[House Report 107-338]
[From the U.S. Government Publishing Office]




107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    107-338

======================================================================



 
           INTERIM BUDGET CONTROL AND ENFORCEMENT ACT OF 2001

                                _______
                                

 December 13, 2001.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

 Mr. Nussle, from the Committee on the Budget, submitted the following

                              R E P O R T

                        [To accompany H.R. 3084]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Budget, to whom was referred the bill 
(H.R. 3084) to revise the discretionary spending limits for 
fiscal year 2002 set forth in the Balanced Budget and Emergency 
Deficit Control Act of 1985 and to make conforming changes 
respecting the appropriate section 302(a) allocation for fiscal 
year 2002 established pursuant to the concurrent resolution on 
the budget for fiscal year 2002, and for other purposes, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                              Introduction

    The purpose of this bill is to revise two limits on Federal 
spending: the discretionary spending limits, which are set 
forth in law and are enforced through automatic spending cuts, 
and the levels in the budget resolution (H. Con. Res. 83) 
adopted by Congress in May and which are enforced through 
points of order.
    The increase in the spending limits and allocations is 
based on the fiscal year 2002 budget resolution with 
adjustments to reflect, under Administration scoring, $18.4 
billion in additional budget authority for defense and a recent 
agreement by the Appropriations Committees and the Office of 
Management and Budget [OMB] to provide non-defense 
discretionary budget authority of about $3.4 billion above the 
levels assumed in the budget resolution. It is also understood 
under this agreement that the spending limits will be adjusted 
by another $2.2 billion for domestic emergencies prior to the 
recent terrorist attack on the United States.
    This bill does not extend the discretionary spending limits 
or the pay-as-you-go requirements beyond their current 
expiration date at the end of fiscal year 2002. Similarly, it 
does not provide for other revisions of the fiscal year 2002 
budget resolution that Congress agreed to on May 8, 2001. The 
bill makes the necessary changes in the budget resolution to 
reflect an additional $18.4 billion for defense activities and 
$3.4 billion for non-defense activities above the levels 
initially assumed in the budget resolution.
    This bill also makes a number of technical corrections in 
the Balanced Budget and Deficit Control Act, and adds a new 
reporting requirement for OMB that is designed to give the 
Committee an understanding of the amount of expenditures 
related to the recent terrorist attacks that will be carried 
forward into the future.

                         Background and Purpose


          Title I--Revising the Discretionary Spending Limits

Background

    The level of the discretionary spending limits for fiscal 
year 2002 was established in 1997 as part of the Balanced 
Budget Act [BBA]. Under the original limits established by the 
BBA, total discretionary budget authority was to increase by 
only $24.2 billion, or 4.6 percent, between fiscal years 1998 
and 2002. But these spending limits were increased in the third 
and fourth years of that five-year budget agreement. Most 
recently, the Foreign Operations Appropriation
    Act for Fiscal Year 2001 (P.L. 106-429) raised the fiscal 
year 2001 limits by $95.9 billion in budget authority and $58.6 
billion in outlays, but left unchanged the limits for fiscal 
year 2002.
    It is unlikely that either Congress or the President would 
agree to the magnitude of spending cuts necessary in one year 
to stay within a fiscal year 2002 spending limit that was 
established five years earlier. Accordingly, the 
Administration's budget submission for fiscal year 2002 called 
for increases of $107.8 billion in budget authority and $97 
billion in outlays from the original statutory limits. 
Similarly, the Congressional Budget Resolution (H. Con. Res. 
83) established a 302(a) allocation for the House 
Appropriations Committee that was consistent with increasing 
the statutory spending limits from those levels by $108.5 
billion in budget authority and $88.1 billion in outlays.

Purpose

    The discretionary spending limits need to be increased to 
accommodate the budget priorities of both the Administration 
and Congress. The President's budget submission for fiscal year 
2002 recommended increasing the spending limits to $660.6 
billion in budget authority and $691.7 billion in outlays, 
using the Administration's estimates. Similarly, the fiscal 
year 2002 Congressional Budget Resolution (H. Con. Res. 83) 
established an overall discretionary allocation that implicitly 
assumed the statutory spending limits would be raised to $661.3 
billion in budget authority and $682.8 billion in outlays, and 
additional funding for defense and other appropriate 
legislation.
    A more immediate reason for increasing the spending limits 
is to avoid a sequester. According to the Office of Management 
and Budget, if the spending limits for fiscal year 2002 are not 
increased, appropriations at the level originally requested by 
the Administration will exceed the spending limit for budget 
authority and trigger a sequester of about $111.3 billion in 
budget authority. This would cause most discretionary programs 
to be reduced in excess of 15 percent.
    The spending limits must be raised to reflect the 
commitment of both the President and Congress to increase 
defense spending. In addition to accommodating a 3 percent 
increase in discretionary spending, H. Con. Res. 83 
specifically authorized the Budget Committee Chairmen of the 
House and Senate to increase the appropriate levels in the 
budget resolution in response to the President's National 
Defense Review. The Administration submitted an amendment to 
its budget submission for fiscal year 2002 requesting an 
additional $18.4 billion in budget authority and $11.4 billion 
in outlays above what was assumed in the budget resolution. 
Assuming the spending limits were increased to the levels 
assumed in the budget resolution as of May, a further increase 
would be necessary to accommodate the additional defense 
spending without triggering a government-wide sequester.
    A further reason for raising the spending limits is to 
accommodate a recent bipartisan agreement between Congress and 
the President. In the wake of the recent terrorist attack and 
in an effort to forge common 302(b) allocations, the 
Appropriations Committees and OMB entered into negotiations on 
a revised level of discretionary spending acceptable to OMB and 
the leadership in the House and the Senate. After several weeks 
of negotiations, the parties agreed to increase the 
discretionary budget authority above the levels established 
pursuant to H. Con. Res. 83--about $18.4 billion of the total 
was earmarked for defense, and slightly more than $3.4 billion 
for education and other initiatives. It was understood that 
another $2.2 billion in non-terrorist-related spending would be 
designated as an emergency.
    It is also necessary to increase the statutory limits in 
order to permit Senate consideration of the appropriation 
bills. Under the Congressional Budget Act, an appropriation 
bill that exceeds the statutory spending limits is subject to a 
point of order in the Senate. For that reason, the levels 
established in H. Con. Res. 83 (as opposed to the levels 
printed in the accompanying Joint Statement of Managers) 
complied with the statutory spending limits. H. Con. Res. 83, 
however, directed the Senate Budget Committee Chairman to 
increase the appropriate levels in the budget resolution to the 
levels agreed to in the Joint Statement upon the enactment of 
legislation increasing the spending limits. Accordingly, it is 
necessary to eliminate any points of order that could impede 
Senate consideration of appropriation bills.
    Finally, by bringing the spending limits into alignment 
with the appropriation bills, the committee hopes to restore 
the spending restraints imposed by the statutory spending 
limits. But as noted above, circumstances have changed 
drastically since then--especially with the events of September 
11. Rigidly adhering to spending levels that do not accommodate 
clearly unforseen events would weaken the relevance of the 
spending limits themselves.

