[House Report 112-577]
[From the U.S. Government Publishing Office]


112th Congress  }                                           {    Report
  2d Session    }        HOUSE OF REPRESENTATIVES           {   112-577
_______________________________________________________________________
 
                     SEQUESTRATION TRANSPARENCY ACT 
                                OF 2012 

                               __________

                              R E P O R T

                                 of the

                        COMMITTEE ON THE BUDGET

                        HOUSE OF REPRESENTATIVES

                              to accompany

                               H.R. 5872

   A BILL TO REQUIRE THE PRESIDENT TO PROVIDE A REPORT DETAILING THE 
  SEQUESTER REQUIRED BY THE BUDGET CONTROL ACT OF 2011 ON JANUARY 2, 
  2013, HAVING CONSIDERED THE SAME, REPORTS FAVORABLY THEREON WITH AN 
       AMENDMENT AND RECOMMENDS THAT THE BILL AS AMENDED DO PASS

                             together with

                             MINORITY VIEWS

                 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


  July 2, 2012.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

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                        COMMITTEE ON THE BUDGET

                     PAUL RYAN, Wisconsin, Chairman
SCOTT GARRETT, New Jersey            CHRIS VAN HOLLEN, Maryland,
MICHAEL K. SIMPSON, Idaho              Ranking Minority Member
JOHN CAMPBELL, California            ALLYSON Y. SCHWARTZ, Pennsylvania
KEN CALVERT, California              MARCY KAPTUR, Ohio
W. TODD AKIN, Missouri               LLOYD DOGGETT, Texas
TOM COLE, Oklahoma                   EARL BLUMENAUER, Oregon
TOM PRICE, Georgia                   BETTY McCOLLUM, Minnesota
TOM McCLINTOCK, California           JOHN A. YARMUTH, Kentucky
JASON CHAFFETZ, Utah                 BILL PASCRELL, Jr., New Jersey
MARLIN A. STUTZMAN, Indiana          MICHAEL M. HONDA, California
JAMES LANKFORD, Oklahoma             TIM RYAN, Ohio
DIANE BLACK, Tennessee               DEBBIE WASSERMAN SCHULTZ, Florida
REID J. RIBBLE, Wisconsin            GWEN MOORE, Wisconsin
BILL FLORES, Texas                   KATHY CASTOR, Florida
MICK MULVANEY, South Carolina        HEATH SHULER, North Carolina
TIM HUELSKAMP, Kansas                KAREN BASS, California
TODD C. YOUNG, Indiana               SUZANNE BONAMICI, Oregon
JUSTIN AMASH, Michigan
TODD ROKITA, Indiana
FRANK C. GUINTA, New Hampshire
ROB WOODALL, Georgia

                           Professional Staff

                     Austin Smythe, Staff Director
                Thomas S. Kahn, Minority Staff Director




                            C O N T E N T S

                              ----------                              
                                                                   Page
Introduction.....................................................     3
Summary of Proposed Changes......................................     3
Legislative History..............................................     3
Section by Section...............................................     6
Hearings.........................................................     6
Votes of the Committee...........................................     7
Committee Oversight Findings.....................................     9
Performance Goals and Objectives.................................     9
Constitutional Authority Statement...............................    10
Committee Cost Estimate..........................................    10
Advisory Committee Statement.....................................    10
Applicability to the Legislative Branch..........................    11
Federal Mandates Statement.......................................    11
Advisory on Earmarks.............................................    11
Changes in Existing Law Made by the Bill, as Reported............    11
Minority Views...................................................    11


112th Congress  }                                             {  Report
  2d Session    }       HOUSE OF REPRESENTATIVES              { 112-577

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


                 SEQUESTRATION TRANSPARENCY ACT OF 2012
                                _______
                                

  July 2, 2012.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Ryan of Wisconsin, from the Committee on the Budget, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 5872]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Budget, to whom was referred the bill 
(H.R. 5872) to require the President to provide a report 
detailing the sequester required by the Budget Control Act of 
2011 on January 2, 2013, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Sequestration Transparency Act of 
2012''.

