributions, other than        1.5     1.6     1.8     1.9     2.1    21.4    23.1    24.8    26.6    28.4     133.1
         for education and health............................
        Tax credit for disabled access expenditures..........     (1)     (1)     (1)     (1)     (1)     0.1     0.1     0.1     0.1     0.1       0.4
Health:
    Exclusion of employer contributions for health care,       ......  ......  ......  ......  ......    58.0    61.1    64.4    68.2    72.5     324.1
     health insurance premiums, and long-term care insurance
     premiums (6)............................................
    Exclusion of medical care and CHAMPUS/TRICARE medical      ......  ......  ......  ......  ......     1.6     1.6     1.6     1.6     1.6       8.0
     insurance for military dependents, retirees, and retiree
     dependents..............................................
    Deduction for health insurance premiums and long-term      ......  ......  ......  ......  ......     1.2     1.3     1.6     2.4     2.8       9.3
     care insurance premiums by the self-employed............
    Deduction for medical expenses and long-term care          ......  ......  ......  ......  ......     4.4     4.8     5.1     5.4     5.8      25.4
     expenses................................................
    Exclusion of workers' compensation benefits (medical       ......  ......  ......  ......  ......     4.5     4.7     4.9     5.1     5.4      24.6
     benefits)...............................................
    Medical savings accounts.................................  ......  ......  ......  ......  ......     (1)     (1)     (1)     (1)     (1)       0.1
    Exclusion of interest on State and local government bonds     0.3     0.3     0.3     0.3     0.3     0.8     0.8     0.9     0.9     0.9       5.9
     for private nonprofit hospital facilities...............
    Deduction for charitable contributions to health              0.8     0.8     0.9     1.0     1.1     2.7     2.9     3.1     3.4     3.6      20.4
     organizations...........................................
    Tax credit for orphan drug research......................     0.1     0.1     0.1     0.1     0.1  ......  ......  ......  ......  ......       0.5
Medicare:
    Exclusion of untaxed Medicare benefits:
        Hospital insurance...................................  ......  ......  ......  ......  ......    16.1    16.8    17.7    18.8    20.3      89.7
        Supplementary medical insurance......................  ......  ......  ......  ......  ......     8.8     9.8    11.1    12.5    14.1      56.3
Income Security:
    Exclusion of workers' compensation benefits (disability    ......  ......  ......  ......  ......     5.0     5.3     5.5     5.8     6.0      27.6
     and survivors payments).................................
    Exclusion of special benefits for disabled coal miners...  ......  ......  ......  ......  ......     0.1     0.1     0.1     0.1     0.1       0.4
    Exclusion of cash public assistance benefits.............  ......  ......  ......  ......  ......     0.7     0.7     0.7     0.8     0.8       3.7
    Net exclusion of pension contributions and earnings:
        Employer plans.......................................  ......  ......  ......  ......  ......    76.0    80.7    83.6    86.5    89.3     416.0
        Individual retirement plans..........................  ......  ......  ......  ......  ......    12.2    12.7    14.0    15.3    16.5      70.7
        Keogh plans..........................................  ......  ......  ......  ......  ......     5.0     5.1     5.2     5.3     5.4      26.1
    Exclusion of other employee benefits:
        Premiums on group term life insurance................  ......  ......  ......  ......  ......     2.0     2.1     2.2     2.3     2.4      11.0
        Premiums on accident and disability insurance........  ......  ......  ......  ......  ......     0.2     0.2     0.2     0.2     0.2       1.0
    Additional standard deduction for the blind and the        ......  ......  ......  ......  ......     2.0     2.1     2.2     2.2     2.3      10.8
     elderly.................................................
    Tax credit for the elderly and disabled..................  ......  ......  ......  ......  ......   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.1
    Deduction for casualty and theft losses..................  ......  ......  ......  ......  ......     0.2     0.2     0.3     0.3     0.3       1.3
    Earned income credit (EIC) (\7\).........................  ......  ......  ......  ......  ......     4.0     4.1     4.1     4.4     4.4      21.1
Social Security and Railroad Retirement: Exclusion of untaxed  ......  ......  ......  ......  ......    24.4    25.4    26.4    27.4    28.3     131.9
 social security and railroad retirement benefits............
Veterans' Benefits and Services:
    Exclusion of veterans' disability compensation...........  ......  ......  ......  ......  ......     2.1     2.2     2.3     2.4     2.4      11.4
    Exclusion of veterans' pensions..........................  ......  ......  ......  ......  ......     0.1     0.1     0.1     0.1     0.1       0.6
    Exclusion of veterans' readjustment benefits.............  ......  ......  ......  ......  ......     0.1     0.1     0.1     0.1     0.1       0.6
    Exclusion of interest on State and local government bonds   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)       0.2
     for veterans' housing...................................
General Purpose Fiscal Assistance:
    Exclusion of interest on public purpose State and local       5.1     5.3     5.4     5.6     5.8    13.0    13.6    14.0    14.4    14.9      96.9
     government debt.........................................
    Deduction of nonbusiness State and local government        ......  ......  ......  ......  ......    35.5    36.8    38.1    39.2    40.4     190.0
     income and personal property taxes......................
    Tax credit for Puerto Rico and possession income, and         3.8     4.0     3.6     3.2     3.0  ......  ......  ......  ......  ......      17.6
     Puerto Rico economic activity...........................
Interest: Deferral of interest on savings bonds..............  ......  ......  ......  ......  ......     1.2     1.2     1.2     1.2     1.2       6.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Positive tax expenditure of less than $50 million.
\2\ In addition, the exemption from excise tax for alcohol fuels results in a reduction in excise tax receipts, net of income tax effect, of $0.5
  billion per year in fiscal years 2000 through 2004.
\3\ Estimate includes amounts of employer-provided health insurance purchased through cafeteria plans and employer-provided child care purchased
  dependent care flexible spending accounts. These amounts are also included in other line items in this table.
\4\ The figures in the table show the effect of the child credit on receipts. The increase in outlays is: $0.8 billion in 2000, $0.8 billion in 2001,
  $0.8 billion in 2002, $0.8 billion in 2003, and $0.8 billion in 2004.
\5\ Estimate includes employer-provided child care purchased through dependent care flexible spending accounts.
\6\ Estimate includes employer-provided health insurance purchased through cafeteria plans.
\7\ The figures in the table show the effect of the earned income credit on receipts. The increase in outlays is: $25.8 billion in 2000, $26.2 billion
  in 2001, $27.0 billion in 2002, $27.4 billion in 2003, and $28.1 billion in 2004.