             Title II--Revising the FY 02 Budget Resolution

Background

    H. Con. Res. 83 assumed an overall discretionary spending 
level for fiscal year 2002 of $661.3 billion in budget 
authority and $682.8 billion in outlays. This represented an 
increase over the fiscal year 2001 level, which was also 
increased as part of H. Con. Res. 83, by $19.3 billion or 3 
percent and $35.7 billion in outlays or 5.5 percent.
    Under section 302(a) and (f) of the Congressional Budget 
Act, the Senate is prohibited from making an allocation that is 
higher than the current level of the discretionary spending 
limits.
    The Senate also may not consider any appropriation bill 
that exceeds these statutory levels. For this reason, the 
levels set forth in H. Con. Res. 83 are less than those 
envisioned by the conferees, which were printed in the Joint 
Statement of Managers.

Purpose

    A key reason for revising the budget resolution is to 
enable Congress to approve an increase in defense spending of 
$18.4 billion. Although H. Con. Res. 83 permitted the Budget 
Committee chairmen to make this adjustment, it is appropriate 
for the entire Congress to vote on a change of this magnitude. 
It also would remove procedural obstacles to the timely 
consideration of the appropriation bills. Under the terms of H. 
Con. Res. 83 and the Congressional Budget Act, the Senate is 
prohibited from considering appropriation bills at the total 
level envisioned in the Joint Statement of Managers (H. Con. 
Res. 83) until legislation is enacted to increase the 
discretionary spending limit.
    Modifying the budget resolution, and increasing the 
spending limit, will accommodate the recent agreement between 
the Appropriations Committees and OMB to increase discretionary 
spending by $5.6 billion beyond the levels envisioned by the 
budget resolution.
    More importantly, no one could have envisioned the 
unprecedented terrorist attack on the United States, and the 
magnitude of resources required to respond to those attacks. In 
the wake of these events, Congress has provided more than $56 
billion in emergency assistance. Obviously and necessarily, 
this assistance is beyond what was contemplated in May. 
According to most economists, the terrorist attacks further 
weakened an already weak economy. Now the Congress is 
considering stimulus-related legislation that may exceed $195 
billion over 5 years.
    The fiscal concerns of the Committee ought to be balanced 
with due attention to the state of the economy and the war on 
terrorism. By modifying the budget resolution to reflect the 
recent agreement on discretionary spending, it is hoped that 
this bill will eliminate one obstacle preventing the timely 
conclusion of the appropriations process. This, in turn, will 
allow Congress and the Administration to focus their efforts on 
waging a war against international terrorism.
    For procedural convenience, the Committee chose to report 
revisions to the spending limits under the BBA and the budget 
resolution in the same legislative vehicle. Necessarily, this 
procedure required including revisions to the budget resolution 
in a bill that may be signed by the President rather than a 
concurrent resolution that is not. In choosing to revise the 
budget resolution in this manner, the Committee on the Budget 
did not intend to endorse the formal involvement of the 
executive branch in the consideration of future budget 
resolutions.

                    Title III--Technical Corrections

Background

    Since the Balanced Budget and Deficit Control Act of 1985 
was enacted it has been amended a number of times. During the 
15 years since that time, a number of incorrect cross 
references and typographical errors have accumulated.

Purpose

    The purpose of this title is to make various technical 
corrections in the Balanced Budget and Deficit Control Act of 
1985, which sets forth the discretionary spending limits, the 
pay-as-you-go requirements, and sequestration-related 
procedures for their enforcement.