SEC. 2. SEQUESTER PREVIEW.

  (a) In General.--Not later than 30 days after the date of enactment 
of this Act, the President shall submit to Congress a detailed report 
on the sequestration required to be ordered by paragraphs (7)(A) and 
(8) of section 251A of the Balanced Budget and Emergency Deficit 
Control Act of 1985 (2 U.S.C. 901a) for fiscal year 2013 on January 2, 
2013.
  (b) Contents of Report.--The report required by subsection (a) shall 
include--
          (1) for discretionary appropriations--
                  (A) an estimate for each category of the 
                sequestration percentages and amounts necessary to 
                achieve the required reduction; and
                  (B)(i) for accounts that are funded pursuant to an 
                enacted regular appropriation bill for fiscal year 
                2013, an identification of each account to be 
                sequestered and estimates of the level of sequestrable 
                budgetary resources and resulting reductions at the 
                program, project, and activity level based upon the 
                enacted level of appropriations; and
                  (ii) for accounts that have not been funded pursuant 
                to an enacted regular appropriation bill for fiscal 
                year 2013, an identification of each account to be 
                sequestered and estimates pursuant to a continuing 
                resolution at a rate of operations as provided in the 
                applicable appropriation Act for fiscal year 2012 of 
                the level of sequestrable budgetary resources and 
                resulting reductions at the program, project, and 
                activity level;
          (2) for direct spending--
                  (A) an estimate for the defense and nondefense 
                functions based on current law of the sequestration 
                percentages and amount necessary to achieve the 
                required reduction; and
                  (B) an identification of the reductions required for 
                each nonexempt direct spending account at the program, 
                project, and activity level;
          (3) an identification of all exempt discretionary accounts 
        and of all exempt direct spending accounts; and
          (4) any other data and explanations that enhance public 
        understanding of the sequester and actions to be taken under 
        it.
  (c) Agency Assistance.--(1) Upon the request of the Director of the 
Office of Management and Budget (in assisting the President in the 
preparation of the report under subsection (a)), the head of each 
agency, after consultation with the chairs and ranking members of the 
Committees on Appropriations of the House of Representatives and the 
Senate, shall promptly provide to the Director information at the 
program, project, and activity level necessary for the Director to 
prepare the report under subsection (a).
  (2) As used in this subsection, the term ``agency'' means any 
executive agency as defined in section 105 of title 5, United States 
Code.
                              Introduction

                              ----------                              


    Under current law, across-the-board spending reductions are 
scheduled to occur on January 2, 2013. These reductions were 
enacted as part of the Budget Control Act of 2011 (BCA) and 
require the Office of Management and Budget (OMB) to make cuts 
in both defense spending and non-defense discretionary spending 
(approximately 10-percent and 8-percent respectively). 
Subsequent to fiscal year 2013, OMB will determine the exact 
amounts to come from discretionary and direct spending at the 
start of each calendar year through fiscal year 2021. To date 
OMB has refused to provide an official estimate of the spending 
reductions that would occur.

                      Summary of Proposed Changes

    This bill does not change current law sequester procedures 
but rather establishes a new requirement for OMB to provide 
Congress with a report related to the spending reductions 
scheduled to take place under the terms of the BCA. The report 
is to include information about programs, projects, and 
activities that would be reduced under current law to achieve 
specified levels in the BCA.