Note.--Details may not add to totals due to rounding.

Source: Joint Committee on Taxation.

                           IV. Summary Tables


                                                     FUNCTION SUMMARY--COMMITTEE REPORTED RESOLUTION
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                           Function                                2000         2001         2002         2003         2004         2005      2001-2005
--------------------------------------------------------------------------------------------------------------------------------------------------------
050:
    BA.......................................................        291.6        305.8        309.1        315.5        323.2        331.5      1,585.1
    OT.......................................................        288.1        294.1        302.3        309.4        317.5        327.9      1,551.1
Discretionary:
    BA.......................................................        292.6        306.8        310.0        316.4        324.0        332.3      1,589.5
    OT.......................................................        289.1        295.1        303.2        310.3        318.3        328.7      1,555.5
Mandatory:
    BA.......................................................         -1.0         -1.0         -0.9         -0.9         -0.8         -0.8         -4.4
    OT.......................................................         -1.0         -1.0         -0.9         -0.9         -0.8         -0.8         -4.4
150:
    BA.......................................................         22.0         20.1         20.9         21.4         21.9         22.6        107.0
    OT.......................................................         16.0         18.6         17.9         17.6         17.7         17.9         89.8
Discretionary:
    BA.......................................................         24.2         20.4         20.9         21.4         21.9         22.5        107.0
    OT.......................................................         20.6         22.6         21.7         21.2         21.2         21.3        108.0
Mandatory:
    BA.......................................................         -2.2         -0.2          0.0          0.0         -0.0          0.2         -0.0
    OT.......................................................         -4.6         -4.0         -3.8         -3.7         -3.5         -3.4        -18.3
250:
    BA.......................................................         19.3         19.7         19.9         19.8         20.1         20.3         99.8
    OT.......................................................         18.4         19.2         19.6         19.5         19.7         19.9         97.9
Discretionary:
    BA.......................................................         19.2         19.6         19.8         19.8         20.0         20.3         99.6
    OT.......................................................         18.4         19.2         19.5         19.5         19.6         19.9         97.7
Mandatory:
    BA.......................................................          0.1          0.1          0.0          0.0          0.0          0.0          0.2
    OT.......................................................          0.1          0.1          0.1          0.0          0.0          0.0          0.3
270:
    BA.......................................................          1.1          1.5         -0.3          1.2          1.2          1.2          4.9
    OT.......................................................         -0.6          0.2         -1.4         -0.0         -0.1         -0.1         -1.4
Discretionary:
    BA.......................................................          2.6          3.1          1.7          3.1          3.1          3.1         14.0
    OT.......................................................          3.0          3.1          1.8          3.1          3.1          3.1         14.3
Mandatory:
    BA.......................................................         -1.5         -1.6         -1.9         -1.9         -1.8         -1.9         -9.2
    OT.......................................................         -3.6         -2.9         -3.1         -3.2         -3.2         -3.2        -15.7
300:
    BA.......................................................         24.5         24.9         25.0         25.0         25.1         25.1        125.1
    OT.......................................................         24.2         24.9         25.0         25.2         25.1         24.9        125.1
Discretionary:
    BA.......................................................         24.2         24.1         24.1         24.1         24.1         24.1        120.3
    OT.......................................................         23.8         24.0         24.2         24.2         24.1         24.0        120.6
Mandatory:
    BA.......................................................          0.3          0.9          1.0          1.0          1.0          1.0          4.8
    OT.......................................................          0.5          0.9          0.8          1.0          1.0          0.9          4.5
350:
    BA.......................................................         35.3         20.9         19.0         18.0         17.4         16.1         91.3
    OT.......................................................         33.9         18.8         17.2         16.4         15.9         14.6         82.9
Discretionary:
    BA.......................................................          4.5          4.5          4.6          4.6          4.7          4.7         23.1
    OT.......................................................          4.6          4.5          4.5          4.5          4.6          4.6         22.8
Mandatory:
    BA.......................................................         30.7         16.4         14.4         13.4         12.7         11.4         68.2
    OT.......................................................         29.3         14.3         12.8         11.8         11.3         10.0         60.1
370:
    BA.......................................................          8.6          6.7          8.9         10.2         13.4         13.4         52.6
    OT.......................................................          4.1          2.6          5.2          5.5          8.4          9.3         30.9
Discretionary:
    BA.......................................................          7.0          2.5          3.0          3.0          2.9          2.9         14.3
    OT.......................................................          7.3          2.8          2.9          2.9          2.8          2.7         14.2
Mandatory:
    BA.......................................................          1.6          4.2          5.9          7.2         10.5         10.5         38.2
    OT.......................................................         -3.2         -0.3          2.3          2.5          5.6          6.6         16.8
400:
    BA.......................................................         54.4         59.2         57.5         59.1         59.1         59.2        294.2
    OT.......................................................         46.7         50.8         53.5         55.5         56.1         56.4        272.4
Discretionary:
    BA.......................................................         14.5         15.8         16.5         17.1         17.1         17.1         83.7
    OT.......................................................         44.4         48.8         51.8         53.6         54.3         54.7        263.1
Mandatory:
    BA.......................................................         39.9         43.5         41.1         42.0         42.0         42.0        210.5
    OT.......................................................          2.3          2.1          1.7          1.9          1.9          1.8          9.3
450:
    BA.......................................................         11.3          9.0          8.8          8.7          8.7          8.7         43.9
    OT.......................................................         10.7         10.4          9.8          8.7          8.3          7.9         45.1
Discretionary:
    BA.......................................................         11.5          9.0          8.8          8.7          8.8          8.8         44.1
    OT.......................................................         11.5         11.1         10.6          9.8          9.3          9.0         49.7
Mandatory:
    BA.......................................................         -0.2          0.0          0.0         -0.1         -0.1          0.0         -0.2
    OT.......................................................         -0.7         -0.7         -0.8         -1.0         -1.0         -1.1         -4.6
500:
    BA.......................................................         57.7         75.0         75.7         76.6         77.8         79.1        384.2
    OT.......................................................         61.9         68.6         72.6         75.4         76.8         78.0        371.4
Discretionary:
    BA.......................................................         44.5         56.8         59.1         59.6         60.3         60.9        296.8
    OT.......................................................         49.6         52.2         55.9         58.7         59.6         60.3        286.8
Mandatory:
    BA.......................................................         13.2         18.2         16.6         17.0         17.5         18.2         87.5
    OT.......................................................         12.3         16.5         16.6         16.7         17.1         17.7         84.6
550:
    BA.......................................................        159.2        169.2        178.9        191.0        205.2        221.5        965.7
    OT.......................................................        153.5        165.8        177.8        190.3        204.8        220.3        959.1
Discretionary:
    BA.......................................................         33.6         34.4         34.8         35.5         36.1         36.8        177.6