                          Legislative History

    The Interim Budget Control and Enforcement Act of 2001 
revises the fiscal year 2002 discretionary spending limits to 
reflect the recent agreement between the President and Congress 
and makes conforming changes in the budget resolution. This 
bill also makes various technical revisions to the Balanced 
Budget and Emergency Deficit Control Act of 1985.
    The discretionary spending limits were first established as 
part of a budget agreement between Congress and the President 
and were included in the Budget Enforcement Act of 1990 (Public 
Law 101-508). These discretionary spending limits were revised 
and extended in 1993 as part of the Omnibus Budget 
Reconciliation Act (Public Law 103-66). The levels were 
extended by this act through fiscal year 1998. The 
discretionary spending limits were revised for fiscal year 1998 
and extended for fiscal years 1999 through 2002 by the Balanced 
Budget Act of 1997 (Public Law 105-33).
    Since the overall limits on discretionary spending were 
established in 1990, separate spending limits have been adopted 
for certain classes of discretionary programs. A separate limit 
for programs for the Violent Crime Reduction Act, originally 
put in place as part of the Violent Crime Reduction Act of 1994 
(Public Law 103-322), lapsed after fiscal year 2000 and 
programs formerly subject to that limit are now under the 
general purpose discretionary limit. Included within the 1998 
highway authorization bill (Transportation Equity Act for the 
21st Century or TEA 21, Public Law 105-178) were separate 
categories for highway and mass transit spending for fiscal 
years 1999 through 2003. In addition, the Department of the 
Interior and Related Agencies Appropriations Act of 2001 
(Public Law 106-291) created a new spending limit specifically 
for a conservation category of discretionary appropriations. 
While the overall discretionary spending limits lapse after 
fiscal year 2002, the conservation category spending limits 
extend through fiscal year 2006.
    On 29 November 1999, as part of the Consolidated 
Appropriations Act for fiscal year 2000 (Public Law 106-113), 
Appropriations Conferees inserted language intended to avoid 
breaching the general purpose spending limits and thereby 
triggering a sequester. The language directed OMB to score the 
costs of certain mandatory provisions under PAYGO instead of 
against the spending limits.
    On 13 July 2000, the enforcement of the fiscal year 2000 
spending limits through sequestration was barred by a provision 
contained in the supplemental appropriations bill for fiscal 
year 2000 (Public Law 106-246). The supplemental appropriations 
bill for that year would have otherwise triggered a mid-session 
sequester.
    On 6 November 2000, the discretionary spending limits for 
fiscal year 2001 were increased in the omnibus appropriations 
act for fiscal year 2001 (Public Law 106-429). The adjustment 
averted a sequester that would otherwise have been triggered by 
the final appropriation bill of that year.
    On 21 December 2000, language that directed OMB to score 
the costs of certain mandatory provisions under PAYGO instead 
of against the spending limits was included in the Consolidated 
Appropriations Act for Fiscal Year 2001 (Public Law 106-554) to 
ensure that certain mandatory provisions that would otherwise 
have resulted in a breach of the spending limits and resulted 
in a sequester, be scored against PAYGO.
    On 21 March 2001, the House Budget Committee ordered 
reported H. Con. Res. 83, the Budget Resolution for Fiscal Year 
2002. On 23 March 2001, the House Budget Committee reported the 
resolution to the House (House Report 107-26). The Budget 
Committee report noted that discretionary spending in 2002 
``will be significantly higher than the current law spending 
limits.'' On 28 March 2001, the House of Representatives 
considered and agreed to the resolution. The Senate took up the 
resolution on 3 April 2001, and on 6 April 2001, agreed to the 
resolution with an amendment.
    On 9 April 2001, the President submitted his budget for 
fiscal year 2002. In his budget, the President proposed raising 
the discretionary spending limit for fiscal year 2002 to $660.6 
billion. The President also proposed to extend the spending 
limits through fiscal year 2005.
    On 8 May 2001, conferees filed the conference report on H. 
Con. Res. 83 with the House (House Report 107-60). On 9 May 
2001, the House agreed to the conference report and on 10 May 
2001, the Senate agreed to the conference report.
    H. Con. Res. 83, as agreed to in the conference report, 
established the overall level of discretionary budget authority 
at $661.3 billion. This discretionary spending level exceeded 
the discretionary spending limit under the Budget Enforcement 
Act for fiscal year 2002, which was $552.8 billion at the time.
    On 27 June 2001, the Committee on the Budget held a hearing 
on the Forthcoming Extension/Modification of the Budget 
Enforcement Act. At the hearing, the Director of the Office of 
Management and Budget, Mitchell E. Daniels, Jr., testified that 
he supported raising the 2002 discretionary spending limits to 
$679 billion--a level that according to Mr. Daniels reflected 
the President's full budget recommendation.
    On 2 October 2001, the Administration and congressional 
appropriators reached an agreement on the level of Federal 
discretionary spending for fiscal year 2002. This level has 
been reported to be $686 billion, which includes $2.2 billion 
of emergency spending, $1.8 billion of conservation funding, 
and $600 million of non-emergency required spending.

                      Section-by-Section Analysis


Section 1. Short title

    Section 1 gives the bill the following short title: the 
``Interim Budget Control and Enforcement Act of 2001.''

Section 2. Purpose

    Section 2 states that this act has the following purposes: 
to revise the discretionary spending limits for fiscal year 
2002 to reflect the recent agreement between the President and 
Congress; to revise the 302(a) allocation to the Appropriations 
Committee for fiscal year 2002; and to make various technical 
corrections in the Balanced Budget and Emergency Deficit 
Control Act of 1985, commonly known as the Deficit Control Act 
[DCA].

                                title i

    Title I amends the DCA, which contains the discretionary 
spending limits, pay-as-you-go requirements, and related 
enforcement procedures, to reflect an increase in the 
discretionary spending limits for fiscal year 2002.

Section 101. Amendments to section 251

    Subsection (a) amends section 251 of the Deficit Control 
Act of 1985 to increase the general purpose discretionary 
spending limits, as currently adjusted for fiscal year 2002. 
The new discretionary levels are set at $681.4 billion in new 
budget authority and $670.4 billion in outlays.
    The difference between the proposed spending limit on 
budget authority of $681.4 billion and the $686 billion that 
was cited in press accounts at the time of the agreement is due 
to conservation- related spending, anticipated emergencies, and 
other cap adjustments. The proposed cap on budget authority 
does not include $1.8 billion for conservation, $2.2 billion 
for non-terrorist-related domestic emergencies, and around $600 
million for Earned Income Tax Credit compliance, continuing 
disability reviews, and adoption incentive payments. Under 
current law, the proposed cap will be automatically increased 
by each of these amounts.
    While subsection (a) changes the level for the general 
purpose discretionary spending limit in fiscal year 2002, it 
makes no changes in the separate discretionary spending limits 
for highways, mass transit, and conservation. Nor does it 
extend any of the limits beyond their current expiration dates. 
Finally, the bill does not change the process under section 251 
of the Deficit Control Act whereby the discretionary spending 
limits are automatically increased by certain emergency 
designated appropriations and other specific classes of 
appropriations such as disability reviews under the 
Supplemental Security Income program, the Earned Income Tax 
Credit compliance initiative, and incentive payments for the 
adoption assistance program.
    Subsection (b) updates the ``General Statement of Budget 
Enforcement'' in section 251 of the DCA from that of enforcing 
H. Con. Res. 84 in the first session of the 105th Congress to 
enforcing H. Con. Res. 83 in the first session of the 107th 
Congress. This reflects the fact that, upon the enactment of 
this bill, the levels of the discretionary spending limits will 
approximate the 302(a) allocation to the Appropriations 
Committee, which were set pursuant to the budget resolution. 
Holding constant for scoring differences between the 
Congressional Budget Office and the Office of Management and 
Budget, any bill that breaches the 302(a) allocations and 
becomes law will trigger an automatic sequester since it will 
also breach the discretionary spending limits.