                          Legislative History

    Enacted on August 2, 2012, the BCA authorized an increase 
in the public debt limit. Added to this increase were statutory 
controls on spending, primarily in the form of establishing 
discretionary spending limits from fiscal years 2012 through 
2021 and making the Balanced Budget and Emergency Deficit 
Control Act of 1985 permanent law.
    These limits for fiscal years 2012 and 2013 were divided 
into security and nonsecurity categories, with the remaining 
years set as a single general discretionary category. These 
initial spending limits have been supplanted, though, since the 
BCA also included additional procedures that had the effect of 
altering the spending limits as set out in the statute. The 
Congressional Budget Office provided to the Congress a letter 
which indicated that the discretionary spending limits of the 
BCA decrease projected spending, including savings from debt 
service, by $917 billion over the 10 fiscal years covering 2012 
through 2012.
    The BCA also established a Joint Select Committee on 
Deficit Reduction (Joint Committee) which was tasked with 
reporting a bill to reduce the federal deficit by an additional 
$1.5 trillion over a 10-year period ending in fiscal year 2021. 
Legislation from the Joint Committee would have been considered 
under procedures limiting amendment and debate. Under the terms 
of the BCA, if legislation from the Joint Committee reducing 
the deficit by at least $1.2 trillion was not enacted, then a 
procedure would be set in motion to reduce spending by 
adjusting the discretionary spending limits downward and 
calculating an amount of reductions in direct spending 
necessary to achieve the $1.2 trillion (or a portion thereof 
were legislation from the Joint Committee achieving some 
deficit reduction was enacted).
    The Joint Committee was unable to report any proposal 
reducing the deficit by any amount and no legislation to that 
purpose was enacted by the required January 15, 2012 deadline. 
On this date, the automatic spending reduction process was 
triggered.
    The process that began on January 15, 2012 had the 
following ramifications: The statutory discretionary spending 
limits were replaced by new spending limits with new 
definitions of security and nonsecurity--now effectively 
defense and nondefense categories, though the previous terms 
are still used. These categories have replaced the 
discretionary general category through 2021.
    The process has two components: sequestration and 
discretionary spending limits reduction. In order to achieve 
the $1.2 trillion in deficit reduction, spending reductions 
will occur absent a change in law. OMB is charged with 
calculating the amount in spending reduction required to 
achieve the specified deficit reduction.
    Since the Joint Committee didn't achieve any deficit 
reduction, the calculation begins with a spending reduction of 
the full $1.2 trillion from fiscal year 2013 through fiscal 
year 2021. According to the BCA formula, that number is reduced 
by 18 percent to account for the reduced cost of debt service 
attributable to the lower level of spending. The remaining 
amount is divided by nine to account for each of fiscal years 
2013 through 2021. This amount is then divided by two so that 
it is evenly distributed between reductions in defense and 
nondefense accounts.
    The spending reductions are further divided between direct 
spending and discretionary spending within the defense and 
nondefense accounts. The implementation of the spending 
reductions is distinct from the calculation of the amounts. 
Once the amount is calculated, the BCA requires reductions 
through sequestration and reductions to the revised 
discretionary spending limits.
    The BCA establishes a unique process for FY 2013. Under the 
law, with the Joint Committee's failure to achieve at least 
$1.2 trillion in deficit reduction, OMB is required to make 
across-the-board reductions in non-exempt programs on January 
2, 2013. The Congressional Budget Office estimates that this 
sequester order will reduce spending by $110 billion.\1\ The 
sequestration order affects both discretionary and direct 
spending for fiscal year 2013. This means discretionary amounts 
appropriated for fiscal year 2013 will be sequestered by the 
calculated amount no matter how much is appropriated--it is not 
sequestered as a function of the discretionary spending limit 
for that fiscal year. In addition, for all fiscal years 2013 
through 2021, a direct spending sequester of nonexempt accounts 
will be ordered.
---------------------------------------------------------------------------
    \1\This estimate, part of CBO's January 2012 current law baseline, 
was published in Box 1-2 of the agency's report, ``The Budget and 
Economic Outlook: Fiscal Years 2012 To 2022.'' http://www.cbo.gov/
sites/default/files/cbofiles/attachments/01-31-2012_Outlook.pdf. This 
is, however, just an estimate. Ultimately, OMB will determine the exact 
amount of spending reduction from the sequester.
---------------------------------------------------------------------------
    The House has acted to replace the sequester scheduled for 
January 2, 2013 with discretionary and mandatory savings. On 
April 27, 2012 Chairman Ryan introduced H.R. 4966, the 
Sequester Replacement Act of 2012 (SRA). This bill, in addition 
to reconciliation legislation that the Budget Committee 
reported, replaces the sequester. The SRA lowers the fiscal 
year 2013 discretionary limit from $1.047 trillion down to 
$1.028 trillion, a $19 billion reduction. Compared to the 
sequester scheduled for January 2, 2013, which would lower 
discretionary spending to $949 billion for fiscal year 2013, 
the SRA would restore $78 billion in discretionary spending.
    On May 10, 2012 the House of Representatives passed H.R. 
5652, the Sequester Replacement Reconciliation Act of 2012 
(SRRA) with the SRA merged into its legislative text. In 
addition to provisions affecting the discretionary limit, the 
SRRA included mandatory savings of $315 billion over 10 years. 
The bill achieved those savings through reforms targeted at 
fraud, slowing the growth of federal spending, and eliminating 
duplicative spending. On a net basis, taking into account the 
change in the discretionary limits and the mandatory savings, 
the SRRA achieves four times the deficit reduction that would 
have been achieved from the first year of the discretionary 
sequester called for under the BCA.
    Despite the House's action to pass legislation to replace 
the sequester, the Senate has not taken up this legislation or 
other legislation to replace the sequester. The President has 
not submitted a specific proposal to replace the sequester. 
Absent action by Congress to replace this sequester, it will go 
into effect on January 2, 2013.
    The Committee has worked to assess the impact of the 
sequester and to review proposals to replace the sequester, 
holding a hearing on April 25, 2012. On April 26, 2012, the 
Chairman Ryan wrote the Acting Director of OMB requesting 
additional information on the sequester. OMB did not provide 
all the information requested. As a result, the Congress and 
the American people are confronted with a sequester that will 
make deep reductions in programs on January 2, 2013, without 
the information on how this sequester will affect individual 
programs.
    On May 31, 2012, House Republican Conference Chairman Jeb 
Hensarling introduced H.R. 5872, the Sequestration Transparency 
Act of 2012, which is designed to obtain information about how 
this sequester will be applied and its effect on both 
nondefense and defense programs. This legislation requires the 
President to provide a detailed report that includes the basic 
details of the sequester and the actions to be taken under it.
    This includes an estimate of the sequestration percentages 
and amounts necessary to achieve the required reduction for 
each spending category at the program, project and activity 
level. On June 27, 2012 the Committee on the Budget met to mark 
up H.R. 5872, to which Chairman Ryan offered a manager's 
amendment. Adopted by voice vote, the amendment changed the 
reporting date in the introduced bill and made conforming and 
technical changes. The legislation was reported favorably to 
the House by a roll call vote of 30-0.