    OT.......................................................         30.1         32.7         33.8         34.5         35.1         35.7        171.8
Mandatory:
    BA.......................................................        125.6        134.8        144.1        155.5        169.1        184.7        788.1
    OT.......................................................        123.4        133.1        144.0        155.8        169.7        184.6        787.3
570:
    BA.......................................................        199.6        218.8        228.6        249.8        265.3        288.7      1,251.2
    OT.......................................................        199.5        219.0        228.6        249.5        265.5        288.7      1,251.4
Discretionary:
    BA.......................................................          3.1          3.1          3.1          3.1          3.1          3.1         15.6
    OT.......................................................          3.1          3.1          3.1          3.1          3.1          3.1         15.5
Mandatory:
    BA.......................................................        196.5        215.6        225.5        246.6        262.2        285.6      1,235.6
    OT.......................................................        196.4        215.9        225.5        246.4        262.4        285.6      1,235.8
600:
    BA.......................................................        238.9        253.2        264.8        274.8        284.9        297.7      1,375.5
    OT.......................................................        248.1        255.4        267.3        278.5        288.4        301.2      1,390.7
Discretionary:
    BA.......................................................         30.4         35.4         38.0         39.1         39.7         40.3        192.5
    OT.......................................................         42.5         42.1         43.0         45.0         45.4         45.7        221.1
Mandatory:
    BA.......................................................        208.5        217.8        226.8        235.7        245.2        257.4      1,182.9
    OT.......................................................        205.6        213.4        224.2        233.5        243.0        255.5      1,169.5
650:
    BA.......................................................        405.0        422.8        443.1        463.8        486.0        510.2      2,325.9
    OT.......................................................        405.0        422.8        443.1        463.8        486.0        510.1      2,325.7
Discretionary:
    BA.......................................................          3.2          3.5          3.5          3.5          3.6          3.6         17.6
    OT.......................................................          3.2          3.4          3.5          3.5          3.5          3.6         17.5
Mandatory:
    BA.......................................................        401.8        419.4        439.6        460.3        482.4        506.6      2,308.3
    OT.......................................................        401.8        419.4        439.6        460.3        482.4        506.6      2,308.3
700:
    BA.......................................................         46.0         47.6         48.8         50.8         52.1         55.5        254.9
    OT.......................................................         45.1         47.1         48.7         50.5         51.8         55.2        253.4
Discretionary:
    BA.......................................................         20.9         21.9         22.4         23.3         23.8         24.4        115.9
    OT.......................................................         20.4         21.8         22.4         23.1         23.7         24.2        115.1
Mandatory:
    BA.......................................................         25.1         25.6         26.4         27.5         28.3         31.1        138.9
    OT.......................................................         24.8         25.4         26.3         27.4         28.2         31.0        138.3
750:
    BA.......................................................         27.4         27.9         28.5         29.2         31.3         32.1        149.0
    OT.......................................................         28.0         28.2         28.7         29.1         31.0         31.9        148.9
Discretionary:
    BA.......................................................         26.6         26.8         27.8         28.5         29.2         29.9        142.3
    OT.......................................................         27.2         27.3         27.9         28.5         29.1         29.8        142.5
Mandatory:
    BA.......................................................          0.7          1.1          0.7          0.6          2.1          2.2          6.7
    OT.......................................................          0.8          0.9          0.8          0.7          2.0          2.1          6.5
800:
    BA.......................................................         13.7         14.4         13.6         13.6         13.6         13.6         68.8
    OT.......................................................         14.7         14.3         13.9         13.8         13.9         13.6         69.4
Discretionary:
    BA.......................................................         12.4         13.2         12.4         12.4         12.4         12.4         62.9
    OT.......................................................         13.2         13.1         12.7         12.6         12.6         12.5         63.5
Mandatory:
    BA.......................................................          1.3          1.2          1.2          1.1          1.1          1.2          5.9
    OT.......................................................          1.6          1.2          1.2          1.1          1.3          1.1          6.0
900:
    BA.......................................................        224.7        219.3        210.7        196.7        182.1        166.5        975.3
    OT.......................................................        224.7        219.3        210.7        196.7        182.1        166.5        975.3
Discretionary:
    BA.......................................................          0.0          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          0.0
Mandatory:
    BA.......................................................        224.7        219.3        210.7        196.7        182.1        166.5        975.3
    OT.......................................................        224.7        219.3        210.7        196.7        182.1        166.5        975.3
920:
    BA.......................................................          0.0         -4.4          0.0          0.0          0.0          0.0         -4.4
    OT.......................................................          0.0         -4.2         -1.3         -4.8         -6.8         -6.1        -23.1
Discretionary:
    BA.......................................................          0.0         -4.4          0.0          0.0          0.0          0.0         -4.4
    OT.......................................................          0.0         -4.2         -1.3         -4.8         -6.8         -6.1        -23.1
Mandatory:
    BA.......................................................          0.0          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          0.0
950:
    BA.......................................................        -42.0        -46.6        -50.9        -50.8        -48.5        -51.6       -248.3
    OT.......................................................        -42.0        -46.6        -50.9        -50.8        -48.5        -51.6       -248.3
Discretionary:
    BA.......................................................         -0.2          0.1         -0.6         -0.6         -0.3         -1.5         -2.9
    OT.......................................................         -0.2          0.1         -0.6         -0.6         -0.3         -1.5         -2.9
Mandatory:
    BA.......................................................        -41.8        -46.7        -50.3        -50.2        -48.2        -50.1       -245.5
    OT.......................................................        -41.8        -46.7        -50.3        -50.2        -48.2        -50.1       -245.5
Total:
    BA.......................................................      1,798.0      1,865.2      1,910.9      1,974.2      2,039.7      2,111.5      9.901.5
    OT.......................................................      1,780.1      1,829.4      1,888.3      1,949.7      2,013.5      2,086.7      9.767.6
Discretionary:\1\
    BA.......................................................        574.8        596.6        610.1        622.6        634.6        645.8      3,109.6
    OT.......................................................        611.7        622.6        640.6        652.7        662.2        675.3      3,253.5
Mandatory:
    BA.......................................................      1,223.2      1,268.6      1,300.8      1,351.7      1,405.2      1,465.7      6,791.9
    OT.......................................................      1,168.5      1,206.8      1,247.7      1,297.0      1,351.3      1,411.3      6,514.1
Revenues.....................................................      1,944.3      2,003.2      2,071.4      2,146.0      2,225.0      2,318.0     10,763.5
Surplus......................................................        164.1        173.8        183.1        196.2        211.5        231.3        995.9
    On-budget................................................         11.2          8.1          1.0          1.1          2.8          6.5         19.5
    Off-budget...............................................        152.9        165.7        182.0        195.2        208.7        224.8        976.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Discretionary spending in this summary reflects the levels that will apply once new discretionary limits are enacted.


  SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET
                                           ACT--BUDGET YEAR TOTAL 2001
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                   Direct spending       Entitlements funded in
                                                                    jurisdiction          annual appropriations
                                                             --------------------------           acts
                          Committee                                                    -------------------------
                                                                 Budget      Outlays       Budget
                                                               authority                 authority     Outlays
----------------------------------------------------------------------------------------------------------------
Appropriations:
    General Purpose Discretionary...........................      541,095      547,279            0            0
        Memo on-budget......................................      537,666      543,901  ...........  ...........
        Memo off-budget.....................................        3,429        3,378  ...........  ...........
    Highways................................................            o       26,920            0            0
    Mass Transit............................................            0        4,639            0            0
    Mandatory...............................................      327,904      310,251            0            0
        Total...............................................      868,999      889,089            0            0
Agriculture, Nutrition, and Forestry........................       14,254       10,542       29,584       12,003
Armed Services..............................................       50,139       50,129            0            0
Banking, Housing and Urban Affairs..........................        4,050       -2,339            0            0
Commerce, Science, and Transportation.......................        7,341        3,433          739          737
Energy and Natural Resources................................        2,429        2,373           40           51
Environmental and Public Works..............................       39,643        2,029            0            0
Finance.....................................................      708,237      705,227      165,511      165,984
Foreign Relations...........................................       11,364       10,107            0            0
Governmental Affairs........................................       60,323       58,905            0            0
Judiciary...................................................        5,590        5,076          253          253
Health, Education, Labor, and Pensions......................       12,259        9,231        1,382        1,381
Rules and Administration....................................          113           68            0            0
Veterans' Affairs...........................................        1,367        1,363       24,527       24,444
Indian Affairs..............................................          192          189            0            0
Small Business..............................................            0         -195            0            0
Unassigned to Committee.....................................     -313,951     -296,951            0            0
        Total...............................................    1,472,349    1,448,276      222,036      204,853
----------------------------------------------------------------------------------------------------------------


  SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET
                                          ACT--5-YEAR TOTAL: 2001-2005
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                   Direct spending       Entitlements funded in
                                                                    jurisdiction          annual appropriations
                                                             --------------------------           acts
                          Committee                                                    -------------------------
                                                                 Budget      Outlays       Budget
                                                               authority                 authority     Outlays
----------------------------------------------------------------------------------------------------------------
Agriculture, Nutrition, and Forestry........................       61,372       43,745      114,139       67,379
Armed Services..............................................      267,298      266,974            0            0
Banking, Housing and Urban Affairs..........................       32,946      -10,841            0            0
Commerce, Science, and Transportation.......................       58,896       38,339        4,061        4,040
Energy and Natural Resources................................       11,570       11,364          200          232
Environmental and Public Works..............................      178,735        8,662            0            0
Finance.....................................................    3,753,455    3,748,941      970,955      971,333
Foreign Relations...........................................       58,705       52,862            0            0
Governmental Affairs........................................      324,981      318,539            0            0
Judiciary...................................................       26,693       25,704        1,265        1,265
Health, Education, Labor, and Pensions......................       51,320       46,784        6,985        7,007
Rules and Administration....................................          462          451            0            0
Veterans' Affairs...........................................        6,837        7,022      133,449      133,090
Indian Affairs..............................................          921          941            0            0
Small Business..............................................            0         -745            0            0
----------------------------------------------------------------------------------------------------------------

