[House Report 112-58]
[From the U.S. Government Publishing Office]


112th Congress  }                                            {   Report
  1st Session   }     HOUSE OF REPRESENTATIVES               {   112-58
_______________________________________________________________________

                         CONCURRENT RESOLUTION 
                            ON THE BUDGET-- 
                            FISCAL YEAR 2012 

                               ----------                              

                              R E P O R T

                                 of the

                        COMMITTEE ON THE BUDGET
                        HOUSE OF REPRESENTATIVES

                              to accompany

                            H. Con. Res. 34

  ESTABLISHING THE BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL 
  YEAR 2012 AND SETTING FORTH APPROPRIATE BUDGETARY LEVELS FOR FISCAL 
                        YEARS 2013 THROUGH 2021

                             together with

                     MINORITY AND ADDITIONAL VIEWS

               [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


 April 11, 2011.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed





















         CONCURRENT RESOLUTION ON THE BUDGET--FISCAL YEAR 2012




















112th Congress  }                                             {  Report
  1st Session   }         HOUSE OF REPRESENTATIVES            {  112-58
_______________________________________________________________________
 
                         CONCURRENT RESOLUTION 

                            ON THE BUDGET-- 

                            FISCAL YEAR 2012 

                               __________

                              R E P O R T

                                 of the

                        COMMITTEE ON THE BUDGET

                        HOUSE OF REPRESENTATIVES

                              to accompany

                            H. Con. Res. 34

  ESTABLISHING THE BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL 
  YEAR 2012 AND SETTING FORTH APPROPRIATE BUDGETARY LEVELS FOR FISCAL 
                        YEARS 2013 THROUGH 2021

                             together with

                     MINORITY AND ADDITIONAL VIEWS

             [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


 April 11, 2011.--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                PAUL TONKO, New York
TODD C. YOUNG, Indiana               KAREN BASS, California
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: Path to Prosperity
    Restoring America's Promise..................................     3
    Statement of Congress' Authority Under the Constitution and 
      the Law....................................................     7
    Components of the Federal Budget.............................     9
    The Crushing Burden of Debt..................................    19
    A Reform Agenda for the U.S. Government......................    25
Summary Tables--Spending and Revenues:
    Table 1. Fiscal Year 2012 Budget Resolution Total Spending 
      and Revenues...............................................    30
    Table 2. Fiscal Year 2012 Budget Resolution Discretionary 
      Spending...................................................    33
    Table 3. Fiscal Year 2012 Budget Resolution Mandatory 
      Spending...................................................    35
    Table 4. Summary of Fiscal Year 2012 Budget Resolution.......    39
    Table 5. Fiscal Year 2012 Budget Resolution vs. the 
      President's Budget.........................................    40
    Table 6. Comparison of Total Budget Revenues for President's 
      Request and Committee Recommendation.......................    42
    Table 7. Comparison of On-Budget Revenues for President's 
      Request and Committee Recommendation.......................    42
Economic Assumptions of the Budget Resolution....................    43
    Table 8. Economic Projections: Administration, CBO, and 
      Private Forecasters........................................    45
    Table 9. Economic Assumptions of the Budget Resolution.......    46
    Table 10. Tax Expenditure Estimates by Budget Function, 
      Fiscal Years 2010-2014.....................................    47
Function-by-Function Presentation................................    57
    050 National Defense.........................................    59
    150 International Relations..................................    61
    250 General Science, Space, and Technology...................    65
    270 Energy...................................................    67
    300 Natural Resources and Environment........................    71
    350 Agriculture..............................................    75
    370 Commerce and Housing Credit..............................    77
    400 Transportation...........................................    85
    450 Community and Regional Development.......................    89
    500 Education, Training, Employment, and Social Services.....    93
    550 Health...................................................    99
    570 Medicare.................................................   103
    600 Income Security..........................................   107
    650 Social Security..........................................   111
    700 Veterans Benefits and Services...........................   115
    750 Administration of Justice................................   117
    800 General Government.......................................   119
    900 Net Interest.............................................   121
    920 Allowances...............................................   123
    950 Undistributed Offsetting Receipts........................   125
    970 Global War on Terrorism and Related Activities...........   127
Revenue..........................................................   129
The Long-Term Budget Outlook.....................................   135
Section-by-Section Description...................................   139
    Title I. Recommended Levels and Amounts......................   140
    Title II. Long-Term Budgeting................................   141
    Title III. Reserves and Contingencies........................   142
    Title IV. Budget Enforcement.................................   143
    Title V. Policy..............................................   146
    Title VI. Senses of the House................................   147
The Congressional Budget Process.................................   149
Enforcing the Budget Resolution..................................   161
Accounts Identified for Advance Appropriations...................   165
Votes of the Committee...........................................   167
Other Matters to be Included Under the Rules of the House........   189
Minority Views...................................................   190
Additional Views.................................................   194
                              T A B L E S

                                                                   Page
    Table 1. Fiscal Year 2012 Budget Resolution Total Spending 
      and Revenues...............................................    30
    Table 2. Fiscal Year 2012 Budget Resolution Discretionary 
      Spending...................................................    33
    Table 3. Fiscal Year 2012 Budget Resolution Mandatory 
      Spending...................................................    35
    Table 4. Summary of Fiscal Year 2012 Budget Resolution.......    39
    Table 5. Fiscal Year 2012 Budget Resolution vs. the 
      President's Budget.........................................    40
    Table 6. Comparison of Total Budget Revenues for President's 
      Request and Committee Recommendation.......................    42
    Table 7. Comparison of On-Budget Revenues for President's 
      Request and Committee Recommendation.......................    42
    Table 8. Economic Projections: Administration, CBO, and 
      Private Forecasters........................................    45
    Table 9. Economic Assumptions of the Budget Resolution.......    46
    Table 10. Tax Expenditure Estimates by Budget Function, 
      Fiscal Years 2010-2014.....................................    47
    Table 11. Committee-Reported Budget vs. the CBO Alternative 
      Fiscal Scenario............................................   137
    Table 12. Allocation of Spending Authority to House Committee 
      on Appropriations..........................................   152
    Table 13. Resolution by Authorizing Committee (On-Budget 
      Amounts)...................................................   152
    Table 14. Fiscal Year 2012 Budget Resolution Total Spending 
      and Revenues: Manager's Amendment..........................   156





























112th Congress                                                   Report
  1st Session             HOUSE OF REPRESENTATIVES               112-58

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

                 CONCURRENT RESOLUTION ON THE BUDGET--
                            FISCAL YEAR 2012

                                _______
                                

  ESTABLISHING THE BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL 
  YEAR 2012 AND SETTING FORTH APPROPRIATE BUDGETARY LEVELS FOR FISCAL 
                        YEARS 2013 THROUGH 2021

                                _______
                                

 April 11, 2011.--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 AND ADDITIONAL VIEWS

                     [To accompany H. Con. Res. 34]
                        The Path to Prosperity:
                      Restoring America's Promise

                              ----------                              


    Americans face a monumental choice about the future of 
their country.
    This budget resolution reflects that choice. It disavows 
the relentless government spending, taxing, and borrowing that 
are leading America, right at this moment, toward a debt-fueled 
economic crisis, and to the demise of America's exceptional 
promise.
    It chooses instead a path to prosperity--by limiting 
government to its core constitutional roles, keeping America's 
promises to seniors, and unleashing the genius of America's 
workers, investors, and entrepreneurs.
    For too long, policymakers in Washington have traveled the 
path of least resistance--a path that has, unsurprisingly, led 
the Nation downhill. The empty promises made by Washington over 
the years have resulted in economic hardships today and 
increasing pessimism about tomorrow.
    Government at all levels is mired in debt. Mismanagement 
and overspending have left the Nation on the brink of 
bankruptcy. Only recently, millions of American families saw 
their dreams destroyed in a financial disaster caused by 
misguided policies, perverse incentives, and irresponsible 
leadership. The crisis squandered the Nation's savings and 
crippled its economy.
    At a time when the free-market foundations of the American 
economy were in desperate need of restoration and repair, the 
past Congress took actions that further undermined them. The 
President and his party's leaders embarked on a stimulus 
spending spree that added hundreds of billions of dollars to 
the debt, yet failed to deliver on its promise to create jobs. 
Acute economic hardship was exploited to enact unprecedented 
expansions of government power.
    The American public swiftly rejected this approach. 
Citizens stood up and demanded their leaders reacquaint 
themselves with America's founding ideals of liberty, limited 
government, and equality under the rule of law.
    Congress can no longer afford to ignore the demands of the 
American public for honest leadership and real solutions. A 
government that loses sovereignty to its bondholders cannot 
long guarantee its people's prosperity--or secure their 
freedom. A government that buries the next generation under an 
avalanche of debt cannot claim the moral high ground in the 
world. A government that allows economic destinies to be 
determined by political considerations rather than merit cannot 
lead the world in productivity and growth. A government that 
promotes dependency and undermines the institutions of faith 
and family will inevitably weaken the Nation's greatest 
strength: the exceptional character of its entrepreneurial, 
self-reliant, and hard-working citizens.
    This budget, The Path to Prosperity, heeds America's 
political, economic, and moral imperatives by confronting the 
Nation's most urgent fiscal challenges.

     It draws upon solutions from across the political 
spectrum and builds upon the important work of the President's 
bipartisan Commission on Fiscal Responsibility and Reform.

     It reflects input from leaders at the State and 
local level, economists and experts who have testified before 
the Committee, and American citizens calling for honest 
leadership and real solutions.

     It applies America's timeless principles to 
today's greatest challenges by committing to three key goals: 
lifting the crushing burden of debt, fulfilling the mission of 
health and retirement security for all Americans, and 
strengthening the foundations of economic growth and job 
creation.

     Above all, this Path to Prosperity calls for a 
government faithful to its limited but noble mission: securing 
every American's right to pursue a destiny of his or her 
choosing. This budget rejects a culture of complacency, offers 
reforms that promote initiative by rewarding effort, and aims 
to restore the dynamism that has defined America over the 
generations.

    As President Lincoln said: ``We cannot escape history. We 
of this Congress and this administration will be remembered in 
spite of ourselves.'' This Congress will be remembered either 
for doing nothing as the Nation slouched toward a preventable 
debt crisis and irreversible decline, or for committing itself 
to the hard work of preventing that crisis.
    This budget cuts $6.2 trillion in spending from the 
President's budget over the next 10 years, reduces the debt as 
a percentage of the economy, and puts the Nation on a path to 
actually pay off the national debt. It brings Federal spending 
to below 20 percent of gross domestic product [GDP], consistent 
with the post-war average, and reduces deficits by $4.4 
trillion.
    Here are its major components:

    Reducing Spending. This budget proposes to bring spending 
on domestic government agencies to below 2008 levels and 
freezes this category for 5 years. The savings proposals in the 
budget are numerous, and include reforming agricultural 
subsidies, shrinking the Federal workforce through a sensible 
attrition policy, and accepting Defense Secretary Gates' plan 
to target inefficiencies at the Pentagon.

    Welfare Reform. The budget will build upon the historic 
welfare reforms of the late 1990s by converting the Federal 
share of Medicaid spending into a block grant that lets States 
create a range of options and gives Medicaid patients access to 
better care. The budget proposes similar reforms to food 
stamps, ending the flawed incentive structure that rewards 
States for adding to the program's rolls. Finally, this budget 
recognizes that the best welfare program is one that ends with 
a job: it consolidates dozens of duplicative job-training 
programs into more accessible, accountable career scholarships 
that will better serve people looking for work.
    While strengthening welfare programs for those who need 
them, the budget calls for eliminating welfare for those who do 
not. It targets corporate welfare, first by ending the 
conservatorship of Fannie Mae and Freddie Mac that is costing 
taxpayers hundreds of billions of dollars. It gets rid of the 
permanent Wall Street bailout authority that Congress created 
last year. It rolls back expensive handouts for uncompetitive 
sources of energy, calling instead for a free and open 
marketplace for energy development, innovation, and 
exploration.

    Health and Retirement Security. The budget's reforms will 
protect health and retirement security. This starts with saving 
Medicare. The open-ended, blank-check nature of the Medicare 
subsidy threatens the solvency of this critical program and 
creates inexcusable levels of waste. This budget takes action 
where others have ducked--but because government should 
reorient its policies without forcing people to reorganize 
their lives, the budget's reforms will not affect those in or 
near retirement in any way.
    Starting in 2022, new Medicare beneficiaries will be 
enrolled in the same kind of health care program that members 
of Congress enjoy. Future Medicare recipients will be able to 
choose a plan that works best for them from a list of 
guaranteed coverage options. This is not a voucher program, but 
rather a premium-support model. A Medicare premium-support 
payment would be paid, by Medicare, to the plan chosen by the 
beneficiary, subsidizing its cost.
    In addition, Medicare will provide increased assistance for 
lower-income beneficiaries and those with greater health risks. 
Reform that empowers individuals--with more help for the poor 
and the sick--will guarantee that Medicare can fulfill the 
promise of health security for America's seniors.
    Congress must also reform Social Security to prevent severe 
cuts to future benefits. This budget calls for policymakers to 
work together to enact common-sense reforms. The goal of this 
proposal is to achieve a solution similar to the plan the 
President's bipartisan Fiscal Commission put forward to save 
Social Security for current retirees and strengthen it for 
future generations.

    Budget Enforcement. It is not enough to change how much 
government spends; Congress also must change how government 
spends. Therefore, this budget proposes process reforms--
including real, enforceable caps on spending--to make sure 
government spends and taxes only as much as it needs to fulfill 
its constitutionally prescribed roles.

    Tax Reform. The budget would focus on growth by reforming 
the Nation's outdated tax code, consolidating brackets, 
lowering tax rates, and assuming top individual and corporate 
rates of 25 percent. It maintains a revenue-neutral approach by 
clearing out a burdensome tangle of deductions and loopholes 
that distort economic activity and leave some corporations 
paying no income taxes at all.
                                ------                                

    Decline is antithetical to the American Idea. America is a 
Nation conceived in liberty, dedicated to equal treatment under 
the law, and defined by endless opportunity. In all the 
chapters of human history, there has never been anything quite 
like America. This budget's goal is to keep it exceptional, and 
to preserve its promise for the next generation.
                              ----------                              


                    Statement of Congress' Authority
                   Under the Constitution and the Law

    Article I of the U.S. Constitution grants Congress the 
power to appropriate funds from the Treasury, pay the 
obligations of and raise revenue for the Federal Government, 
and publish statements and accounts of all financial 
transactions.
    By law, Congress is also obligated to write a budget 
representing its plan to carry out these transactions in the 
forthcoming fiscal years. While the President is required to 
propose his administration's budget requests for Congress' 
consideration, Congress is solely responsible for writing the 
laws that raise revenues, appropriate funds, and prioritize 
taxpayer dollars within an overall federal budget.
    The budget resolution is the only legislative vehicle that 
views government comprehensively. It provides the framework for 
the consideration of other legislation. Ultimately, a budget is 
more than a series of numbers; it also serves as an expression 
of Congress' principles, vision and philosophy of governing.
    This budget resolution intends to recommit the nation fully 
to the timeless principles of American government enshrined in 
the U.S. Constitution--liberty, limited government, and 
equality under the rule of law. It is submitted, as prescribed 
by law, to apply these principles, to reflect this vision, and 
to provide a framework for the orderly execution of Congress' 
constitutional duties for fiscal year 2012 and beyond.

                              ----------                              

                    Components of the Federal Budget

                              ----------                              


                       Annually Approved Spending

    Discretionary spending--funding debated and approved 
annually by Congress and the President--accounted for slightly 
less than 40 percent of all Federal spending in 2010. This 
category includes transportation, energy, education, foreign 
aid, and funding for most government agencies.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    More than half of the category goes toward national 
defense, but it is important to put that number into 
perspective. Defense spending as a share of the budget has 
fallen from around 25 percent 30 years ago to around 20 percent 
today. Like all categories of government spending, defense 
spending should be executed with efficiency and accountability. 
But responsible budgeting must never forget that the first 
responsibility of the Federal Government is to provide for the 
defense of the Nation.
    The category in Figure 1 labeled ``non-defense 
discretionary'' spending is primarily devoted to funding other 
government agencies. These agencies have been the beneficiaries 
of a major spending increase over the past 2 years. Since 
January 2009, there has been a 24 percent increase in this 
slice of the pie--a number that jumps to 84 percent when 
stimulus funds are included.
    Of the many new laws that made up the recent spending 
spree, the 2009 stimulus law has gotten the most attention, 
with considerable focus on the billions of dollars it wasted on 
dubious government projects as well as the many promises it 
broke with respect to job creation and economic growth. But 
domestic government agencies also received large increases in 
their base budgets--the Environmental Protection Agency [EPA], 
for example, received a 36 percent budget increase in just two 
short years.
    An inevitable consequence of the past Congress' decision to 
ramp up spending so quickly was that billions of Americans' tax 
dollars were squandered. The Government Accountability Office 
[GAO]--the non-partisan agency that audits the government's 
books--recently found between $100 billion and $200 billion in 
duplication, overlap, and waste in Federal spending.\1\ 
Clearly, Congress must restore discipline to this category.
---------------------------------------------------------------------------
    \1\Government Accountability Office: Opportunities to Reduce 
Potential Duplication in Government Programs, Save Tax Dollars, and 
Enhance Revenue, March 2011. http://www.gao.gov/new.items/d11318sp.pdf.
---------------------------------------------------------------------------
    The Path to Prosperity builds on these efforts to cut 
spending, ensuring government can efficiently and effectively 
meet its proper responsibilities. But getting discretionary 
spending under control is only a first step toward fiscal 
sustainability. The real drivers of the Nation's debt lie 
elsewhere.

                          Entitlement Spending

    Spending for programs authorized under permanent law is 
usually referred to as ``mandatory spending,'' even though 
Congress can change the law at any time.
    As illustrated in Figure 1, this ``autopilot'' spending 
accounted for nearly 60 percent of all Federal spending in 
2010. Congress does not regularly debate, annually appropriate, 
or properly scrutinize this category of spending. If an 
individual meets legal eligibility requirements for these 
government programs, he or she automatically receives--or ``is 
legally entitled to''--the benefit. This category includes food 
stamps, unemployment benefits, and farm subsidies--programs 
that are frequently referred to as ``entitlement programs.''
    The three largest entitlements are Medicare, Medicaid, and 
Social Security. Congress created these programs in the middle 
decades of the past century in response to a problem that has 
preoccupied American lawmakers for more than a century: how can 
government best preserve the freedom to risk and to dare, in 
pursuit of dreams large and small, while providing a safety net 
for those citizens who meet with misfortune along the way?
    For decades, seniors have been able to rely on Social 
Security and Medicare for their basic retirement needs, while 
Medicaid has sought to ensure that low-income Americans would 
not go without essential health care. But Americans will not be 
able to rely on these programs for much longer unless Congress 
repairs and reforms them. Medicare, Medicaid, and Social 
Security all face structural problems that are driving them--
and the country--into bankruptcy.
    Unlike defense, the share of the budget that goes to these 
entitlement programs is growing rapidly. In 1970, these major 
entitlements consumed about 20 percent of the budget--a number 
that has grown to more than 40 percent today (see Figure 1). 
Unless action is taken to reform these programs, they will 
continue to crowd out all other national priorities until they 
break the Federal budget.
    Simply put, these programs were created with a 20th-century 
economy in mind. They were not designed for the new demographic 
and economic challenges of the 21st century.
    There are three key forces driving Medicare, Medicaid, and 
Social Security into bankruptcy. All three are interrelated, 
even though some of them affect one program more than the 
others.

                              DEMOGRAPHICS

    The first is demographics. This problem is most clearly 
seen in the financing for Social Security.
    Social Security is financed through a pay-as-you-go system, 
which means that current workers' Social Security taxes are 
used to pay benefits for current retirees. In 1935 when Social 
Security was enacted, there were about 42 working-age Americans 
for each retiree. The average life expectancy for men in 
America was 60 years; for women it was 64. With these 
demographics, it was easy for the program to generate 
sufficient revenue to meet its promises to those older than 65.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    The demographic situation has changed dramatically, 
however, since the creation of the program. In 1950, there were 
3.5 million beneficiaries. Currently, there are more than 50 
million beneficiaries--a more than 14-fold increase.
    The explosion of payments in the 75 years since the Social 
Security system was enacted will be dwarfed by the demographic 
demands about to come. The first members of the baby-boom 
generation--those born between 1946 and 1964--are already 
eligible for early retirement. At the same time, thanks to 
innovations in medical technology and health care, life 
expectancies have lengthened to an average of 75 years for men 
and 80 years for women, and are expected to grow further.
    Not only is the Nation aging, there has also been a 
demographic shift to a lower retirement age. In 1945, the 
average age of retirement was 69.6 years. In 2009, it was 63.8 
years.
    To put this in perspective, when Social Security was first 
enacted in 1935, each worker, on average, was contributing less 
than 2.5 percent of one retiree's benefits. By 2030, each wage 
earner will be paying for nearly half of each retired person's 
full benefits.
    This represents a huge shift of earnings away from younger 
families trying to build their futures, toward Social Security 
recipients. No economy can grow and thrive under that heavy a 
tax burden.
    Real reform--especially with respect to Social Security--
must reflect demographic reality.

                               ECONOMICS

    The second force is economics. For much of the past 2 
years, Washington has been embroiled in a bruising debate over 
a law that was supposed to provide a ``comprehensive'' solution 
to the Nation's health-care problems by putting even more of 
the health sector under government control. Yet rapidly rising 
health-care costs remain as big a problem as ever. In 2010, 
health-care costs rose by more than 7 percent, compared to 
around 1 percent for all other goods and services.
    This is putting immense pressure on Medicare and Medicaid. 
But these programs are not just affected by rapidly rising 
health-care costs--they are actually a key driver of inflation 
in the health-care sector. Nearly 50 cents of every dollar 
spent on health care in this country is spent by Federal, 
State, or local governments. Because of the design and 
structure of these programs, much of the government's money 
gets wasted--and shows up as inflation in the cost of care.
    Everyone who is on Medicare or knows someone on Medicare 
has stories about waste in the system: unnecessary tests, 
redundant treatments, and the cost in both time and money of 
mistaken billings and misplaced records. This kind of waste is 
inevitable in a top-down, government-run system, and it is a 
big reason that costs have spiraled out of control.
    Moreover, America's health-care entitlements are currently 
set up as open-ended, blank-check commitments to reimburse 
health-care providers for services--and this very structure 
raises costs and reduces efficiency. Such commitments create 
perverse incentives for everyone in the health-care system to 
maximize his or her share of this apparently limitless 
government subsidy. This leads to large-scale waste and fraud.
    Last year's health-care law--with its maze of mandates, 
dictates, controls, tax hikes, and subsidies--exacerbates the 
flaws in this model and will push costs further in the wrong 
direction. Already, health insurance companies have announced 
big premium hikes related to the law's new mandates. Its so-
called cost controls amount to the same kind of fee-for-service 
reductions that have failed to control costs in Medicare for 
decades. (Providers predictably increase the number of services 
provided for each condition as the government lowers fees). It 
will dramatically expand a Medicaid program that is already 
breaking State budgets and adding to a growing flood of red ink 
at the Federal level.
    Real reform--especially with respect to Medicare--must 
eliminate this unsustainable waste and reduce inefficiencies 
and costs by giving beneficiaries themselves more control over 
their own health-care benefits and decisions.

                      SKEWED POLITICAL INCENTIVES

    As the central government increases subsidies and control 
over the price and delivery of health care, it saps the system 
of innovation and efficiency, and it pushes quality health care 
out of reach for those who are not eligible for Federal 
programs. This results in more demands to increase Federal 
subsidies and control. Any effort to propose significant 
reforms to these programs triggers a barrage of demagoguery and 
resistance.
    Skewed political incentives have proved especially damaging 
in the Medicaid Program. Because the Federal Government matches 
every State dollar spent on the program, States do not pay the 
full cost of expanding benefits. At the same time, every dollar 
in Medicaid expenditures cut from State budgets triggers more 
than a dollar worth of cuts in Federal funding. These 
incentives encourage States to expand the program beyond those 
who are truly in need.
    Worse, States are not given the flexibility to design their 
Medicaid programs in smart or efficient ways. When even their 
smaller share of the tab becomes unaffordable, as has happened 
in many States recently, it is often the case that their only 
option is to impose across-the-board reductions in 
reimbursements to doctors, which leave many doctors unwilling 
to see Medicaid patients. As a result, these patients are left 
with fewer options and lower-quality care. The new health care 
law, with its large expansions of Medicaid, will funnel more 
people into a broken system.
    Real reform--especially with respect to Medicaid--must give 
States the flexibility they need to better assist their most 
vulnerable populations.

                             EMPTY PROMISES

    Policymakers have known about these problems for decades, 
but few have been willing to propose real solutions.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Figure 3 makes clear that, absent action, Medicare, 
Medicaid, and Social Security will soon grow to consume every 
dollar of revenue the government raises in taxes. At that 
point, policymakers would be left with no good options. Making 
do without any Federal Government departments, including the 
military, is not really an option, and neither is raising taxes 
to a level that no free and prospering economy could sustain.
    Of course, if Congress continues to delay, it will lose 
even the ability to make such choices on its own terms. The 
foreign governments and institutional lenders that finance 
America's debt would cut up the Nation's credit cards before 
things got that far. That would mean sudden, steep cuts in 
entitlement benefits to current seniors, less help for the 
poor, and a crushing tax burden on young families.
    Each year that Congress fails to act, the U.S. government 
gets closer to breaking promises to current retirees, while 
adding to a growing list of empty promises made to future 
generations. The government's unfunded liabilities--promises 
the government makes to current workers about their health and 
retirement security for which it has no means to pay--are 
growing by trillions of dollars a year.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    America has seen unfunded obligations much less daunting 
take down some of its proudest companies. In industries such as 
steel, aviation, and autos, workers lost promised benefits when 
their employers failed to take timely, responsible steps to 
update their unworkable, 20th-century benefit structures. Many 
retirees lost the critical health and retirement benefits they 
were counting on.
    Unless Congress acts, Americans can expect the same thing 
to happen to Social Security and Medicare. Under current law, 
Social Security benefits are scheduled to be cut by 22 percent 
in 2037, when the Social Security trust fund runs out of assets 
and payroll taxes are not sufficient to cover benefits owed. 
Medicare is on a similarly unsustainable path: the Medicare 
trend line illustrated in Figure 3 is a mathematical 
impossibility. Future benefit cuts--against a backdrop of 
skyrocketing health-care costs--are a certainty if the program 
goes unreformed.
    Americans deserve a Federal health and retirement safety 
net they can count on. If Congress wants to avoid defaulting on 
Federal health and retirement programs, it must adopt a program 
of gradual adjustment--one that frees the Nation from the 
shadow of debt, strengthens its health and retirement safety 
net, protects those in or near retirement from any disruptions 
in their benefits, and supports robust economic growth and job 
creation.

                                 Taxes

    The U.S. government is running sustained deficits not 
because Americans are taxed too little, because it spends too 
much.
    Over the past 40 years, Federal revenue has averaged 
between 18 percent and 19 percent of GDP. This level has 
generally been compatible with prosperity, even though there is 
broad agreement that the structure of the tax code should be 
simplified and made more conducive to economic growth, higher 
wages, and entrepreneurship.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Figure 5 shows that Washington has a spending problem, not 
a revenue problem. The President's budget would drive both 
spending and revenues to historic highs as a share of the total 
U.S. economy. The trend is clear: chasing ever-higher spending 
with ever-higher tax rates would leave the U.S. economy at a 
severe disadvantage compared to the rest of the world, to say 
nothing of the pain felt by American families deprived of the 
chance to save for a better future.
    Nor can the government solve this problem just by raising 
the top individual tax rates: even if it were wise to raise 
taxes on the most successful small businesses in America--most 
of which are owned by individuals and file at individual 
rates--the government cannot even come close to closing the 
fiscal gap that way. To close the fiscal gap by raising the top 
rates, the government would have to collect an additional 
$500,000 each year on average from every taxpayer in the top 
two brackets, on top of what these taxpayers already pay.
    The non-partisan Congressional Budget Office has concluded 
that the tax rates needed to sustain the Nation's current 
fiscal trajectory into the future would end up sinking the 
economy.\2\ That is one reason why the President's Commission 
on Fiscal Responsibility and Reform proposed, as part of an 
overall effort to fix the Nation's unsustainable deficits, a 
fundamental tax reform plan that actually lowered income tax 
rates to promote growth, while eliminating tax loopholes to 
broaden the tax base.\3\
---------------------------------------------------------------------------
    \2\Congressional Budget Office. Letter to Congressman Paul D. Ryan. 
May 2008.
    \3\The National Commission on Fiscal Responsibility and Reform: The 
Moment of Truth, December 2010. http://www.fiscalcommission.gov/sites/
fiscalcommission.gov/files/documents/TheMomentofTruth12--1--2010.pdf.
---------------------------------------------------------------------------
    A broader base with lower rates is central to a fair, 
efficient and sustainable tax code, and the economic growth 
spurred by such a reform is a precondition to fixing the 
Nation's fiscal mess.

                           Deficits and Debt

    The deficit is how much the Federal Government has to 
borrow to fund the excess of spending over revenue in a given 
year. The debt is the total amount outstanding that the 
government owes; it represents the accumulation of deficits 
over time.
    This year is projected to mark the third straight year in 
which the government borrows more than $1 trillion. Debt held 
by the public stood a $6.3 trillion the day President Obama 
took office. According to the Congressional Budget Office, 
under the President's budget, the debt will double by 2013 and 
triple by 2021. Clearly, Congress must address this crisis 
now--before it is too late.
                      The Crushing Burden of Debt

                              ----------                              


    The United States is facing a crushing burden of debt--a 
debt that will soon surpass the size of the entire U.S. economy 
and ultimately capsize it if left on its present course.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    America's unsustainable budget path is no longer a problem 
that is far off in the future. The lenders who buy much of the 
Federal Government's debt have noticed the disconnect between 
the government's perilous fiscal situation and the low rates of 
interest it is paying on the bonds that constitute the 
government's debts. Some have even decided to purge their 
portfolios of U.S. debt, and others are advising their clients 
to do the same.\4\
---------------------------------------------------------------------------
    \4\``Pimco's Biggest Fund Dumps Treasury Bond Holdings.'' Reuters 
with CNBC.com, 9 March 2011, http://www.cnbc.com/id/41990901/ (accessed 
31 March 2011).
---------------------------------------------------------------------------
    Through its interventions into the economy, the Federal 
Reserve has recently become the largest buyer of government 
debt in the country, and these purchases have helped keep 
interest rates low. But the Fed is scheduled to stop making 
these purchases this summer. Congress must show the market that 
it has a credible plan for getting the national debt under 
control, in order to ease concerns over the government's 
credit-worthiness and stave off an interest-rate spike.
    This budget is offered in the hope that it might 
demonstrate the new House majority's determination to face the 
government's most difficult fiscal challenges.