Section 102. Presidential report

    Section 102 directs the President to include with his 
budget submission for fiscal year 2003, which must be submitted 
by the first Monday in February, a report identifying all 
expenditures related to the recent terrorist attacks on the 
United States on September 11, 2002 that are ongoing or 
recurring in nature.
    This report is intended to assist Congress as it develops 
its priorities in the context of the budget resolution to 
determine which budget authority provided in the wake of the 
events of September 11 should be incorporated into the budget 
resolution and any future discretionary spending limits for 
fiscal year 2003 and subsequent years. While the Committee 
anticipates that certain expenditures provided in the wake of 
the recent terrorist attacks will require further funds in 
subsequent years, it recognizes that most expenditures related 
to the cleanup and rebuilding are essentially one-time events.

                                title ii

    Title II revises certain levels and amounts that were 
initially established by the Concurrent Resolution on the 
Budget for fiscal year 2002 (H. Con. Res. 83) to levels 
equivalent to the revised levels for discretionary spending 
limits established under Title I.

Section 201. Amendments to FY 2002 budget resolution

    Section 201 increases the recommended levels of new budget 
authority for fiscal year 2002, which were initially 
established by section 101(1)(B) of H. Con. Res. 83. The new 
level is set at $1.65 trillion. It also increases the 
recommended outlay levels for each of fiscal years 2002 through 
2005 to reflect the anticipated spend out rate of the 
additional budget authority. The adjustment is roughly 
equivalent to the revised levels of the discretionary spending 
limits under Title I except that it reflects CBO scoring of the 
outlays. Under Section 311(a) of the Congressional Budget Act, 
any bill that exceeds the levels set in the Budget Resolution 
is subject to a point of order that precludes further 
consideration of the measure in both the House of 
Representatives and the Senate.
    Section 201 also makes corresponding and conforming changes 
in H. Con. Res. 83 by setting forth revised levels of the 
surplus, public debt, debt held by the public, and interest for 
fiscal year 2002.
    In order to ensure that the budgetary totals equal the sum 
of the functional categories, paragraph (2) makes an equivalent 
change in allowances (function 920) for fiscal year 2002. No 
effort was made to distribute this increase among the budget 
functions because these changes have already been made through 
the appropriations process.
    The Committee believes that it is fully appropriate to 
revise the budget resolution. Revisions in the budget 
resolution are not only sanctioned under existing law but were 
once routine. Under Section 304 of the Budget Act, Congress is 
free to revise at any time the budget resolution. Until 1986, 
Congress routinely adopted a second budget resolution in the 
fall of each year. Even in the conference report adopted in 
May, Congress revised the levels for fiscal year 2001 that were 
established in the budget resolution for the preceding year.

Section 202. Additional requirements respecting fiscal year 2002 budget 
        resolution

    Section 202(a) directs the chairmen of the Budget 
Committees of each respective House to make corresponding and 
conforming changes in H. Con. Res. 83 by setting forth new 
levels of total budget authority, total budget outlays, the 
surplus or deficit, public debt, debt held by the public, net 
interest (function 900), and allowances (function 920) for 
fiscal years 2003 through 2011 as appropriate. It clarifies 
that these levels shall be treated as if they were adopted by 
Congress. Under the Congressional Budget Act, however, these 
levels are not enforced by points of order.
    Subsection (b)(1) expresses the intent of the bill that the 
allocations set forth pursuant to Section 302(a) of the 
Congressional Budget Act for fiscal year 2002 will be increased 
to $683.2 billion in new budget authority and $702.8 billion in 
outlays.
    Subsection (b)(2) directs each such chairman to make a 
corresponding change in the 302(a) allocation that was issued 
to the Committee on Appropriations pursuant to H. Con. Res. 83. 
As required under Section 302(b) of the Congressional Budget 
Act, the Appropriations Committee will be required to subdivide 
this revised allocation among each of its 13 subcommittees. It 
will be these revised levels that will be subsequently enforced 
through Section 302(f) of the Congressional Budget Act, which 
limits the total level of appropriations provided by the bill 
to each subcommittee's 302(b) allocation.
    Subsection (c) stipulates that these changes must be 
submitted for printing in the Congressional Record. This is 
consistent with the current practice of submitting all spending 
level adjustments into the Record.
    Subsection (d) repeals a section of H. Con. Res. 83 that 
directs the presiding officer of the House to use the levels 
set forth in the spending table included in the joint statement 
of managers accompanying the conference report instead of the 
levels in the actual budget resolution to enforce budget-
related points of order.

                               title iii

Section 301. Technical corrections to Balanced Budget Act

    Section 301 makes various technical corrections in the 
Balanced Budget and Deficit Control Act of 1985, which sets 
forth the discretionary spending limits, the pay-as-you-go 
requirements, and sequestration-related procedures for their 
enforcement. These changes are not substantive and, in many 
cases, reflect the accumulation of 15 years worth of incorrect 
cross-references and typographical errors.

                       Explanation of Amendments

    The bill was reported without amendment.

              Application of Law to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act (Public Law 
104-1).

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates. This bill has the following purposes: to revise the 
discretionary spending limits for fiscal year 2002 to reflect 
the recent agreement between the President and Congress; to 
revise the 302(a) allocation to the Appropriations Committee 
for fiscal year 2002; and to make various technical corrections 
in the DCA. As such, the bill does not contain any unfunded 
mandates.