        V. Budget Resolutions: Enforcement and Other Provisions

    A budget resolution does not become law and cannot amend 
law. However, a budget resolution's miscellaneous provisions 
can affect the consideration of legislation to implement and 
enforce the underlying policy assumptions contained in such 
resolution. The Committee-reported resolution contains a number 
of provisions which implement policies assumed in this 
resolution while protecting the Social Security surplus and 
maintaining on-budget surpluses which will serve to further 
reduce the publically held debt.
    Title I of the Committee-reported resolution contains a 
provision to focus attention on debt held by the public levels. 
Section 101(6) provides advisory debt held by the public 
levels. These debt held by the public levels reflect the fact 
that the resolution devotes the entire Social Security surplus 
to the reduction of debt held by the public.
    Section 102(c) shows (for informational purposes only) the 
level of budget authority and outlays for Social Security 
administrative expenses. These expenses, as is the case with 
all expenditures from the Social Security trust funds are off-
budget, however for scoring purposes they are counted against 
the discretionary spending limits because they are provided 
annually in appropriations acts.
    Title II of the Committee-reported resolution contains 14 
sections that either modify budget procedures for consideration 
of legislation or authorize the Chairman of the Budget 
Committee to alter the levels in the budget resolution to 
accommodate Senate consideration of certain legislation.
    Each of these sections are discussed in more detail below. 
Many of these sections make reference to the terms ``on-
budget'' and ``deficit.'' Congress, the Office of Management 
and Budget and the Congressional Budget Office generally 
distinguish between on-budget and off-budget activities in the 
federal budget. ``On-budget'' means the receipts and 
disbursements of all Federal government accounts, funds, and 
functions except the receipts and disbursements of the two 
Social Security trust funds and the Postal Service.
    The whole premise of this resolution is to preserve the 
Social Security surplus and to prohibit consideration of 
legislation resulting in an on-budget deficit in the future. 
The Committee does intend, by virtue of the reserve funds set 
out in title II, that on-budget surpluses may be made available 
for: tax relief, targeted agriculture spending, spending for 
schools and roads in rural counties, providing medical care to 
disabled children, and for a Medicare prescription drug 
benefit. After accounting for such spending, the Committee-
reported resolution produces a $19.5 billion on-budget surplus 
over the next 5 years.

The Senate's pay-as-you-go point of order

    The Senate's ``pay-go'' point of order was modified in 
section 207 of the conference report on the fiscal year 2000 
budget resolution to make clear that spending of on-budget 
surpluses would not violate the pay-go rule. This rule 
continues in effect, unchanged by this resolution, and is 
reprinted below:

               PAY-AS-YOU-GO POINT OF ORDER IN THE SENATE

    See Section 207 of H. Con. Res. 68 (106th Cong. 1st Sess.)
    (a) Purposes.--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 on-budget deficit 
        or cause an on-budget deficit for any one of the three 
        applicable time periods as measured in paragraphs (5) 
        and (6).
          (2) Applicable time periods.--For purposes of this 
        subsection the term ``applicable time period'' means 
        any one 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 
                by 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 
                subsection (b) through (d) of section 257 of 
                the Balanced Budget and Emergency Deficit 
                Control Act of 1985 for fiscal years beyond 
                those covered by that concurrent resolution on 
                the budget
          (6) Prior surplus.--If direct spending or revenue 
        legislation increases the on-budget deficit or causes 
        an on-budget deficit when taken individually, then it 
        must also increase the on-budget deficit or causes an 
        on-budget deficit when taken together with all direct 
        spending and revenue legislation enacted since the 
        beginning of the calendar year not accounted for in the 
        baseline under paragraph (5)(A), except that the direct 
        spending or revenue effects 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 (103d Congress) is repealed.
    (g) Sunset.--Subsections (a) through (e) of this section 
shall expire September 30, 2002.
    The Committee-reported resolution assumes that the on-
budget surplus be placed on the Senate's pay-as-you-go 
scorecard. The baseline on-budget surpluses are shown on the 
table below:

                                                                                             TABLE 1
                                                                                    [In billions of dollars]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            Fiscal year--
                                                           --------------------------------------------------------------------------------------------------------------   5 yr.       10 yr.
                                                               2001       2002       2003       2004       2005       2006       2007       2008       2009       2010
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline on-budget surplus................................     26.509     54.330     77.487    105.636    132.475    197.085    248.281    290.469    348.599    410.089    396.437    1,890.961
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

  Discussion of the provisions contained in Title II of the Committee-
                          reported resolution

Section 201: Congressional lockbox for Social Security surpluses

    The Committee-reported resolution contains language which 
is very similar to section 201 of the conference report on the 
fiscal year 2000 budget resolution. This ``Social Security 
lockbox'' as it is known, provides a point of order in both the 
House of Representatives and the Senate against a budget 
resolution that sets forth an on-budget deficit for any fiscal 
year. This ensures that Social Security surpluses cannot be 
used by the budget to finance deficit spending.
    As a result of an amendment offered and agreed to in 
committee by Senator Abraham, the point of order will now be 
permanent and in the Senate will require 60 votes for a waiver 
or to sustain an appeal. In addition, an amendment offered and 
agreed to in committee by Senator Grams, added a ``double 
lock'' on this lockbox point of order by adding a ``lookback''. 
The ``lookback'' requires that after the end of the fiscal 
year, in its next budget resolution, Congress must look back to 
see if any deficit spending has occurred and make the Social 
Security trust fund whole in the subsequent year by reducing 
future discretionary spending by an equivalent amount.