                         An Unsustainable Path

    The recent sovereign debt crises in Greece and other 
highly-indebted European countries provide a cautionary tale of 
the rough justice of the marketplace--lenders cannot and will 
not finance unsustainable deficits forever, and when they cut 
up the credit cards of profligate countries, severe economic 
turmoil ensues.
    Over the past few years, Americans have seen just how 
quickly a severe financial crisis can create widespread pain 
and chaos. But the last crisis was foreseen only by a small 
number of perceptive individuals who recognized the 
implications of unwise decisions being made in Washington and 
on Wall Street.
    By contrast, nearly every fiscal expert and advisor in 
Washington has warned that a major debt crisis is inevitable if 
the U.S. government remains on its current unsustainable path. 
The government's failure to prevent this completely preventable 
crisis would rank among history's most infamous episodes of 
political malpractice. Erskine B. Bowles, the Democratic co-
chairman of the President's Fiscal Commission, said it best: 
``The era of deficit denial is over.''\5\
---------------------------------------------------------------------------
    \5\Wolf, Richard. ``Are We Ready to Cut the U.S. Deficit?'' USA 
TODAY, 29 November 2010. http://www.usatoday.com/printedition/news/
20101129/1adeficit29--cv.art.htm (accessed 31 March 2011).
---------------------------------------------------------------------------

                         Nearing a Debt Crisis

    Like a household or business, a nation's indebtedness is 
best understood in terms of how much it owes relative to how 
much it makes. By that measure, debt held by the public--money 
that the U.S. government owes to others--will reach nearly 70 
percent of the entire U.S. economy this year.
    If this were merely a temporary rise in the debt, it would 
not be so alarming. But, the spending spree of the past 2 
years, combined with the coming retirement of nearly 80 million 
baby boomers, threaten to turn these recent deficit spikes into 
a permanent plunge into debt.
    Debt in excess of 60 percent of the economy is not 
sustainable for an extended period of time. That is bad news 
for the United States. According to the non-partisan CBO, the 
President's budget would keep the debt climbing as a share of 
the economy in the decade ahead, from nearly 70 percent this 
year to more than 87 percent of the U.S. economy by 2021.

                     How a Debt Crisis Would Unfold


                        SPIRALING INTEREST RATES

    The first sign that a debt crisis has arrived is that bond 
investors lose confidence in a government's ability to pay its 
debts--and by that point, it is usually too late to avoid 
severe disruption and economic pain. Right now, the U.S. 
government is able to borrow at historically low rates, partly 
because of the Fed's interventions in the market, but also 
because the bonds of most foreign countries are looking even 
riskier. Neither of these conditions is going to last. Interest 
rates--and the burden of paying interest on the debt--have 
nowhere to go but up.
    Interest payments are already consuming around 10 cents of 
every tax dollar. But as interest rates rise from their current 
historically low levels and debt continues to mount, interest 
payments are projected to consume over 20 percent of all tax 
revenue by 2020.
    That means that one in five tax dollars will be dedicated 
to making interest payments by the end of the decade--and 
that's according to optimistic projections about interest 
rates. If interest rates increase by a higher-than-expected 
amount in the future--which appears to be more likely--then the 
Nation's interest payments could cost trillions of dollars 
more.

                             FOREIGN FLIGHT

    It would be one thing if the U.S. government owed most of 
this money to domestic lenders. But the Nation's reliance on 
foreign creditors has increased dramatically over the past few 
decades. Foreigners now own roughly half of all publicly held 
U.S. debt, a sharp increase from a generation ago when 
foreigners owned just 5 percent of U.S. debt. This makes the 
Nation vulnerable to a sudden shift in foreign-investor 
sentiment, particularly during a time of crisis.
    If foreign investors, especially foreign governments such 
as China, begin to lose confidence in the U.S. government's 
ability to solve its most difficult fiscal challenges, they 
will demand higher compensation to offset the perceived risk of 
holding U.S. debt--meaning sharply higher interest rates.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    During the financial crisis, foreigners flocked to Treasury 
debt simply because other investments looked so unsafe by 
comparison, and this helped keep interest rates low. But these 
investment flows work both ways, as the heavily indebted 
nations of Europe have recently learned. If Congress continues 
to put off difficult choices regarding the Nation's long-term 
problems, foreign investors will re-evaluate the 
creditworthiness of the United States and demand higher 
interest rates.

                      The Consequences of Inaction


                              STAGFLATION

    The economic effects of a debt crisis would be far worse 
than what the Nation experienced during the financial turmoil 
of 2008. For starters, no entity on the planet is large enough 
to bail out the U.S. government. Absent a bailout, the only 
solutions to a debt crisis would be truly painful: massive tax 
increases, sudden and disruptive cuts to vital programs, 
runaway inflation, or all three. This would create a huge hole 
in the economy that would be exacerbated by panic.
    Even if high debt did not cause a crisis, however, the 
Nation would still be in for a long and grinding period of 
economic decline. A recent study completed by Reinhart and 
economist Kenneth S. Rogoff of Harvard confirms this common-
sense conclusion. The study found conclusive empirical evidence 
that total debt exceeding 90 percent of the economy has a 
significant negative effect on economic growth.\7\
---------------------------------------------------------------------------
    \7\Reinhart, Carmen M. and Kenneth S. Rogoff: Growth in a Time of 
Debt, January 2010. http://www.economics.harvard.edu/files/faculty/51--
Growth--in--Time--Debt.pdf.
---------------------------------------------------------------------------
    The study looked specifically at the United States, 
focusing on growth and inflation relative to past periods when 
this Nation has experienced high debt levels. The study found 
that not only is average economic growth dramatically lower 
when gross U.S. debt exceeds 90 percent of the economy, but 
inflation also becomes a problem.
    Essentially, the study confirmed that huge debts of the 
kind the Nation is on track to accumulate are associated with 
``stagflation''--a toxic mix of economic stagnation and rising 
inflation.

                         REAL PAIN FOR FAMILIES

    Warning signs in financial markets would merely be a 
harbinger of the real economic pain that would eventually be 
felt by American families in the event of a debt crisis.
    Much higher interest rates on government debt would 
translate into much higher interest rates on mortgages, credit 
cards, and auto loans. These higher rates would most likely 
come as a shock to most Americans, who have grown accustomed to 
borrowing in a climate of historically low interest rates. It 
might even shock those who lived through the double-digit 
interest rates of the early 1980s.
    Despite the increase in saving rates that has occurred in 
the wake of the financial crisis, U.S. households are still 
heavily indebted. The Nation's households still owe $13 
trillion in private debt, or roughly 120 percent of their total 
disposable income. A large chunk of that total debt consists of 
home mortgages, while the rest is in credit cards and other 
forms of debt.
    It turns out that roughly half of all that debt is in the 
form of variable interest rate loans, meaning that a sudden 
increase in Treasury bond rates would lead to higher borrowing 
costs for consumers relatively quickly. According to the 
current level and composition of U.S. household debt, estimates 
suggest that an interest rate increase of just 1 percentage 
point would lead to more than $400 in extra interest payments 
each year for the average family.
    Given that a serious debt crisis could lead to a sharp 
increase in Treasury rates, the added interest costs for the 
typical family could easily exceed $1,000 per year. As 
household borrowing costs spiked, growth in overall consumer 
spending, which accounts for nearly 70 percent of the U.S. 
economy, would decline.

                        REAL PAIN FOR BUSINESSES

    Higher borrowing costs would also serve as a serious 
impediment for businesses. The rise in interest rates would 
lead to lower business investment as companies would face a 
much higher hurdle for profitability on potential expansion 
plans.
    Businesses would be doubly squeezed because, as their 
funding costs were rising, demand for their products 
(particularly consumer durables bought on credit such as cars, 
home furnishings, and the like) would be slipping as consumer 
spending tailed off. Add in higher taxes from a cash-strapped 
government trying to appease its creditors, and the inevitable 
result would be less business expansion and higher 
unemployment.

                            HARSH AUSTERITY

    As economic growth deteriorates, it becomes harder for the 
government to raise revenue through taxes, and a vicious cycle 
ensues. If the Nation ultimately experiences a panicked run on 
its debt, it will be forced to make immediate and painful 
fiscal adjustments (like the austerity program that has 
provoked riots in Greece).
    Facing the inability to borrow at a reasonable rate in the 
market, the government would have to slash spending and raise 
taxes to narrow its large fiscal gap. In such a crisis, the Fed 
may also face rising pressure to step in and ``monetize'' the 
government's debt--essentially printing money to buy up the 
public debt that private investors refuse to finance.
    The consequences of these actions would be disastrous for 
the U.S. and the global economy. If the U.S. government were 
forced to address such a situation by cutting domestic spending 
and raising taxes to close the budget gap, it would be 
compelled to do so indiscriminately. Promises to current 
retirees would be broken, and tax rates would be raised across 
the board, without regard for the economic consequences. 
Monetizing the debt, meanwhile, would soon lead to a 
destabilizing inflation. This would wipe out the savings of 
millions of Americans, hitting seniors the hardest. When 
combined with benefit cuts, this would mean punishing seniors 
twice.

                       FINANCIAL SYSTEM BREAKDOWN

    The U.S. dollar is the world's reserve currency, and U.S. 
Treasury bonds are the lynchpin of global debt markets, 
considered to be safe and highly liquid assets by virtually all 
financial institutions worldwide. A U.S. debt crisis would lead 
to sharp declines in the dollar and in the price of these 
bonds, causing a deterioration of the balance sheets of large 
financial institutions. The resulting panic would be orders of 
magnitude more disruptive than the financial crisis in 2008.

                          The Path to Decline

    In the end, the debate about rising U.S. debt is not just 
about dollars and cents, but also about America's status as a 
world power and its freedom to act in its own best interests. 
If the Nation stays on its current path, interest payments on 
the national debt will begin to exceed yearly defense spending 
just 11 years from now. In just 16 years, yearly interest 
expenses will be double national defense spending.
    If it stays on its current fiscal path, the United States 
will be unable to afford its role as an economic and military 
superpower. Other nations with very different interests will 
rush in to fill that role.
    Last year in Foreign Affairs magazine, financial historian 
Niall Ferguson surveyed some of the great empire declines 
throughout history and observed that ``most imperial falls are 
associated with fiscal crises. All the * * * cases were marked 
by sharp imbalances between revenues and expenditures, as well 
as difficulties with financing public debt. Alarm bells should 
be ringing loudly * * * [for] the United States.''\8\
---------------------------------------------------------------------------
    \8\Ferguson, Niall: ``Complexity and Collapse: Empires on the Edge 
of Chaos,'' Foreign Affairs, March/April 2010.
---------------------------------------------------------------------------
    America must not lose its role in the world. For this and 
many other reasons, Congress must act now to change the 
Nation's fiscal course. The new House majority was sent here by 
the American people to get spending under control, keep taxes 
low, and confront these great challenges today to allow this 
generation to pass an even greater Nation along to the next 
generation.
    Congress can choose to let this Nation go the way of fallen 
empires, or it can begin--today--the work of restoring the 
vitality and greatness of America.
                A Reform Agenda for the U.S. Government

                              ----------                              


    When it comes to this generation's defining challenge--the 
explosive growth of the national debt--the simple truth is that 
Washington has not been honest with the American people.
    The past Congress added trillions to the problem, and the 
current administration has offered no serious plan to address 
the sea of red ink. There is a vacuum of leadership in 
Washington. This budget attempts to lead where others have 
fallen short. To do otherwise would consign the United States 
to a diminished future--a future that disrespects the 
sacrifices that generations of American families have made to 
secure the promise of this exceptional Nation.
    This budget offers America a model of government guided by 
the timeless principles of the American Idea: free market 
democracy, open competition, a robust private sector bound by 
rules of honesty and fairness, a secure safety net, and equal 
opportunity for all under a limited constitutional government 
of popular consent.
    In certain key respects, the Federal Government has strayed 
from these timeless principles. This budget offers a set of 
fundamental reforms to put the Nation back on the right track.

    1. Reform government to make it more efficient, effective, and 
                              responsible

    The role of the Federal Government is both vital and 
limited. When government takes on too many tasks, it usually 
does none of them well. Limited government also means effective 
government. This budget recommits the Federal Government to the 
security of every American citizen's natural right to life, 
liberty and the pursuit of happiness, while fostering an 
environment for economic growth and private-sector job 
creation.

    Providing for the Common Defense. Recognizing that the 
first job of government is to secure the safety and liberty of 
its citizens from threats at home and abroad, this budget 
rejects proposals to make deep, across-the-board cuts in 
funding for national defense. Instead, it reflects the $178 
billion in savings identified by Defense Secretary Robert 
Gates, $100 billion of which would be reinvested in higher 
military priorities. American men and women in uniform are 
currently engaged with a fierce enemy and dealing with emerging 
threats around the world. This budget achieves savings in the 
category of national defense without jeopardizing preparedness 
or critical missions.

    Streamlining Other Government Agencies. Government spending 
on domestic departments and agencies has grown too much, too 
fast over the past decade, with much of the money going to 
programs and projects the Nation can do without. This budget 
starts to restore spending discipline to a government that 
badly needs it by returning non-security discretionary spending 
to below 2008 levels. It reduces the bureaucracy's reach by 
applying private-sector realities to the Federal Government's 
civilian workforce. Similar to the Fiscal Commission, the 
budget resolution would boost private-sector employment by 
slowing the explosive growth of the public sector, achieving, 
through attrition, a 10-percent reduction over the next 3 years 
in the Federal workforce, coupled with a pay freeze through 
2016. It targets hundreds of government programs that have 
outlived their usefulness. It reflects an extension of the 
moratorium on earmarks. It repeals the government takeover of 
health care enacted last year and moves toward patient-centered 
reform.

    Ending Corporate Welfare. There is a growing and pernicious 
trend of government overreach into sectors of the private 
economy--a trend that stacks the deck in favor of entrenched 
interests and stifles growth. This budget ends the taxpayer 
bailouts of failed financial institutions and stops Washington 
from picking the winners and losers across sectors of the 
economy.

    Boosting American Energy Resources. Too great a percentage 
of America's vast natural resources remain locked behind 
bureaucratic barriers and red tape. This budget removes 
moratoria on safe, responsible energy exploration in the United 
States, ends Washington policies that drive up gas prices, and 
unlocks American energy production to help lower costs, create 
jobs, and reduce dependence on foreign oil.

    Changing Washington's Culture of Spending. The budget 
process in Washington contains numerous structural flaws that 
bias the Federal Government toward ever-higher levels of 
spending. This budget locks in savings with enforceable 
spending caps and budget-process reforms, addressing not only 
what Washington spends, but also how tax dollars are spent.

         2. Reform welfare to strengthen the social safety net

    This budget builds upon the historic progress of bipartisan 
welfare reform in the late 1990s. It strengthens Medicaid, food 
stamps and job-training programs by providing States with 
greater flexibility to help recipients build self-sufficient 
futures for themselves and their families.

    Repairing a Broken Medicaid System. Medicaid's flawed 
financing structure has created rapidly rising costs that are 
nearly impossible to check. This budget ends an onerous, one-
size-fits-all approach by converting the Federal share of 
Medicaid spending into a block grant that gives States the 
flexibility to tailor their Medicaid programs to the needs of 
their unique populations.

    Protecting Assistance for Those in Need. The welfare 
reformers of the 1990s were not able to extend their work 
beyond cash welfare program. This budget extends those 
successes to other means-tested programs to ensure that 
America's safety net does not become a hammock that lulls able-
bodied citizens into lives of complacency and dependency.

    Preparing the Workforce for a 21st Century Economy. The 
government's dozens of job-training programs suffer from 
overlapping responsibilities and too often lack accountability. 
The government must do a much better job of leveraging and 
targeting existing resources in this policy area. This budget 
consolidates a complex maze of dozens of job-training programs 
into more accessible, accountable career scholarships aimed at 
empowering American workers with the resources they need to 
pursue their dreams.

  3. Reform government programs to fulfill the mission of health and 
                          retirement security

    This budget puts an end to empty promises from a broke 
government, offering instead real security through real 
reforms. The framework established in this budget secures 
health and retirement benefit programs both for current 
beneficiaries, who will receive the benefits they have 
organized their retirements around, and for future generations, 
who will inherit stronger programs they can count on when they 
retire.

    Saving Medicare. A flaw in Medicare's structure is driving 
up health-care costs, which are, in turn, threatening to 
bankrupt the system--and ultimately the Nation. This budget 
saves Medicare by fixing this flawed structure so that the 
program will be there for future generations. These changes 
will not affect those in or near retirement in any way. When 
younger workers become eligible for Medicare, they will be able 
to choose from a list of guaranteed coverage options, enjoying 
the same kind of choices in their plans that members of 
Congress enjoy today. Medicare would then provide a payment to 
subsidize the cost of the plan. In addition, Medicare will 
provide increased assistance for lower-income beneficiaries and 
those with greater health risks. Reform that empowers 
individuals--with a strengthened safety net for the poor and 
the sick--will guarantee that Medicare can fulfill the promise 
of health security for America's seniors.

    Advancing Social Security Solutions. The risk to Social 
Security, driven by demographic changes, is nearer at hand than 
most acknowledge. This budget heads off a crisis by forcing 
action from the President and both chambers of Congress to 
ensure the solvency of this critical program--creating the 
space for bipartisan solutions.

   4. Reform the tax code to promote economic growth and job creation

    This budget recognizes that the Nation's fiscal health 
requires a vibrant, growing private sector. It charts a 
prosperous path forward by reforming a tax code that is overly 
complex and unfair.

    Individual Tax Reform. The current code for individuals is 
too complicated, with high marginal rates that discourage 
growth. This budget embraces the widely acknowledged principles 
of pro-growth tax reform by proposing to consolidate tax 
brackets and lower tax rates, with a top rate of 25 percent, 
while clearing out the burdensome tangle of loopholes that 
distort economic activity.

    Corporate Tax Reform. American businesses labor under the 
highest corporate income tax in the developed world. The 
perverse incentives created by the corporate income tax do a 
lot of damage, yet the tax itself raises relatively little 
revenue. This budget improves incentives for job creators to 
work, invest, and innovate in the United States by lowering the 
corporate rate from 35 percent to a much more competitive 25 
percent.

                               The Choice

    Throughout history, Americans have selflessly tackled the 
difficult challenges before the republic, whether civil war, 
economic depression, or military threats from abroad. Each 
generation has been tested, and each generation has found 
strength in America's highest principles and called forth its 
deepest virtues to make certain that the next generation 
inherited a stronger, more prosperous and free America.
    Today, the Nation's crushing burden of debt jeopardizes 
this legacy. This generation must not be the first to fail--to 
break the link that binds the past, the present, and the 
future.
    America is drawing perilously close to a tipping point that 
has the potential to curtail free enterprise, transform its 
government, and weaken its national identity in ways that may 
not be reversible.
    In this America faces two dangers: long-term economic 
decline as the number of makers diminishes and the number of 
takers grows and, worse, gradual moral-political decline as 
dependency and passivity weaken the Nation's character and as 
the power to make decisions is stripped from individuals and 
their elected representatives and given to non-elected 
bureaucracies.
    The Path to Prosperity charts a different course.
    This budget provides a plan for assuring that this 
generation upholds America's historic legacy, rediscovers her 
abiding principles, and charts a new path to prosperity.
    It marks a new Federal commitment, assuring this Nation's 
workers, savers, and investors that the new House majority 
recognizes the threat that unlimited government poses to the 
American way of life, and that it is determined to fulfill its 
commitments and responsibly restrain government's growth.
    Restoring limits to the size and scope of government is not 
a partisan issue. In his State of the Union Address on 4 
January 1935, President Roosevelt--in words later repeated by 
President Reagan--warned of the threat to America's national 
character from permanent dependency on government:

          The lessons of history, confirmed by the evidence 
        immediately before me, show conclusively that continued 
        dependence upon relief induces a spiritual and moral 
        disintegration fundamentally destructive to the 
        national fiber. To dole out relief in this way is to 
        administer a narcotic, a subtle destroyer of the human 
        spirit * * * It is in violation of the traditions of 
        America.

    Americans truly face a monumental choice--a choice that can 
no longer be avoided.

    The Path to Prosperity is the groundwork for a serious 
conversation about the future of this exceptional Nation.
    While an important statement of priorities, a budget is 
merely a blueprint for the actual work of statecraft. The 
elected representatives of the American people--in the House of 
Representatives, in the Senate, and in the White House--now 
must take up the tools and start building the future Americans 
deserve.
    This generation's defining moment has arrived.