                             Rollcall Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the committee report to include for 
each record vote on a motion to report the measure or matter 
and on any amendments offered to the measure or matter the 
total number of votes for and against and the names of the 
Members voting for and against. No recorded votes were taken on 
H.R. 3084. The bill was ordered reported by voice vote.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the body of this report.

                           Committee Estimate

    Clauses 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 3084. However, clause 3(d)(3)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act.

   New Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the House of Representatives and Section 308(a) of the 
Congressional Budget Act of 1974, and with respect to 
requirements of 3(c)(3) of rule XIII of the House of 
Representatives and Section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 3084 from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 16, 2001.
Hon. Jim Nussle,
Chairman, Committee on the Budget,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3084, the Interim 
Budget Control and Enforcement Act of 2001.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sandy Davis.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 3084--Interim Budget Control and Enforcement Act of 2001

    H.R. 3084 would increase the limits on discretionary 
spending for 2002 in the Balanced Budget and Emergency Deficit 
Control Act of 1985 (the Deficit Control Act) and make 
conforming changes in the recommended levels of discretionary 
spending for that year in the Congressional budget resolution 
to reflect the recent bipartisan agreement on appropriations 
reached between the President and Congressional leaders. By 
itself, the bill would not directly affect spending or revenue 
levels; it would simply modify certain budget control 
procedures. Thus, pay-as-you-go procedures would not apply. 
Although the bill would make possible higher discretionary 
spending than current law allows, that increase in spending 
would be attributable to the appropriation acts that provide 
the spending authority. The bill contains no intergovernmental 
or private-sector mandates as defined in the Unfunded Mandates 
Reform Act and would not affect the budgets of state, local, or 
tribal governments.
    Discretionary spending is provided in annual appropriation 
acts under the jurisdiction of the House and Senate 
Appropriations Committees. Those laws generally are controlled 
by two parallel sets of enforcement procedures. First, the 
Deficit Control Act, as amended, sets annual limits on total 
budget authority and outlays for discretionary spending. The 
discretionary spending limits are enforced automatically by 
across-the-board cuts in spending (known as sequestration) that 
are implemented, if necessary, after the end of the 
Congressional session. The current limits expire after 2002. 
Second, the Congressional Budget Act of 1974 provides for 
allocations of total discretionary spending to the House and 
Senate Appropriations Committees at levels recommended in the 
most recent concurrent resolution on the budget. Those 
allocations generally are enforced by points of order, or 
procedural objections, that can be raised by Members of 
Congress when the appropriation bills are considered by the 
House or Senate if the bills are inconsistent with the 
applicable allocations.
    The Balanced Budget Act of 1997 amended the Deficit Control 
Act to establish the discretionary spending limits for fiscal 
years 1998 through 2002. The statutory limit for new 
discretionary budget authority for 2002, as currently adjusted, 
is about $550 billion; the current limit for discretionary 
outlays is $572 billion. However, the President's 2002 budget 
and the 2002 Congressional budget resolution recommended total 
new discretionary budget authority of about $661 billion for 
the year. Both budget plans acknowledged that the statutory 
limits for discretionary budget authority and outlays would 
have to be increased. On October 2, 2001, the President and 
Congressional leaders announced a bipartisan agreement to raise 
the recommended level of total discretionary budget authority 
for 2002 to $686 billion, an amount that incorporates 
additional funds for defense, education, and contingent 
emergencies that were not included in their original budget 
plans for the year.
    The main purpose of H.R. 3084 is no modify the 
discretionary spending limits and the Congressional budget 
resolution to reflect the bipartisan agreement on 
appropriations for 2002. Under H.R. 3084, the new limits for 
the overall discretionary category would be $681.4 billion in 
budget authority and $670.4 billion in outlays. (For technical 
reasons, approximately $4.6 billion in discretionary budget 
authority covered by the budget agreement is excluded from the 
proposed new limits. That amount includes up to $2.2 billion in 
appropriations for future emergencies and $0.6 billion for 
adoption incentive payments, continuing disability reviews, and 
an earned income tax compliance initiative; the Deficit Control 
Act requires the Office of Management and Budget to adjust the 
limits automatically for those appropriations after they have 
been enacted into law. Another $1.8 billion covers 
appropriations for land conservation programs that are covered 
by separate limits specified in the Deficit Control Act.)
    The bill would also change the aggregate levels in the 2002 
budget resolution and certain functional categories in the 
resolution by amounts that are consistent with the recommended 
increases in the discretionary spending limits. The Chairmen of 
the House and Senate Budget Committees would be authorized to 
increase the allocations of discretionary spending of the House 
and Senate Appropriations Committees consistent with those new 
levels. The annual appropriation acts, which are within the 
jurisdiction of the Appropriations Committees, will provide the 
actual new discretionary budget authority for 2002.
    In addition, H.R. 3084 would require the President, when he 
submits his budget for 2003, to submit a report to the Congress 
that identifies spending designated as an emergency under the 
Deficit Control Act that is related to the terrorist attacks of 
September 11, 2001, and is of an ongoing or recurring nature. 
It also would make a series of technical and conforming changes 
in the Deficit Control Act.
    The CBO staff contact for this estimate is Sandy Davis. 
This estimate was approved by Robert A. Sunshine, Assistant 
Director for Budget Analysis.