Section 202: Reserve fund for Medicare

    The Committee-reported resolution contains language in 
section 202 which establishes a two-part reserve fund for 
Medicare legislation.
    Subsection (a) permits the Chairman of the Committee on the 
Budget to adjust the section 302 allocation to the Committee on 
Finance, and the aggregates and other appropriate budgetary 
levels for legislation which provides a Medicare prescription 
drug benefit if the cost of the legislation does not exceed $20 
billion over the period of fiscal years 2001 through 2003 and 
the legislation does not cause an on-budget deficit in any of 
these years.
    Subsection (b) provides that if the Committee on Finance 
fails to report such legislation prior to September 1, 2000, 
the adjustments permitted by subsection (a) shall be made with 
respect to any legislation considered in the Senate which 
contains a prescription drug benefit.
    Subsection (c) permits the Chairman of the Committee on the 
Budget to adjust the section 302 allocation to the Committee on 
Finance and the spending aggregates for legislation which 
provides an additional $20 billion for fiscal years 2004 and 
2005 if the Committee on Finance reports legislation which 
extends the solvency of the Medicare Hospital Insurance trust 
fund without the use of new subsidies from the general fund, 
without decreasing beneficiaries' access to health care, and 
excluding the cost of extending and modifying the prescription 
drug benefit crafted pursuant to the first part of the reserve 
fund. The Committee assumes Medicare reform efforts will ensure 
adequate reimbursement for Medicare providers. The allocation 
of this $20 billion cannot cause an on-budget deficit in either 
2004 or 2005.

Section 203: Reserve fund for the stabilization of payments to counties 
        in support of education

    The Committee-reported resolution contains language which 
provides a reserve fund that would allow the Chairman of the 
Committee on the Budget to adjust the section 302 allocation to 
the Energy and Natural Resources Committee for legislation 
which provides for additional mandatory spending for the 
stabilization of receipt-based payments to counties that 
support school and road systems and also provides that a 
portion of those payments would be dedicated toward local 
investments in Federal lands within those counties. Adjustments 
may also be made for amendments which bring the reported 
legislation into compliance with the terms of this reserve 
fund. The reserve fund requires that the committee report this 
legislation and that the cost shall not exceed $200,000,000 in 
the first year and not more than $1,100,000,000 for fiscal 
years 2001 through 2005.

Section 204: Reserve fund for Agriculture

    The Committee-reported resolution contains language which 
provides a reserve fund that would allow the Chairman of the 
Committee on the Budget to adjust the section 302 allocation to 
the Committee on Agriculture, Nutrition, and Forestry for 
legislation which provides for additional mandatory spending 
for assistance for producers of program crops and specialty 
crops, enhancement for agriculture conservation programs, and 
perhaps other programs within the committee's jurisdiction. The 
reserve fund can only be triggered if the committee reports 
legislation to the Senate on or before June 29, 2000. 
Adjustments may also be made for amendments which bring the 
reported legislation into compliance with the terms of this 
reserve fund. The cost of such legislation shall not exceed 
$5,500,000,000 for fiscal year 2000; $1,640,000,000 for fiscal 
year 2001; and $3,000,000,000 for fiscal years 2001 through 
2005.

Section 205: Tax reduction reserve fund in the Senate

    The Committee-reported resolution contains language which 
provides a reserve fund that allows the Chairman of the 
Committee on the Budget to adjust the spending and revenue 
aggregate for legislation that reduces revenues as long as the 
legislation does not cause an on-budget deficit for the first 
year or the sum of the five years covered by this resolution.

Section 206: Reserve fund for additional surpluses

    The Committee-reported resolution contains language which 
would allow the Chairman of the Committee on the Budget to 
adjust the revenue aggregate, the pay-go scorecard balances, 
and the reconciliation instructions to take into account any 
additional surpluses contained in the Economic and Budget 
Outlook published by the Congressional Budget Office (CBO). 
This section calls upon the CBO to complete this ``summer-
update'' by July 1, 2000. If surpluses are larger than was set 
forth in their prior report, then the Chairman may make the 
above-mentioned adjustments in an amount equal to the increase 
for fiscal years 2001 through 2005. This will permit additional 
revenue reductions to occur in the reconciliation legislation 
provided for in section 104 of the Committee-reported 
resolution.

Section 207: Mechanism for additional debt reduction

    If either or both of the tax reconciliation bill envisioned 
by section 104 of the Committee-reported resolution or the 
Medicare/Prescription drug legislation envisioned by section 
202 of the Committee-reported resolution do not become law 
(because they are never enacted by the Congress or the 
President vetoes the measures), the Committee-reported 
resolution contains language which would allow the Chairman of 
the Budget Committee to reduce the balances available on the 
Senate's pay-go scorecard and adjust the aggregates and 
committee allocations to prevent these ``reconciled'' or 
``reserved'' amounts from being spent for anything else. In 
addition, the debt held by the public levels shown in section 
101(6) of this resolution will be reduced by those same amounts 
to make clear that these funds are dedicated to debt reduction.