                           Section by Section

                         SECTION 1. SHORT TITLE

    This section provides for the short title of the bill: 
``Sequester Transparency Act of 2012.''

                      SECTION 2. SEQUESTER PREVIEW

    This section requires the President to submit, not later 
than 30 days after the enactment to Congress, a detailed report 
on the sequestration of discretionary and direct spending as 
required by section 251A of the Balanced Budget and Emergency 
Deficit Control Act of 1985 (as amended by the Budget Control 
Act of 2011) for fiscal year 2013. This sequestration is 
scheduled to occur on January 2, 2013.
    The contents of this report must include, for discretionary 
spending, sequestration percentages and amounts necessary to 
achieve the required reduction of sequestrable budgetary 
resources and resulting reductions at the program, project, and 
activity level. Those percentages must be calculated relative 
to any enacted regular appropriation bills for fiscal year 
2013. For spending that has not been funded through regular 
appropriation bills but rather through a continuing resolution, 
the levels must be identified at a rate of operations as 
provided in appropriation Acts for fiscal year 2012.
    For direct spending, the report must include an estimate 
for functions based on current law of the sequestration 
percentages and amount necessary to achieve the required 
reduction; and an identification of the reductions required for 
each nonexempt direct spending account at the program, project, 
and activity level.
    The report must include an identification of all exempt 
discretionary accounts and direct spending accounts, and any 
other data and explanation enhancing the public's understanding 
of the sequester.
    In order for the Office of Management and Budget to prepare 
the report, the head of each executive agency, after 
consultation with the chairs and ranking members of the 
Committees on Appropriations of the House of Representatives 
and the Senate, must promptly provide to the Director 
information at the program, project, and activity level.