         Statement of General Performance Goals and Objectives

    In accordance with clause (3)(c)(4) of House Rule XIII, the 
goals of H.R. 3084 are to revise the discretionary spending 
limits for fiscal year 2002 to reflect the recent agreement 
between the President and Congress; to revise the 302(a) 
allocation to the Appropriations Committee for fiscal year 
2002; and to make various technical corrections in the DCA.
    The Committee expects the Office of Management and Budget 
to comply with H.R. 3084 and implement the changes to the law 
in accordance with these stated goals.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
constitutional authority for this legislation is provided in 
article I, section 8, clause 18, which grants Congress the 
general legislative power to make all laws necessary and proper 
for carrying into execution the enumerated powers of Congress.
    In addition, the Committee finds that the constitutional 
authority for Title II of this legislation is also provided in 
article I, section 5, clause 3, which provides that each House 
may determine the rules of its proceedings.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows. In addition, 
changes to the concurrent resolution on the budget for fiscal 
year 2002 (H. Con. Res. 83, 107th Congress, 1st session) are 
also shown. (New matter is printed in italic and existing law 
in which no change is proposed is shown in roman):

BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF 1985

           *       *       *       *       *       *       *



  PART C--EMERGENCY POWERS TO ELIMINATE DEFICITS IN EXCESS OF MAXIMUM 
                             DEFICIT AMOUNT


SEC. 250. TABLE OF CONTENTS; STATEMENT OF BUDGET ENFORCEMENT THROUGH 
                    SEQUESTRATION; DEFINITIONS.

  (a) Table of Contents.--

Sec. 250. Table of contents; budget enforcement statement; definitions.
Sec. 251. Enforcing discretionary spending limits.
     * * * * * * *
Sec. 256.  [GENERAL AND SPECIAL SEQUESTRATION RULES] General and special 
          sequestration rules.
     * * * * * * *
  [(b) General Statement of Budget Enforcement Through 
Sequestration.--This part provides for budget enforcement as 
called for in House Concurrent Resolution 84 (105th Congress, 
1st session).]
  (b) General Statement of Budget Enforcement Through 
Sequestration.--This part provides for budget enforcement as 
called for in House Concurrent Resolution 83 (107th Congress, 
1st session).
  (c) Definitions.--
  As used in this part:
          (1) * * *

           *       *       *       *       *       *       *

          (4)(A) * * *

           *       *       *       *       *       *       *

                  (F) The term ``Federal and State Land and 
                Water Conservation Fund sub-category'' means 
                discretionary appropriations for activities in 
                the accounts described in subparagraph (E)(i)-
                (E)(iv) or portions thereof.
                  (G) The term ``State and Other Conservation 
                sub-category'' means discretionary 
                appropriations for activities in the accounts 
                described in subparagraph (E)(v)-(E)(ix), with 
                the exception of Urban and Community Forestry 
                as described in subparagraph (E)(ix), or 
                portions thereof.
                  (H) The term ``Urban and Historic 
                Preservation sub-category'' means discretionary 
                appropriations for activities in the accounts 
                described in subparagraph (E)(ix)-(E)(xii), 
                with the exception of Forest Legacy and Smart 
                Growth Partnerships as described in 
                subparagraph (E)(ix), or portions thereof.
                  (I) The term ``Payments in Lieu of Taxes sub-
                category'' means discretionary appropriations 
                for activities in the account described in 
                subparagraph (E)(xiii) or portions thereof.
                  (J) The term ``Federal Deferred Maintenance 
                sub-category'' means discretionary 
                appropriations for activities in the account 
                described in subparagraph (E)(xiv) or portions 
                thereof.
                  (K) The term ``Coastal Assistance sub-
                category'' means discretionary appropriations 
                for activities in the accounts described in 
                subparagraph (E)(xv)-(E)(xvii) or portions 
                thereof.

           *       *       *       *       *       *       *

          (18) The term ``deposit insurance'' refers to the 
        expenses of the Federal deposit insurance agencies, and 
        other Federal agencies supervising insured depository 
        institutions, resulting from full funding of, and 
        continuation of, the deposit insurance guarantee 
        commitment in effect under current estimates.

           *       *       *       *       *       *       *


SEC. 251. ENFORCING DISCRETIONARY SPENDING LIMITS.

  (a) * * *
  (b) Adjustments to Discretionary Spending Limits.--
          (1) Preview Report.--
                  (A) Concepts and definitions.--When the 
                President submits the budget under section 1105 
                of title 31, United States Code, OMB shall 
                calculate and the budget shall include 
                adjustments to discretionary spending limits 
                (and those limits as cumulatively adjusted) for 
                the budget year and each outyear to reflect 
                changes in concepts and definitions. Such 
                changes shall equal the baseline levels of new 
                budget authority and outlays using up-to-date 
                concepts and definitions minus those levels 
                using the concepts and definitions in effect 
                before such changes. Such changes may only be 
                made after consultation with the [committees] 
                Committees on Appropriations and the Budget of 
                the House of Representatives and the Senate and 
                that consultation shall include written 
                communication to such committees that affords 
                such committees the opportunity to comment 
                before official action is taken with respect to 
                such changes.

           *       *       *       *       *       *       *

          (C)(i) In addition to the adjustment required by 
        subparagraph (B), when the President submits the budget 
        under section 1105 of title 31, United States Code, for 
        fiscal [years] year 2000, 2001, 2002, or 2003, OMB 
        shall calculate and the budget shall include for the 
        budget year and each outyear an adjustment to the 
        limits on outlays for the highway category and the mass 
        transit category equal to--
                  (I) * * *

           *       *       *       *       *       *       *

          (D)(i) * * *
          (ii) When the President submits the budget under 
        section 1105 of title 31, United States Code, for 
        fiscal [years] year 2000, 2001, 2002, or 2003, OMB 
        shall adjust the estimates made in clause (i) by the 
        adjustments by subparagraphs (B) and (C).

           *       *       *       *       *       *       *

  (c) Discretionary Spending Limit.--As used in this part, the 
term ``discretionary spending limit'' means--
          (1) * * *

           *       *       *       *       *       *       *

          (5) with respect to fiscal year 2001--
                  (A) for the discretionary category: 
                $637,000,000,000 in new budget authority and 
                $612,695,000,000 in outlays;
                  (B) for the highway category: $26,204,000,000 
                in outlays; and
                  (C) for the mass transit category: 
                $5,190,000,000 in outlays;
          (6) with respect to fiscal year 2002--
                  [(A) for the discretionary category: 
                $551,074,000,000 in new budget authority and 
                $560,799,000,000 in outlays;]
                  (A) for the discretionary category: 
                $681,441,000,000 in new budget authority and 
                $670,447,000,000 in outlays;

           *       *       *       *       *       *       *


SEC. 252. ENFORCING PAY-AS-YOU-GO.