                                                            TABLE 1.--FISCAL YEAR 2012 BUDGET RESOLUTION TOTAL SPENDING AND REVENUES
                                                                                    [In billions of dollars]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
         Fiscal year              2011          2012         2013        2014        2015        2016        2017        2018        2019        2020        2021       2012-2016     2012-2021
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Summary
Total Spending:
  BA........................     3,540.321     3,442.192   3,482.930   3,592.504   3,695.660   3,880.045   4,034.289   4,187.742   4,397.323   4,602.220   4,786.275    18,093.331    40,101.181
  OT........................     3,617.800     3,528.537   3,558.999   3,585.799   3,670.705   3,857.986   3,997.718   4,123.287   4,352.171   4,543.782   4,739.102    18,202.026    39,958.085
On-budget:
  BA........................     3,040.757     2,858.546   2,836.375   2,908.773   2,973.288   3,117.227   3,226.372   3,330.990   3,488.494   3,636.213   3,761.565    14,694.209    32,137.842
  OT........................     3,120.767     2,947.917   2,915.880   2,905.764   2,952.528   3,099.709   3,194.911   3,271.929   3,449.147   3,584.187   3,720.855    14,821.797    32,042.826
Off-budget:
  BA........................       499.564       583.646     646.555     683.731     722.372     762.818     807.918     856.752     908.829     966.007   1,024.710     3,399.123     7,963.339
  OT........................       497.033       580.620     643.119     680.035     718.177     758.277     802.806     851.357     903.024     959.596   1,018.248     3,380.228     7,915.259
Revenues:
  Total.....................     2,230.199     2,533.212   2,860.329   3,093.942   3,236.738   3,377.014   3,589.281   3,744.762   3,938.622   4,142.155   4,354.210    15,101.235    34,870.265
  On-budget.................     1,664.563     1,866.454   2,127.981   2,324.503   2,425.363   2,522.695   2,693.493   2,807.893   2,958.678   3,119.794   3,286.942    11,266.996    26,133.796
  Off-budget................       565.636       666.758     732.348     769.439     811.375     854.319     895.788     936.869     979.944   1,022.361   1,067.268     3,834.239     8,736.469
Surplus/Deficit (-):
  Total.....................    -1,387.601      -995.325    -698.670    -491.857    -433.967    -480.972    -408.437    -378.525    -413.549    -401.627    -384.892    -3,100.791    -5,087.820
  On-budget.................    -1,456.204    -1,081.463    -787.899    -581.261    -527.165    -577.014    -501.418    -464.036    -490.469    -464.392    -433.912    -3,554.801    -5,909.030
  Off-budget................        68.603        86.138      89.229      89.404      93.198      96.042      92.982      85.512      76.920      62.765      49.020       454.011       821.210
Debt Held by the Public (end        10,351        11,418      12,217      12,801      13,326      13,886      14,363      14,800      15,254      15,681      16,071       na            na
 of year)...................
Debt Subject to Limit (end          14,973        16,204      17,177      17,955      18,704      19,513      20,257      20,981      21,711      22,416      23,105       na            na
 of year)...................                                                                                           By Function
National Defense (050):
  BA........................       561.172       582.626     600.283     616.451     628.847     641.976     653.695     665.679     677.884     690.273     702.903     3,070.183     6,460.618
  OT........................       640.396       593.580     597.211     606.903     618.837     635.475     643.275     650.246     666.959     679.088     691.494     3,052.006     6,383.068
International Affairs (150):
  BA........................        51.873        36.575      35.653      31.694      30.316      29.356      30.729      31.978      32.824      33.698      34.572       163.594       327.396
  OT........................        44.138        36.102      34.545      34.178      32.613      32.161      31.926      31.594      30.487      30.123      30.740       169.599       324.469
General Science, Space, and
 Technology (250):
  BA........................        28.649        27.452      27.316      27.312      27.312      27.311      27.652      28.341      29.049      29.758      30.472       136.704       281.976
  OT........................        31.037        29.798      28.242      27.763      27.469      27.506      27.646      28.114      28.684      29.344      29.946       140.777       284.511
Energy (270):
  BA........................         6.535         6.996       3.850       1.215       1.101       1.021       1.010       1.075       1.211       1.179       1.195        14.182        19.852
  OT........................        13.328        16.174      10.053       4.547       1.360       0.340       0.460       0.539       0.497       0.470       0.476        32.474        34.916
Natural Resources and
 Environment (300):
  BA........................        31.986        31.921      29.414      25.296      26.893      25.231      26.156      26.618      26.956      27.787      27.756       138.753       274.027
  OT........................        40.431        36.818      33.386      28.943      29.271      26.070      26.307      25.308      25.439      25.990      25.992       154.487       283.523
Agriculture (350):
  BA........................        26.337        19.819      18.396      16.717      17.355      17.235      16.859      17.025      17.159      17.469      17.755        89.522       175.789
  OT........................        21.703        19.559      21.989      16.469      16.688      16.505      16.069      16.180      16.283      16.579      16.873        91.210       173.193
Commerce and Housing Credit
 (370):
  BA........................        -6.720        15.275       3.998       0.666      -2.451      -3.102      -0.232       0.006       0.052       0.153       0.091        14.386        14.458
  OT........................        -6.708        17.235       2.573     -13.823     -19.253     -23.295     -23.525     -25.709     -17.268     -17.707     -19.359       -36.562      -140.129
  On-budget:
    BA......................       -10.478        14.317       4.040       0.508      -2.609      -3.260      -0.293      -0.261      -0.222      -0.128      -0.196        12.996        11.895
    OT......................       -10.466        16.275       2.611     -13.986     -19.417     -23.459     -23.592     -25.981     -17.547     -17.992     -19.650       -37.976      -142.738
  Off-budget:
    BA......................         3.758         0.958      -0.042       0.158       0.158       0.158       0.061       0.268       0.274       0.281       0.288         1.390         2.563
    OT......................         3.758         0.960      -0.038       0.163       0.164       0.165       0.068       0.272       0.278       0.285       0.291         1.414         2.609
Transportation (400):
  BA........................        84.992        64.316      64.515      64.265      60.377      68.563      65.916      70.578      66.719      67.472      68.936       322.036       661.656
  OT........................        94.664        80.431      71.264      67.722      66.084      65.957      67.036      67.451      69.869      71.551      76.853       351.457       704.218
Community and Regional
 Development (450):
  BA........................        15.832        11.572      11.344      11.280      11.206      11.117      11.219      11.497      11.779      12.065      12.354        56.519       115.434
  OT........................        24.306        23.559      20.609      18.127      14.176      12.257      11.231      10.860      11.028      11.294      11.524        88.728       144.664
Education, Training,
 Employment and Social
 Services (500):
  BA........................        57.756        67.122      63.887      66.076      69.446      73.314      75.371      76.798      78.314      79.629      80.952       339.845       730.909
  OT........................       100.278       100.012      73.071      68.044      70.450      73.310      75.665      77.013      78.385      79.806      81.047       384.887       776.803
Health (550):
  BA........................       376.350       341.873     343.733     338.064     327.012     320.409     339.663     349.840     371.826     395.908     404.674     1,671.091     3,533.001
  OT........................       375.875       346.636     340.608     320.444     315.117     325.200     342.703     347.303     368.558     382.056     400.682     1,648.006     3,489.309
Medicare (570):
  BA........................       490.879       481.521     519.903     550.105     573.252     618.945     637.938     657.067     711.486     758.271     809.106     2,743.726     6,317.594
  OT........................       490.687       481.816     520.406     550.248     573.333     619.385     638.059     657.111     711.897     758.376     809.201     2,745.188     6,319.832
Income Security (600):
  BA........................       592.287       501.664     487.498     457.308     431.150     436.659     436.985     441.467     457.183     468.308     480.687     2,314.278     4,598.908
  OT........................       603.073       501.006     487.248     456.072     429.143     438.896     434.795     434.302     454.448     465.565     477.942     2,312.364     4,579.416
Social Security (650):
  BA........................       735.080       769.060     807.668     850.744     897.641     948.701   1,006.098   1,068.714   1,135.334   1,206.195   1,278.208     4,273.814     9,968.364
  OT........................       732.595       766.217     804.387     847.118     893.490     944.153   1,000.980   1,063.315   1,129.525   1,199.780   1,271.743     4,255.365     9,920.707
  On-budget:
    BA......................       106.523        54.439      29.096      32.701      36.261      40.171      44.263      48.717      53.508      58.552      64.053       192.668       461.761
    OT......................       106.569        54.624      29.256      32.776      36.311      40.171      44.263      48.717      53.508      58.552      64.053       193.138       462.231
  Off-budget:
    BA......................       628.557       714.621     778.572     818.043     861.380     908.530     961.835   1,019.997   1,081.826   1,147.643   1,214.155     4,081.146     9,506.603
    OT......................       626.026       711.593     775.131     814.342     857.179     903.982     956.717   1,014.598   1,076.017   1,141.228   1,207.690     4,062.227     9,458.476
Veterans Benefits and
 Services (700):
  BA........................       129.331       128.339     130.024     134.143     138.167     147.410     146.323     145.412     155.091     159.680     164.381       678.083     1,448.970
  OT........................       128.435       127.140     130.025     134.055     137.851     146.868     145.704     144.751     154.407     158.979     163.622       675.939     1,443.401
Administration of Justice
 (750):
  BA........................        46.813        56.946      45.326      45.093      44.928      47.009      45.731      46.699      47.768      50.848      52.863       239.302       483.212
  OT........................        55.166        53.931      50.482      48.664      47.337      48.519      46.650      46.957      47.649      50.415      52.407       248.933       493.010
General Government (800):
  BA........................        26.337        22.762      22.185      22.232      22.183      22.217      22.453      22.979      23.559      23.915      24.356       111.579       228.841
  OT........................        27.003        27.205      23.460      22.619      22.021      21.643      21.718      22.016      22.295      22.606      23.024       116.947       228.606
Net Interest (900):
  BA........................       212.303       255.731     317.745     386.625     448.008     506.973     557.872     600.266     633.687     665.554     687.087     1,915.081     5,059.547
  OT........................       212.303       255.731     317.745     386.625     448.008     506.973     557.872     600.266     633.687     665.554     687.087     1,915.081     5,059.547
  On-budget:
    BA......................       329.803       372.433     433.760     504.269     569.303     633.745     691.747     742.666     784.534     823.870     851.993     2,513.510     6,408.320
    OT......................       329.803       372.433     433.760     504.269     569.303     633.745     691.747     742.666     784.534     823.870     851.993     2,513.510     6,408.320
  Off-budget:
    BA......................      -117.500      -116.702    -116.016    -117.644    -121.295    -126.772    -133.875    -142.401    -150.847    -158.316    -164.906      -598.428    -1,348.773
    OT......................      -117.500      -116.702    -116.016    -117.644    -121.295    -126.772    -133.875    -142.401    -150.847    -158.316    -164.906      -598.428    -1,348.773
Allowances (920):
  BA........................  ............        -6.198      -2.528      -3.548      -4.827      -5.933      -6.682      -7.172      -7.706      -8.187      -8.765       -23.034       -61.546
  OT........................  ............        -2.525      -3.687      -4.564      -5.433      -6.499      -6.533      -7.059      -7.588      -8.097      -8.652       -22.709       -60.637
  On-budget:
    BA......................  ............        -6.173      -2.399      -3.260      -4.353      -5.256      -5.799      -6.085      -6.417      -6.697      -7.073       -21.441       -53.512
    OT......................  ............        -2.500      -3.558      -4.276      -4.959      -5.822      -5.650      -5.972      -6.299      -6.607      -6.960       -21.116       -52.603
  Off-budget:
    BA......................  ............        -0.025      -0.129      -0.288      -0.474      -0.677      -0.883      -1.087      -1.289      -1.490      -1.692        -1.593        -8.034
    OT......................  ............        -0.025      -0.129      -0.288      -0.474      -0.677      -0.883      -1.087      -1.289      -1.490      -1.692        -1.593        -8.034
Undistributed Offsetting
 Receipts (950):
  BA........................       -86.894       -99.723     -97.279     -99.233    -102.254    -104.367    -110.468    -117.124    -122.853    -127.757    -133.309      -502.856    -1,114.367
  OT........................       -86.894       -99.723     -97.279     -99.233    -102.254    -104.367    -110.468    -117.124    -122.853    -127.757    -133.309      -502.856    -1,114.367
  On-budget:
    BA......................       -71.643       -84.517     -81.449     -82.695     -84.857     -85.946     -91.248     -97.099    -101.718    -105.645    -110.174      -419.464      -925.348
    OT......................       -71.643       -84.517     -81.449     -82.695     -84.857     -85.946     -91.248     -97.099    -101.718    -105.645    -110.174      -419.464      -925.348
  Off-budget:
    BA......................       -15.251       -15.206     -15.830     -16.538     -17.397     -18.421     -19.220     -20.025     -21.135     -22.112     -23.135       -83.392      -189.019
    OT......................       -15.251       -15.206     -15.830     -16.538     -17.397     -18.421     -19.220     -20.025     -21.135     -22.112     -23.135       -83.392      -189.019
Global War on Terrorism
 (970):
  BA........................       159.423       126.544      50.000      50.000      50.000      50.000      50.000      50.000      50.000      50.000      50.000       326.544       576.544
  OT........................        75.984       117.835      92.661      64.878      54.401      50.929      50.147      49.851      49.784      49.769      49.769       380.704       630.024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                                                               TABLE 2.--FISCAL YEAR 2012 BUDGET RESOLUTION DISCRETIONARY SPENDING
                                                                                    [In billions of dollars]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
         Fiscal year              2011          2012         2013        2014        2015        2016        2017        2018        2019        2020        2021       2012-2016     2012-2021
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Summary
Total Spending:
  BA........................     1,182.761     1,139.974   1,079.883   1,095.524   1,108.667   1,122.766   1,139.781   1,162.246   1,185.789   1,209.598   1,233.627     5,546.812    11,477.854
  OT........................     1,352.070     1,285.957   1,207.946   1,166.605   1,155.469   1,160.959   1,170.491   1,182.506   1,208.292   1,231.858   1,259.695     5,976.935    12,029.777
Defense (050 + 970):
  BA........................       714.531       702.334     643.476     659.549     671.853     684.895     696.458     708.261     720.277     732.507     744.938     3,362.107     6,964.549
  OT........................       710.308       704.656     683.207     665.026     666.236     679.287     686.143     692.641     709.102     721.061     733.272     3,398.412     6,940.631
Nondefense:
  BA........................       468.230       437.640     436.406     435.975     436.814     437.871     443.323     453.985     465.512     477.091     488.689     2,184.706     4,513.305
  OT........................       641.762       581.301     524.739     501.579     489.233     481.672     484.348     489.864     499.190     510.797     526.423     2,578.524     5,089.146                                                                                           By Function
National Defense (050):
  BA........................       555.108       575.790     593.476     609.549     621.853     634.895     646.458     658.261     670.277     682.507     694.938     3,035.563     6,388.005
  OT........................       634.324       586.821     590.546     600.148     611.835     628.358     635.996     642.790     659.318     671.292     683.503     3,017.708     6,310.607
International Affairs (150):
  BA........................        45.985        32.316      32.316      32.316      32.316      32.316      32.145      32.374      33.183      34.020      34.861       161.580       328.164
  OT........................        48.858        39.014      35.494      34.964      33.507      32.712      32.086      31.828      32.279      32.976      33.660       175.691       338.520
General Science, Space, and
 Technology (250):
  BA........................        28.534        27.333      27.191      27.187      27.187      27.186      27.527      28.216      28.924      29.633      30.347       136.085       280.732
  OT........................        30.915        29.675      28.114      27.638      27.344      27.381      27.521      27.989      28.559      29.219      29.821       140.151       283.260
Energy (270):
  BA........................         4.009         1.898       1.798       1.798       1.798       1.798       1.820       1.866       1.912       1.959       2.006         9.089        18.652
  OT........................        12.456        11.964       8.927       5.981       2.834       1.870       1.850       1.898       1.913       1.925       1.947        31.576        41.109
Natural Resources and
 Environment (300):
  BA........................        29.838        28.793      27.193      25.612      25.550      25.479      25.765      26.431      27.115      27.793      28.484       132.625       268.214
  OT........................        38.250        34.099      30.976      29.065      27.797      26.264      25.810      25.009      25.487      26.041      26.660       148.202       277.208
Agriculture (350):
  BA........................         4.895         4.895       4.895       4.895       4.895       4.895       4.956       5.080       5.207       5.335       5.463        24.475        50.516
  OT........................         5.823         5.594       5.011       4.814       4.722       4.668       4.706       4.790       4.900       5.013       5.131        24.809        49.348
Commerce and Housing Credit
 (370):
  BA........................        -3.083        -4.179      -4.168      -4.190      -4.212      -4.237      -4.304      -4.412      -4.523      -4.634      -4.745       -20.986       -43.602
  OT........................         2.115        -0.128      -2.558      -2.821      -2.957      -3.739      -3.912      -4.036      -4.059      -4.103      -4.152       -12.202       -32.463
  On-budget:
    BA......................        -3.341        -4.437      -4.426      -4.448      -4.470      -4.495      -4.565      -4.679      -4.797      -4.915      -5.032       -22.276       -46.265
    OT......................         1.857        -0.388      -2.820      -3.084      -3.221      -4.003      -4.179      -4.308      -4.338      -4.388      -4.443       -13.516       -35.172
  Off-budget:
    BA......................         0.258         0.258       0.258       0.258       0.258       0.258       0.261       0.268       0.274       0.281       0.288         1.290         2.663
    OT......................         0.258         0.260       0.262       0.263       0.264       0.265       0.268       0.272       0.278       0.285       0.291         1.314         2.709
Transportation (400):
  BA........................        26.986        23.767      23.716      23.681      23.646      23.611      23.895      24.496      25.123      25.742      26.374       118.421       244.050
  OT........................        92.362        80.210      70.920      67.468      65.707      65.648      66.723      67.145      67.454      69.117      74.379       349.952       694.771
Community and Regional
 Development (450):
  BA........................        12.402        11.415      11.395      11.370      11.344      11.316      11.443      11.731      12.025      12.322      12.619        56.840       116.981
  OT........................        23.523        21.252      18.722      16.097      13.894      12.284      11.517      11.246      11.414      11.681      11.911        82.249       140.017
Education, Training,
 Employment and Social
 Services (500):
  BA........................        78.255        77.273      76.621      76.654      76.228      76.021      76.619      78.278      79.943      81.701      83.361       382.797       782.699
  OT........................       116.401       100.300      81.733      77.599      76.553      75.835      76.117      77.140      78.616      80.185      81.868       412.020       805.946
Health (550):
  BA........................        50.122        50.122      50.122      50.122      50.122      50.122      50.749      52.017      53.318      54.624      55.935       250.610       517.252
  OT........................        63.320        60.157      54.763      50.803      50.073      49.361      49.391      50.216      51.278      52.497      53.759       265.158       522.300
Medicare (570):
  BA........................         5.389         4.902       4.902       4.802       4.802       4.702       4.769       4.887       5.009       5.036       5.154        24.110        48.965
  OT........................         5.431         5.326       5.178       5.033       5.023       4.919       4.979       5.074       5.197       5.232       5.364        25.480        51.325
Income Security (600):
  BA........................        61.655        56.883      56.802      56.705      56.601      56.490      57.136      58.565      60.029      61.500      62.976       283.480       583.686
  OT........................        69.314        62.850      59.547      58.435      57.901      57.400      57.700      58.657      59.883      61.232      62.579       296.132       596.183
Social Security (650):
  BA........................         5.504         5.504       5.504       5.504       5.504       5.504       5.573       5.712       5.855       5.998       6.142        27.520        56.801
  OT........................         5.819         5.861       5.773       5.678       5.653       5.606       5.655       5.763       5.896       6.033       6.177        28.571        58.094
  On-budget:
    BA......................  ............  ............  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ............  ............
    OT......................         0.046         0.185       0.160       0.075       0.050  ..........  ..........  ..........  ..........  ..........  ..........         0.470         0.470
  Off-budget:
    BA......................         5.504         5.504       5.504       5.504       5.504       5.504       5.573       5.712       5.855       5.998       6.142        27.520        56.801
    OT......................         5.773         5.676       5.613       5.603       5.603       5.606       5.655       5.763       5.896       6.033       6.177        28.101        57.624
Veterans Benefits and
 Services (700):
  BA........................        56.812        58.979      60.918      62.834      64.840      66.904      69.004      71.179      73.500      75.843      78.292       314.475       682.293
  OT........................        55.958        57.866      60.992      62.798      64.558      66.385      68.399      70.529      72.827      75.155      77.551       312.599       677.059
Administration of Justice
 (750):
  BA........................        44.561        47.676      42.988      42.988      42.988      42.988      43.525      44.614      45.729      46.849      47.973       219.628       448.319
  OT........................        52.539        50.607      46.843      44.978      44.226      43.443      43.681      44.475      45.515      46.464      47.576       230.097       457.807
General Government (800):
  BA........................        16.366        16.035      16.033      16.027      16.020      16.012      16.186      16.591      17.006      17.423      17.842        80.127       165.175
  OT........................        18.678        18.915      17.301      16.411      15.821      15.437      15.461      15.666      15.758      16.097      16.475        83.884       163.341
Allowances (920):
  BA........................  ............        -5.972      -1.819      -2.329      -2.814      -3.236      -3.486      -3.639      -3.844      -4.055      -4.396       -16.170       -35.590
  OT........................  ............        -2.262      -2.998      -3.362      -3.420      -3.802      -3.337      -3.526      -3.726      -3.965      -4.283       -15.845       -34.681
Global War on Terrorism
 (970):
  BA........................       159.423       126.544      50.000      50.000      50.000      50.000      50.000      50.000      50.000      50.000      50.000       326.544       576.544
  OT........................        75.984       117.835      92.661      64.878      54.401      50.929      50.147      49.851      49.784      49.769      49.769       380.704       630.024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                                                                 TABLE 3.--FISCAL YEAR 2012 BUDGET RESOLUTION MANDATORY SPENDING
                                                                                    [In billions of dollars]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
         Fiscal year              2011          2012         2013        2014        2015        2016        2017        2018        2019        2020        2021       2012-2016     2012-2021
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Summary
Total Spending:
  BA........................     2,357.560     2,302.218   2,403.048   2,496.980   2,586.994   2,757.279   2,894.508   3,025.496   3,211.534   3,392.622   3,552.648    12,546.519    28,623.327
  OT........................     2,265.730     2,242.580   2,351.053   2,419.194   2,515.236   2,697.027   2,827.227   2,940.781   3,143.879   3,311.924   3,479.407    12,225.090    27,928.309
On-budget:
  BA........................     1,863.758     1,724.334   1,762.254   1,819.011   1,870.384   2,000.223   2,092.424   2,174.723   2,308.834   2,432.895   2,534.368     9,176.206    20,719.451
  OT........................     1,774.728     1,667.896   1,713.809   1,745.025   1,802.926   1,944.621   2,030.343   2,095.459   2,247.029   2,358.647   2,467.627     8,874.278    20,073.383
Off-budget:
  BA........................       493.802       577.884     640.793     677.969     716.610     757.056     802.084     850.772     902.700     959.727   1,018.280     3,370.313     7,903.876
  OT........................       491.002       574.684     637.243     674.169     712.310     752.406     796.884     845.322     896.850     953.277   1,011.780     3,350.813     7,854.926                                                                                           By Function
National Defense (050):
  BA........................         6.064         6.836       6.807       6.902       6.994       7.081       7.237       7.418       7.607       7.766       7.965        34.620        72.613
  OT........................         6.072         6.759       6.665       6.755       7.002       7.117       7.279       7.456       7.641       7.796       7.991        34.298        72.461
International Affairs (150):
  BA........................         5.888         4.259       3.337      -0.622      -2.000      -2.960      -1.416      -0.396      -0.359      -0.322      -0.289         2.014        -0.768
  OT........................        -4.720        -2.912      -0.949      -0.786      -0.894      -0.551      -0.160      -0.234      -1.792      -2.853      -2.920        -6.092       -14.051
General Science, Space, and
 Technology (250):
  BA........................         0.115         0.119       0.125       0.125       0.125       0.125       0.125       0.125       0.125       0.125       0.125         0.619         1.244
  OT........................         0.122         0.123       0.128       0.125       0.125       0.125       0.125       0.125       0.125       0.125       0.125         0.626         1.251
Energy (270):
  BA........................         2.526         5.098       2.052      -0.583      -0.697      -0.777      -0.810      -0.791      -0.701      -0.780      -0.811         5.093         1.200
  OT........................         0.872         4.210       1.126      -1.434      -1.474      -1.530      -1.390      -1.359      -1.416      -1.455      -1.471         0.898        -6.193
Natural Resources and
 Environment (300):
  BA........................         2.148         3.128       2.221      -0.316       1.343      -0.248       0.391       0.187      -0.159      -0.006      -0.728         6.128         5.813
  OT........................         2.181         2.719       2.409      -0.122       1.473      -0.194       0.497       0.299      -0.048      -0.051      -0.668         6.285         6.315
Agriculture (350):
  BA........................        21.442        14.924      13.501      11.822      12.460      12.340      11.903      11.945      11.952      12.134      12.292        65.047       125.273
  OT........................        15.880        13.965      16.978      11.655      11.966      11.837      11.363      11.390      11.383      11.566      11.742        66.401       123.845
Commerce and Housing Credit
 (370):
  BA........................        -3.637        19.454       8.166       4.856       1.761       1.135       4.072       4.418       4.575       4.787       4.836        35.372        58.060
  OT........................        -8.823        17.363       5.131     -11.002     -16.296     -19.556     -19.613     -21.673     -13.209     -13.604     -15.207       -24.360      -107.666
  On-budget:
    BA......................        -7.137        18.754       8.466       4.956       1.861       1.235       4.272       4.418       4.575       4.787       4.836        35.272        58.160
    OT......................       -12.323        16.663       5.431     -10.902     -16.196     -19.456     -19.413     -21.673     -13.209     -13.604     -15.207       -24.460      -107.566
  Off-budget:
    BA......................         3.500         0.700      -0.300      -0.100      -0.100      -0.100      -0.200  ..........  ..........  ..........  ..........         0.100        -0.100
    OT......................         3.500         0.700      -0.300      -0.100      -0.100      -0.100      -0.200  ..........  ..........  ..........  ..........         0.100        -0.100
Transportation (400):
  BA........................        58.006        40.549      40.799      40.584      36.731      44.952      42.021      46.082      41.596      41.730      42.562       203.615       417.606
  OT........................         2.302         0.221       0.344       0.254       0.377       0.309       0.313       0.306       2.415       2.434       2.474         1.505         9.447
Community and Regional
 Development (450):
  BA........................         3.430         0.157      -0.051      -0.090      -0.138      -0.199      -0.224      -0.234      -0.246      -0.257      -0.265        -0.321        -1.547
  OT........................         0.783         2.307       1.887       2.030       0.282      -0.027      -0.286      -0.386      -0.386      -0.387      -0.387         6.479         4.647
Education, Training,
 Employment and Social
 Services (500):
  BA........................       -20.499       -10.151     -12.734     -10.578      -6.782      -2.707      -1.248      -1.480      -1.629      -2.072      -2.409       -42.952       -51.790
  OT........................       -16.123        -0.288      -8.662      -9.555      -6.103      -2.525      -0.452      -0.127      -0.231      -0.379      -0.821       -27.133       -29.143
Health (550):
  BA........................       326.228       291.751     293.611     287.942     276.890     270.287     288.914     297.823     318.508     341.284     348.739     1,420.481     3,015.749
  OT........................       312.555       286.479     285.845     269.641     265.044     275.839     293.312     297.087     317.280     329.559     346.923     1,382.848     2,967.009
Medicare (570):
  BA........................       485.490       476.619     515.001     545.303     568.450     614.243     633.169     652.180     706.477     753.235     803.952     2,719.616     6,268.629
  OT........................       485.256       476.490     515.228     545.215     568.310     614.466     633.080     652.037     706.700     753.144     803.837     2,719.709     6,268.507
Income Security (600):
  BA........................       530.632       444.781     430.696     400.603     374.549     380.169     379.849     382.902     397.154     406.808     417.711     2,030.798     4,015.222
  OT........................       533.759       438.156     427.701     397.637     371.242     381.496     377.095     375.645     394.565     404.333     415.363     2,016.232     3,983.233
Social Security (650):
  BA........................       729.576       763.556     802.164     845.240     892.137     943.197   1,000.525   1,063.002   1,129.479   1,200.197   1,272.066     4,246.294     9,911.563
  OT........................       726.776       760.356     798.614     841.440     887.837     938.547     995.325   1,057.552   1,123.629   1,193.747   1,265.566     4,226.794     9,862.613
  On-budget:
    BA......................       106.523        54.439      29.096      32.701      36.261      40.171      44.263      48.717      53.508      58.552      64.053       192.668       461.761
    OT......................       106.523        54.439      29.096      32.701      36.261      40.171      44.263      48.717      53.508      58.552      64.053       192.668       461.761
  Off-budget:
    BA......................       623.053       709.117     773.068     812.539     855.876     903.026     956.262   1,014.285   1,075.971   1,141.645   1,208.013     4,053.626     9,449.802
    OT......................       620.253       705.917     769.518     808.739     851.576     898.376     951.062   1,008.835   1,070.121   1,135.195   1,201.513     4,034.126     9,400.852
Veterans Benefits and
 Services (700):
  BA........................        72.519        69.360      69.106      71.309      73.327      80.506      77.319      74.233      81.591      83.837      86.089       363.608       766.677
  OT........................        72.477        69.274      69.033      71.257      73.293      80.483      77.305      74.222      81.580      83.824      86.071       363.340       766.342
Administration of Justice
 (750):
  BA........................         2.252         9.270       2.338       2.105       1.940       4.021       2.206       2.085       2.039       3.999       4.890        19.674        34.893
  OT........................         2.627         3.324       3.639       3.686       3.111       5.076       2.969       2.482       2.134       3.951       4.831        18.836        35.203
General Government (800):
  BA........................         9.971         6.727       6.152       6.205       6.163       6.205       6.267       6.388       6.553       6.492       6.514        31.452        63.666
  OT........................         8.325         8.290       6.159       6.208       6.200       6.206       6.257       6.350       6.537       6.509       6.549        33.063        65.265
Net Interest (900):
  BA........................       212.303       255.731     317.745     386.625     448.008     506.973     557.872     600.266     633.687     665.554     687.087     1,915.081     5,059.547
  OT........................       212.303       255.731     317.745     386.625     448.008     506.973     557.872     600.266     633.687     665.554     687.087     1,915.081     5,059.547
  On-budget:
    BA......................       329.803       372.433     433.760     504.269     569.303     633.745     691.747     742.666     784.534     823.870     851.993     2,513.510     6,408.320
    OT......................       329.803       372.433     433.760     504.269     569.303     633.745     691.747     742.666     784.534     823.870     851.993     2,513.510     6,408.320
  Off-budget:
    BA......................      -117.500      -116.702    -116.016    -117.644    -121.295    -126.772    -133.875    -142.401    -150.847    -158.316    -164.906      -598.428    -1,348.773
    OT......................      -117.500      -116.702    -116.016    -117.644    -121.295    -126.772    -133.875    -142.401    -150.847    -158.316    -164.906      -598.428    -1,348.773
Allowances (920):
  BA........................  ............        -0.226      -0.709      -1.219      -2.013      -2.697      -3.196      -3.533      -3.862      -4.132      -4.369        -6.864       -25.956
  OT........................  ............        -0.263      -0.689      -1.202      -2.013      -2.697      -3.196      -3.533      -3.862      -4.132      -4.369        -6.864       -25.956
  On-budget:
    BA......................  ............        -0.201      -0.580      -0.931      -1.539      -2.020      -2.313      -2.446      -2.573      -2.642      -2.677        -5.271       -17.922
    OT......................  ............        -0.238      -0.560      -0.914      -1.539      -2.020      -2.313      -2.446      -2.573      -2.642      -2.677        -5.271       -17.922
  Off-budget:
    BA......................  ............        -0.025      -0.129      -0.288      -0.474      -0.677      -0.883      -1.087      -1.289      -1.490      -1.692        -1.593        -8.034
    OT......................  ............        -0.025      -0.129      -0.288      -0.474      -0.677      -0.883      -1.087      -1.289      -1.490      -1.692        -1.593        -8.034
Undistributed Offsetting
 Receipts (950):
  BA........................       -86.894       -99.723     -97.279     -99.233    -102.254    -104.367    -110.468    -117.124    -122.853    -127.757    -133.309      -502.856    -1,114.367
  OT........................       -86.894       -99.723     -97.279     -99.233    -102.254    -104.367    -110.468    -117.124    -122.853    -127.757    -133.309      -502.856    -1,114.367
  On-budget:
    BA......................       -71.643       -84.517     -81.449     -82.695     -84.857     -85.946     -91.248     -97.099    -101.718    -105.645    -110.174      -419.464      -925.348
    OT......................       -71.643       -84.517     -81.449     -82.695     -84.857     -85.946     -91.248     -97.099    -101.718    -105.645    -110.174      -419.464      -925.348
  Off-budget:
    BA......................       -15.251       -15.206     -15.830     -16.538     -17.397     -18.421     -19.220     -20.025     -21.135     -22.112     -23.135       -83.392      -189.019
    OT......................       -15.251       -15.206     -15.830     -16.538     -17.397     -18.421     -19.220     -20.025     -21.135     -22.112     -23.135       -83.392      -189.019
Global War on Terrorism
 (970):
  BA........................  ............  ............  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ............  ............
  OT........................  ............  ............  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ............  ............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                                                 TABLE 4.--SUMMARY OF FISCAL YEAR 2012 BUDGET RESOLUTION
                                                                [As a percentage of GDP]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                 Average
                                                                     2011   2012   2013   2014   2015   2016   2017   2018   2019   2020   2021  2012-21
--------------------------------------------------------------------------------------------------------------------------------------------------------
Deficit:
    Committee Recommendation......................................    9.2    6.3    4.3    2.9    2.4    2.5    2.0    1.8    1.9    1.8    1.6      2.7
    CBO...........................................................    9.3    6.9    4.2    3.0    3.0    3.3    2.9    2.8    3.0    3.1    3.1      3.5
    President's Budget............................................    9.5    7.4    5.5    4.4    4.1    4.4    4.3    4.3    4.7    4.8    4.9      4.9
Debt Held by the Public:
    Committee Recommendation......................................   68.8   72.8   74.5   74.2   73.2   72.5   71.7   70.7   69.8   68.7   67.5       na
    CBO...........................................................   68.9   73.4   75.1   74.9   74.5   74.6   74.7   74.7   75.0   75.3   75.6       na
    President's Budget............................................   69.1   74.3   77.2   78.3   78.9   79.9   81.1   82.4   84.0   85.7   87.4       na
Outlays:
    Committee Recommendation......................................   24.1   22.5   21.7   20.8   20.2   20.2   20.0   19.7   19.9   19.9   19.9     20.5
    CBO...........................................................   24.1   23.2   23.0   22.9   23.0   23.3   23.3   23.2   23.6   23.7   23.9     23.3
    President's Budget............................................   24.3   23.6   23.2   23.0   23.0   23.4   23.4   23.4   23.8   24.0   24.2     23.5
Revenues:
    Committee Recommendation......................................   14.8   16.1   17.4   17.9   17.8   17.6   17.9   17.9   18.0   18.2   18.3     17.7
    CBO...........................................................   14.8   16.3   18.8   19.9   20.0   20.0   20.3   20.4   20.5   20.6   20.8     19.8
    President's Budget............................................   14.8   16.2   17.7   18.6   18.9   19.0   19.1   19.1   19.1   19.2   19.3     18.6
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                                                 TABLE 5.--FISCAL YEAR 2012 BUDGET RESOLUTION VS. THE PRESIDENT'S BUDGET
                                                                                                        [In billions of dollars]
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                         Fiscal year                              2011          2012         2013        2014        2015        2016        2017        2018         2019          2020          2021        2012-2016      2012-2021
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             FIscal Year 2012 Budget Resolution as Approved
Total Spending:
  BA........................................................     3,540.321     3,442.192   3,482.930   3,592.504   3,695.660   3,880.045   4,034.289   4,187.742     4,397.323     4,602.220     4,786.275    18,093.331      40,101.181
  OT........................................................     3,617.800     3,528.537   3,558.999   3,585.799   3,670.705   3,857.986   3,997.718   4,123.287     4,352.171     4,543.782     4,739.102    18,202.026      39,958.085
On-budget:
  BA........................................................     3,040.757     2,858.546   2,836.375   2,908.773   2,973.288   3,117.227   3,226.372   3,330.990     3,488.494     3,636.213     3,761.565    14,694.209      32,137.842
  OT........................................................     3,120.767     2,947.917   2,915.880   2,905.764   2,952.528   3,099.709   3,194.911   3,271.929     3,449.147     3,584.187     3,720.855    14,821.797      32,042.826
Off-budget:
  BA........................................................       499.564       583.646     646.555     683.731     722.372     762.818     807.918     856.752       908.829       966.007     1,024.710     3,399.123       7,963.339
  OT........................................................       497.033       580.620     643.119     680.035     718.177     758.277     802.806     851.357       903.024       959.596     1,018.248     3,380.228       7,915.259
Revenues:
  Total.....................................................     2,230.199     2,533.212   2,860.329   3,093.942   3,236.738   3,377.014   3,589.281   3,744.762     3,938.622     4,142.155     4,354.210    15,101.235      34,870.265
  On-budget.................................................     1,664.563     1,866.454   2,127.981   2,324.503   2,425.363   2,522.695   2,693.493   2,807.893     2,958.678     3,119.794     3,286.942    11,266.996      26,133.796
  Off-budget................................................       565.636       666.758     732.348     769.439     811.375     854.319     895.788     936.869       979.944     1,022.361     1,067.268     3,834.239       8,736.469
Surplus/Deficit (-):
  Total.....................................................    -1,387.601      -995.325    -698.670    -491.857    -433.967    -480.972    -408.437    -378.525      -413.549      -401.627      -384.892    -3,100.791      -5,087.820
  On-budget.................................................    -1,456.204    -1,081.463    -787.899    -581.261    -527.165    -577.014    -501.418    -464.036      -490.469      -464.392      -433.912    -3,554.801      -5,909.030
  Off-budget................................................        68.603        86.138      89.229      89.404      93.198      96.042      92.982      85.512        76.920        62.765        49.020       454.011         821.210                                                                                              CBO Reestimate of President's FY 2012 Budget
Total Spending:
  BA........................................................     3,677.645     3,709.647   3,747.784   4,000.342   4,237.851   4,517.330   4,748.371   4,969.225     5,258.895     5,555.389     5,819.706    20,212.954      46,564.540
  OT........................................................     3,654.674     3,707.711   3,799.617   3,976.170   4,190.719   4,475.798   4,687.227   4,896.108     5,200.243     5,482.594     5,755.561    20,150.015      46,171.748
On-budget:
  BA........................................................     3,177.788     3,125.156   3,100.451   3,315.659   3,514.460   3,753.448   3,939.325   4,111.173     4,348.530     4,587.593     4,792.920    16,809.174      38,588.715
  OT........................................................     3,157.641     3,126.667   3,155.807   3,295.189   3,471.671   3,716.602   3,883.405   4,043.545     4,295.770     4,521.290     4,735.320    16,765.936      38,245.266
Off-budget:
  BA........................................................       499.857       584.491     647.333     684.683     723.391     763.882     809.046     858.052       910.365       967.796     1,026.786     3,403.780       7,975.825
  OT........................................................       497.033       581.044     643.810     680.981     719.048     759.196     803.822     852.563       904.473       961.304     1,020.241     3,384.079       7,926.482
Revenues:
  Total.....................................................     2,229.272     2,543.820   2,898.846   3,211.879   3,442.445   3,634.952   3,817.507   3,993.990     4,179.021     4,381.930     4,597.186    15,731.942      36,701.576
  On-budget.................................................     1,663.636     1,877.062   2,166.741   2,442.771   2,631.410   2,780.984   2,922.080   3,057.493     3,199.460     3,359.964     3,530.324    11,898.968      27,968.289
  Off-budget................................................       565.636       666.758     732.105     769.108     811.035     853.968     895.427     936.497       979.561     1,021.966     1,066.862     3,832.974       8,733.287
Surplus/Deficit (-):
  Total.....................................................    -1,425.402    -1,163.891    -900.771    -764.291    -748.274    -840.846    -869.720    -902.118    -1,021.222    -1,100.664    -1,158.375    -4,418.073      -9,470.172
  On-budget.................................................    -1,494.005    -1,249.605    -989.066    -852.418    -840.261    -935.618    -961.325    -986.052    -1,096.310    -1,161.326    -1,204.996    -4,866.968     -10,276.977
  Off-budget................................................        68.603        85.714      88.295      88.127      91.987      94.772      91.605      83.934        75.088        60.662        46.621       448.895         806.805                                                                                                               Difference
Total Spending:
  BA........................................................      -137.324      -267.455    -264.854    -407.838    -542.191    -637.285    -714.082    -781.483      -861.572      -953.169    -1,033.431    -2,119.623      -6,463.359
  OT........................................................       -36.874      -179.174    -240.618    -390.371    -520.014    -617.812    -689.509    -772.821      -848.072      -938.812    -1,016.459    -1,947.989      -6,213.663
On-budget:
  BA........................................................      -137.031      -266.610    -264.076    -406.886    -541.172    -636.221    -712.953    -780.183      -860.036      -951.380    -1,031.355    -2,114.965      -6,450.873
  OT........................................................       -36.874      -178.750    -239.927    -389.425    -519.143    -616.893    -688.494    -771.616      -846.623      -937.103    -1,014.465    -1,944.139      -6,202.440
Off-budget:
  BA........................................................        -0.293        -0.845      -0.778      -0.952      -1.019      -1.064      -1.128      -1.300        -1.536        -1.789        -2.076        -4.657         -12.486
  OT........................................................         0.000        -0.424      -0.691      -0.946      -0.871      -0.919      -1.016      -1.206        -1.449        -1.708        -1.993        -3.851         -11.223
Revenues:
  Total.....................................................         0.927       -10.608     -38.517    -117.937    -205.707    -257.938    -228.226    -249.228      -240.399      -239.775      -242.976      -630.707      -1,831.310
  On-budget.................................................         0.927       -10.608     -38.760    -118.268    -206.047    -258.289    -228.587    -249.600      -240.782      -240.170      -243.382      -631.972      -1,834.492
  Off-budget................................................         0.000         0.000       0.243       0.331       0.340       0.351       0.361       0.372         0.383         0.395         0.406         1.265           3.182
Surplus/Deficit (-):
  Total.....................................................       -37.801      -168.566    -202.101    -272.434    -314.307    -359.874    -461.284    -523.594      -607.673      -699.037      -773.483    -1,317.282      -4,382.352
  On-budget.................................................       -37.801      -168.142    -201.167    -271.157    -313.095    -358.604    -459.907    -522.016      -605.840      -696.933      -771.083    -1,312.167      -4,367.947
  Off-budget................................................         0.000        -0.424      -0.934      -1.277      -1.211      -1.270      -1.377      -1.578        -1.832        -2.103        -2.399        -5.116         -14.405
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                           TABLE 6.--COMPARISON OF TOTAL BUDGET REVENUES FOR PRESIDENT'S REQUEST AND COMMITTEE RECOMMENDATION
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              2011     2012     2013     2014     2015     2016     2017     2018     2019     2020     2021   2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
President's Request.......................    2,229    2,544    2,899    3,212    3,442    3,635    3,818    3,994    4,179    4,382    4,597     36,702
Committee Recommendation..................    2,230    2,533    2,860    3,094    3,237    3,377    3,589    3,745    3,939    4,142    4,354     34,870
Difference................................        1      -11      -39     -118     -206     -258     -228     -249     -240     -240     -243     -1,831
--------------------------------------------------------------------------------------------------------------------------------------------------------