                                Hearings

    On April 25, 2012, the Committee on the Budget of the House 
held a hearing on the Budget Control Act of 2011 and how the 
application of an across-the-board cut in both direct spending 
and discretionary spending is to occur on January 2, 2013 by 
Presidential order.
    Those testifying were Daniel I. Werfel, Controller, Office 
of Federal Financial Management at the Office of Management and 
Budget, and Susan A. Poling, Deputy General Counsel at the 
Government Accountability Office. The Office of Management and 
Budget is the lead agency responsible for implementing any 
sequester. At the hearing, Mr. Werfel declined to provide 
specific information in response to Members' questions relating 
to what the administration's specific proposal is to avoid the 
sequester and how the administration would implement the 
sequester if legislation is not enacted by the deadline. Mr. 
Werfel indicated that it would be premature for OMB to provide 
information on programs whose sequester status is subject to 
the agency's review.
    The Chairman of the Committee on the Budget wrote to Acting 
OMB Director Zients on April 26, requesting additional 
information by May 4 on how the administration would execute 
the sequester required by the Budget Control Act. Acting 
Director Zients responded on May 25, 2012 with a letter calling 
on Congress to avoid the sequester and lacked specific detail 
on how the sequester would operate citing that ``seven months 
remain before the sequester would take effect.'' Acting 
Director Zients said that OMB did not maintain a list of which 
budget accounts are exempt, non-exempt, or subject to a special 
rule, but OMB would produce a list ``at the appropriate time.''

                         Votes of the Committee

    Clause 3(b) of House Rule XIII requires each committee 
report to accompany any bill or resolution of a public 
character to include the total number of votes cast for and 
against each roll call vote, on a motion to report and any 
amendments offered to the measure or matter, together with the 
names of those voting for and against.
    Listed below are the actions taken in the Committee on the 
Budget of the House of Representatives on the Sequester 
Replacement Act of 2012.
    On June 27, 2012, the committee met in open session, a 
quorum being present.
    Chairman Ryan asked unanimous consent to be authorized, 
consistent with clause 4 of House Rule XVI, to declare a recess 
at any time during the committee meeting.
    There was no objection to the unanimous consent request.
    Chairman Ryan asked unanimous consent to dispense with the 
first reading of the bill and the bill be considered as read 
and open to amendment at any point.
    There was no objection to the unanimous consent request.
    The committee adopted and ordered reported the 
Sequestration Transparency Act of 2012.
    The committee took the following votes:

                   AMENDMENT OFFERED BY CHAIRMAN RYAN

    1. This amendment proposed making a change to the reporting 
date in section 2(a) by striking ``July 9, 2012'' and inserting 
``Not later than 30 days after the date of enactment of this 
Act''. The amendment made some technical changes to the bill 
text and allowed OMB to request information from federal 
agencies related to the program, project, and activity level 
necessary for the report.
    The amendment was adopted by voice vote.