Section 208: Emergency designation point of order in the Senate

    The Committee-reported resolution contains language which 
provides a 60-vote point of order in the Senate against any 
legislation (including conference reports) which contains an 
emergency designation with respect to any spending or revenues. 
This section is very similar to section 206 of the conference 
report on the fiscal year 2000 budget resolution with the 
following two exceptions: the point of order now applies to 
defense as well as non-defense spending and is permanent. As 
was the case last year, the point of order would operate 
similar to the Senate's Byrd Rule (section 314 of the 
Congressional Budget and Impoundment Control Act of 1974) in 
that if the point of order is sustained, the offending language 
(in this case the emergency designation) can be excised from 
the bill, amendment or conference report, leaving the remainder 
intact. This is likely to result in the remaining language then 
being subject to some other Budget Act point of order because 
the additional spending would then be scored against either the 
discretionary spending limits, the section 311 aggregates, a 
committee's allocation, or pay-go.

Section 209: Reserve fund pending the increase of fiscal year 2001 
        discretionary spending limits

    Section 312(b) of the Congressional Budget and Impoundment 
Control Act of 1974 provides a 60-vote point of order in the 
Senate against any legislation that exceeds the discretionary 
spending limits set forth in section 251 of the Balanced Budget 
and Impoundment Control Act of 1985. This point of order 
applies to a concurrent resolution on the budget as well as 
substantive legislation. Sustaining the current discretionary 
spending limits is not feasible based on recent budget 
submissions by President Clinton and congressional action.
    The Committee-reported resolution envisions a level of 
discretionary spending which exceeds the current statutory 
limits. However, because of the restrictions of section 312(b), 
the functional totals and spending aggregates contained in this 
resolution technically indicate a level of discretionary 
spending which adheres to the current-law limits. The section 
302(a) allocation to the Committee on Appropriations is also in 
compliance with the current limits. This is achieved by 
assuming a reserve amount within function 920.
    The Committee-reported resolution contains language which 
provides the Chairman of the Committee on the Budget in the 
Senate with the authority to adjust the section 302(a) 
allocation to the Committee on Appropriations up to the level 
of discretionary spending envisioned by the resolution, only 
after legislation has been enacted which increases the 
statutory discretionary spending limits. For the purposes of 
this section, the Committee assumes that only the fiscal year 
2001 limits will be increased. No assumption is made with 
respect to the appropriate level for fiscal year 2002. The 
Committee also intends that in order to maintain mathematical 
consistency and accurate enforcement of the budget resolution, 
the Chairman will also be authorized to adjust the aggregates 
contained in the resolution. Therefore the Committee 
anticipates that the language of section 209 will be amended to 
provide the Chairman with this additional authority.

Section 210: Congressional firewall for defense and non-defense 
        spending

    The Committee-reported resolution contains language which, 
upon the enactment of legislation which increases the 
discretionary spending limits for fiscal year 2001, establishes 
a ``firewall'' between defense and non-defense discretionary 
spending in the Senate. This firewall consists of limits on the 
overall level of both defense and non-defense spending. The 
non-defense portion includes the outlays for both highways and 
mass transit. These limits will be enforced by a 60-vote point 
of order against measure which exceeds the limits.

Section 211: Mechanisms for strengthening budgetary integrity

    The Committee-reported resolution contains language which 
establishes two new points of order in the Senate one with 
respect to advanced appropriations and the other with respect 
to delayed obligations. Both points of order require 60-votes 
for a waiver or to sustain an appeal of the ruling of the 
Chair. Similar to the emergency designation point of order in 
section 208 of the Committee-reported resolution, these points 
of order also operate like the Byrd Rule: if the point of order 
is sustained, the offending language will be excised from the 
measure--including the conference report. Both points of order 
expire at the end of fiscal year 2002 in keeping with the 
lifetime of the current discretionary spending limits.
    Section 211(b) of the Committee-reported resolution 
provides a point of order against any appropriation that 
results in the sum of all advances from fiscal year 2001 into 
fiscal year 2002 (or into any subsequent fiscal year) in excess 
of the amounts which were advanced from fiscal year 2000 into 
fiscal year 2001 for education programs ($14.2 billion).
    Section 211(c) of the Committee-reported resolution 
provides a point of order against the use of any delayed 
obligations in an appropriations bill with specific exceptions 
for current programmatic-driven delays (including a date and a 
dollar limitation) which are contained in this section. These 
specified delays total approximately $11.2 billion and are 
described below:
          Department of the Interior: for Operation of Indian 
        Programs School Operation Costs (Bureau of Indian 
        Affairs Funded Schools and Other Education Programs)--
        until July 1 not to exceed $401,000,000.
          Department of Labor: for Training and Employment 
        Insurance--until July 1 not to exceed $1,650,000,000.
          Department of Labor: for State Unemployment Service--
        until July 1 not to exceed $902,000,000.
          Department of Education: for Education Reform--until 
        July 1 not to exceed $512,000,000.
          Department of Education: for Education for the 
        Disadvantaged--until July 1 not to exceed 
        $2,462,000,000.
          Department of Education: for School Improvement 
        Program--until July 1 not to exceed $975,000,000.
          Department of Education: for Special Education--until 
        July 1 not to exceed $2,048,000,000.
          Department of Education: for Vocational Education--
        until July 1 not to exceed $858,000,000.
          Department of Transportation: for Grants to the 
        National Railroad Passenger Corporation--until 
        September 30 not to exceed $343,000,000.
          Department of Veterans' Affairs: for Medical Care 
        (equipment-land-structures)--until August 1 not to 
        exceed $900,000,000.
          Environmental Protection Agency: for Hazardous 
        Substance Superfund--until September 1 not to exceed 
        $100,000,000.
    Section 211(g) of the Committee-reported resolution 
provides guidance for interpreting the germaneness requirement 
found in section 305(b)(2) of the Congressional Budget and 
Impoundment Control Act of 1974. Section 305 requires that all 
amendments offered on the floor to a budget resolution or a 
reconciliation bill must be germane to the underlying 
legislation and is enforced by a 60-vote point of order in the 
Senate. The Committee-reported resolution states that an 
amendment will be considered not germane if it contains only 
precatory (non-binding) language. This is designed to place a 
60-vote hurdle with respect to what is commonly referred to as 
``sense of the Senate'' amendments. Note that it is not meant 
to preclude the inclusion of ``purpose'' or ``findings'' 
language that is part of an otherwise substantive amendment.