                             TABLE 7.--COMPARISON OF ON-BUDGET REVENUES FOR PRESIDENT'S REQUEST AND COMMITTEE RECOMMENDATION
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              2011     2012     2013     2014     2015     2016     2017     2018     2019     2020     2021   2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
President's Request.......................    1,664    1,877    2,167    2,443    2,631    2,781    2,922    3,057    3,199    3,360    3,530     27,968
Committee Recommendation..................    1,665    1,866    2,128    2,325    2,425    2,523    2,693    2,808    2,959    3,120    3,287     26,134
Difference................................        1      -11      -39     -118     -206     -258     -229     -250     -241     -240     -243     -1,834
--------------------------------------------------------------------------------------------------------------------------------------------------------

                      Economic Assumptions of the
                           Budget Resolution

                              ----------                              


                              Introduction

    The U.S. economy began to slowly recover, in the latter 
part of 2009, from the damaging effects of a long and deep 
recession and financial crisis. Growth in gross domestic 
product [GDP] turned positive, financial markets normalized, 
and major credit markets began to function smoothly after an 
extended period of paralysis and turmoil. Still, the recession 
and financial crisis put the economy in a deep ditch, and the 
climb out will take years. A prime example of this uphill climb 
is the labor market. Total job losses during the recession and 
aftermath summed to 8.7 million, and as of early 2011, only 1.5 
million of those jobs have been recouped. Although the latest 
employment data are encouraging, at the current pace of job 
creation it would still take until the end of the decade to 
return to a pre-recession level of unemployment of around 5.0 
percent.
    The economic crisis and actions by the Congress also 
promise to have long-lasting negative effects on the Federal 
budget and the U.S. fiscal position more generally. Before the 
crisis, the Congressional Budget Office [CBO] projected the 
budget deficit would be about $250 billion in 2010, or 1.5 
percent of GDP, with a debt level just under the long-term 
historical average. Today, a budget deficit measured in 
billions almost seems quaint; last year's deficit was $1.4 
trillion, nearly 10 percent of GDP--the largest deficit, as a 
share of the economy, since World War II.
    The sources of this swift and sharp deterioration in 
Federal finances are easy to identify: the recession and 
financial crisis shrank tax revenues while record spending 
across the entire government--from temporary initiatives aimed 
at addressing the financial crisis, to permanent expansions--
caused the public debt to soar. In many important ways, the 
sizeable losses recorded by the private sector in 2008 and 2009 
have simply been transferred to the public sector. While 
household and bank balance sheets have mended, the public 
balance sheet has deteriorated and sovereign risk has 
increased. Experts say that U.S. debt has now reached levels 
that promise to hamper economic growth and job creation, or 
even spark an economic crisis, in the coming years. The 
Nation's economic health and prosperity depend increasingly on 
reining in budget deficits and getting debt levels under 
control.

                     The Current Economic Situation

    The current data suggest the U.S. economy is expanding at a 
moderate pace, though the recovery from the recession and 
financial crisis still promises to be long and difficult.

     Real GDP grew by just more than 2\1/2\ percent in 
2010. Private Blue Chip forecasters expect growth of just more 
than 3.0 percent in 2011, rising toward 3\1/2\ percent (with 
some upside potential) in 2012.

     Total payroll employment rose by 216,000 in March. 
Recent monthly job increases have been encouraging, though at 
this pace it would still take until the end of the decade to 
return to a pre-recession level of unemployment (5.0 percent).

     Since late last year, the unemployment rate has 
declined from 9.8 percent to its current level of 8.8 percent. 
Still, a broader gauge of unemployment, which includes 
individuals who are marginally attached to the workforce, are 
closer to 16 percent. In addition, the share of the unemployed 
population who have been out of work for 6 months or more is 45 
percent.

     Food, energy, and other commodity prices have 
increased sharply in recent months, straining family budgets. 
(Food and energy account for slightly less than 15 percent of 
consumer spending.) Oil prices are well over $100 per barrel 
heading into the spring, pushed upward in part by continued 
turmoil in the Middle East.

     These food and energy prices have caused headline 
inflation to drift somewhat higher in recent months, although 
so-called ``core'' inflation (excluding food and energy) is 
still well contained at just more than 1.0 percent. This is 
still below the Federal Reserve's implicit target range of 2.0 
percent to 2.5 percent for core inflation.

     The housing market is still quite weak and remains 
a lingering headwind for the U.S. economy. New home sales 
continue to hover at an all-time low and the excess inventory 
of homes continues to weigh on home prices. Since their peak in 
2006, national home values have fallen by about one-third.

     The manufacturing sector has been showing signs of 
strength recently, after a significant decline. The Institute 
of Supply Management's manufacturing index has topped 61 in 
recent months (readings above 50 indicate expansion) and 
manufacturing employment is up by more than 125,000 in the past 
5 months.

     The stock market has rallied sharply since last 
fall, helped along by the Federal Reserve's additional monetary 
stimulus through ``quantitative easing,'' or QE2, over this 
period. For instance, the Standard & Poor's 500 has risen by 
more than 20 percent since last fall.

                          The Economic Outlook

     The economic projections from the administration, 
the CBO, and private forecasters generally show moderate to 
fairly strong growth in the next few years (see Table 1).

                                      TABLE 8.--ECONOMIC PROJECTIONS: ADMINISTRATION, CBO, AND PRIVATE FORECASTERS
                                                                    [Calendar years]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     2010    2011    2012    2013    2014    2015    2016    2017    2018    2019    2020    2021
--------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Percent Change
Real GDP:
    Administration Budget.........................    2.7     2.7     3.6     4.4     4.3     3.8     3.3     2.9     2.6     2.5     2.5     2.5
    CBO (Jan. 2011)...............................    2.8     2.7     3.1     3.1     3.5     3.8     3.0     2.5     2.4     2.4     2.4     2.3
    Blue Chip*....................................    2.9     3.1     3.3     3.2     3.1     2.9     2.8     2.7     2.6     2.6     2.6     2.6
Consumer Price Index:
    Administration Budget.........................    1.6     1.3     1.8     1.9     2.0     2.0     2.1     2.1     2.1     2.1     2.1     2.1
    CBO (Jan. 2011)...............................    1.7     1.6     1.3     1.6     1.8     2.0     2.2     2.4     2.3     2.3     2.3     2.3
    Blue Chip*....................................    1.6     2.2     2.1     2.3     2.4     2.4     2.4     2.4     2.4     2.4     2.4     2.4                                                                 Annual Average, Percent
Unemployment Rate:
    Administration Budget.........................    9.6     9.3     8.6     7.5     6.6     5.9     5.5     5.3     5.3     5.3     5.3     5.3
    CBO (Jan. 2011)...............................    9.6     9.4     8.4     7.6     6.8     5.9     5.3     5.3     5.2     5.2     5.2     5.2
    Blue Chip*....................................    9.6     9.0     8.4     7.5     6.8     6.3     6.0     5.8     5.6     5.6     5.6     5.6
3-Month Treasury Bill:
    Administration Budget.........................    0.1     0.2     1.0     2.6     3.7     4.0     4.1     4.1     4.1     4.1     4.1     4.1
    CBO (Jan. 2011)...............................    0.1     0.3     1.1     2.5     3.5     4.0     4.3     4.4     4.4     4.4     4.4     4.4
    Blue Chip*....................................    0.1     0.2     1.1     2.9     3.6     3.8     3.9     4.0     3.9     3.9     3.9     3.9
10-Year Treasury Note:
    Administration Budget.........................    3.2     3.0     3.6     4.2     4.6     5.0     5.2     5.3     5.3     5.3     5.3     5.3
    CBO (Jan. 2011)...............................    3.2     3.4     3.8     4.2     4.6     5.0     5.3     5.4     5.4     5.4     5.4     5.4
    Blue Chip*....................................    3.2     3.7     4.3     4.9     5.2     5.4     5.4     5.4     5.4     5.4     5.4     5.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Figures for 2011 through 2021 are from the Blue Chip forecast of March 2011.Sources: Office of Management and Budget, Congressional Budget Office, Blue Chip Economic Indcators.


     CBO sees economic growth improving at a moderate 
pace in the coming years. GDP is expected to move into the 3-
percent to 3\1/2\ percent growth range in the next few years, 
even reaching nearly 4.0 percent in 2015. The administration's 
near-term GDP is outlook is more optimistic than either CBO or 
the Blue Chip consensus. For instance, the administration is 
calling for growth well in excess of 4.0 percent in 2013 and 
2014, just as significant tax increases are being absorbed by 
the economy. Consecutive-year GDP growth in excess of 4.0 
percent has not been realized in the U.S. since the latter part 
of the 1990s.

     Most forecasts see the unemployment rate declining 
slowly from its current elevated level. Both CBO and the 
administration do not see the unemployment rate falling back to 
the 5.0-percent range until the latter part of the decade. The 
Blue Chip consensus sees unemployment ranging between 5\1/2\ 
percent and 6 percent even in the latter part of the budget 
horizon.

     As the economy recovers, the forecasts predict 
that interest rates will gradually move higher. The 10-year 
Treasury rate, for instance, is expected to rise from its 
current level of about 3\1/2\ percent into the 4-percent to 5-
percent range over the medium term. Despite showing stronger 
economic growth than CBO, the administration projects long-term 
interest rates at, or below CBO's. The Blue Chip consensus 
expects higher interest rates over the near term than either 
the administration or CBO. Over the medium term, the private 
sector consensus sees the 10-year rate reaching nearly 5.5 
percent.

     Rates of inflation are also expected to normalize 
in the coming years from their current very low levels. Both 
CBO and the administration expect the consumer price index to 
move up to the 2.0-percent range in 2015. The Blue Chip 
consensus sees inflation exceeding 2.0 percent as early as 
2012.
    CBO's annual economic assumptions were adopted for use in 
the budget resolution and are shown in Table 9.

                                                 TABLE 9.--ECONOMIC ASSUMPTIONS OF THE BUDGET RESOLUTION
                                                               [Calendar years, 2010-2021]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           2010    2011    2012    2013    2014    2015    2016    2017    2018    2019    2020    2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Percent Change
Real GDP:
    CBO (Jan. 2011).....................................    2.8     2.7     3.1     3.1     3.5     3.8     3.0     2.5     2.4     2.4     2.4     2.3
Consumer Price Index:
    CBO (Jan. 2011).....................................    1.7     1.6     1.3     1.6     1.8     2.0     2.2     2.4     2.3     2.3     2.3     2.3                                                                 Annual Average, Percent
Unemployment Rate:
    CBO (Jan. 2011).....................................    9.6     9.4     8.4     7.6     6.8     5.9     5.3     5.3     5.2     5.2     5.2     5.2
3-Month Treasruy Bill:
    CBO (Jan. 2011).....................................    0.1     0.3     1.1     2.5     3.5     4.0     4.3     4.4     4.4     4.4     4.4     4.4
10-Year Treasury Note:
    CBO (Jan. 2011).....................................    3.2     3.4     3.8     4.2     4.6     5.0     5.3     5.4     5.4     5.4     5.4     5.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sources: Office of Management and Budget, Congressional Budget Office, Blue Chip Economic Indcators.