                  AMENDMENT OFFERED BY MR. VAN HOLLEN

    2. This amendment proposed to rescind the January 2, 2013 
sequester, offsetting the higher spending that would result 
through revenue increases and certain spending reductions. It 
would increase revenues by eliminating certain deductions for 
domestic oil and gas companies and raising taxes on individuals 
with annual income greater than $1,000,000. The amendment would 
reduce spending by eliminating direct payments to farmers; 
reforming the Federal Flood Insurance Program; and increasing 
retirement contributions paid by Members of Congress.
    The amendment was not agreed to by a roll call vote of 10 
ayes and 19 noes.

                           ROLLCALL VOTE NO. 1
------------------------------------------------------------------------
 Name &                      Answer    Name &                    Answer
 State     Aye       No     Present     State     Aye     No     Present
------------------------------------------------------------------------
RYAN                 X                VAN          X
 (WI)                                  HOLLEN
 (Chair                                (MD)
 man)                                  (Rankin
                                       g)
------------------------------------------------------------------------
GARRETT              X                SCHWARTZ     X
 (NJ)                                  (PA)
------------------------------------------------------------------------
SIMPSON                               KAPTUR
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT                               BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                                  YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                BASS         X
 (TX)                                  (CA)
------------------------------------------------------------------------
MULVANE              X                BONAMICI     X
 Y (SC)                                (OR)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    3. Mr. Garrett made a motion that the committee report the 
bill as amended and that the bill do pass.
    The motion was agreed to by a roll call vote of 30 ayes and 
0 noes.

                           ROLLCALL VOTE NO. 2
------------------------------------------------------------------------
 Name &                      Answer    Name &                    Answer
 State     Aye       No     Present     State     Aye     No     Present
------------------------------------------------------------------------
RYAN        X                         VAN          X
 (WI)                                  HOLLEN
 (Chair                                (MD)
 man)                                  (Rankin
                                       g)
------------------------------------------------------------------------
GARRETT     X                         SCHWARTZ     X
 (NJ)                                  (PA)
------------------------------------------------------------------------
SIMPSON                               KAPTUR
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL     X                         DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT                               BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN        X                         McCOLLUM
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                                  YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE       X                         PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT     X                         HONDA
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET     X                         RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA     X                         WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR     X                         MOORE
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK       X                         CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE      X                         SHULER
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES      X                         BASS         X
 (TX)                                  (CA)
------------------------------------------------------------------------
MULVANE     X                         BONAMICI     X
 Y (SC)                                (OR)
------------------------------------------------------------------------
HUELSKA     X                         ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG       X                         ........
 (IN)
------------------------------------------------------------------------
AMASH       X                         ........
 (MI)
------------------------------------------------------------------------
ROKITA      X                         ........
 (IN)
------------------------------------------------------------------------
GUINTA      X                         ........
 (NH)
------------------------------------------------------------------------
WOODALL     X
 (GA)
------------------------------------------------------------------------

    4. Mr. Garrett made a motion that, pursuant to clause 1 of 
rule XXII, the Chairman be authorized to offer such motions as 
may be necessary in the House to go to conference with the 
Senate, and staff be authorized to make any necessary technical 
and conforming changes to the bill.
    The motion was agreed to without objection.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee on the Budget's 
oversight findings and recommendations are reflected in the 
body of this report.

                    Performance Goals and Objectives

    With respect to the requirement of clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives, the 
performance goals and objectives of this legislation are to 
provide both the President and the Congress improved tools to 
reconsider spending.

                   Constitutional Authority Statement

    Pursuant to clause 7 of rule XII of the Rules of the House 
of Representatives, the committee finds the constitutional 
authority for this legislation in Article I, section 9, clause 
7.