Section 212: Prohibition on the use of Federal Reserve surpluses

    The Committee-reported resolution contains language which 
is designed to ensure that transfers from non-budgetary 
governmental entities such as the Federal Reserve banks shall 
not be used to offset increased on-budget spending when such 
transfers produce no real budgetary effects. It has long been 
the view of the Committee that transfers of Federal Reserve 
surpluses to the Treasury are not valid offsets for increased 
spending. Nonetheless, such transfers have been legislated in 
the past--as recently as the fall of 1999. The purpose of this 
section is to establish a scoring rule to make clear that such 
transfers will not be taken into account when determining 
compliance with the various Budget Act and Senate pay-go points 
of order.

Section 213: Reaffirming the prohibition on the use of revenue offsets 
        for discretionary spending

    The Committee-reported resolution contains language which 
is intended to emphasize the longstanding view of the 
Congressional Budget Committees and the Congressional Budget 
Office that changes in revenues shall not be scored in 
appropriations legislation. This means that tax increases shall 
not be used as offsets for increased discretionary spending. 
The Committee finds it necessary to set this forth in this 
budget resolution in response to the President once again 
asserting in his fiscal year 2001 budget that an increase in 
tobacco taxes can be used to offset huge increases in 
discretionary spending.

Section 214: Application and effect of changes in allocations and 
        aggregates

    The Committee-reported resolution contains language which 
is identical to the language found in section 208 of the 
conference report on the fiscal year 2000 budget resolution. 
This language clarifies how and when any adjustments to the 
allocations or aggregates or pay-go balances permitted by the 
various reserve funds contained in the Committee-reported 
resolution may be made.

Section 215: Reserve fund to foster the health of children with 
        disabilities and the employment and independence of their 
        families

    The Committee-reported resolution contains language which 
provides a reserve fund that would allow the Chairman of the 
Committee on the Budget to adjust the section 302 allocation to 
the Committee on Finance and the spending aggregate for 
legislation which facilitates children with disabilities 
receiving needed health care at home while still allowing their 
families to become or remain employed. The reserve fund can 
only be triggered if the committee reports legislation to the 
Senate. Adjustments may also be made for amendments which bring 
the reported legislation into compliance with the terms of this 
reserve fund. This will permit such legislation to make use of 
any on-budget surpluses. However, the cost of such legislation 
shall not exceed $50,000,000 for fiscal year 2001; and 
$300,000,000 for fiscal years 2001 through 2005.

Section 216: Exercise of rulemaking powers

    The Committee-reported resolution contains language 
regarding the rulemaking authority of each of the Houses of 
Congress.
    Title III of the Committee-reported resolution contains the 
following 29 non-binding provisions that express the will or 
intent of either or both Houses of Congress:
          Sense of the Senate on controlling and eliminating 
        the growing international problem of tuberculosis.
          Sense of the Senate on increased funding for the 
        Child Care and Development Block Grant.
          Sense of the Senate on tax relief for college tuition 
        paid and for interest paid on student loans.
          Sense of the Senate on increased funding for the 
        National Institutes of Health.
          Sense of the Senate supporting funding levels in 
        Educational Opportunities Act.
          Sense of the Senate on additional budgetary 
        resources.
          Sense of the Senate on regarding the inadequacy of 
        the payments for skilled nursing care.
          Sense of the Senate on the CARA programs.
          Sense of the Senate on veteran's medical care.
          Sense of the Senate on Impact Aid.
          Sense of the Senate on funding for increased acreage 
        under the Conservation Reserve Program and the Wetlands 
        Reserve Program.
          Sense of the Senate on tax simplification.
          Sense of the Senate on antitrust enforcement by the 
        Department of Justice and Federal Trade Commission 
        regarding agriculture mergers and anticompetitive 
        activity.
          Sense of the Senate regarding fair markets for 
        American farmers.
          Sense of the Senate on women and Social Security 
        reform.
          Protection of battered women and children.
          Use of False Claims Act in combating medicare fraud.
          Sense of the Senate regarding the National Guard.
          Sense of the Senate regarding military readiness.
          Sense of the Senate on compensation for the Chinese 
        Embassy bombing in Belgrade.
          Sense of the Senate supporting full funding of the 
        President's digital opportunity initiatives.
          Sense of the Senate regarding immunization funding.
          Sense of the Senate regarding tax credits for small 
        businesses providing health insurance to low-income 
        employees.
          Sense of the Senate on funding for criminal justice.
          Sense of the Senate regarding the Pell Grant.
          Sense of the Senate regarding comprehensive public 
        education reform.
          Sense of the Senate on providing adequate funding for 
        United States international leadership.
          Sense of the Senate concerning the HIV/AIDS crisis.
          Sense of the Senate regarding tribal colleges.

                             RECONCILIATION

Reconciliation

    The Committee-reported resolution contains a reconciliation 
instruction to reduce revenues by not more than $13.157 billion 
for fiscal year 2001 and by not more than $149.761 billion for 
the sum of the fiscal years 2001 through 2005.
    The Senate Finance Committee would be required to report 
reconciliation legislation by September 22, 2000.

                   VI. Committee Views and Estimates

    Section 301(c) of the Congressional Budget Act requires the 
committees of the Senate to report to the Budget Committees the 
views and estimates of budget requirements for matters within 
their jurisdictions to assist the Budget Committees in 
preparing the budget resolution.
    Following are the views and estimates received from the 
various committees:




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