                                   TABLE 10.--TAX EXPENDITURE ESTIMATES BY BUDGET FUNCTION, FISCAL YEARS 2010-2014\1\
                                                                  [Billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Corporations                                 Individuals
                      Function                      ------------------------------------------------------------------------------------------   Total
                                                       2010     2011     2012     2013     2014     2010     2011     2012     2013     2014    2010-14
--------------------------------------------------------------------------------------------------------------------------------------------------------
National Defense
    Exclusion of benefits and allowances to armed    .......  .......  .......  .......  .......      4.3      4.7      4.9      5.1      5.7       24.7
     forces personnel..............................
    Exclusion of military disability benefits......  .......  .......  .......  .......  .......      0.2      0.2      0.2      0.2      0.2        1.1
    Deduction for overnight-travel expenses of       .......  .......  .......  .......  .......      0.1      0.1      0.1      0.1      0.1        0.3
     national guard and reserve members............
    Exclusion of combat pay........................  .......  .......  .......  .......  .......      1.2      1.0      0.9      0.9      1.0        4.9
International Affairs
    Exclusion of certain allowances for Federal      .......  .......  .......  .......  .......      1.6      1.7      1.8      1.9      2.0        9.0
     employees abroad..............................
    Exclusion of foreign earned income:
        Housing....................................  .......  .......  .......  .......  .......      1.1      1.1      1.2      1.2      1.3        5.9
        Salary.....................................  .......  .......  .......  .......  .......      5.1      5.2      5.4      5.6      5.8       27.1
    Inventory property sales source rule exception.      7.2      7.4      7.6      7.8      8.0  .......  .......  .......  .......  .......       38.0
    Deduction for foreign taxes instead of a credit      0.2      0.2      0.3      0.3      0.3  .......  .......  .......  .......  .......        1.3
    Interest expense allocation:
        Unavailability of symmetric worldwide           -2.7     -2.9     -3.1     -3.3     -3.5  .......  .......  .......  .......  .......      -15.5
         method*...................................
        Separate grouping of affiliated financial        1.2      1.3      1.4      1.5      1.6  .......  .......  .......  .......  .......        7.0
         companies.................................
    Apportionment of research and development            0.3      0.3      0.4      0.4      0.4  .......  .......  .......  .......  .......        1.8
     expenses for determination of foreign tax
     credits.......................................
    Special rules for interest-charge domestic           0.5      0.1      0.1      0.1      0.1  .......  .......  .......  .......  .......        0.9
     international sales corporations..............
    Tonnage tax....................................      0.1      0.1      0.1      0.1      0.1  .......  .......  .......  .......  .......        0.5
    Deferral of active income of controlled foreign     12.5     13.3     14.1     14.9     15.8  .......  .......  .......  .......  .......       70.6
     corporations..................................
    Deferral of active financing income\2\.........      1.0  .......  .......  .......  .......  .......  .......  .......  .......  .......        1.0
General Science, Space, and Technology
    Credit for increasing research activities            4.0      3.0      2.3      1.8      0.9      0.1      0.1    (\3\)    (\3\)    (\3\)       12.6
     (section 41)..................................
    Expensing of research and experimental               4.3      4.2      4.4      5.8      6.9      0.1      0.1      0.1      0.1      0.1       26.3
     expenditures..................................
    Therapeutic research credit....................      0.1      0.1      0.1      0.1      0.1      0.1      0.1      0.1      0.1      0.1        0.8
Energy
    Credit for energy efficiency improvements to     .......  .......  .......  .......  .......      1.7      1.2  .......  .......  .......        2.8
     existing homes................................
    Credits for alternative technology vehicles....      0.2      0.1    (\3\)    (\3\)    (\3\)      0.6      0.3  .......  .......  .......        1.3
    Credit for holders of clean renewable energy       (\3\)    (\3\)    (\3\)    (\3\)    (\3\)      0.1      0.1      0.1      0.1      0.1        0.6
     bonds (sections 54 and 54C)...................
    Exclusion of energy conservation subsidies       .......  .......  .......  .......  .......    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.1
     provided by public utilities..................
    Credit for holder of qualified energy              (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)      0.1      0.1      0.1        0.4
     conservation bonds............................
    Credit for enhanced oil recovery costs.........    (\3\)    (\3\)  .......  .......  .......    (\3\)    (\3\)  .......  .......  .......        0.1
    Credit for producing fuels from a non-             (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)      (3)        0.1
     conventional source...........................
    Credits for alcohol fuels\4\...................      0.1    (\3\)    (\3\)    (\3\)    (\3\)  .......  .......  .......  .......  .......        0.1
    Energy credit (section 48):
        Solar......................................    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)      (\3\)
        Geothermal.................................    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)      (\3\)
        Fuel cells.................................    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)      (\3\)
        Microturbines..............................    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)      (\3\)
    Credits for electricity production from
     renewable resources (section 45):
        Wind.......................................      1.0      1.1      1.3      1.4      1.5    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        6.2
        Closed-loop biomass........................    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)  .......  .......  .......  .......  .......        0.2
        Geothermal.................................    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)  .......  .......  .......  .......  .......        0.1
        Qualified hydropower.......................    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)  .......  .......  .......  .......  .......        0.1
        Solar (limited to facilities placed in         (\3\)    (\3\)    (\3\)    (\3\)    (\3\)  .......  .......  .......  .......  .......        0.1
         service before1/1/06).....................
        Small irrigation power.....................    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)  .......  .......  .......  .......  .......        0.1
        Municipal solid waste......................    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)  .......  .......  .......  .......  .......        0.1
        Open-loop biomass..........................      0.4      0.3      0.3      0.3      0.2    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        1.6
    Credits for investments in clean coal                0.2      0.2      0.2      0.2      0.2  .......  .......  .......  .......  .......        0.9
     facilities....................................
    Coal production credits:
        Refined coal...............................    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)  .......  .......  .......  .......  .......        0.1
        Indian coal................................    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)  .......  .......  .......  .......  .......        0.1
    Credit for the production of energy-efficient        0.2      0.1  .......  .......  .......  .......  .......  .......  .......  .......        0.3
     appliances....................................
    Credits for alternative technology vehicles:
        Hybrid vehicles............................    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        1.0
        Other alternative fuel vehicles............    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.1
    Credit for clean-fuel vehicle refueling            (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.2
     property......................................
    Residential energy efficient property credit...  .......  .......  .......  .......  .......      0.2      0.2      0.2      0.2      0.2        0.9
    New energy efficient home credit...............    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)  .......  .......  .......  .......  .......        0.1
    Credit for certain alternative motor vehicles      (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.2
     that do not meet existing criteria of a
     qualified plug-in electric drive motor vehicle
    Credit for investment in advanced energy             0.4      0.3      0.2      0.1      0.1      0.1      0.1    (\3\)    (\3\)    (\3\)        1.5
     property......................................
    Exclusion of interest on State and local           (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.3
     government qualified private activity bonds
     for energy production facilities..............
    Deduction for expenditures on energy-efficient       0.1      0.1      0.1      0.1      0.1      0.1      0.1      0.1      0.1      0.1        0.9
     commercial building property..................
    Expensing of exploration and development costs,
     fuels:
        Oil and gas................................      0.7      0.7      0.9      1.0      1.0    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        4.2
        Other fuels................................    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.4
    Excess of percentage over cost depletion,
     fuels:
        Oil and gas................................      0.5      0.8      0.9      0.9      1.0    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        4.1
        Other fuels................................      0.2      0.2      0.2      0.2      0.2    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.7
    Amortization of geological and geophysical           0.1      0.1      0.1      0.1      0.1    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.6
     expenditures associated with oil and gas
     exploration...................................
    Amortization of air pollution control                0.1      0.2      0.2      0.2      0.1  .......  .......  .......  .......  .......        0.7
     facilities....................................
    Depreciation recovery periods for energy
     specific items:
        Five-year MACRS for certain energy property      0.3      0.3      0.2      0.2      0.1    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        1.1
         (solar, wind, etc.).......................
        10-year MACRS for smart electric               (\3\)      0.1      0.1      0.1      0.2  .......  .......  .......  .......  .......        0.5
         distribution property.....................
        15-year MACRS for certain electric               0.1      0.1      0.2      0.2      0.2  .......  .......  .......  .......  .......        0.8
         transmission property.....................
        15-year MACRS for natural gas distribution       0.1      0.1      0.1      0.1      0.1  .......  .......  .......  .......  .......        0.6
         line......................................
    Election to expense 50 percent of qualified          0.7      0.8      0.7      0.6      0.2  .......  .......  .......  .......  .......        2.7
     property used to refine liquid fuels..........
    Exceptions for publicly traded partnership with  .......  .......  .......  .......  .......      0.5      0.5      0.6      0.6      0.7        2.8
     qualified income derived from certain energy-
     related activities............................
Natural Resources and Environment
    Special depreciation allowance for certain         (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.1
     reuse and recycling property..................
    Expensing of exploration and development costs,      0.1      0.1      0.1      0.1      0.1    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.3
     nonfuel minerals..............................
    Excess of percentage over cost depletion,            0.1      0.1      0.1      0.1      0.1    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.5
     nonfuel minerals..............................
    Expensing of timber-growing costs..............      0.7      0.2      0.2      0.2      0.2    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        1.2
    Special rules for mining reclamation reserves..    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.2
    Special tax rate for nuclear decommissioning         0.9      0.9      1.0      1.1      1.1  .......  .......  .......  .......  .......        5.0
     reserve funds.................................
    Exclusion of contributions in aid of               (\3\)    (\3\)    (\3\)    (\3\)    (\3\)  .......  .......  .......  .......  .......        0.2
     construction for water and sewer utilities....
    Exclusion of earnings of certain environmental     (\3\)    (\3\)    (\3\)    (\3\)    (\3\)  .......  .......  .......  .......  .......        0.1
     settlement funds..............................
    Amortization and expensing of reforestation          0.1      0.1      0.1      0.1      0.1      0.1      0.1      0.1      0.1      0.1        1.2
     expenditures..................................
    Special tax rate for qualified timber gain.....  .......  .......  .......  .......  .......      0.4      0.4      0.4      0.4      0.5        2.2
    Treatment of income from exploration and mining  .......  .......  .......  .......  .......    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.1
     of natural resources as qualifying income
     under the publicly-traded partnership rules...
Agriculture
    Expensing of soil and water conservation           (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.2
     expenditures..................................
    Expensing of the costs of raising dairy and        (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.6
     breeding cattle...............................
    Exclusion of cost-sharing payments.............    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.1
    Exclusion of cancellation of indebtedness        .......  .......  .......  .......  .......      0.1      0.1      0.1      0.1      0.1        0.5
     income of farmers.............................
    Income averaging for farmers and fishermen.....  .......  .......  .......  .......  .......    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.1
    Five-year carryback period for net operating         0.1      0.1      0.1      0.1      0.1      0.1      0.1      0.1      0.1      0.1        0.7
     losses attributable to farming................
    Expensing by farmers for fertilizer and soil       (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.3
     conditioner costs.............................
Commerce and Housing
    Housing:
        Deduction for mortgage interest on owner-    .......  .......  .......  .......  .......     90.8     93.8     94.1     98.5    106.8      484.1
         occupied residences.......................
        Deduction for property taxes on real         .......  .......  .......  .......  .......     15.0     22.8     26.5     27.6     29.1      120.9
         property..................................
        Increased standard deduction for real        .......  .......  .......  .......  .......      0.5  .......  .......  .......  .......        0.5
         property taxes............................
        Exclusion of capital gains on sales of       .......  .......  .......  .......  .......     15.0     16.5     17.5     18.2     19.0       86.3
         principal residences......................
        Exclusion of interest on State and local         0.3      0.3      0.3      0.4      0.4      0.7      0.8      0.8      0.9      1.0        5.9
         government qualified private activity
         bonds for owner-occupied housing..........
        Deduction for premiums for qualified         .......  .......  .......  .......  .......      0.3      0.1  .......  .......  .......        0.4
         mortgage insurance........................
        Exclusion of income attributable to the      .......  .......  .......  .......  .......      0.8      0.7      0.5    (\3\)  .......        2.1
         discharge of principal residence
         acquisition indebtedness..................
        First-time homebuyer credit\5\.............  .......  .......  .......  .......  .......      8.7     -2.4     -2.5     -1.6     -0.8        1.5
        Credit for low-income housing..............      4.9      5.1      5.3      5.6      6.1      0.2      0.3      0.3      0.3      0.3       28.5
        Credit for rehabilitation of historic            0.4      0.4      0.4      0.4      0.4      0.1      0.1      0.2      0.2      0.2        2.7
         structures................................
        Credit for rehabilitation of structures,       (\3\)      0.1      0.1      0.1      0.1      0.1      0.1      0.2      0.2      0.2        1.1
         other than historic structures............
        Exclusion of interest on State and local         0.2      0.2      0.3      0.3      0.3      0.6      0.6      0.7      0.7      0.7        4.7
         government qualified private activity
         bonds for rental housing..................
        Depreciation of rental housing in excess of      0.5      0.5      0.5      0.4      0.4      4.5      4.4      4.2      3.9      4.0       23.3
         alternative depreciation system...........
    Other business and commerce:
        Exclusion of interest on State and local         0.1      0.1      0.1      0.1      0.1      0.2      0.2      0.2      0.2      0.2        1.8
         government small-issue qualified private
         activity bonds............................
        Carryover basis of capital gains on gifts..  .......  .......  .......  .......  .......      7.7      9.4      3.6      4.2      7.2       32.1
        15-year recovery period for retail motor         0.2      0.1      0.1      0.1      0.1      0.2      0.1      0.1      0.1      0.2        1.9
         fuels outlets.............................
        Deferral of gain on non-dealer installment      -4.1      0.1      4.1      5.6      5.8     -1.4     -2.3      2.0      2.4      1.9       14.1
         sales\6\..................................
        Deferral of gain on like-kind exchanges....      1.4      1.7      2.0      2.3      2.6      0.7      0.8      1.2      1.4      1.5       15.6
        Expensing under section 179 of depreciable       0.2      1.3      0.7     -0.5     -0.2      0.7      5.7      3.1     -1.9     -0.9        8.2
         business property.........................
        Amortization of business start-up costs....      0.1      0.1    (\3\)    (\3\)    (\3\)      1.3      1.3      1.1      1.0      0.9        5.8
        Reduced rates on first $10,000,000 of            3.2      3.2      3.2      3.1      3.1  .......  .......  .......  .......  .......       15.9
         corporate taxable income..................
        Exemptions from imputed interest rules.....    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)      0.4      0.5      0.5      0.6      0.6        2.6
        Expensing of magazine circulation              (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.1
         expenditures..............................
        Special rules for magazine, paperback book,    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.2
         and record returns........................
        Completed contract rules...................      0.6      0.6      0.7      0.7      0.8    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        3.4
        Cash accounting, other than agriculture....    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)      1.0      1.0      1.1      1.1      1.2        5.4
        Credit for employer-paid FICA taxes on tips      0.3      0.4      0.4      0.4      0.4      0.2      0.3      0.3      0.3      0.3        3.3
        Deduction for income attributable to             7.0      8.4      8.8      9.2      9.8      2.4      3.2      3.8      4.4      5.1       62.1
         domestic production activities............
        Credit for the cost of carrying tax-paid       (\3\)    (\3\)    (\3\)    (\3\)    (\3\)  .......  .......  .......  .......  .......        0.1
         distilled spirits in wholesale inventories
        Reduced rates of tax on dividends and long-  .......  .......  .......  .......  .......     77.7     84.2     65.9     90.3     84.9      402.9
         term capital gains........................
        Surtax on unearned income*.................  .......  .......  .......    -18.3    -26.3  .......  .......  .......  .......  .......      -44.7
        Exclusion of capital gains at death........  .......  .......  .......  .......  .......     25.4     31.7     39.0     45.6     52.3      194.0
        Expensing of costs to remove architectural     (\3\)    (\3\)    (\3\)    (\3\)    (\3\)      0.1      0.1      0.1      0.1      0.1        0.6
         and transportation barriers to the
         handicapped and elderly...................
        Exclusion for gain from certain small        .......  .......  .......  .......  .......      0.5      0.3      0.4      0.5      0.7        2.5
         business stock............................
        Distributions in redemption of stock to pay  .......  .......  .......  .......  .......      0.2    (\3\)      0.3      0.4      0.4        1.3
         various taxes imposed at death............
        Ordinary gain or loss treatment for sale or      0.4      0.2      0.1     -0.1     -0.1    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.5
         exchange of Fannie Mae and Freddie Mac
         preferred stock by certain financial
         institutions..............................
        Inventory methods and valuation:
            Last in first out......................      3.6      3.8      4.0      4.2      4.4      0.5      0.5      0.6      0.6      0.7       22.9
            Lower of cost or market................      0.4      0.4      0.4      0.5      0.5      0.1      0.1      0.1      0.1      0.1        2.7
            Specific identification for homogeneous    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.2
             products..............................
        Exclusion of gain or loss on sale or           (\3\)    (\3\)    (\3\)    (\3\)    (\3\)  .......  .......  .......  .......  .......        0.1
         exchange of brownfield property...........
        Income recognition rule for gain or loss       (\3\)    (\3\)    (\3\)    (\3\)    (\3\)      0.8      0.8      0.8      0.8      0.9        4.4
         from section 1256 contracts...............
        Net alternative minimum tax attributable to     -0.5     -0.5     -0.5     -0.5     -0.5     -0.1     -0.1     -0.1     -0.1     -0.1       -3.0
         net operating loss limitation*............
        Exclusion of interest on State and local       (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.1
         qualified private activity bonds for green
         buildings and sustainable design projects.
        Depreciation of buildings other than rental      0.2      0.2      0.2      0.2      0.2      0.1      0.2      0.2      0.2      0.2        1.9
         housing in excess of alternative
         depreciation system.......................
        Depreciation of equipment in excess of the      24.1      6.5     -5.0      0.8     10.7      4.3      1.2     -0.9      0.1      1.9       43.7
         alternative depreciation system\7\........
        Inclusion of income arising from business       21.1      6.9      0.5      0.3    (\3\)      1.7      0.5    (\3\)    (\3\)    (\3\)       31.0
         indebtedness discharged by the
         reacquisition of a debt instrument........
        5-year carryback of general business             1.3     -0.1     -0.1     -0.1     -0.1      0.3    (\8\)    (\8\)    (\8\)    (\8\)        0.9
         credits...................................
    Financial institutions:
        Exemption of credit union income...........      0.4      0.3      0.5      0.5      0.7  .......  .......  .......  .......  .......        2.3
    Insurance companies:
        Exclusion of investment income on life           2.5      2.5      2.6      2.6      2.7     25.4     25.7     26.3     27.0     27.7      149.5
         insurance and annuity contracts...........
        Small life insurance company taxable income      0.1      0.1      0.1      0.1      0.1  .......  .......  .......  .......  .......        0.3
         adjustment................................
        Special treatment of life insurance company      2.2      2.3      2.4      2.6      2.7  .......  .......  .......  .......  .......       12.2
         reserves..................................
        Special deduction for Blue Cross and Blue        0.4      0.4      0.4      0.4      0.5  .......  .......  .......  .......  .......        2.1
         Shield companies..........................
        Tax-exempt status and election to be taxed       0.1      0.1      0.1      0.1      0.1  .......  .......  .......  .......  .......        0.3
         only on investment income for certain
         small property and casualty insurance
         companies.................................
        Interest rate and discounting period             0.7      0.7      0.7      0.8      0.7  .......  .......  .......  .......  .......        3.4
         assumptions for reserves of property and
         casualty insurance companies..............
        Proration for property and casualty              0.3      0.3      0.4      0.4      0.4  .......  .......  .......  .......  .......        1.8
         insurance companies.......................
Transportation
    Exclusion of employer-paid transportation        .......  .......  .......  .......  .......      3.8      4.2      4.4      4.6      4.8       21.8
     benefits......................................
    Deferral of tax on capital construction funds        0.1      0.1      0.1      0.1      0.1  .......  .......  .......  .......  .......        0.5
     of shipping companies.........................
    Exclusion of interest on State and local           (\3\)    (\3\)    (\3\)    (\3\)      0.1      0.1      0.1      0.1      0.1      0.1        0.4
     government qualified private activity bonds
     for highway projects and rail-truck transfer
     facilities....................................
    Exclusion of employer-provided transit and       .......  .......  .......  .......  .......      0.7      0.8      0.8      0.9      0.9        4.0
     vanpool benefits..............................
    High-speed intercity rail vehicle speed            (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.1
     requirement for exempt high-speed rail
     facility bonds................................
    Exclusion of interest on State and local             0.2      0.2      0.2      0.3      0.3      0.5      0.6      0.6      0.7      0.7        4.2
     government qualified private activity bonds
     for private airports, docks, and mass-
     commuting facilities..........................
Community and Regional Development
    Empowerment zone tax incentives................      0.2      0.2      0.1    (\3\)    (\3\)      0.3      0.2      0.1    (\3\)    (\3\)        1.3
    Renewal community incentives...................    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)      0.2      0.1      0.1      0.1      0.1        1.0
    New markets tax credit.........................      0.3      0.3      0.3      0.3      0.3      0.4      0.4      0.4      0.4      0.4        3.5
    District of Columbia tax incentives............      0.1    (\3\)    (\3\)    (\3\)    (\3\)      0.2      0.1      0.1      0.1      0.1        0.7
    Credit for Indian reservation employment.......    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.1
    Exclusion of interest on State and local             0.1      0.1      0.1      0.1      0.1      0.2      0.3      0.3      0.3      0.3        1.9
     government qualified private activity bonds
     for sewage, water, and hazardous waste
     facilities....................................
    Issuance of recovery zone economic development     (\3\)      0.1      0.1      0.1      0.1    (\3\)      0.1      0.1      0.1      0.1        0.7
     bonds.........................................
    Issuance of tribal economic development bonds..    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.2
    Build America bonds\5\.........................      0.2      0.5      0.8      0.8      0.8      0.7      1.5      2.3      2.3      2.3       12.0
    Eliminate requirement that financial                 0.2      0.3      0.3      0.3      0.3  .......  .......  .......  .......  .......        1.6
     institutions allocate interest expense
     attributable to tax-exempt interest...........
    Disaster Relief:
        Gulf opportunity zone......................      0.1    (\3\)    (\3\)    (\3\)    (\3\)      0.6      0.4      0.3      0.2      0.2        1.9
        Midwest disaster relief....................      0.2      0.2      0.3      0.3      0.3      0.9      0.1      0.1      0.1      0.2        2.7
        National disaster relief...................      0.2      0.1    (\3\)    (\3\)    (\3\)      0.2      0.2      0.1    (\3\)    (\3\)        0.8
Education, Training, Employment, and Social
 Services
    Education and training:
        Deduction for interest on student loans....  .......  .......  .......  .......  .......      0.9      0.5      0.4      0.5      0.5        2.8
        Deduction for higher education expenses....  .......  .......  .......  .......  .......      0.1  .......  .......  .......  .......        0.1
        Exclusion of earnings of Coverdell           .......  .......  .......  .......  .......      0.1      0.1      0.1      0.2      0.2        0.6
         education savings accounts................
        Exclusion of interest on educational         .......  .......  .......  .......  .......    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.1
         savings bonds.............................
        Exclusion of scholarship and fellowship      .......  .......  .......  .......  .......      2.1      2.2      2.4      2.5      2.7       11.9
         income....................................
        Exclusion of income attributable to the      .......  .......  .......  .......  .......      0.1      0.1      0.1      0.1      0.1        0.5
         discharge of certain student loan debt and
         NHSC and certain State educational loan
         repayments................................
        Exclusion of employer-provided education     .......  .......  .......  .......  .......      0.9      0.9      0.9      0.9      1.0        4.5
         assistance benefits.......................
        Exclusion of employer-provided tuition       .......  .......  .......  .......  .......      0.2      0.2      0.2      0.2      0.2        1.1
         reduction benefits........................
        Parental personal exemption for students     .......  .......  .......  .......  .......      1.3      2.3      2.4      2.2      2.1       10.4
         aged 19 to 23.............................
        Exclusion of interest on State and local         0.1      0.1      0.1      0.2      0.2      0.3      0.4      0.4      0.4      0.4        2.6
         government qualified private activity
         bonds for student loans...................
        Exclusion of interest on State and local         0.7      0.8      0.9      1.0      1.0      1.9      2.2      2.3      2.5      2.6       16.0
         government qualified private activity
         bonds for private nonprofit and qualified
         public educational facilities.............
        Credit for holders of qualified zone             0.2      0.3      0.3      0.3      0.3  .......  .......  .......  .......  .......        1.4
         academy bonds.............................
        Deduction for charitable contributions to        0.4      0.4      0.4      0.4      0.4      5.1      6.0      6.5      6.8      7.1       33.3
         educational institutions..................
        Deduction for teacher classroom expenses...  .......  .......  .......  .......  .......    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.1
        Credits for tuition for post-secondary
         education:
            Hope credit\5\.........................  .......  .......  .......  .......  .......      9.6      4.7      3.0      3.0      2.9       23.1
            Lifetime learning credit...............  .......  .......  .......  .......  .......      2.3      3.0      3.2      3.2      3.1       14.7
        Exclusion of tax on earnings of qualified
         tuition programs:
            Prepaid tuition programs...............  .......  .......  .......  .......  .......    (\3\)      0.1      0.1      0.1      0.1        0.4
            Savings account programs...............  .......  .......  .......  .......  .......      0.4      0.5      0.6      0.7      0.8        2.9
        Qualified school construction bonds........    (\3\)      0.1      0.2      0.3      0.4      0.1      0.3      0.5      0.6      0.7        3.3
    Employment:
        Exclusion of employee meals and lodging      .......  .......  .......  .......  .......      1.0      1.1      1.1      1.2      1.2        5.6
         (other than military).....................
        Exclusion of benefits provided under         .......  .......  .......  .......  .......     26.4     29.3     32.3     36.1     39.0      163.1
         cafeteria plans\9\........................
        Exclusion of housing allowances for          .......  .......  .......  .......  .......      0.6      0.7      0.7      0.7      0.7        3.4
         ministers.................................
        Exclusion of miscellaneous fringe benefits.  .......  .......  .......  .......  .......      6.6      7.5      8.0      8.2      8.5       38.7
        Exclusion of employee awards...............  .......  .......  .......  .......  .......      0.3      0.4      0.4      0.4      0.4        1.8
        Exclusion of income earned by voluntary      .......  .......  .......  .......  .......      3.2      3.8      4.2      4.4      4.6       20.2
         employees' beneficiary associations.......
        Special tax provisions for employee stock        0.9      1.0      1.1      1.2      1.3      0.5      0.5      0.5      0.5      2.5        8.0
         ownership plans (ESOPs)...................
        Deferral of taxation on spread on               -1.0     -1.0     -1.1     -1.2     -1.2      0.4      0.3      0.3      0.3      0.3       -4.9
         acquisition of stock under incentive stock
         option plans*.............................
        Deferral of taxation on spread on employee      -0.1     -0.1     -0.1     -0.2     -0.2    (\3\)    (\3\)    (\3\)      0.1      0.1       -0.5
         stock purchase plans*.....................
        Disallowance of deduction for excess            -0.2     -0.2     -0.2     -0.2     -0.2  .......  .......  .......  .......  .......       -1.0
         parachute payments (applicable if payments
         to a disqualified individual are
         contingent on a change of control of a
         corporation and are equal to or greater
         than three times the individual's
         annualized includible compensation)\10\*..
        Limits on deductible compensation\11\*.....     -0.6     -0.6     -0.6     -0.7     -0.8  .......  .......  .......  .......  .......       -3.3
        Work opportunity tax credit................      0.5      0.5      0.3      0.1      0.1      0.1      0.1      0.1    (\3\)  .......        1.8
        Credit for retention of certain newly hired  .......      1.7      0.9      0.3      0.2  .......      1.5      0.6  .......  .......        5.3
         workers...................................
    Social services:
        Credit for children under age 17\5\........  .......  .......  .......  .......  .......     55.1     24.7     14.2     14.0     13.9      121.9
        Credit for child and dependent care and      .......  .......  .......  .......  .......      3.1      2.5      2.5      2.5      2.5       13.1
         exclusion of employer-provided child
         care\12\..................................
        Credit for employer-provided dependent care    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.2
        Exclusion of certain foster care payments..  .......  .......  .......  .......  .......      0.4      0.4      0.4      0.4      0.4        2.1
        Adoption credit and employee adoption        .......  .......  .......  .......  .......      0.5      1.0    (\3\)    (\3\)    (\3\)        1.6
         benefits exclusion........................
        Deduction for charitable contributions,          1.0      1.0      1.0      1.1      1.1     29.2     34.5     37.8     39.6     41.3      187.5
         other than for education and health\13\...
        Credit for disabled access expenditures....    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.4
Health
    Exclusion of employer contributions for health   .......  .......  .......  .......  .......    105.7    117.3    128.0    147.4    161.0      659.4
     care, health insurance premiums, and long-term
     care insurance premiums\14\...................
    Exclusion of medical care and TRICARE medical    .......  .......  .......  .......  .......      2.3      2.5      2.6      2.8      2.9       13.1
     insurance for military dependents, retirees,
     and retiree dependents not enrolled in
     Medicare......................................
    Exclusion of health insurance benefits for       .......  .......  .......  .......  .......      1.4      1.7      1.9      2.1      2.3        9.5
     military retirees and retiree dependents
     enrolled in Medicare..........................
    Deduction for health insurance premiums and      .......  .......  .......  .......  .......      4.6      5.1      5.5      6.1      6.6       27.9
     long-term care insurance premiums by the self-
     employed......................................
    Deduction for medical expenses and long-term     .......  .......  .......  .......  .......     10.8     13.5     16.1     17.5     19.6       77.6
     care expenses.................................
    Exclusion of workers' compensation benefits      .......  .......  .......  .......  .......      3.0      3.2      3.5      3.7      4.0       17.4
     (medical benefits)............................
    Health savings accounts........................  .......  .......  .......  .......  .......      0.9      1.2      1.6      2.1      2.1        8.0
    Exclusion of interest on State and local             0.5      0.6      0.6      0.7      0.7      1.3      1.5      1.6      1.7      1.8       10.8
     government qualified private activity bonds
     for private nonprofit hospital facilities.....
    Deduction for charitable contributions to            1.8      1.8      1.9      1.9      2.0      2.5      3.0      3.3      3.5      3.6       25.3
     health organizations..........................
    Credit for purchase of health insurance by       .......  .......  .......  .......  .......      0.2      0.2      0.1      0.1      0.1        0.8
     certain displaced persons\5\..................
    Credit for orphan drug research................      0.5      0.5      0.6      0.6      0.6    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        2.8
    Premium subsidy for COBRA continuation           .......  .......  .......  .......  .......      4.9      1.2    (\3\)  .......  .......        6.2
     coverage\5\...................................
    Tax credit for small businesses purchasing           0.3      0.6      0.8      0.9      0.7      1.6      3.6      4.4      5.1      4.5       22.6
     employer insurance............................
    Credits and subsidies for participation in       .......  .......  .......  .......  .......  .......  .......  .......  .......     22.4       22.4
     exchanges\5\..................................
Medicare
    Exclusion of Medicare benefits:................
        Hospital insurance (Part A)................  .......  .......  .......  .......  .......     28.6     33.6     35.9     37.8     39.9      175.8
        Supplementary medical insurance (Part B)...  .......  .......  .......  .......  .......     20.5     23.4     24.4     27.2     29.0      124.5
        Prescription drug insurance (Part D).......  .......  .......  .......  .......  .......      5.5      6.6      6.7      7.7      8.7       35.1
        Exclusion of certain subsidies to employers      0.4      0.5      0.5      0.3  .......  .......  .......  .......  .......  .......        1.7
         who maintain prescription drug plans for
         Medicare enrollees........................
Income Security
    Exclusion of workers' compensation benefits      .......  .......  .......  .......  .......      3.4      3.7      3.9      4.1      4.4       19.5
     (disability and survivors payments)...........
    Exclusion of damages on account of personal      .......  .......  .......  .......  .......      1.5      1.6      1.6      1.6      1.6        7.9
     physical injuries or physical sickness........
    Exclusion of special benefits for disabled coal  .......  .......  .......  .......  .......    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.1
     miners........................................
    Exclusion of cash public assistance benefits...  .......  .......  .......  .......  .......      3.1      3.4      4.4      4.9      5.0       20.8
    Net exclusion of pension contributions and
     earnings\6\:
        Plans covering partners and sole             .......  .......  .......  .......  .......     12.4     15.7     17.0     17.7     18.2       81.1
         proprietors (sometimes referred to as
         ``Keogh plans'')..........................
        Defined benefit plans......................  .......  .......  .......  .......  .......     38.9     51.9     62.0     75.8     74.6      303.2
        Defined contribution plans.................  .......  .......  .......  .......  .......     32.5     38.2     44.1     49.1     48.3      212.2
    Individual retirement arrangements:
        Traditional IRAs...........................  .......  .......  .......  .......  .......     20.1     12.3     13.2     18.4     21.6       85.6
        Roth IRAs..................................  .......  .......  .......  .......  .......      3.4      4.0      4.8      5.4      6.3       23.9
        Credit for certain individuals for elective  .......  .......  .......  .......  .......      0.9      1.0      1.1      1.0      1.0        5.0
         deferrals and IRA contributions...........
    Exclusion of other employee benefits:
        Premiums on group term life insurance        .......  .......  .......  .......  .......      1.5      1.6      1.7      1.8      1.9        8.5
         (excludes payroll taxes)..................
        Premiums on accident and disability          .......  .......  .......  .......  .......      3.2      3.4      3.6      3.7      3.8       17.8
         insurance.................................
    Additional standard deduction for the blind and  .......  .......  .......  .......  .......      1.8      2.2      2.7      2.8      3.0       12.4
     the elderly...................................
    Deduction for casualty and theft losses........  .......  .......  .......  .......  .......      0.2      0.3      0.3      0.3      0.3        1.4
    Earned income credit\5\........................  .......  .......  .......  .......  .......     56.2     52.4     52.5     53.6     54.0      268.8
    Phase out of the personal exemption for the      .......  .......  .......  .......  .......    -30.6    -41.1    -33.5    -38.6    -42.7     -186.5
     regular income tax, and disallowance of the
     personal exemption and the standard deduction
     against the alternative minimum tax*..........
    Exclusion of survivor annuities paid to          .......  .......  .......  .......  .......    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.1
     families of public safety officers killed in
     the line of duty..............................
    Exclusion of disaster mitigation payments......    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)        0.2
    Making work pay credit\5\......................  .......  .......  .......  .......  .......     59.7     15.5  .......  .......  .......       75.3
Social Security and Railroad Retirement
    Exclusion of untaxed Social Security and         .......  .......  .......  .......  .......     26.8     33.4     36.0     37.4     39.7      173.0
     railroad retirement benefits..................
Veterans' Benefits and Services
    Exclusion of veterans' disability compensation.  .......  .......  .......  .......  .......      4.5      5.9      5.4      5.6      5.7       27.0
    Exclusion of veterans' pensions................  .......  .......  .......  .......  .......      0.1      0.1      0.1      0.1      0.1        0.7
    Exclusion of veterans' readjustment benefits...  .......  .......  .......  .......  .......      0.9      1.0      1.3      1.3      1.4        5.8
    Exclusion of interest on State and local           (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)      0.1      0.1        0.3
     government qualified private activity bonds
     for veterans' housing.........................
General Purpose Fiscal Assistance
    Exclusion of interest on public purpose State        7.5      8.5      9.0      9.9     10.4     19.3     21.9     23.1     25.3     26.7      161.6
     and local government bonds....................
    Deduction of nonbusiness State and local         .......  .......  .......  .......  .......     30.7     43.6     50.6     54.1     58.3      237.3
     government income taxes, sales taxes, and
     personal property taxes.......................
Interest
    Deferral of interest on savings bonds..........  .......  .......  .......  .......  .......      1.3      1.4      1.4      1.5      1.5        7.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\Reflects legislation enacted by December 15, 2010.
\2\Does not include provision that permits look-through of payments between related foreign corporations.
\3\Positive tax expenditure of less than $50 million.
\4\In addition to the amounts above, the excise tax credit for alcohol fuel mixtures results in a reduction in excise tax receipts, net of income, of
  $5.1 billion over the fiscal years 2010 through 2014.
\5\Estimate includes refundability associated with the following outlay effects:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Corporations                                 Individuals
                                                    ------------------------------------------------------------------------------------------   Total
                                                       2010     2011     2012     2013     2014     2010     2011     2012     2013     2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
First-time homebuyer credit........................  .......  .......  .......  .......  .......      3.4  .......  .......  .......  .......        3.4
Build America bonds................................      0.2      0.5      0.8      0.8      0.8      0.7      1.5      2.3      2.3      2.3       12.0
Recovery zone bonds................................    (\3\)      0.1      0.1      0.1      0.1    (\3\)      0.1      0.1      0.1      0.1        0.7
Hope credit........................................  .......  .......  .......  .......  .......      3.1      0.8  .......  .......  .......        3.9
Credit for children under age 17...................  .......  .......  .......  .......  .......     32.7     11.1      4.1      4.2      4.7       56.7
Earned income credit...............................  .......  .......  .......  .......  .......     50.9     45.5     44.8     45.5     45.6      232.2
Making work pay credit.............................  .......  .......  .......  .......  .......     19.7      4.7  .......  .......  .......       24.4
Premium subsidy for COBRA continuation coverage....  .......  .......  .......  .......  .......      0.1      0.1    (\3\)  .......  .......        0.3
Credit for health insurance by certain displaced     .......  .......  .......  .......  .......      0.2      0.1      0.1      0.1      0.1        0.6
 persons...........................................
Credits and subsidies for participation in           .......  .......  .......  .......  .......  .......  .......  .......  .......     12.6      12.6
 exchanges.........................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
\6\Pattern differs from tax expenditure calculated in prior pamphlets because of economic conditions in 2008 and 2009.
\7\Includes bonus depreciation and general acceleration under MACRS.
\8\Negative tax expenditure of less than $50 million.
\9\Estimate includes amounts of employer-provided health insurance purchased through cafeteria plans and employer-provided child care purchased through
  dependent care flexible spending accounts. These amounts are also included in other line items in this table.
\10\Estimate does not include effects of changes made by the Emergency Economic Stabilization Act of 2008.
\11\Estimate does not include effects of changes made by the Emergency Economic Stabilization Act of 2008. Estimate includes effects of changes made by
  Patient Protection and Affordable Care Act enacted in 2010.
\12\Estimate includes employer-provided child care purchased through dependent care flexible spending accounts.
\13\In addition to the general charitable deduction, the tax expenditure accounts for the higher percentage limitation for public charities, the fair
  market value deduction for related-use tangible personal property, the enhanced deduction for inventory, the fair market value deduction for publicly
  traded stock and exceptions to the partial interest rules.
\14\Estimate includes employer-provided health insurance purchased through cafeteria plans.Note: Details may not add to totals due to rounding. An ``*'' indicates a negative tax expenditure for the 2010-2014 period.
Source: Joint Committee on Taxation.

                   Function-by-Function Presentation

                              ----------                              


    The budget resolution often is described as the 
``architecture'' of policy--and the metaphor is fitting in 
several ways. First, the structure of the resolution is built 
with myriad technical components--numbers, legislative text, 
procedural mechanisms--necessary for the budget to stand. 
Second, the measure's allocation of resources creates a 
framework in which the government is intended to function. 
Third, as a whole--in its choices of priorities, and its 
overall fiscal policy--the budget resolution stands against the 
backdrop of the economy, expressing its authors' vision of 
governing. The budget's role is to set the Federal Government's 
fiscal policy to reflect the Nation's priorities, and establish 
the foundation for the legislative decisions that will be made 
by the committees of jurisdiction.
    Total spending in the budget is divided among 21 budget 
``functions.'' Each function represents a broad area of 
government activities--national defense, international affairs, 
transportation, education, health, and so on. The functions 
have antecedents dating back decades, but they are not directly 
linked to specific congressional committees, agencies of the 
Executive Branch, or, for the most part, particular programs; 
they transcend these units. Because the totals in the functions 
are prospective--the budget is a planning document, not an 
audit--the function totals are not binding; they simply 
describe how the Budget Committee views the expected 
distribution of resources under the budget's guidelines. But 
the committee allocations that flow from these function levels 
(see ``The Congressional Budget Process'' later in this report) 
do have a means of enforcement; and in that sense, the function 
levels in the resolution are relevant to the programs over 
which legislative committees have jurisdiction.
    The budget functions presented here are the following:
          050 National Defense
          150 International Affairs
          250 Science, Space, and Technology
          270 Energy
          300 Natural Resources and Environment
          350 Agriculture
          370 Commerce and Housing Credit
          400 Transportation
          450 Community and Regional Development
          500 Education, Training, Employment, and Social 
        Services
          550 Health
          570 Medicare
          600 Income Security
          650 Social Security
          700 Veterans Benefits and Services
          750 Administration of Justice
          800 General Government
          900 Net Interest
          920 Allowances
          950 Undistributed Offsetting Receipts
          970 Global War on Terrorism and Related Activities
    When the committee allocations differ from those estimated 
in baseline spending projections, it means some form of policy 
change must occur to meet the budget levels. The budget does 
not prescribe the specific policies--the committees of 
jurisdiction make those decisions--but it does drive changes in 
policy.
    This budget assumes significant policy changes, and a major 
readjustment of the Federal Government's fiscal course. To 
demonstrate the viability of these assumptions--and to prove 
the credibility of the budget itself--this report offers a 
range of policy options to help demonstrate how the budget's 
fiscal goals could be achieved. These options are illustrative; 
as noted, any actual policy changes are the discretion of the 
committees with jurisdiction over the programs involved. 
Nevertheless, the assumptions are based on the Congressional 
Budget Office estimates and justified in the report text.
                     FUNCTION 050: NATIONAL DEFENSE

                              ----------                              


                            Function Summary

    The first job of a nation's government is securing the 
safety and liberty of its citizens from threats at home and 
abroad. Recent events in the Middle East, South Asia, and East 
Asia have demonstrated again that the demands on the American 
military are unpredictable both in geographic location and in 
the mission to be executed. Whether supporting transitions to 
democracy in the Middle East, providing disaster relief in 
Japan, combating piracy off the Horn of Africa, or suppressing 
the terrorist networks that threaten Americans' way of life, 
the men and women of the United States military have performed 
superbly. As reflected in the National Defense function, this 
budget maintains funding to provide the equipment, training, 
and compensation for their continued success.
    National Defense includes funds to develop, maintain, and 
equip the military forces of the United States. More than 95 
percent of the funding in this function goes to Department of 
Defense [DoD] military activities; the remainder applies to 
atomic energy defense activities of the Department of Energy, 
and other defense-related activities (primarily in connection 
with homeland security). Funding for global war on terror and 
related activities is included in Function 970.

                Summary of Committee-Reported Resolution

    The resolution calls for $582.6 billion in budget authority 
and $593.6 billion in outlays in fiscal year 2012. Most of the 
spending in the function is discretionary, which in fiscal year 
2012 totals $575.8 billion in budget authority and $586.8 
billion in outlays. Mandatory spending in 2012 is $6.8 billion 
in budget authority and $6.8 billion in outlays. The 10-year 
totals for budget authority and outlays are $6.461 trillion and 
$6.383 trillion, respectively.
    A robust national defense requires a substantial commitment 
of national resources, and Congress and the administration must 
remain vigilant to ensure the national defense program is 
executed efficiently and accountably. The Armed Services 
Committee has outlined an aggressive oversight agenda for the 
112th Congress that is intended to ``ensure that the Department 
of Defense is operated efficiently and with fiscal discipline 
in order to maximize the return on the taxpayers' 
investments.'' A critical element of that oversight agenda is a 
review of acquisition programs with an eye toward reevaluating 
those programs that ``no longer represent the best value for 
the taxpayer.''
    Congressional efforts to increase accountability and 
efficiency in the national defense mission dovetail with the 
efforts of Secretary of Defense Gates. After an exhaustive 
review of the Pentagon's operations, the Secretary, together 
with the uniformed military, identified $178 billion (over 5 
years) in efficiencies and savings. This budget reinvests $100 
billion of that amount in higher priority military 
capabilities. The remaining $78 billion is dedicated to deficit 
reduction. As Admiral Mullen, Chairman of the Joint Chiefs of 
Staff has said on many occasions, the national debt is a threat 
to the economic foundations of America's national security. The 
Department's reform efforts, and the oversight program of the 
Armed Services Committee, are critical to ensuring the defense 
budget provides the capabilities America needs at a cost the 
country can afford.
    The rising share of total defense spending consumed by 
compensation costs is putting pressure on the defense budget. 
On a per-troop basis, the military personnel account has 
reached record levels over the past decade, rising at a real 
annual rate of 3.4 percent (excluding war funding). This growth 
has been driven by rising basic pay, new and enhanced benefits 
for service members, and growing health care costs. Generous 
compensation is essential to the maintenance of the all-
volunteer military, but the tremendous growth in these accounts 
raises fundamental questions about the risk of personnel costs 
crowding out needed investment in defense modernization.

                    Discretionary Spending Policies

    Fully Fund the President's Military Force Request. Within 
the National Defense category, subfunction 051 represents the 
Department of Defense military activities. The budget 
resolution assumes full funding of the request developed by 
Secretary Gates in this area.