                        Committee Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the committee report incorporates the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to sections 402 and 423 of the 
Congressional Budget Act of 1974.
                       Congressional Budget Office,
                                             U.S. Congress,
                                     Washington, DC, June 28, 2012.
Hon. Paul Ryan, Chairman,
Committee on the Budget, U.S. House of Representatives, Washington, DC 
        20515.
    Dear Mr. Chairman: The Congressional Budget Office has prepared the 
enclosed cost estimate for H.R. 5872, the Sequestration Transparency 
Act of 2012.
    If you wish further details on this estimate, we will be pleased to 
provide them. The CBO staff contact is Matthew Pickford, who can be 
reached at 226-2860.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.
Enclosure.
    cc: Hon. Chris Van Hollen, Ranking Member.
                                 ______
                                 
               congressional budget office cost estimate
                             june 28, 2012

           H.R. 5872: Sequestration Transparency Act of 2012

 As ordered reported by the House Committee on the Budget on June 27, 
                                  2012

    H.R. 5872 would require the President to provide a detailed report 
to the Congress within 30 days of enactment regarding detailed plans 
for implementing the across-the-board spending cuts for fiscal year 
2013 that are required under the Balanced Budget and Emergency Deficit 
Control Act. Under that act, the Office of Management and Budget (OMB) 
will implement governmentwide spending cuts in 2013. The bill also 
would require federal agencies to provide OMB any necessary 
information.
    CBO estimates that implementing the legislation would have no 
significant impact on the federal budget because it would not 
significantly increase OMB's workload under current law. Enacting the 
bill could affect direct spending by agencies not funded through annual 
appropriations, such as the Tennessee Valley Authority and the 
Bonneville Power Administration; therefore, pay-as-you-go procedures 
apply. CBO estimates, however, that any net increase in spending by 
those agencies would not be significant. Enacting H.R. 5872 would not 
affect revenues.
    H.R. 5872 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.
    The CBO staff contact for this estimate is Matthew Pickford. The 
estimate was approved by Theresa Gullo, Deputy Assistant Director for 
Budget Analysis.

                      Advisory Committee Statement

    No advisory committee within the meaning of section 5(b) of 
the Federal Advisory Committee Act was created by this 
legislation.

                Applicability 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).

                       Federal Mandates Statement

    The committee adopted the estimate of Federal mandates 
prepared by the Director of the Congressional Budget Office 
pursuant to section 423 of the Unfunded Mandates Reform Act 
(Public Law 104-4).

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 3521 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.

         Changes in Existing Law Made by the Bill, as Reported

    The Committee advises that existing law will not change as 
a result of the enactment of this legislation.