  (a) * * *
  (b) Sequestration.--
          (1) * * *
          (2) Calculation of deficit increase.--OMB shall 
        calculate the amount of deficit increase or decrease by 
        adding--
                  (A) * * *
                  (B) the estimated amount of savings in direct 
                spending programs applicable to the budget year 
                resulting from the prior year's sequestration 
                under this section or section 253, if any, as 
                published in OMB's final sequestration report 
                for that prior year; and

           *       *       *       *       *       *       *

  (c) Eliminating a Deficit Increase.--(1) The amount required 
to be sequestered in a fiscal year under subsection (b) shall 
be obtained from non-exempt direct spending accounts from 
actions taken in the following order:
          (A) * * *

           *       *       *       *       *       *       *

          (C) Third.--(i) If additional reductions in direct 
        spending accounts are required to be made, each 
        remaining non-exempt direct spending account shall be 
        reduced by the uniform percentage necessary to make the 
        reductions in direct spending required by [paragraph 
        (1)] subsection (b); except that the medicare programs 
        specified in section 256(d) shall not be reduced by 
        more than 4 percent and the uniform percentage 
        applicable to all other direct spending programs under 
        this paragraph shall be increased (if necessary) to a 
        level sufficient to achieve the required reduction in 
        direct spending.

           *       *       *       *       *       *       *


SEC. 254. REPORTS AND ORDERS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Sequestration Preview Reports.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Pay-as-you-go sequestration reports.--The preview 
        reports shall set forth, for the current year and the 
        budget year, estimates for each of the following:
                  [(A) The amount of net deficit increase or 
                decrease, if any, calculated under subsection 
                252(b).]
                  (A) The amount of the sequestration, if any, 
                calculated under section 252(b).

           *       *       *       *       *       *       *

  (f) Final Sequestration Reports.--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Explanation of differences.--The OMB report shall 
        explain any differences between OMB and CBO estimates 
        of the amount of any net deficit change calculated 
        under [subsection] section 252(b), any excess deficit, 
        any breach, and any required sequestration percentage. 
        The OMB report shall also explain differences in the 
        amount of [sequesterable] sequestrable resources for 
        any budget account to be reduced if such difference is 
        greater than $5,000,000.

           *       *       *       *       *       *       *


SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES.

  (a) * * *

           *       *       *       *       *       *       *

  (g) Other Programs and Activities.--
          (1)(A) * * *
          (B) The following Federal retirement and disability 
        accounts and activities shall be exempt from reduction 
        under any order issued under this part:
                  Black Lung Disability Trust Fund (20-8144-0-
                7-601);

           *       *       *       *       *       *       *

                  Railroad supplemental annuity pension fund 
                (60-8012-0-7-602);

           *       *       *       *       *       *       *

          (2) Prior legal obligations of the Government in the 
        following budget accounts and activities shall be 
        exempt from any order issued under this part:
                  Biomass energy development (20-0114-0-1-271);

           *       *       *       *       *       *       *

                  Rail service assistance (69-0122-0-1-401); 
                and

           *       *       *       *       *       *       *

  (h) Low-Income Programs.--The following programs shall be 
exempt from reduction under any order issued under this part:
          Block grants to States for temporary assistance for 
        needy families;
          Child nutrition programs (with the exception of 
        special milk programs) (12-3539-0-1-605);
          Temporary assistance for needy families (75-1552-0-1-
        609);
          Contingency fund (75-1522-0-1-609);
          Child care entitlement to States (75-1550-0-1-609);
          Commodity supplemental food program (12-3512-0-1-
        605);
          Food stamp programs (12-3505-0-1-605 and 12-3550-0-1-
        605);
          Grants to States for Medicaid (75-0512-0-1-55l);
          Supplemental Security Income Program (75-0406-0-1-
        609); [and]
          Special supplemental nutrition program for women, 
        infants, and children (WIC) (12-3510-0-1-605); and
          Family support payments to States 
        (75-1501-0-1-609)[;] .

           *       *       *       *       *       *       *


SEC. 256. GENERAL AND SPECIAL SEQUESTRATION RULES.

  (a) * * *

           *       *       *       *       *       *       *

  (k) Effects of Sequestration.--The effects of sequestration 
shall be as follows:
          (1) Budgetary resources sequestered from any account 
        shall be permanently cancelled, except as provided in 
        paragraph [(5)] (6).

           *       *       *       *       *       *       *


SEC. 257. THE BASELINE.

  (a) * * *
  (b) Direct Spending and Receipts.--For the budget year and 
each outyear, the baseline shall be calculated using the 
following assumptions:
          (1) * * *
          (2) Exceptions.--(A)(i) No program established by a 
        law enacted on or before the date of enactment of the 
        Balanced Budget Act of 1997 with estimated current year 
        outlays greater than $50,000,000 shall be assumed to 
        expire in the budget year or the outyears. The scoring 
        of new programs with estimated outlays greater than 
        $50,000,000 a year shall be based on scoring by the 
        Committees on Budget or OMB, as applicable. OMB, CBO, 
        and the Budget Committees shall consult on the scoring 
        of such programs where there are [differenes] 
        differences between CBO and OMB.

           *       *       *       *       *       *       *


SEC. 258. SUSPENSION IN THE EVENT OF WAR OR LOW GROWTH.