    Prioritize Nuclear Modernization. The independent Strategic 
Posture Commission identified a ``pattern of underinvestment 
[in the nuclear weapons complex] over the last two decades.'' 
This resolution addresses to reverse the pattern by 
prioritizing the nuclear modernization work of the National 
Nuclear Security Administration [NNSA]. This includes providing 
fiscal space for the modernization of the nuclear weapons 
complex and in connection with the implementation of the New 
Strategic Arms Reduction Treaty with Russia.
                  FUNCTION 150: INTERNATIONAL AFFAIRS

                              ----------                              


                            Function Summary

    The past decade has seen a 167-percent increase in 
resources devoted to the international affairs activities of 
the United States. Numerous factors have driven this rapid 
expansion of government spending: efforts related to the war on 
terrorism, increases in staffing levels at the State Department 
and USAID, the expansion of U.S. aid for global health, and the 
adoption of a new model for delivering development assistance, 
the Millennium Challenge Corporation.
    Unquestionably, many vital U.S. interests can best be 
achieved through the foreign affairs budget. But it is also 
necessary to step back and ask what results are being achieved 
through this rapidly growing commitment of resources--
especially in light of the domestic challenges to the Federal 
Government's fiscal condition. Funding in the International 
Affairs function reflects this re-evaluation.
    This category of the budget includes international 
development and humanitarian assistance; international security 
assistance; the conduct of foreign affairs; foreign information 
and exchange activities; and international financial programs. 
The major agencies in this function include the Departments of 
Agriculture, State, and the Treasury, the United States Agency 
for International Development [USAID], and the Millennium 
Challenge Corporation.
    In accordance with the administration's request, funding 
for incremental, non-enduring civilian activities in 
Afghanistan, Pakistan, and Iraq are reflected in Function 970 
rather than in this account.

                Summary of Committee-Reported Resolution

    The resolution calls for $36.6 billion in budget authority 
and $36.1 billion in outlays in fiscal year 2012. As with 
defense, the majority of International Affairs spending is 
discretionary; in fiscal year 2012, it totals $32.3 billion in 
budget authority and $39 billion in outlays. Mandatory spending 
in 2012 is $4.3 billion in budget authority and -$2.9 billion 
in outlays. (The negative outlay figure reflects receipts from 
foreign military sales and foreign military financing 
transactions.) Over 10 years, budget authority totals $327.4 
billion, with outlays of $324.5 billion.
    This budget assumes funding for the essential missions of 
the international affairs effort, while paring back spending in 
areas of duplication or non-core functions. While the actual 
policies will be determined by the committees of jurisdiction, 
options that could be employed to meet budget targets include 
those listed below.

                 Discretionary Spending Policy Options

    While the committees of jurisdiction will determine actual 
policies, the illustrations below suggest some options for 
meeting the budget's parameters.

    Eliminate Duplication in Development Efforts. President 
Bush and Congress created the Millennium Challenge Corporation 
[MCC] in January 2004 as part of a new approach to development 
assistance. Its aim was to focus on promoting partnerships with 
countries committed to good governance, economic freedom, and 
investing in their citizens. Since then, the U.S. Government 
has provided more than $10 billion in development assistance 
through the MCC. Over the same period, the United States' 
traditional Development Assistance program has provided more 
than $13 billion for these same development purposes. Now that 
the first round of MCC compacts is complete, it is time to 
evaluate the relative performance of these programs and to 
focus U.S. resources on the programs that produce the best 
results.

    Protect U.S. Veto at Multilateral Development Banks. The 
U.S. plays a leading role in the world's multilateral financial 
institutions, especially the multilateral development banks 
[MDBs], including the World Bank and its regional counterparts. 
During the financial crisis, these institutions increased 
lending volumes sharply in an effort to ameliorate the 
consequences of the economic slowdown. Following years of 
negotiations, the Treasury Department is now requesting 
increased U.S. contributions to bolster the core capital of 
these institutions, allowing the MDBs to continue lending at 
these heightened levels. While these increased contribution 
levels are subject to authorization, failure to participate 
would result in the U.S. losing its veto over key decisions at 
these institutions. To protect the U.S. veto at these 
institutions, this resolution assumes full funding for the 
capital increases at the MDBs. The Budget Committee notes the 
Financial Services Committee's commitment to thorough oversight 
of the Treasury request, and will look to its conclusions in 
future years on the appropriate level of funding to assume for 
the MDBs' concessional lending windows.

    Require Private Funding for the U.S. Institute for Peace. 
The U.S. Institute for Peace [USIP] is a think tank that seeks 
to help prevent and resolve international conflicts. While its 
goals are laudable, the contribution of USIP to achieving them 
is not unique given the approximately 350 think tanks in 
Washington DC, and another 1,500 across the country. Like other 
such organizations, USIP should rely on funding from the 
private sector or contract-based funding for particular 
projects of value to U.S. government agencies. One way to 
encourage this is to adopt the position added to H.R. 1, at the 
initiative of Representative Weiner of New York, which calls 
for no further direct government funding for USIP.

    Require Private Funding for Peripheral Foreign Affairs 
Institutions. In the past, the U.S. has provided funding for a 
number of smaller foreign affairs agencies, including the East-
West Center and the Asia Foundation. As noted by Chairman Ros-
Lehtinen in the Foreign Affairs Committee's Views and Estimates 
letter, these institutions engage in programming that could 
easily be supported by the private sector and is redundant of 
other U.S. Government activities. Again, these aims could be 
achieved in a manner consistent with the Committee's 
recommendation by providing no further government funding for 
these peripheral institutions.

    Consolidate Foreign Affairs Bureaucracies. Since 2001, 
staffing levels at the State Department and USAID have 
increased by 13 percent and 76 percent, respectively. 
Undoubtedly both organizations merited some increase in staff 
given the premature and excessive reduction of staff during the 
1990s peace dividend. Nevertheless, consolidation of staffing 
levels here as in other government agencies is necessitated 
given the fiscal problems facing the U.S. Government.
          FUNCTION 250: GENERAL SCIENCE, SPACE, AND TECHNOLOGY

                              ----------                              


                            Function Summary

    The largest component of this function--about half of total 
spending--is for the space flight, research, and supporting 
activities of the National Aeronautics and Space Administration 
[NASA]. The function also contains general science funding, 
including the budgets for the National Science Foundation 
[NSF], the Department of Energy [DOE] Office of Science, and 
the Department of Homeland Security's Science and Technology 
Directorate.
    Spending for this function has grown by about 9 percent 
since the start of the administration. The stimulus bill also 
provided about $1.0 billion for NASA, $3.0 billion for NSF, and 
$1.6 billion for DOE's Office of Science.

                Summary of Committee-Reported Resolution

    The resolution calls for $27.5 billion in budget authority 
and $29.8 billion in outlays in fiscal year 2012. Nearly all 
the spending in the function is discretionary, which totals 
$27.3 billion in 2012 budget authority, and $29.7 billion in 
outlays. Mandatory budget authority in 2012 is $119 million, 
with $123 million in related outlays. The 10-year totals for 
budget authority and outlays are $282.0 billion and $284.5 
billion, respectively.
    The budget builds on H.R.1 by reducing excess and 
unnecessary spending, while supporting core government 
responsibilities.
    The resolution preserves basic research, providing stable 
funding for NSF to conduct its authorized activities. The 
budget also recognizes the vital strategic importance of the 
United States to remain the pre-eminent space-faring Nation. In 
the President's request, the administration shifted priorities 
away from the 2010 NASA authorization, allocating about $2 
billion to commercial cargo and crew and Earth Science climate 
change initiatives. The budget realigns funding in accordance 
with the NASA authorization and its specified spending limits 
to support robust space capability.

               Illustrative Discretionary Spending Option

    The committees of jurisdiction will determine policies to 
align with the spending levels in the resolution. The option 
below is offered as an illustration of the kinds of proposals 
that can help meet the budget's fiscal guidelines.

    Restore Core Government Responsibilities. The stimulus bill 
provided $1.6 billion, $800 million of which is currently 
unspent, for the Department of Energy's Office of Science. 
Included were some areas, such as biological and environmental 
research, that could potentially crowd out private investment. 
The resolution levels support preserving the Office of 
Science's original role as a venue for groundbreaking 
scientific discoveries, while paring back applied and 
commercial research and development.
                          FUNCTION 270: ENERGY

                              ----------                              


                            Function Summary

    This category includes civilian energy and environmental 
programs of the Department of Energy [DOE]. Function 270 also 
includes the Rural Utilities Service of the Department of 
Agriculture, the Tennessee Valley Authority [TVA], the Federal 
Energy Regulatory Commission, and the Nuclear Regulatory 
Commission. (It does not include DOE's national security 
activities--the National Nuclear Security Administration--which 
are in Function 050, or its basic research and science 
activities, which are in Function 250.)
    Since the start of the current administration, total 
outlays in Function 270 activities have increased by more than 
200 percent. The administration has pursued a heavy-handed 
compliance culture dependent on regulations and spending. 
Regulations have extracted some $1.75 trillion per year from 
the economy, according to a recent report from the Small 
Business Administration, including $281 billion for 
environmental regulations that disproportionately hit small 
businesses. (Further discussion can be found in ``The Impact of 
Regulatory Costs on Small Firms,'' by Nicole V. Crain and W. 
Mark Crain, Small Business Research Survey, September 2010.) 
The stimulus alone allocated $80 billion of taxpayers' dollars 
specifically for politically favored renewable-energy 
interests. The administration has also stifled domestic energy 
production by blocking or delaying production both onshore and 
offshore, destroying jobs and idling American energy sources.
    The results are plain to see: gasoline prices have more 
than doubled since the President took office; and burdensome 
and ineffective regulations have driven up the prices of many 
products and services, while creating barriers for needed 
capital investment and job creation.
    All this for questionable gain. As The New York Times 
noted: ``[A] growing number of economists say that the 
environmental benefits of energy efficiency have been 
oversold.'' (See ``When Energy Efficiency Sullies the 
Environment,'' The New York Times, 7 March 2011.)

                Summary of Committee-Reported Resolution

    The resolution calls for $7.0 billion in budget authority 
and $16.2 billion in outlays in fiscal year 2012. Discretionary 
spending is $1.9 billion in budget authority and $12 billion in 
outlays in fiscal year 2012. Mandatory spending in 2012 is $5.1 
billion in budget authority and $4.2 billion in outlays. The 
10-year totals for budget authority and outlays are $19.9 
billion and $34.9 billion, respectively. The large disparity 
between budget authority and outlays results mainly from a 
large infusion of stimulus funds that are still being expended: 
the function grew by more than 200 percent since the start of 
the Obama administration because of stimulus funding. Over the 
course of the decade, outlays return to more normal ranges.
    H.R. 1 reduced funding for non-core energy research, loan 
guarantees for lower-demand programs, and excess and 
unnecessary spending in Department of Energy's civilian 
accounts which received large funding levels in the stimulus 
bill.
    Additionally, the House continuing resolution limited the 
Nuclear Regulatory Commission from terminating the Yucca 
Mountain license review without due cause (e.g. a significant 
scientific or technical justification). The attempt by the 
administration to terminate the Yucca geologic repository would 
exacerbate the Federal Government's current significant 
unfunded liabilities and ignore its legal obligation to collect 
and manage commercial and defense waste across 39 States.
    The fiscal year 2012 budget resolution builds on H.R.1 
provisions and pursues a balanced approach to energy policy, 
domestic energy production to help generate economic prosperity 
for job creation, lower gasoline and energy prices, and greater 
revenues, while moving toward market-based solutions for 
sustainable energy sources. The resolution draws on the 
American Energy Initiative's efforts to advance an all-of-the-
above energy approach for the U.S.

                      Illustrative Policy Options

    The committees of jurisdiction will determine policies to 
align with the spending levels in the resolution. The options 
below are offered as illustrations of the kinds of proposals 
that can help meet the budget's fiscal guidelines.

                         DISCRETIONARY SPENDING

    Scale Back Corporate Subsidies in the Energy Industry. The 
resolution provides sufficient funding for essential government 
missions, including energy security and basic research and 
development. It recommends paring back spending in areas of 
duplication or non-core functions, such as applied and 
commercial research and development projects best left to the 
private sector. For example, renewable projects have received 
substantial subsidies, increasing prices across the board for 
consumers. According to the Energy Information Agency, 
commercial solar and wind industries receive subsidies of more 
than $23/Mwh (megawatt hour) compared with $0.44/Mwh for 
conventional coal and $0.25/Mwh for natural gas. This does not 
include the $27.2 billion allocated in the 2009 ``stimulus'' 
bill for energy efficiency and renewable energy research and 
investment. The budget aims to roll back such Federal 
intervention and corporate welfare spending.

                           MANDATORY SPENDING

    Repeal the Western Area Power Administration [WAPA] 
Borrowing Authority. The $3.25 billion borrowing authority in 
WAPA's Transmission Infrastructure Program provides loans to 
develop new transmission systems aimed solely at integrating 
renewable energy. To date, WAPA has announced only one project 
under the borrowing authority: a wind transmission project 
owned by a foreign company. This authority was inserted into 
the stimulus bill without the opportunity for debate. Of most 
concern, the authority includes a bailout provision that would 
require American taxpayers to pay outstanding balances on 
projects that private developers fail to repay.
            FUNCTION 300: NATURAL RESOURCES AND ENVIRONMENT

                              ----------                              


                            Function Summary

    The Natural Resources and Environment function consists of 
major departments and agencies in the Department of Interior, 
including the National Park Service [NPS], the Bureau of Land 
Management [BLM], the Bureau of Reclamation, and the Fish and 
Wildlife Service [FWS]; conservation-oriented and land 
management agencies within the Department of Agriculture [USDA] 
including the Forest Service; the National Oceanic and 
Atmospheric Administration [NOAA] in the Department of 
Commerce; the Army Corps of Engineers; and the Environmental 
Protection Agency [EPA]. The discussion below elaborates on the 
budget resolution's recommended policies in these areas.
    Spending on programs contained in the Natural Resources and 
Environment function has increased 45 percent since the start 
of the current administration. The budget resolution recognizes 
the importance of these activities--which include overseeing 
water resources, conservation, land management, and 
recreational resources--but bigger government has not equated 
to better government; and the increase in resources has only 
invited mismanagement and duplication.
    The administration has blocked and delayed domestic energy 
production both onshore and offshore, costing jobs and 
sidelining American energy sources at a time of rising gasoline 
prices and unstable conflict in the Middle East and North 
Africa. The budget resolution provides for a more measured 
approach, generating receipts from bonus bids, rents, 
royalties, and fees as a result of unlocking domestic energy 
supplies in a safe, environmentally responsible manner. The 
budget also encourages the development of American-made 
renewable and alternative energy sources, while affirming the 
principle that environmental stewardship and economic growth 
are not mutually exclusive goals.
    In addition, the budget recognizes the importance of 
preserving significant habitats, while properly maintaining 
America's existing public lands. The Federal Government owns 
and controls 650 million acres of land in the United States--
one out of every three acres--especially in areas of the 
western U.S. But the government has not adequately maintained 
this land, some of which could return value to individual 
States and counties through more productive use. The Federal 
Government opts instead to acquire more while neglecting 
maintenance and upkeep of what it already controls. While the 
President's budget more than doubles funding for the Land and 
Water Conservation Fund [LWCF]--from $346.1 million in fiscal 
year 2008 to $900 million in his fiscal year 2012 budget--
Federal lands suffer from a current maintenance backlog that 
measures in the billions of dollars. The government has a 
responsibility to maintain and care for existing resources 
before acquiring more land.

                Summary of Committee-Reported Resolution

    The resolution calls for $31.9 billion in budget authority 
and $36.8 billion in outlays in fiscal year 2012. Discretionary 
budget authority in 2012 totals $28.8 billion, with $34.1 
billion in related outlays; mandatory spending is $3.1 billion 
in budget authority and $2.7 billion in outlays. Over 10 years, 
budget authority totals $274.0 billion, and outlays are $283.5 
billion.

                      Illustrative Policy Options

    H.R. 1 focused on paring back unnecessary spending and 
funds to carry out overreaching regulatory expansion. Its 
provisions also included funding limitations on EPA's ability 
to prohibit or restrict the emission of carbon dioxide or 
methane from any stationary source, on the Bureau of 
Reclamation's implementation of the San Joaquin River 
Settlement, and on implementation of Federal regulations on the 
Delta smelt thereby restoring water supplies to farming 
communities.
    The budget builds on the fiscal discipline of H.R.1, and 
supports American energy production. The second largest source 
of revenue to taxpayers comes directly from the multiple forms 
of revenues, royalties, and payments generated from producing 
energy offshore and onshore. Producing more American-made 
energy can improve the Federal budget outlook, strengthen job 
creation, and reduce reliance on foreign oil.
    This budget also emphasizes core government 
responsibilities, while reducing spending in areas of 
duplication or non-core functions. While the actual policies 
will be determined by the committees of jurisdiction, options 
to meet budget targets include those listed below.

                         DISCRETIONARY SPENDING

    Focus on Maintaining Existing Land Resources. Annual 
funding for the Land and Water Conservation Fund [LWCF] has 
typically ranged between $250 million and $450 million. The 
President's budget requests $900 million for fiscal year 2012--
an increase of more than 200 percent since the start of the 
administration--but this allocation cannot be used for 
maintenance. As noted previously, the Federal Government 
already is struggling with a maintenance backlog on the 
millions of acres it controls--a backlog totaling between $13.2 
and $19.4 billion--but the administration is seeking to acquire 
even more land. Continuing the policy established in H.R. 1 
would focus on the maintenance backlog, before moving to 
misdirected acquisition of additional lands.

                           MANDATORY SPENDING

    Expand Onshore and Offshore Energy Production. Despite 
access to abundant domestic resources, the Federal Government 
has adopted policies that largely prevent American production 
of oil and natural gas. For the country to break free of 
excessive dependence on foreign energy supplies, it requires 
producing more energy at home.
    Under this administration's policies, 2011 will be the 
first year since 1958 that there will be no lease sale in the 
Outer Continental Shelf. As a result in 2011, revenue to the 
Federal Government from bonus bids and rents was 1 percent the 
level of 2008, a decline of nearly $9.9 billion. Unlocking 
domestic energy supplies in a safe, environmentally responsible 
manner will increase revenues from bonus bids, rents, 
royalties, and fees. The budget allows for further access in 
areas such as the Outer Continental Shelf, including offshore 
sales off the coast of Virginia, the Eastern Gulf of Mexico, 
and the Intermountain West. A reinvigorated offshore and 
onshore energy program could create more than 1.2 million jobs 
annually.
    Finally, the budget encourages the development of American-
made renewable and alternative energy sources, including 
nuclear, wind, solar, and more, affirming the position that 
environmental stewardship and economic growth are not mutually 
exclusive goals.

    Revise and Reauthorize the Bureau of Land Management's Land 
Sales Process. Instead of requiring that all proceeds from land 
sales be used to acquire other parcels of land and to cover 
sales expenses, this option would direct that 70 percent of the 
proceeds, net of expenses, go to the Treasury. It would limit 
the Department of the Interior's share of the receipts to $60 
million per year (plus an additional amount to cover BLM's 
administrative costs) for land acquisition and restoration 
projects on BLM lands. The option also would reduce the amount 
of Federal spending not subject to regular oversight through 
the congressional appropriation process. The change would 
reduce the Federal budget deficit and ensure that U.S. 
taxpayers benefit directly from land sales.
                       FUNCTION 350: AGRICULTURE

                              ----------                              


                            Function Summary

    The agriculture category includes funds for direct 
assistance and loans to food and fiber producers; export 
assistance; market information; inspection services; and 
agricultural research. Farm policy is driven by the Food, 
Conservation, and Energy Act of 2008 (the Farm Bill), which 
provides farmers protection against uncertainties, such as poor 
weather conditions and unfavorable market conditions.
    Farm safety net programs are divided into three areas: 
commodity programs, crop insurance, and supplemental disaster 
assistance. Commodity programs, which the Farm Bill authorizes 
through the 2012 crop/marketing year, include both direct 
payments and price-based counter-cyclical payments as well as 
the marketing assistance loan program; and the new average crop 
revenue election payment program. Due to recent strength in 
agricultural markets, outlays for price-based programs have 
declined. Nevertheless, direct payments, which do not vary with 
market prices, have remained steady at $5 billion each year. 
Crop insurance outlays, while volatile, have trended sharply 
higher and averaged $5.6 billion over 2008-10, more than double 
their 2000-02 average level.
    With farm income, crop prices, and Federal deficits hitting 
new highs, and with food prices going up, it is time to reform 
agricultural support programs, while maintaining a strong 
safety net for farmers.

                Summary of Committee-Reported Resolution

    The resolution calls for $19.8 billion in budget authority 
and $19.6 billion in outlays in fiscal year 2012. Discretionary 
spending in fiscal year 2012 is $4.9 billion in budget 
authority and $5.6 billion in outlays; mandatory spending, the 
majority of the function's total, is $14.9 billion in budget 
authority, with outlays of $14 billion. The 10-year totals for 
budget authority and outlays are $175.8 billion and $172.8 
billion, respectively.

                      Illustrative Policy Options

    Specific policies in this category will be determined by 
the committees of jurisdiction. Among the options they may wish 
to consider are the following.

                         DISCRETIONARY SPENDING

    Adopt H.R. 1 Policies. This budget adopts the baseline of 
H.R. 1 as passed by the House on 11 February 2011. This would 
reduce spending by the United States Department of Agriculture 
[USDA] and other related agencies. Among other policies, this 
would reduce funding for Departmental Administration and 
Offices as well as requiring a more efficient use of existing 
funds.

                           MANDATORY SPENDING

    Reform Agricultural Commodity and Insurance Programs. Under 
this option, mandatory agricultural outlays, other than food 
and nutrition programs, will be reduced by $29.3 billion 
relative to the currently anticipated levels from fiscal year 
2012 through fiscal year 2021. These savings could be achieved 
by reducing both direct payments and crop insurance subsidies, 
and by reforming export assistance programs. The Committee on 
Agriculture is responsible for implementing these reductions, 
and to maintain the committee's flexibility, this option 
assumes the savings will not take effect until the beginning of 
the next Farm Bill. Farmers will benefit greatly from other 
provisions in this budget, including regulatory relief, the 
maintenance of low capital gains and estate taxes, and lower 
interest rates due to reduced Federal borrowing.
               FUNCTION 370: COMMERCE AND HOUSING CREDIT

                              ----------                              


                            Function Summary

    The Federal Government's commerce and housing activities 
should refocus limited resources on efforts to bolster free 
enterprise and economic growth. Such an approach would have the 
additional direct benefit of reducing government spending, 
easing the demand for higher taxes or more borrowing, and would 
curb corporate welfare in the housing, financial services, and 
telecommunications industries. This budget calls for an end to 
the cycle of future bailouts perpetuated by the financial 
regulation law authored by Senator Dodd and Representative 
Frank, as well as putting a stop to the costly taxpayer 
ownership of Fannie Mae and Freddie Mac.
    These government activities are included in the Commerce 
and Housing Credit budget function. Overall, the category has 
four components: mortgage credit; the Postal Service (mostly 
off budget); deposit insurance (negligible spending due to 
reserve supporting fees and the like); and other advancement of 
commerce (the majority of the discretionary and mandatory 
spending in this function).
    The mortgage credit component of this function includes 
housing assistance through the Federal Housing Administration 
[FHA], the Federal National Mortgage Association [Fannie Mae], 
the Federal Home Loan Mortgage Corporation [Freddie Mac], the 
Government National Mortgage Association [Ginnie Mae], and 
rural housing programs of the Department of Agriculture. The 
function also includes net Postal Service spending and spending 
for deposit insurance activities of banks, thrifts, and credit 
unions. Most of the Commerce Department is provided for in this 
function, including the International Trade Administration, the 
Bureau of Economic Analysis, the Patent and Trademark Office, 
the National Institute of Standards and Technology, the 
National Telecommunications and Information Administration, and 
the Bureau of the Census. Also funded through this function are 
independent agencies such as the Securities and Exchange 
Commission [SEC], the Commodity Futures Trading Commission 
[CFTC], the Federal Trade Commission, the Federal 
Communications Commission [FCC], and the majority of the Small 
Business Administration [SBA].

                Summary of Committee-Reported Resolution

    In this function, the budget resolution provides for $15.3 
billion in budget authority and $17.2 billion in outlays in 
fiscal year 2012. Of that total, 2012 discretionary spending is 
-$4.2 billion in budget authority and -$128 million in outlays. 
Mandatory spending in 2012 is $19.5 billion in budget authority 
and $17.4 billion in outlays. The function totals over 10 years 
are $14.5 billion in budget authority and -$140.1 billion in 
outlays.
    On-budget totals for fiscal year 2012 are $14.3 billion in 
budget authority and $16.3 billion in outlays. Of these 
amounts, discretionary budget authority is -$4.4 billion, with 
outlays of -$388 million. Mandatory on-budget spending for 
fiscal year 2012 is $18.8 billion in budget authority and $16.7 
billion in outlays. Over 10 years, the on-budget totals are 
$11.9 billion in budget authority and -$142.7 billion in 
outlays.
    Negative discretionary totals for budget authority and 
outlays mainly reflect the negative subsidy rates applied to 
certain loan and loan guarantee programs scored under the 
guidelines of the Federal Credit Reform Act [FCRA], such as FHA 
and Ginnie Mae programs. It should be noted that FHA loans are 
scored using a different accounting method than the fair value 
estimates that CBO applies to Fannie Mae and Freddie Mac, 
resulting in budget disparities. (See discussion under 
Mandatory Spending.)
    Negative mandatory totals for outlays in this function 
mainly result from the wind-down of several programs created in 
response to the financial crisis that initially produced large 
positive outlays, such as those associated with the Troubled 
Asset Relief Program and various deposit insurance programs. It 
should be noted that from 2008 through 2009, total outlays in 
Function 370 were a positive $319 billion.

                      Illustrative Policy Options

    The resolution aims to draw the Federal Government back 
from its overreach into the housing, financial, and 
telecommunications markets, and curtail the corporate welfare 
that distorts and misdirects the flow of free market energies. 
While the committees of jurisdiction will determine the actual 
policies in pursuit of these goals, the options below offer 
several potential approaches.

                         DISCRETIONARY SPENDING

    Eliminate Corporate Welfare Within the Department of 
Commerce. Business subsidies distort the economy, impose unfair 
burdens on taxpayers, and are especially problematic given the 
fiscal problems facing the U.S. Government. With potential 
savings of roughly $6 billion over 10 years, programs that 
should be considered for elimination include the following:

     The Holling's Manufacturing Extension Program, 
which subsidizes a network of nonprofit extension centers that 
provide technical, financial and marketing services for small 
and medium-size businesses that are largely available in the 
private market. The program already obtains two-thirds of its 
funding from non-Federalsources, and was originally intended to 
be self-supporting.

     The Baldrige National Quality Program. This 
program provides presidential awards to applicable companies 
that are found to be outstanding in certain categories of 
leadership and business. Given the Nation's fiscal condition, 
and the availability of quality management assistance for 
companies in the private marketplace, there is no justification 
for this subsidy.

     Trade Promotion Activities at the International 
Trade Administration [ITA]. This agency, within the Department 
of Commerce, provides trade promotion services for U.S. 
companies. The fees it charges for these services do not cover 
the cost of these activities. Businesses can obtain similar 
services from the State and local governments, and the private 
market. The ITA should be eliminated or charge for the full 
cost of these services.

    Tighten the Belts of Government Agencies. Duplication, 
hidden subsidies, and large bureaucracies are symptomatic of 
many agencies within Function 370. Among them are the 
following:

     The General Services Administration [GSA] Federal 
Citizen Services Fund. This fund is the e-mail, print, and 
telephone information service of the GSA, managing websites for 
the general public such as USA.gov. Many of its 
responsibilities, however, duplicate those of other offices 
within the GSA, including the Electronic Government Fund. In 
light of cutbacks in various government agencies, this 
resolution supports rationalizing the GSA wherever possible. As 
an agency whose mission is to provide services to other parts 
of the government, the GSA stretches across many budget 
functions: it has more than 12,500 employees; owns or leases 
about 9,600 buildings and related assets; and has a budget of 
more than $900 million, an increase of 200 percent since 2008.

     The Small Business Administration [SBA]. The SBA 
provides almost $60 million in grants, hidden in its 
discretionary salaries and expenses budget, which could be 
canceled.

     The Securities and Exchange Commission [SEC]. In 
2010, the SEC spent more than $1.1 billion on salaries and 
expenses, with more than $700 million going to compensation and 
benefits alone. About 3,800 full-time employees occupied the 
SEC at the end of 2010, with an average compensation and 
benefits package of about $187,600 per employee. The SEC's 
budget has swollen by 20 percent since 2008. The President's 
budget requests $1.4 billion in 2012, an increase of 53 percent 
from 2008 levels. On top of this, the Dodd-Frank Wall Street 
Reform and Consumer Protection Act requests doubling the size 
of the SEC's budget from current levels, increasing it to $2.25 
billion in fiscal year 2015.

    In its Views and Estimates, the House Committee on 
Financial Services notes the regulatory failures of the 
Commission leading up to the financial crisis: ``It is well-
documented that prior to 2009, the SEC failed to adequately 
fulfill its mission in the run-up to the financial crisis--
including its failure to adequately supervise the Nation's 
largest investment banks, which resulted in the bailout of Bear 
Stearns and the collapse of Lehman Brothers and the ensuing 
financial panic; its failure to supervise the credit rating 
agencies that bestowed AAA ratings on securities that later 
proved to be no better than junk; and its failure to ensure 
that issuers made adequate disclosures about securities 
constructed from poorly underwritten mortgages that were bound 
to fail. In addition, subsequent to the financial crisis, the 
SEC's inability to detect the Madoff and Stanford Ponzi schemes 
cast further doubt on its capability to supervise the 
institutions under its regulatory mandate.''
    The Government Accountability Office [GAO] issued a report 
in 2010 in which it identified ``material weaknesses in the 
SEC's controls.'' It demonstrated deficiencies in the SEC's 
reporting of financials, budgetary resources, and other 
internal controls.
    While the administration requests expanding the SEC's 
budget, this resolution questions the premise that more funding 
for the SEC means better, smarter regulation. It denies the 
claim that the essential tasks of providing greater 
transparency, investor protection, and enforcement for 
increasingly complex markets can only be achieved with reams of 
even more complex regulation, and by adding scores of well-
compensated regulators to government payrolls. During a time 
when trimming the deficit is imperative, the SEC should create 
headroom in its budget by streamlining and making more 
efficient its operations and resources; defraying taxpayer 
expenses by designating self-regulatory organizations (subject 
to SEC oversight) to perform needed examinations of investment 
advisors; and enhancing collaboration with other agencies, such 
as the Commodity Futures Trading Commission, to reduce 
duplication, waste, and overlap in supervision. Ultimately, the 
committees of jurisdiction will establish the specific 
policies.