                             Minority Views

    There is general bipartisan agreement that the across-the-
board, meat-ax spending cuts that are scheduled to begin in 
January under sequestration will be bad for the country. Not 
only will the overall size and immediacy of the cuts put a drag 
on a fragile economy, but the arbitrary buzz-saw nature of the 
cuts would wreak havoc on defense and non-defense programs 
alike.
    Defense Secretary Panetta believes that both the magnitude 
and the arbitrary nature of the cuts will damage our national 
defense. What has received far less attention is the 
devastating impact the cuts will have on other vital services 
and investments. They will cut the nation's air traffic 
controllers and could put air safety at risk. The cuts could 
put public safety at risk by cutting the FBI, the COPS program, 
border security, and food safety efforts. The sequestration 
cuts will reduce our investment in education--in early 
education, elementary and secondary education, and special 
education for kids with disabilities.
    Sequestration will make these cuts in vital services, but 
also other cuts in vital investments for our economy in 
transportation, science, and research. Scientific research into 
treatments and cures to cancer, diabetes, Alzheimer's, 
Parkinson's, and other diseases that plague American families 
will be put on the chopping block along with our competitive 
edge in this important area of research. In fact, a coalition 
of universities and groups--including the American Cancer 
Society, the Biotechnologies Industry Association, PhRMA, and 
others--has concluded that the cuts to the National Institutes 
of Health will jeopardize America's competitive edge in medical 
research, and will result in the loss of more than 33,000 jobs 
in the biotech sector.
    Democrats on the Budget Committee voted this week in favor 
of getting more detailed information about the negative impacts 
of the cuts looming through sequestration next year. But we 
think the Congress should be focusing on avoiding the 
sequester, something even Republicans agree is an irresponsible 
approach to cutting the budget.
    That is why Democrats offered a substitute in mark-up that 
provides an alternative approach to reducing the deficit in a 
credible and stable way. Unfortunately, our substitute was 
defeated on a straight party-line vote with every Republican 
opposing it. Our substitute would eliminate the sequester in 
2013 entirely--both on defense and non-defense spending--and 
replace the savings with even greater deficit reduction 
accomplished through a balanced approach that both decreases 
spending and increases revenues without increasing the tax 
burden on middle-income Americans. The Democratic substitute 
makes targeted policy choices that promote economic growth 
while achieving deficit reduction, maintaining the Medicare 
guarantee for seniors, and protecting Social Security and the 
social safety net for vulnerable Americans. The substitute also 
lays out a framework for replacing the entire ten-year 
sequester with a fair, balanced, and bipartisan approach that 
reduces the deficit while protecting the middle class, seniors, 
and vital services and investments in education, science, 
research, and critical infrastructure necessary to compete in 
the global economy.
    A balanced approach is what every bipartisan group that has 
examined the nation's fiscal challenge has concluded that we 
need to follow: deficit reduction through a combination of 
spending cuts and revenues generated by cutting unnecessary tax 
breaks and special interest loopholes. The Budget Control Act 
of 2011 already cuts the budget by almost $1 trillion over ten 
years, solely through spending cuts. Putting aside the fact the 
House Republican budget resolution violates that agreement by 
cutting another $19 billion from the 2013 discretionary level, 
appropriators are hard at work trying to find a way to make 
those cuts in a targeted fashion.
    We want to do our job and replace the sequester with 
thoughtful, rather than arbitrary, deficit reduction. We should 
come together with a balanced approach, as bipartisan groups 
have recommended. That means not just cuts to programs but also 
cutting tax loopholes and special interest tax breaks.
    The substitute Democrats offered this week strikes that 
balance. It repeals several costly tax incentives that 
subsidize the ``Big 5'' major integrated oil companies. In a 
time of record oil profits and high prices at the pump, we do 
not need to subsidize big oil companies to do what they would 
do in any case: produce oil. The substitute also implements a 
``Buffett Rule'' meant to ensure that middle class families 
will not confront higher effective tax rates than the wealthy. 
Starting in 2013, this substitute imposes a minimum effective 
tax rate of 30 percent on adjusted gross incomes above $2 
million (to be phased in for taxpayers with income between $1 
million and $2 million).
    The substitute also refocuses farm subsidies, better 
targeting the agriculture safety net while continuing to help 
farmers effectively manage risk. It eliminates direct 
payments--made regardless of yields, prices, farm income or 
size--that are difficult to defend in times of record crop 
yields and prices. The substitute also reforms the federal 
flood insurance program, including the same language that 
passed overwhelmingly on the House floor last summer.
    There should be bipartisan support for replacing the 
across-the-board sequester cuts to defense and non-defense 
programs with deficit reduction from specific spending cuts and 
cuts to special interest tax breaks. By refusing to support the 
substitute, Congressional Republicans have once again chosen to 
protect special interest tax breaks over our investments in 
national defense and other vital national priorities. We will 
continue to work to reduce the deficit in a rational way, 
through a balanced approach that protects key services and 
investments, rather than through arbitrary spending cuts under 
sequestration.

                                          Chris Van Hollen,
                                            Ranking Member,
                                  Debbie Wasserman Schultz,
                                              Marcy Kaptur,
                                                  Tim Ryan,
                                                Gwen Moore,
                                          Allyson Schwartz,
                                           Earl Blumenauer,
                                                Mike Honda,
                                            Betty McCollum,
                                          Suzanne Bonamici,
                                                Karen Bass,
                                              John Yarmuth,
                                         Bill Pascrell, Jr.
                                              Kathy Castor,
                                              Heath Shuler,
                                             Lloyd Doggett.

                                  
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