  (a) Procedures in the Event of a Low Growth Report.--
          (1) Trigger.--Whenever CBO issues a low-growth report 
        under section [254(j)] 254(i), the Majority Leader of 
        the House of Representatives may, and the Majority 
        Leader of the Senate shall, introduce a joint 
        resolution (in the form set forth in paragraph (2)) 
        declaring that the conditions specified in section 
        [254(j)] 254(i) are met and suspending the relevant 
        provisions of this title, titles III and VI of the 
        Congressional Budget Act of 1974, and section 1103 of 
        title 31, United States Code.
          (2) Form of joint resolution.--
                  (A) The matter after the resolving clause in 
                any joint resolution introduced pursuant to 
                paragraph (1) shall be as follows: ``That the 
                Congress declares that the conditions specified 
                in section [254(j)] 254(i) of the Balanced 
                Budget and Emergency Deficit Control Act of 
                1985 are met, and the implementation of the 
                Congressional Budget and Impoundment Control 
                Act of 1974, chapter 11 of title 31, United 
                States Code, and part C of the Balanced Budget 
                and Emergency Deficit Control Act of 1985 are 
                modified as described in section 258(b) of the 
                Balanced Budget and Emergency Deficit Control 
                Act of 1985.''.

           *       *       *       *       *       *       *


SEC. 258B. FLEXIBILITY AMONG DEFENSE PROGRAMS, PROJECTS, AND 
                    ACTIVITIES.

  (a) * * *

           *       *       *       *       *       *       *

  (c) The President may not exercise the authority provided by 
this [paragraph] section for a fiscal year unless--
          (1) * * *

           *       *       *       *       *       *       *

          (3) a joint resolution affirming or modifying the 
        changes proposed by the President pursuant to this 
        [paragraph] section becomes law.
  (d) Within 5 calendar days of session after the President 
submits a report to Congress under subsection (c)(1) for a 
fiscal year, the majority leader of each House of Congress 
shall (by request) introduce a joint resolution which contains 
provisions affirming the changes proposed by the President 
pursuant to this [paragraph] section.

           *       *       *       *       *       *       *

                              ----------                              


             HOUSE CONCURRENT RESOLUTION 83, 107TH CONGRESS

       (Concurrent Resolution on the Budget for Fiscal Year 2002)

                TITLE I--RECOMMENDED LEVELS AND AMOUNTS

SEC. 101. RECOMMENDED LEVELS AND AMOUNTS.

  The following budgetary levels are appropriate for the fiscal 
years 2001 through 2011:
          (1) * * *
          (2) New budget authority.--For purposes of the 
        enforcement of this resolution, the appropriate levels 
        of total new budget authority are as follows:
                  Fiscal year 2001: $1,653,681,000,000.
                  [Fiscal year 2002: $1,510,948,000,000.]
                  Fiscal year 2002: $1,648,921,000,000.

           *       *       *       *       *       *       *

          (3) Budget outlays.--For purposes of the enforcement 
        of this resolution, the appropriate levels of total 
        budget outlays are as follows:
                  Fiscal year 2001: $1,600,529,000,000.
                  [Fiscal year 2002: $1,476,841,000,000.]
                  Fiscal year 2002: $1,611,036,000,000.

           *       *       *       *       *       *       *

          (4) Surpluses.--For purposes of the enforcement of 
        this resolution, the amounts of the surpluses are as 
        follows:
                  Fiscal year 2001: $29,933,000,000.
                  [Fiscal year 2002: $161,361,000,000.]
                  Fiscal year 2002: $27,166,000,000.

           *       *       *       *       *       *       *

          (5) Public debt.--The appropriate levels of the 
        public debt are as follows:
                  Fiscal year 2001: $5,660,699,000,000.
                  [Fiscal year 2002: $5,603,812,000,000.]
                  Fiscal year 2002: $5,738,007,000,000.

           *       *       *       *       *       *       *

          (6) Debt held by the public.--The appropriate levels 
        of the debt held by the public are as follows:
                  Fiscal year 2001: $3,243,211,000,000.
                  [Fiscal year 2002: $2,924,234,000,000.]
                  Fiscal year 2002: $3,058,429,000,000.

           *       *       *       *       *       *       *


SEC. 102. MAJOR FUNCTIONAL CATEGORIES.

  Congress determines and declares that the appropriate levels 
of new budget authority, budget outlays, new direct loan 
obligations, and new primary loan guarantee commitments for 
fiscal years 2002 through 2011 for each major functional 
category are:
          (1) * * *

           *       *       *       *       *       *       *

          (18) Net Interest (900):
                  Fiscal year 2001:
                          (A) New budget authority, 
                        $275,467,000,000.
                          (B) Outlays, $275,467,000,000.
                  [Fiscal year 2002:
                          [(A) New budget authority, 
                        $259,162,000,000.
                          [(B) Outlays, $259,162,000,000.]
                  Fiscal Year 2002:
                          (A) New budget authority, 
                        $262,639,000,000.
                          (B) Outlays, $262,639,000,000.

           *       *       *       *       *       *       *

          (19) Allowances (920):
                  Fiscal year 2001:
                          (A) New budget authority, 
                        $84,528,000,000.
                          (B) Outlays, $84,697,000,000.
                  [Fiscal year 2002:
                          [(A) New budget authority, 
                        -$103,548,000,000.
                          [(B) Outlays, -$99,379,000,000.]
                  Fiscal Year 2002:
                          (A) New budget authority, 
                        $15,948,000,000.
                          (B) Outlays, $16,340,000,000.

           *       *       *       *       *       *       *


TITLE II--BUDGET ENFORCEMENT AND RULEMAKING

           *       *       *       *       *       *       *


                  Subtitle C--Miscellaneous Provisions

SEC. 221. APPLICATION AND EFFECT OF CHANGES IN ALLOCATIONS AND 
                    AGGREGATES.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Enforcement in the House.--
          (1) * * *
          [(2) Appropriate levels.--For purposes of enforcement 
        of the Congressional Budget Act of 1974 in the House of 
        Representatives, the appropriate levels of total new 
        budget authority and total budget outlays for fiscal 
        years 2002 through 2011 prescribed by this resolution 
        pursuant to section 301(a)(1) of such Act shall be 
        based upon the table entitled ``Conference Report 
        Fiscal Year 2002, Budget Resolution Total Spending and 
        Revenues'' in conjunction with the provisions of title 
        II of this resolution.]

           *       *       *       *       *       *       *


                                
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