                           MANDATORY SPENDING

    Extend and Expand Auction Authority. Congress first granted 
auction authority to the Federal Communications Commission in 
the mid-1990s. Since then, auctions have generated more than 
$50 billion for the U.S. Treasury and created a vibrant 
wireless industry that contributes hundreds of thousands of 
jobs and hundreds of billions annually to the economy. With 
wireless usage growing exponentially every quarter, more 
spectrum is desperately needed. But the FCC's auction authority 
expires in 2012. Extending and expanding the auction authority 
would enable the agency to conduct voluntary incentive auctions 
that would encourage private entities to vacate under-utilized 
spectrum and make it available for re-auction--and could 
generate more than $24 billion over 10 years.

    Terminate the Telecommunications Development Fund [TDF]. 
This fund, created by the Telecommunications Act of 1996, is a 
quasi-governmental venture capital entity that receives 
interest earnings from deposits made on spectrum auctions. A 
portion of the funding is used to invest in small 
telecommunications companies, and the rest is used for salaries 
and administrative costs, including lobbying. The fund has not 
demonstrated significant success in meeting its statutory 
goals, and its efforts overlap with several other Federal 
programs and the private sector. To date, the TDF has collected 
$100 million that would have otherwise been deposited into the 
Treasury and directly benefited taxpayers. Congress should 
accept the President's proposal to eliminate this program.

    Freeze Universal Service Collections at Fiscal Year 2011 
Levels, and Reduce Spending. In 1997 the Federal Communications 
Commission established the Universal Service Fund [USF] to 
preserve affordable telephone service for rural areas to enable 
the telecommunications industry's transition from a cross-
subsidized monopoly to a competitive marketplace. This fund 
collects receipts derived by certain telecommunications 
operators from charges on their customers' phone bills to 
promote service to high-cost areas, low-income users, e-rate 
for schools and libraries, and rural health care. But runaway 
costs and lack of accountability have left this program in 
desperate need of reform. The USF fee now amounts to a 15-
percent surcharge on subscribers' long-distance bills. 
Meanwhile, annual USF spending has doubled over the past 
decade, growing from $4.5 billion in 2000 to an estimated $9.09 
billion this year, and is expected to reach $11.2 billion by 
2021. The Energy and Commerce Committee has thoroughly 
documented cases of waste, fraud, and abuse in the USF 
programs, while the Office of Management and Budget has 
designated it as one of 14 Federal programs with ``high-error'' 
based on its level of improper payments. Moreover, the USF 
significantly overlaps with the Rural Broadband Access Loan and 
Loan Guarantee Program, the Community Connect Grant Program, 
the Distance Learning and Telemedicine Grant Program, and the 
$7 billion allocated in the broadband provisions of the 
American Recovery and Reinvestment Act of 2009. A complete 
overhaul of funding in this policy area is warranted. It might 
include freezing USF collections so they cannot rise any 
further; eliminating duplication by consolidating all competing 
broadband funding programs into a modernized USF; and requiring 
a minimum $1-billion reduction in annual spending through the 
elimination of waste, fraud and abuse.

    Terminate Grants to Worsted Wool. The Miscellaneous Trade 
and Technical Corrections Act of 2004 (Public Law 108-429) 
mandated payments to certain manufacturers of worsted wool 
products to ease adjustment to changes in trade law. The 
grants, originally slated to end in 2007, still exist and have 
been extended until 2014. Termination of this ``temporary'' 
grant program is overdue.

    Restrict New FDIC Authority to Bail Out Bank Creditors. 
This budget proposes to end the cycle of future bailouts 
perpetuated by the Dodd-Frank Wall Street Reform and Consumer 
Protection law.
    This financial regulatory overhaul is not reform. It 
expands and centralizes power in Washington, doubling down on 
the root causes of the 2008 crisis. It contains layer-upon-
layer of new bureaucracy sewn together by complex regulations, 
but fails to address key problems, such as Fannie Mae and 
Freddie Mac, that contributed to the worst financial meltdown 
in recent history. Although the bill is dubbed ``Wall Street 
Reform,'' it actually intensifies the problem of too-big-to-
fail by giving large, interconnected financial institutions 
advantages that small firms will not enjoy.
    While the authors of Dodd-Frank went to great lengths to 
denounce bailouts, this law only sustains them. The Federal 
Deposit Insurance Corporation [FDIC] now has the authority to 
access taxpayer dollars in order to bail out the creditors of 
large, ``systemically significant'' financial institutions. CBO 
projects the cost for this new authority at $26 billion, 
although CBO Director Elmendorf recently testified that ``the 
cost of the program will depend on future economic and 
financial events that are inherently unpredictable.'' In other 
words, another large-scale financial crisis where creditors are 
guaranteed government bailouts could cost much more.
    This resolution calls for ending this regime, now enshrined 
into law, which paves the way for future bailouts. House 
Republicans put forth an enhanced bankruptcy alternative that--
instead of rewarding corporate failure with taxpayer dollars--
would place the responsibility of large, failing firms in the 
hands of the shareholders who own them, the managers who run 
them, and the creditors who finance them.
    This resolution also supports cancelling ability of the 
Dodd-Frank Bureau of Consumer Financial Protection to fund its 
operations with the Federal Reserve's yearly remittances to the 
Treasury Department. The bill was written to provide off-budget 
financing for the new Bureau, which will be housed at the 
Federal Reserve but will have complete autonomy from the Fed. 
To preserve its independence as the Nation's monetary 
authority, the Federal Reserve is off budget and its excess 
earnings from monetary operations are returned to the Treasury 
to reduce the deficit. Now, instead of directing these 
remittances to reduce the deficit, Dodd-Frank requires 
diverting a portion of them to pay for a new bureaucracy with 
the authority to write far-reaching rules on financial products 
and restrict credit to the very customers it seeks to 
``protect.''

    Privatize the Business of Government-Controlled Mortgage 
Giants Fannie Mae and Freddie Mac. Since being placed into 
government conservatorship in 2008, Fannie Mae and Freddie Mac, 
absent major reforms, are expected to have an all-in cost to 
taxpayers of more than $375 billion through 2021, according to 
CBO estimates. This includes the losses on preexisting 
commitments, those entered into prior to conservatorship, of 
about $248 billion. CBO has made Fannie and Freddie explicit 
entities of the Federal budget, accounting for their 
liabilities as liabilities of the government. In contrast, the 
administration does not fully account for the taxpayer exposure 
of Fannie and Freddie, instead leaving them off budget.
    So far, Treasury has bailed out Fannie and Freddie to the 
tune of $150 billion. Fannie Mae, Freddie Mac, and the Federal 
Housing Administration now own or insure 95 percent of the 
entire U.S. housing market.
    This budget recommends putting an end to the practice of 
corporate subsidies and taxpayer bailouts in housing finance. 
It envisions the eventual elimination of Fannie Mae and Freddie 
Mac, winding down their government guarantee and ending 
taxpayer subsidies. In the interim, it supports requiring 
Fannie and Freddie to charge lenders to bring private capital 
back, shrinking their retained portfolios. It also calls for 
various measures that would bring transparency and 
accountability to these two government-sponsored enterprises.
    At the same time, the government should adopt measures to 
discourage shifting of taxpayer risk to the FHA and other 
government-backed entities as Fannie and Freddie are 
dismantled. Right now, there are notable differences between 
the accounting treatment of FHA-insured loans and Fannie- and 
Freddie-guaranteed loans. The Federal Credit Reform Act of 
1990, which determines cost by taking net present value of the 
cash flows associated with loans and discounting them using 
marketable Treasury security rates, applies to FHA Mutual 
Mortgage Insurance loans. But this understates the full costs 
associated with FHA loans. In contrast, CBO uses fair value 
scoring for Fannie Mae- and Freddie Mac-guaranteed loans, which 
reflects the full financial risk incurred by the taxpayer of 
backing these loans.
    As a result, similar policies for Fannie and Freddie versus 
FHA could have opposite effects on the budget. For example, a 
decrease in the conforming loan limit for FHA loans under 
straight credit reform would increase spending and the deficit. 
In contrast, a decrease in the conforming loan limits for 
Fannie and Freddie loans would reduce spending and the deficit 
by reducing the expected taxpayer subsidy. Put another way, if 
credit reform scoring used by FHA were applied to Fannie Mae 
and Freddie Mac, it would show a savings to the Federal 
Government--when in reality the Treasury Department has 
provided more than $150 billion to date to cover their past 
losses. This resolution authorizes the use of fair value 
scoring for FHA loans. Without it, there is an opportunity for 
credit reform arbitrage by shifting loan losses into FHA on the 
budget, where they will appear as ``gains'' for the taxpayer.
    As the government reforms its role in U.S. housing markets, 
which this resolution supports, Fannie, Freddie and FHA loans 
should be treated with parity and full transparency on the 
budget. The housing-finance system of the future, however, will 
allow private-market secondary lenders to fairly, freely, and 
transparently compete, with the knowledge that they will 
ultimately bear appropriate risk for the loans they guarantee. 
Their viability and profitability will be determined by the 
soundness of their practices and the value of their services.
                      FUNCTION 400: TRANSPORTATION

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                            Function Summary

    Although transportation infrastructure is a vital component 
of the U.S. economy--the mechanisms of Federal highway and 
transit spending have become distorted. Further, however worthy 
some transportation projects might be, their capacity as job 
creators has been vastly oversold, as demonstrated by the 
extravagant but unfulfilled promises that accompanied the 2009 
``stimulus'' bill. It is not solely a matter of how much the 
public spends on infrastructure, but how effectively the funds 
are spent--and how that spending is financed.
    This budget builds on H.R. 1, which returns discretionary 
Federal transportation spending to 2008 levels, and in 
particular reduces dubious high-speed rail projects that have 
failed the clear basic cost-benefit analyses.
    This budget category includes ground, air, water and other 
transportation funding. The major agencies and programs here 
include the Department of Transportation (including the Federal 
Aviation Administration; the Federal Highway Administration; 
the Federal Transit Administration; highway, motor carrier, 
rail and pipeline safety programs; and the Maritime 
Administration); the Department of Homeland Security (including 
the Federal Air Marshals, the Transportation Security 
Administration, and the U.S. Coast Guard); the aeronautical 
activities of the National Aeronautics and Space Administration 
[NASA]; and the National Railroad Passenger Corporation 
[Amtrak].

                Summary of Committee-Reported Resolution

    The resolution calls for $64.3 billion in budget authority 
and $80.4 billion in outlays in fiscal year 2012. Discretionary 
budget authority in 2012 is $23.8 billion, with outlays of 
$80.2 billion; and mandatory spending is $40.5 billion in 
budget authority and $221 million in outlays. (The large 
discrepancies between budget authority and outlays here results 
from transportation programs, such as the Highway Trust Fund, 
through which funding is provided as contract authority, a type 
of mandatory budget authority, while outlays are controlled by 
annual limitations on obligations set in appropriations acts.) 
Over 10 years, budget authority totals $661.7 billion, with 
outlays of $704.2 billion.

                      Illustrative Policy Options

    The budget supports maintaining essential funding for 
highways, aviation and safety, with reductions in other 
transportation activities of lower priority to the Federal 
Government. As is true elsewhere, actual policy decisions will 
be determined by the committees of jurisdiction. Nevertheless, 
the options below suggest one set of policies that can help 
meet the budget's levels.

                         DISCRETIONARY SPENDING

    Eliminate Funding for High-Speed Rail. With the Federal 
Government's fiscal challenges making long-term subsidization 
infeasible, high-speed rail projects and any new intercity rail 
projects should be pursued only if they can be established as 
self-supporting commercial services. The threat of large, 
endless subsidies is precisely the reason Governors across the 
country are rejecting federally funded high speed rail 
projects. There are only two high-speed rail lines in the world 
that break even: one in Europe and one in Japan, and both in 
areas that have unusually high population density and gasoline 
prices.

    Terminate the Transit Starts Programs. The budget calls for 
terminating the New Starts and Small Starts programs within the 
Department of Transportation. The benefits of these mass 
transit projects are local, not national. They should be funded 
at the local level.

    Increase Registration Fees for the Federal Aviation 
Administration [FAA]. The FAA regulates the registration of 
aircraft and the licensing and certification of pilots. 
Currently, taxpayers subsidize aircraft owners and operators 
because there is no charge for some of these licenses, while 
others are issued at below cost. The costs for these services 
should be borne by those who benefit from them.

                           MANDATORY SPENDING

    Balance the Highway Trust Fund. Federal surface 
transportation programs are mainly funded through the 18.4-
cent-per gallon tax on gasoline and the 24.4-cent-per-gallon 
tax on diesel fuel that are deposited into the Highway Trust 
Fund. This fund is on an unsustainable path. Over the past 
decade, spending has mostly exceeded revenues because gas-tax 
levels plateaued while spending grew; and spending increasingly 
has been diverted to non-highway projects, such as bike trails 
and museums, and politicized through earmarks such as the 
celebrated ``bridge to nowhere.'' To make up for funding 
shortfalls, the trust fund has required three large general 
fund contributions totaling $35 billion since 2008. To maintain 
the current level of spending, the fund will require at least 
another $134 billion in bailouts through 2021, with the next 
installment due in 2013. The budget anticipates a long-term 
surface transportation authorization bill that keeps the 
Highway Trust Fund solvent without additional general fund 
transfers or increases in the gasoline tax. The legislation 
could achieve these goals by consolidating the more than 55 
separate highway programs into a small number of core highway 
activities, and focusing every dollar on pursuing a targeted 
and cohesive national transportation policy.
    Under current law, the trust fund cannot incur negative 
balances and therefore must maintain a $4 billion balance in 
the Highway Account and a $2 billion balance in the Transit 
Account to prevent a general fund transfer. This budget assumes 
these transportation programs are reformed and funding is 
reduced to maintain these balances.

    Make Airport Improvement Grants Sustainable. Through the 
Airport Improvement Program [AIP], the Federal Aviation 
Administration provides capital improvement grants to airports. 
Between 2000 and 2010, spending on the AIP program increased by 
47-percent. In light of soaring deficits, these high levels 
cannot be sustained. The budget calls for reasonable spending 
reductions consistent with H.R. 658, the FAA Reauthorization 
and Reform Act of 2011, which maintains the ability for 
airports to obtain additional non-Federalsources of funding for 
important infrastructure investments.

    Require Airports to Fund a Larger Portion of the Cost of 
Aviation Security. Taxpayers currently subsidize more than half 
the cost of aviation security for the travelers who use and 
benefit from the system. This burden could be eased by shifting 
greater responsibility to those who fly. One way to do so would 
be by applying a simple flat fee of $5 per one-way trip for 
security system users--instead of a $2.50 fee for a one-way 
trip with no stops and a $5 fee for a trip with one or more 
stops.

    Phase Out Subsidies for Essential Air Service [EAS]. EAS is 
a classic example of a temporary government program that has 
become immortal. EAS funding--originally intended to provide 
transitional assistance to small communities to adjust to the 
airline deregulation in the late 1970s--has not only continued, 
but has grown rapidly in recent years. From $50 million in 
2001, it quadrupled to $200 million in fiscal year 2010, with a 
45-percent increase since 2000 in the number of communities 
using these subsidies. According to the Transportation and 
Infrastructure Committee's Views and Estimates, 34 EAS 
communities in fiscal year 2010 averaged fewer than 10 
passengers per day; and in 22 EAS communities, pilots often 
outnumbered passengers. Further, last year subsidies in 16 EAS 
communities exceeded $1,000 per-passenger on a round-trip 
basis, while one community had a per passenger round trip 
subsidy of $8,224.

    Offset the Cost of Federal Rail Safety Activities. Private-
sector passenger and rail freight companies should assume 
responsibility for government-provided safety services by 
paying a fee to the Federal Railroad Administration.

    Terminate the Ocean Freight Differential Program for Food 
Aid. Current law requires the Department of Transportation to 
reimburse other Federal agencies for the subsidies they must 
pay to the U.S. shipping industry to transport food aid. The 
budget recommends ending these subsidies.
            FUNCTION 450: COMMUNITY AND REGIONAL DEVELOPMENT

                              ----------                              


                            Function Summary

    This category includes programs that provide Federal 
funding for economic and community development in both urban 
and rural areas, including: Community Development Block Grants 
[CDBGs]; the non-power activities of the Tennessee Valley 
Authority; the regional commissions, including the Appalachian 
Regional Commission; the Economic Development Administration 
[EDA]; and partial funding for the Bureau of Indian Affairs.
    Homeland Security spending in this function includes the 
State and local government grant programs of the Department of 
Homeland Security, including partial funding for the Federal 
Emergency Management Agency [FEMA].
    Aside from those programs related to emergency preparedness 
and critical needs, this resolution supports streamlining non-
essential community and regional initiatives that are not core 
functions of the Federalgovernment.

                Summary of Committee-Reported Resolution

    The resolution calls for $11.6 billion in budget authority 
and $23.6 billion in outlays in fiscal year 2012. Discretionary 
budget authority in 2012 is $11.4 billion, with $21.3 billion 
in associated outlays. Mandatory spending in 2012 is $157 
million in budget authority and $2.3 billion in outlays. The 
10-year totals for budget authority and outlays are $115.4 
billion and $144.7 billion, respectively.
    The large gap between budget authority and outlays in the 
function totals and discretionary levels results mainly from 
prior-year outlays from the stimulus bill.

                      Illustrative Policy Options

    As elsewhere, the committees of jurisdiction will make 
final policy determinations. The proposals below indicate 
policy options that might be considered.

                         DISCRETIONARY SPENDING

    Eliminate Non-Core Programs. At a time when shrinking 
spending is imperative for the government's fiscal well-being, 
this resolution recommends taking a hard look at community and 
regional programs; focusing on those that deliver funds for 
non-core Federalgovernment functions; and consolidating, 
streamlining and jettisoning wherever possible. Among programs 
that should be considered in this review are the following:

     The Community Development Fund [CDF]. 
Historically, about 80 percent to 90 percent of funding for the 
CDF is spent on the Community Development Block Grant [CDBG]. 
CDBG is an annual formula grant directed to State and local 
governments to address a broad array of initiatives. In 2010, 
about $4 billion was appropriated for CDBG. Currently, there is 
no set community poverty rate to be eligible for funds, nor is 
there an exclusion for communities with high average income. 
H.R. 1 reduced the funding for CDBG sharply from more than $4 
billion to $1.5 billion.

     The Department of Housing and Urban Development 
[HUD] Role in Brownfields Redevelopment. This is a grant 
program for cities to develop, for other economic purposes, 
abandoned and unneeded properties that were formerly industrial 
and commercial sites. The President's budget and H.R. 1 both 
recommend termination of this program, which is duplicative 
with many existing HUD and other community development 
initiatives.

     The Community Development Financial Institutions 
[CDFI] Fund. The main purpose of the CDFI, which is in the 
Department of the Treasury, is to direct funding to a range of 
financial institutions to assist with community development. 
Spending for CDFI has grown 43 percent since 2008, there is 
overlap with CDFI in other areas of the government, and the 
core purpose of the program is increasingly hard to define. Its 
New Markets Tax Credit Program, designed to spur private 
capital investment in low-income areas, has financed 
development in luxury hotels, condominiums, and other projects 
for financial institutions such as The Blackstone Group, 
Goldman Sachs, and JPMorgan Chase. In addition, the President's 
budget would use CDFI for the Healthy Food Financing Initiative 
[HFFI]--part of the ``Let's Move!'' program led by the First 
Lady--provides financing from CDFI to certain retail operations 
that offer healthy food options.

                           MANDATORY SPENDING

    Reform the National Flood Insurance Program [NFIP]. This 
program, administered by the Federal Emergency Management 
Agency, is one of the major mandatory programs in Function 450. 
While CBO's budget baseline assumes collections from 
policyholders will cover costs associated with flood insurance 
activities, the NFIP continues to owe a debt of $19.6 billion 
to the Treasury, on which it must also pay debt service. Most 
of this debt accumulated during the hurricane season of 2005. 
Currently, 20 percent of NFIP policies are subsidized. On 
average, taking into account subsidized and unsubsidized 
policies under NFIP, premium collections cover only 40 percent 
of the actuarial value of the insurance.
    NFIP, like many other government programs, was designed as 
a temporary incentive for homeowners who were unaware of their 
flood risks (before flood-mapping began in 1975) to purchase 
flood insurance. At present, however, homeowners can receive 
NFIP subsidies for new purchases of existing properties with 
high-flood risk (even though flood mapping began decades ago), 
for second and vacation homes, and for properties that realize 
repetitive losses from flood damage. While ultimately the 
authorizing committee will determine the appropriate course to 
pursue for flood insurance reform, this resolution supports 
options for NFIP that eliminate the subsidy for those types of 
properties in particular, efforts that would create more 
headroom for the private sector in flood insurance, and any 
other policies that would make the NFIP more actuarially sound 
and reduce its deficit to the Treasury.
   FUNCTION 500: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES

                              ----------                              


                            Function Summary

    The budget for the U.S. Department of Education, and the 
role of the Federal Government in education, have grown 
significantly over the past 45 years, but academic achievement 
has not seen a commensurate improvement. Now more than ever, 
the Nation's students must have access to a high-quality 
education and skills-training needed to compete in the rapidly 
changing global economy. At the same time, Congress must make 
every dollar count by eliminating wasteful, duplicative, and 
ineffective programs. The U.S. Government Accountability Office 
[GAO] recently identified many areas that are ripe for reform. 
In the area of education, their report identified 82 separate 
programs designed to improve teacher quality across 10 Federal 
agencies, and dozens of overlapping job training programs.
    Reforms in these areas are reflected in Function 500, which 
covers Federal spending primarily in the Departments of 
Education, Labor, and Health and Human Services for programs 
that directly provide--or assist States and localities in 
providing--services to young people and adults. Activities 
reflected here provide developmental services to low-income 
children; help fund programs for disadvantaged and other 
elementary and secondary school students; make grants and loans 
to post secondary students; and fund job-training and 
employment services for people of all ages.

                Summary of Committee-Reported Resolution

    The resolution provides $67.1 billion in budget authority 
and $100.0 billion in outlays in fiscal year 2012. In that 
year, discretionary spending is $77.3 billion in budget 
authority and $100.3 billion in outlays; mandatory spending in 
2012 is -$10.2 billion in budget authority and -$288 million in 
outlays. Over 10 years, spending in this function totals $730.9 
billion in budget authority and $776.8 billion in outlays.
    The large gap between budget authority and outlays in the 
function totals and discretionary levels results mainly from 
prior-year outlays from the stimulus bill. The negative 
mandatory numbers are due to the direct lending program, in 
which the Education Department acts effectively as a bank 
making student loans.

                      Illustrative Policy Options

    The committees of jurisdiction will make final policy 
determinations, but options worthy of consideration include the 
following.

                         DISCRETIONARY SPENDING

    Reform Job Training Programs. As global economic forces 
churn through old jobs and create new ones, more workers must 
obtain additional skills to meet changing demands of the modern 
job market. Unfortunately, Federal job training programs are 
balkanized, difficult to access, and lacking in accountability. 
There are at least 49 job training programs spread across nine 
different agencies. In January, the GAO issued a report that 
found almost all Federalemployment and training programs 
overlap with at least one other program, providing similar 
services to similar populations. Together, these programs spent 
$18 billion in fiscal year 2009, including stimulus dollars, 
and $14.5 billion in fiscal year 2010. Meanwhile, Senator 
Coburn recently presented a report highlighting the high amount 
of waste, fraud, and abuse that occurs in these programs. All 
congressional committees with jurisdiction over job training 
programs should look to consolidate as many administrative 
structures as possible to eliminate duplication and maximize 
taxpayer funds by focusing them on the most effective means of 
delivering job training activities. A streamlined approach will 
not only provide administrative savings, but improve access, 
choice, and flexibility to enable workers and job seekers to 
respond quickly and effectively to whatever specific career 
challenges they face.

    Restore funding for the DC Opportunity Scholarship Program 
[DC OSP]. The DC Opportunity Scholarship program, created in 
2003, enabled thousands of the neediest children in the 
District of Columbia's failing public schools to attend 
participating private elementary or secondary schools of their 
choice. Even in the midst of its stimulus spending spree, the 
111th Congress refused to reauthorize this program, denying 
students access to a high-quality education in the Nation's 
Capital. This budget supports the reinstatement of the 
successful DC Opportunity Scholarship Program.

    Make the Pell Grant Program Sustainable. Pell Grants are 
the perfect example of promises that cannot be kept. The 
program is on an unsustainable path, a fact acknowledged by the 
President's own fiscal year 2012 budget. The College Cost 
Reduction and Access Act of 2007 [CCRAA], the Higher Education 
Opportunity Act of 2008 [HEOA], the `stimulus' bill, and the 
Student Aid and Fiscal Responsibility Act of 2010 [SAFRA] all 
made Pell Grants more generous than the Federal budget could 
afford. This, along with a dramatic rise in the number of 
eligible students due to the recession, have caused program 
costs to more than double since 2008, from $16.1 billion in 
2008 to an estimated $35.0 billion in fiscal year 2012. The 
Department of Education warns that without changes to reduce 
program costs, Pell Grants will have a shortfall of $20.4 
billion at the end of fiscal year 2012.
    Urgent reforms are necessary to enable the program to 
continue as the foundation of the Nation's commitment to 
helping low-income students gain access to higher education. 
The budget recommends the following:

     End year-round Pell. The Higher Education 
Opportunity Act expanded Pell Grant funding for eligible 
students to receive a second Pell Grant in a single year to 
attend summer school. The Department of Education attributes 
22-percent of program growth since 2008 to this extra award.

     Set stricter lifetime limits. Currently, students 
can get Pell Grants for 18 semesters (9 years). The budget 
recommends a limit of 12 semesters (6 years), or their 
equivalents for part-time students.

     Roll back certain recent expansions to the Need 
Analysis to Ensure Aid is Targeted to the Truly Needy. The 
Department of Education attributes 14 percent of program growth 
since 2008 to recent legislative expansions to the need 
analysis formula. The biggest cost drivers come from changes 
made in the College Cost Reduction and Access Act of 2007 
[CCRAA], such as the expansions of the level at which a student 
qualifies for an automatic zero `Expected Family Contribution' 
[EFC] and the income protection allowance. These should be 
returned to pre-CCRAA levels.

     Eliminate administrative fees paid to 
participating institutions. The government pays participating 
schools $5 per grant to administer and distribute Pell awards. 
Schools already benefit significantly from the Pell program 
because the aid makes attendance at those schools more 
affordable.

     Consider a maximum income cap. Currently there is 
no fixed upper income limit for a student to qualify for Pell. 
Figures are simply plugged into a formula to calculate the 
amount for which the student qualifies. The higher the 
student's income level, the less of a grant they receive.

     Eliminate eligibility for less-than-half-time 
students. Funding should be reserved for students with a larger 
commitment to their education.

     Terminate eligibility for those who currently 
receive the minimum award. Right now a student can get a 
minimum Pell award of $278, which is unlikely to have much, if 
any, impact. Funding should be more effectively targeted 
towards those who need it most.

     Adopt a sustainable maximum award level. The 
Department of Education attributes 25 percent of recent program 
growth to the $619 increase in the maximum award done in the 
stimulus bill that took effect in the 2009-10 academic year.

    Eliminate Ineffective and Duplicative Federal Education 
Programs. The current structure for K-12 programs at the 
Department of Education is fragmented and ineffective. 
Moreover, many programs are duplicative or are highly 
restrictive, serving only a small number of students. Given the 
budget constraints, Congress must focus resources on programs 
that truly help students. The budget calls for reorganization 
and streamlining of K-12 programs and anticipates major reforms 
to the Elementary and Secondary Education Act [ESEA], which was 
last reauthorized as the No Child Left Behind Act [NCLB]. The 
budget would continue the terminations and reductions made in 
H.R. 1 to programs that are failing to improve student 
achievement. It also recommends that the committees of 
jurisdiction address the duplication between the 82 programs 
that are designed to improve teacher quality.

    Eliminate the Even Start Program. Even Start provides 
family literacy classes to low-income families. Evaluations 
have shown the program to be ineffective.

    Encourage Private Funding for Cultural Agencies. Federal 
subsidies for the National Endowment for the Arts, the National 
Endowment for the Humanities, and the Corporation for Public 
Broadcasting can no longer be justified. The activities and 
content funded by these agencies go beyond the core mission of 
the Federal Government and they are generally enjoyed by people 
of higher education and income levels, making them a wealth 
transfer from poorer to wealthier citizens. These agencies can 
raise funds from private-sector patrons--which will also free 
them from any risk of political interference.

    Reform and Consider Eliminating the Corporation for 
National and Community Service. Programs administered out of 
this agency--which created the oxymoron of the paid 
``volunteer''--provide funding to students and others who work 
in certain areas of public service. Participation by 
``volunteers'' in these programs is not means-tested. The 
Federal Government already has aid programs focused on low-
income students, and paying volunteers is not a core Federal 
responsibility, especially in times of high deficits and debt. 
Further, it is much more efficient to have such efforts operate 
at the State and local level by the community that receives the 
benefit of the service.

    Accept the President's Proposal to Terminate the 
Christopher Columbus Fellowship Foundation. This fellowship 
program has not demonstrated clear outcomes and has high 
overhead costs.

    Accept the President's Proposal to End Funding for the 
Harry S. Truman Scholarship Foundation. This program can 
continue to operate on its endowed Trust Fund.

    Terminate the Safe and Drug-Free Schools Program. This 
program funds grants to reduce youth substance abuse. Program 
evaluations have repeatedly found the program to be 
ineffective.

    Promote State, Local, and Private Funding for Museums and 
Libraries. The Federal Institute of Museum and Library Services 
is an independent agency that makes grants to museums and 
libraries. This is not a core Federal responsibility. This 
function can be funded at the State and local level and 
augmented significantly by charitable contributions from the 
private sector.

                           MANDATORY SPENDING

    Repeal New Funding From the Student Aid and Fiscal 
Responsibility Act [SAFRA] of 2010. During the debate on SAFRA, 
the Congressional Budget Office provided estimates that showed 
projected future savings from a government takeover of all 
Federal student loans decreased dramatically when ``market 
risk'' was taken into account. Since that time, the President's 
National Commission on Fiscal Responsibility and the Pew-
Peterson Commission on Budget Reform have recommended the 
incorporation of such ``fair value accounting'' for all Federal 
loan and loan guarantee programs to enable the true assessment 
of their cost to taxpayers. Unfortunately, SAFRA used the 
higher non-adjusted savings projection to subsidize the new 
health care law and to increase spending on several education 
programs. Although much of the funding allocations have already 
been spent, Congress could cancel the future spending in the 
following ways:

     First, it could repeal the expansion of the 
Income-Based Repayment [IBR] program. SAFRA made more generous 
the IBR plan for new borrowers of Direct Loans. This program, 
created in the College Cost Reduction and Access Act of 2007, 
is still relatively new. Congress should ensure the program is 
meeting its intended goals before it is expanded.

     Second, Congress could repeal the new mandatory 
College Access Challenge Grants. SAFRA dedicated mandatory 
spending to this discretionary program regardless of its 
effectiveness and created a ``funding cliff'' with resources 
abruptly terminating in 2014.

     Third, it could make discretionary payments to 
non-profit servicers, rather than mandatory payments. SAFRA 
established two separate funding categories for Direct Loan 
servicing contracts, a mandatory stream for eligible non-profit 
servicers and a discretionary stream for other servicers. Both 
of these types of servicers should be funded with discretionary 
funds.

     Fourth, it could make discretionary funding for 
the Community College/TAA grants. SAFRA provides mandatory 
funding for fiscal years 2011-14 for the Trade Adjustment 
Assistance [TAA] Community College and Career Training program 
a competitive grant program administered by the Department of 
Labor. This is a discretionary program that should not be 
funded with mandatory funds.

    Accept the Fiscal Commission's Proposal to Eliminate In-
School Interest Subsidies for Undergraduate and Graduate 
Students. The budget would accept the Fiscal Commission's 
recommendation to eliminate in-school interest subsidies for 
undergraduate and graduate students. The Federal Government 
focuses aid on family income prior to a student's enrollment, 
and then provides a number of repayment protections and, in 
some cases, loan forgiveness after graduation. There is no 
evidence that eliminating in-school interest is critical to 
individual matriculation.

    Reform and Consider Eliminating the Social Services Block 
Grant. The Social Services Block Grant is an annual payment 
sent to States without a matching requirement, to help achieve 
a range of social goals, including child care, health services, 
and employment services. Most of these are also funded by other 
Federal programs. States are given wide discretion to determine 
how to spend this money and are not required to demonstrate the 
outcomes of this spending, so there is no evidence of its 
effectiveness. The budget recommends eliminating this 
duplicative spending.
                          FUNCTION 550: HEALTH

                              ----------                              


                            Function Summary

    The principal driver of spending in this function is 
Medicaid, the Federal-State low-income health program. It 
represents more than 70 percent of the function total, and is 
growing at a rate of 7.5 percent per year--far faster than the 
growth of the overall economy. The Congressional Budget Office 
[CBO] projects that Federal spending on this program to be 
$259.7 billion in fiscal year 2012. This is expected to more 
than double within the next 10 years, reaching $559.9 billion 
by fiscal year 2021.
    But this represents only the Federal share of Medicaid. 
State spending on the program is expected to follow these same 
trends. According to the Centers for Medicare and Medicaid 
Services' December 2010 Actuarial Report on the Financial 
Outlook on Medicaid, total State spending will rise from $133.5 
billion in 2010 to $327.6 billion in 2019.
    While these spending trends are clearly unsustainable, 
Medicaid also has fostered a two-tiered hierarchy in the 
health-care marketplace that stigmatizes Medicaid enrollees. 
Its perverse funding structure is exacerbating budget pressures 
at the State and Federal level, while creating a mountain of 
waste. With administrators looking to control costs and 
providers refusing to participate in a system that severely 
under-reimburses their services, Medicaid beneficiaries are 
ultimately left navigating an increasingly complex system for 
even the most basic procedures. Absent reform, Medicaid will 
not be able to deliver on its promise to provide a sturdy 
health-care safety net for society's most vulnerable.
    Medicaid's current structure gives States a perverse 
incentive to expand the program and little incentive to save. 
For every dollar that a State government spends on Medicaid, 
the Federal Government pays an average of 57 cents. Expanding 
Medicaid coverage during boom years is tempting and easy to 
do--State governments pay less than half the cost. Yet to 
restrain Medicaid's growth, States must rescind a dollar's 
worth of coverage to save 43 cents.
    The recently enacted health care law adds even more 
liabilities to an already unsustainable program. CBO estimates 
the new law will increase Federal Medicaid spending $627 
billion more than it otherwise would be. This is due to the 
millions of new beneficiaries that are being driven into the 
program. In fact, CBO estimates that in every year for the next 
ten years, no fewer than 30 million new enrollees will be added 
the Medicaid program.
    For all these reasons, this budget anticipates a 
fundamental reform of the Medicaid Program. One potential 
approach is described below.
    In addition to Medicaid, this budget function reflects 
spending for the State Children's Health Insurance Program 
[SCHIP], health research and training, including the National 
Institutes of Health [NIH] and substance abuse prevention and 
treatment; and consumer and occupational health and safety, 
including the Occupational Safety and Health Administration.
    Discretionary spending in this function includes funding 
for Project Bioshield, the National Institutes of Health, 
including the National Institute of Allergy and Infectious 
Diseases, the Food Safety and Inspection Service, and the Food 
and Drug Administration.

                Summary of Committee-Reported Resolution

    The resolution calls for $341.9 billion in budget authority 
and $346.6 billion in outlays in fiscal year 2012. 
Discretionary spending for the year is $50.1 billion in budget 
authority and $60.2 billion in outlays; mandatory spending is 
$291.8 billion in budget authority and $286.5 billion in 
outlays. The 10-year totals for budget authority and outlays 
are $3.53 trillion and $3.49 trillion, respectively.

                      Illustrative Policy Options

    The exact contours of a Medicaid reform--as well as other 
policies flowing from the fiscal assumptions in this budget 
resolution--will be determined by the committees of 
jurisdiction. Nevertheless, the demand for Medicaid reform, and 
other measures to slow the growth of Federal spending, are 
unquestioned, and one set of potential approaches is described 
below.

                           MANDATORY SPENDING

    Transform and Strengthen the Medicaid Safety Net. One way 
to secure the Medicaid benefit is by converting the Federal 
share of Medicaid spending into an allotment tailored to meet 
each State's needs, indexed for inflation and population 
growth. Such a reform would end the misguided one-size-fits-all 
approach that has tied the hands of so many State governments. 
States would no longer be shackled by federally determined 
program requirements and enrollment criteria. Instead, each 
State would have the freedom and flexibility and to tailor a 
Medicaid Program that fit the needs of its unique population.
    This reform also would improve the health-care safety net 
for low-income Americans by giving States the ability to offer 
their Medicaid populations more options and better access to 
care. Medicaid recipients, like all other Americans, deserve to 
choose their own doctors and make their own health care 
decisions, instead of having Washington dictate those decisions 
for them.
    Based on this kind of reform, this budget assumes $750 
billion in savings over 10 years, easing the fiscal burdens 
imposed on State budgets, and contributing to the long-term 
stabilization of the Federal Government's fiscal path.

    Repeal the Medicaid Expansions in the New Health Care Law. 
The recently enacted health care law calls for major expansions 
in the Medicaid program beginning in 2014. These expansions 
will have significant impact on the Federal share of the 
Medicaid Program, and will dramatically increase outlays.
    From fiscal year 2014 through 2021, however, the new law is 
expected to increase Federal spending by $649 billion more than 
it otherwise would be.
    This future fiscal burden will have serious budgetary 
consequences for both Federal and State governments. While the 
health law requires the Federal Government to finance 100 
percent of the Medicaid costs associated covering new 
enrollees, this provision begins to phase out in fiscal year 
2016. At that time, State governments will be required to 
assume a share of this cost. This share increases from fiscal 
year 2016 through 2020, when States will be required to finance 
10 percent of the health law's expansion of Medicaid.
    Not only does this expansion magnify the challenges to both 
State and Federal budgets, it also binds the hands of local 
governments in developing solutions that meet the unique needs 
of their own citizens. The health care law would exacerbate the 
already crippling one-size-fits-all enrollment mandates that 
resulted in below-market reimbursements, poor health care 
outcomes, and restrictive services. The budget calls for 
repealing the Medicaid expansions contained in the health care 
law, and removing the burdensome programmatic mandates on State 
governments. Adopting this option would save $649 billion over 
10 years.

    Repeal the Exchange Subsidies Created by the New Health 
Care Law. According to CBO estimates, the health law proposes 
to spend $777 billion over the next 10 years providing eligible 
individuals with subsidies to purchase government-approved 
health insurance. These subsidies can only be used to purchase 
plans that meet standards determined by Federal bureaucracies. 
In addition to this enormous market distortion, the law also 
stipulates a complex maze of eligibility and income tests to 
determine how much of a subsidy qualifying individuals may 
receive.
    The new law couples these subsidies with a mandate for 
individuals to purchase health insurance and bureaucratic 
controls on the types of insurance companies can offer. Taken 
together, these provisions will dramatically undermine the 
private insurance market, which serves as the backbone of the 
current U.S. health care system. Exchange subsidies will 
undermine the competitive forces of a marketplace. Government 
mandates will drive out all but the largest insurance 
companies. Punitive tax penalties will force individuals to 
purchase coverage whether they choose to or not.
    Left in place, the health law will eventually lead to a 
single-payer system in which the Federal Government determines 
how much health care Americans need and what kind of care they 
can receive. This budget recommends repealing the architecture 
of this new law and allowing Congress instead to purse patient-
centered, consumer-directed health care reforms that actually 
bring down the cost of care rather than putting those decisions 
into the hands of bureaucrats. For Function 550, repeal of the 
insurance subsidies and other exchange-related spending would 
save roughly $760 billion over 10 years.

    Other Related Savings. Interactions from repealing unspent 
stimulus funding and other associated provisions in the new 
health care law save roughly $24 billion over 10 years.

                         DISCRETIONARY SPENDING

    Extend H.R. 1 Policies. This budget assumes the baseline 
proposed by H.R. 1, the Full-Year Continuing Appropriations Act 
of 2011, as passed by the House on 19 February 2011. This will 
reduce aggregate spending for the Department of Health and 
Human Services and other health-related agencies by requiring 
more efficient use of taxpayer dollars and adopting 
recommendations made by the Opportunities to Reduce Potential 
Duplication in Government Programs, Save Taxpayer Dollars, and 
Enhance Revenue report issued by the Government Accountability 
Office.
                         FUNCTION 570: MEDICARE

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                            Function Summary

    With the creation of Medicare in 1965, the United States 
made a commitment to help fund the medical care of elderly 
Americans without exhausting their life savings or the assets 
and incomes of their working children and younger relatives. In 
urging the creation of Medicare, President Kennedy said that 
such a program was chiefly needed to protect, not the poor, but 
people who had worked for years and suddenly found all their 
savings gone because of a costly health problem.
    But spending for Medicare has grown quickly in recent 
decades--in part because of rising enrollment and in part 
because of rising costs per enrollee--and has reached 
unsustainable rates. Between 1975 and 2009, gross 
Federalspending for Medicare rose from 0.9 percent of GDP to 
3.5 percent. Today Medicare outlays are growing at a rate of 
7.2 percent per year, and under the alternative fiscal scenario 
in CBO's The Long-Term Budget Outlook (June 2010), mandatory 
spending on Medicare is projected to reach 7 percent of GDP by 
2035 and 14 percent of GDP by 2080. CBO's March baseline 
projects that Medicare's Hospital Insurance Trust Fund will be 
bankrupt by 2020.
    Medicare's imbalance threatens beneficiaries' access to 
quality, affordable care. The program's fundamentally flawed 
structure is driving up health care costs, which are, in turn, 
threatening to bankrupt the system--and ultimately the Nation. 
Without reform, the program will end up causing exactly what it 
was created to avoid: millions of America's seniors without 
adequate health security and a younger working generation 
saddled with enormous debts to pay for spending levels that 
cannot be sustained.
    Letting government break its promises to current seniors 
and to future generations is unacceptable. In addition, placing 
Medicare on a sustainable path is an indispensable part of 
restoring the Federal Government's fiscal balance. The reforms 
outlined in this budget protect and preserve Medicare for those 
in or near retirement, while saving and strengthening the 
program so future generations can count on it when they retire.
    The Medicare Program's spending appears here, in Function 
570 of the budget resolution. The function reflects the 
Medicare Part A Hospital Insurance [HI] Program, Part B 
Supplementary Medical Insurance [SMI] Program, Part C Medicare 
Advantage Program, and Part D Prescription Drug Benefit, as 
well as premiums paid by qualified aged and disabled 
beneficiaries.
    The various parts of the program are financed in different 
ways. Part A benefits are financed primarily by a payroll tax 
(currently 2.9 percent of taxable earnings), the revenues from 
which are credited to the HI Trust Fund. For Part B, premiums 
paid by beneficiaries cover about one-quarter of outlays, and 
the government's general funds cover the rest. (Payments to 
private insurance plans under Part C are financed by a blend of 
funds from Parts A and B.) Enrollees' premiums under Part D are 
set to cover about one-quarter of the cost of the basic 
prescription drug benefit, although many low-income enrollees 
receive larger subsidies; the general fund covers most of the 
remaining cost.

                Summary of Committee-Reported Resolution

    The resolution calls for $481.5 billion in budget authority 
and $481.8 billion in outlays in fiscal year 2012. 
Discretionary spending is $4.9 billion in budget authority and 
$5.3 billion in outlays in fiscal year 2012, and mandatory 
spending is $476.6 billion in budget authority and $476.5 
billion in outlays. Over 10 years, the function totals are 
$6.32 trillion in budget authority and $6.32 trillion in 
outlays.

                      Illustrative Policy Options

    The Medicare Program attempts to do two things to make sure 
that all seniors have secure, affordable health coverage. 
First, the program pools risk among a specific population of 
Americans, ensuring that seniors enjoy secure access to 
coverage. The policies supported by this budget strengthen and 
enhance this aspect of Medicare so seniors will have more 
health-care choices within the same stabilized risk pool.
    Second, Medicare subsidizes coverage for seniors to ensure 
that coverage is affordable. Affordability is a critical goal, 
but the subsidy structure of Medicare is fundamentally broken 
and drives costs in the opposite direction. The open-ended, 
blank-check nature of the Medicare subsidy drives health-care 
inflation at an astonishing pace, threatens the solvency of the 
program, and creates inexcusable levels of waste in the system.
    While the committees of jurisdiction will make the final 
determinations of specific Medicare reforms, the options 
described below offer one clear and reliable path toward 
solvency.

                            PREMIUM SUPPORT

    In the Medicare system, the Federal Government--not the 
patient--is the customer; and the government has been a clumsy, 
ineffective steward of value. Controlling costs without 
limiting access or sacrificing quality has proved impossible. 
In an attempt to get control of the waste in the system, 
Washington has made across-the-board payment reductions to 
providers without regard to quality or patient satisfaction. It 
has not worked. Costs have continued to grow, seniors continue 
to lose access to quality care, and the program remains on its 
path to bankruptcy. Absent reform, Medicare will be unable to 
meet the needs of current seniors and future generations.
    Reform aimed at empowering individuals--with a strengthened 
safety net for the poor and the sick--will not only ensure the 
fiscal sustainability of this program, the Federal budget, and 
the U.S. economy, but also guarantee that Medicare can fulfill 
the promise of health security for America's seniors.
    The Medicare reform envisioned in this budget resolution 
begins with a commitment to keep the promises made to those who 
now are in or near retirement. Consequently, for those 55 and 
older, the Medicare Program and its benefits will remain as 
they are, without change.
    For future retirees, the budget supports an approach known 
as ``premium support.''
    Starting in 2022, new Medicare beneficiaries would be 
enrolled in the same kind of health care program that Members 
of Congress enjoy. The Medicare recipient of the future would 
choose, from a list of guaranteed coverage options, a health 
plan that best suits his or her needs. This is not a voucher 
program; a Medicare premium-support payment would be paid, by 
Medicare, directly to the plan chosen by the beneficiary, 
subsidizing its cost. The program would operate in a manner 
similar to that of the Medicare prescription drug benefit. The 
Medicare premium-support payment would be adjusted so that the 
sick would receive higher payments if their conditions 
worsened; lower-income seniors would receive additional 
assistance to help cover out-of-pocket costs; and wealthier 
seniors would assume responsibility for a greater share of 
their premiums.
    This approach to strengthening the Medicare Program--which 
builds on the Rivlin-Ryan reform advanced in the President's 
Fiscal Commission--would ensure security and affordability for 
seniors now and into the future. It would set up a carefully 
monitored exchange for Medicare plans. Health plans that chose 
to participate in the Medicare Exchange would agree to offer 
insurance to all Medicare beneficiaries--to avoid cherry-
picking and ensure that Medicare's sickest and highest-cost 
beneficiaries received coverage.
    While there would be no disruptions in the current Medicare 
fee-for-service program for those currently enrolled or 
becoming eligible in the next 10 years, all seniors would have 
the choice to opt-in to the new Medicare Program once it began 
in 2022. No senior would be forced to stay in the old program. 
This budget envisions giving seniors the freedom to choose a 
plan best suited for them, guaranteeing health security 
throughout their retirement years.
    This reform also ensures affordability by fixing the 
currently broken subsidy system and letting market competition 
work as a real check on widespread waste and skyrocketing 
health-care costs. Putting patients in charge of how their 
health care dollars are spent will force providers to compete 
against each other on price and quality.

            ADDITIONAL IMPROVEMENTS IN THE MEDICARE PROGRAM

    A Long-Term `Doc Fix.' In recent years, Medicare's 
physician reimbursement formula--the ``sustained growth rate'' 
[SGR]--has threatened steep reductions in payments, leaving 
doctors uncertain about their incomes and, in some cases, 
reluctant to take on additional Medicare patients. Congress has 
patched over the problem numerous times with ad hoc increases 
in reimbursements--a practice known as the ``doc fix.'' These 
measures have become increasingly expensive to taxpayers 
without stabilizing the program. With the inclusion of a 
reserve fund this budget accommodates a fix to the Medicare 
physician payment formula for the next 10 years. It supports 
reforms to provide for a reimbursement system that fairly 
compensates physicians who treat Medicare beneficiaries while 
providing incentives to improve quality and efficiency.

    Ending the Raid on the Medicare Trust Fund. Supporters of 
last year's government takeover of health care insisted the law 
would both shore up the Medicare Trust Fund and pay for a new 
health-care entitlement program. In testimony before the 
Committee, Medicare's chief actuary stated that the same dollar 
could not be used twice. This budget calls for directing any 
potential Medicare savings in current law toward shoring up 
Medicare, not paying for new entitlements. As part of the 
repeal of the new health care law, the budget eliminates its 
new rationing board (the Independent Payment Advisory Board) 
and stabilizes plan choices for current seniors.

    Medical Liability Insurance Reform. This budget also 
advances common-sense curbs on abusive and frivolous lawsuits. 
Medical lawsuits and excessive verdicts increase health care 
costs and result in reduced access to care. When mistakes 
happen, patients have a right to fair representation and fair 
compensation. But the current tort litigation system too often 
serves the interests of lawyers while driving up costs. The 
budget supports several changes to laws governing medical 
liability, including limits on noneconomic and punitive 
damages.
                     FUNCTION 600: INCOME SECURITY

                              ----------                              


                            Function Summary

    The welfare reforms of the late 1990s are a success story 
of modern domestic policy, but they did not go as far as many 
think. Reformers were not able to extend their work beyond cash 
welfare to other means-tested programs. Notably, programs that 
subsidize food and housing for low-income Americans remain 
dysfunctional, and their explosive growth is threatening the 
overall strength of the safety net. If the government continues 
running trillion-dollar deficits and experiences a debt crisis, 
the poor and vulnerable will undoubtedly be the hardest hit, as 
the Federal Government's only recourse will be severe, across-
the-board cuts.
    Most of the Federal Government's income support program are 
included in Function 600, Income Security. These include: 
general retirement and disability insurance (excluding Social 
Security)--mainly through the Pension Benefit Guaranty 
Corporation [PBGC]--and benefits to railroad retirees. Other 
components are Federal employee retirement and disability 
benefits (including military retirees); unemployment 
compensation; low-income housing assistance, including section 
8 housing; food and nutrition assistance, including food stamps 
and school lunch subsidies; and other income security programs.
    This last category includes: Temporary Assistance to Needy 
Families [TANF], the Government's principal welfare program; 
Supplemental Security Income [SSI]; spending for the refundable 
portion of the Earned Income Credit [EIC]; and the Low Income 
Home Energy Assistance Program [LIHEAP]. Agencies involved in 
these programs include the Departments of Agriculture, Health 
and Human Services, Housing and Urban Development, the Social 
Security Administration (for SSI), and the Office of Personnel 
Management (for Federal retirement benefits).

                Summary of Committee-Reported Resolution

    The resolution calls for $501.7 billion in budget authority 
and $501 billion in outlays in fiscal year 2012. Discretionary 
spending is $56.9 billion in budget authority and $62.9 billion 
in outlays in fiscal year 2012. Mandatory spending in 2012 is 
$444.8 billion in budget authority and $438.2 billion in 
outlays. The 10-year totals for budget authority and outlays 
are $4.60 trillion and $4.58 trillion, respectively.

                      Illustrative Policy Options

    Reforming the Federal Government's income security programs 
can both strengthen the safety net and ease their growing 
burden on taxpayers. Among reforms that could be considered by 
the committees of jurisdiction are the following.

                         DISCRETIONARY SPENDING

    Return LIHEAP to Historical Levels. The President has 
proposed to return the Low-Income Home Energy Assistance 
Program [LIHEAP] to historical funding levels, consistent with 
those provided in 2008 prior to energy price spikes. The budget 
recommends accepting the President's proposal.

                           MANDATORY SPENDING

    Block Grant the Supplemental Nutrition Assistance Program 
[SNAP]. Spending on SNAP--formerly known as the Food Stamp 
Program--has increased dramatically over the past 3 years. 
Projections for SNAP have increased by more than 75 percent 
since 2007, or more than $300 billion. This program has grown 
more than four-fold since 2001. While this is partially due to 
the recession, SNAP spending is forecast to be permanently 
higher than previous estimates even after employment has 
recovered. A variety of factors are driving this growth, but 
one major reason is that while the States have the 
responsibility of administering the program, they have little 
incentive to ensure it is well run.
    The budget resolution envisions converting SNAP into an 
allotment tailored for each State's low-income population, 
indexed for food inflation and eligibility. This option would 
make no changes to SNAP until 2015--after employment has 
recovered--providing States with time to structure their own 
programs. This proposal is estimated to save $127 billion over 
10 years.

    Reform Civil Service Pensions. In keeping with a 
recommendation from the National Commission on Fiscal 
Responsibility, this option calls for Federal employees--
including Members of Congress and staff--to make greater 
contributions toward their own retirement. This would achieve 
significant budgetary savings and also help facilitate a 
transition to a defined contribution system for new Federal 
employees that would give them more control over their own 
retirement security. From a fiscal responsibility standpoint, 
this option would replace a system that is creating unfunded 
future liabilities for taxpayers with a fully funded system: it 
could save an estimated $121.5 billion over 10 years. The 
overwhelming majority of private sector companies have 
transitioned to defined contribution retirement plans for new 
employees. It is the public sector--at the Federal, State, and 
municipal level--that has been resistant to change.

    Reduce Incentives to Medicate Children. Currently, the SSI 
program contains incentives for parents to place their children 
on medication solely to receive SSI benefits. This option would 
remove these incentives. This proposal is estimated to save 
$1.4 billion over 10 years.

    Reform the Pension Benefit Guaranty Corporation [PBGC]. 
Currently, the PBGC faces a $23-billion unfunded liability. 
While this budget does not assume the President's proposal, it 
recognizes the need to reform the PBGC to ensure that a future 
taxpayer funded bailout does not occur. Potential savings could 
total an estimated $2.7 billion over 10 years.

    Eliminate the Failed Troubled Asset Relief Program [TARP] 
Housing Subsidies. This resolution supports jettisoning the 
loan subsidy initiative, Home Affordable Modification Program 
[HAMP], created by the Obama administration as part of TARP for 
homeowners delinquent on mortgage payments. While the program 
announced in early 2009 that it would help up to 4 million 
homeowners avoid foreclosure, since then it has made only 
600,000 loan modifications permanent--just 15 percent of the 
target. Eliminating HAMP could save $1.4 billion over 10 years.
                     FUNCTION 650: SOCIAL SECURITY

                              ----------                              


                            Function Summary

    This category consists of the Social Security Program, or 
Old Age, Survivors, and Disability Insurance [OASDI]. It is the 
largest budget function in terms of outlays, and provides funds 
for the Government's largest entitlement program. Under 
provisions of the Congressional Budget Act and the Budget 
Enforcement Act, Social Security trust funds are considered to 
be off-budget. Therefore, although the discussion below 
describes both the on-budget and off-budget components, the 
budget resolution itself contains only the on-budget portion.
    Social Security must be reformed to prevent severe cuts in 
future benefits. This budget strengthens the program by forcing 
policymakers to come to the table and enact common-sense 
reforms to keep the program solvent for current beneficiaries 
and make it stronger for future generations.
    The President's Commission on Fiscal Responsibility and 
Reform put forward a proposal last December to make Social 
Security sustainably solvent over the 75-year actuarial period 
that is used to measure the soundness of the program--
demonstrating that there is a bipartisan way forward.

                Summary of Committee-Reported Resolution

    Social Security contains both on-budget and off-budget 
spending--the latter consisting of benefit payments for the 
OASDI program. The budget resolution reflects only the on-
budget spending. In that category, the resolution calls for 
$54.4 billion in budget authority and $54.6 billion in outlays 
in fiscal year 2012. Over 10 years, the on-budget totals are 
$461.8 billion in budget authority and $462.2 billion in 
outlays.

                Confronting Social Security's Insolvency

    Although Social Security is off budget, its impact on the 
government's overall fiscal condition is real and cannot be 
ignored. Regrettably, an all-too-common reaction to the fiscal 
problem in Social Security has been denial. It is claimed that 
the Social Security Trust Fund will remain solvent until 2037, 
at which point the government could theoretically cover any 
shortfall by raising taxes. Others play down whether any 
changes to Social Security will be necessary; they contend 
sustained economic growth could take care of the problem all by 
itself.
    Neither is correct. First, any value in the balances in the 
Social Security Trust Fund is derived purely from government 
accounting. The trust fund is not a real savings account. From 
1983 to 2011, it collected more Social Security taxes than it 
paid out in Social Security benefits. But the government 
borrowed all of these surpluses and spent them on other 
government programs unrelated to Social Security. The Trust 
Fund holds Treasury securities, but the ability to redeem these 
securities is completely dependent on the Treasury's ability to 
raise money through taxes or borrowing--or by squeezing out 
spending from other government priorities.
    Beginning in 2011, Social Security started paying out more 
in benefits than it collected in taxes--in other words, running 
cash deficits--a trend that will worsen as the baby boomers 
continue to retire. To pay full benefits, the government must 
pay back the money it owes Social Security.
    Those who wish to solve this problem by raising taxes 
ignore the profound economic damage that such large tax 
increases would entail. Just lifting the cap on income subject 
to Social Security taxes, as some have proposed, would, when 
combined with the Obama administration's other preferred tax 
policies, lift the top marginal tax rate above 60 percent. Most 
economists agree that raising marginal tax rates that high 
would create a significant drag on economic growth, job 
creation, productivity and wages.
    Social Security's fragile condition poses a serious problem 
that threatens to break the broader compact in which workers 
support the generation preceding them, and earn the support of 
those who follow.
    The Committee believes there is a bipartisan path forward 
on Social Security--one that requires all parties first to 
acknowledge the fiscal realities of this critical program. The 
President's Fiscal Commission recently made a positive first 
step by advancing solutions to ensure the solvency of Social 
Security. They suggested a more progressive benefit structure, 
with benefits for higher-income workers growing more slowly 
than those of workers with lower incomes who are more 
vulnerable to economic shocks in retirement. The Commission 
also recommended reforms that take account of increases in 
longevity, to arrest the demographic problems that are 
undermining Social Security's finances.
    In addition, there is bipartisan consensus that Social 
Security reform should provide more help to those who fall 
below the poverty line after retirement. There is no security 
in a program that is blind to the needs of the Nation's most 
vulnerable citizens--lower-income seniors should receive more 
targeted assistance than those who have had ample opportunity 
to save for retirement.
    While certain details of the commission's Social Security 
proposals, particularly on the tax side, are of debatable 
merit, the commission undoubtedly made positive steps forward 
on bipartisan solutions to strengthen Social Security. This 
budget seeks to build on the commission's work, forcing action 
to solve this pressing problem by requiring the President to 
put forward specific ideas on fixing Social Security. The 
budget also puts the onus on Congress to develop legislation to 
ensure the sustainable solvency of this critical program.
    This budget calls for setting in motion the process of 
reforming Social Security by altering a current law trigger 
that in the event that the Social Security program is not 
sustainable, requires the President, in conjunction with the 
Board of Trustees, to submit a plan for restoring balance to 
the fund. This option then would require congressional leaders 
to put forward their best ideas as well. Although the Committee 
on Ways and Means would make the final determination, this 
option would require that:

     If in any year the Board of Trustees of the 
Federal Old-Age and Survivors Insurance Trust Fund and the 
Federal Disability Insurance Trust Fund, in its annual 
Trustees' Report, determines that the 75-year actuarial balance 
of the Social Security Trust Funds is in deficit, and the 
annual balance of the Social Security Trust Funds in the 75th 
year is in deficit, the Board of Trustees should, no later than 
the 30th of September of the same calendar year, submit to the 
President recommendations for statutory reforms necessary to 
achieve a positive 75-year actuarial balance and a positive 
annual balance in the 75th-year.

     No later than the 1st of December of the same 
calendar year in which the Board of Trustees submits its 
recommendations, the President shall promptly submit 
implementing legislation to both Houses of Congress including 
recommendations necessary to achieve a positive 75-year 
actuarial balance and a positive annual balance in the 75th 
year;

     Within 60 days of the President submitting 
legislation, the committees of jurisdiction to which the 
legislation has been referred shall report the bill which shall 
be considered by the full House or Senate under expedited 
procedures.

    Again, the aim of this option is to force a recognition of 
the need to reform Social Security. This procedure offers a 
first step in that direction.
              FUNCTION 700: VETERANS BENEFITS AND SERVICES

                              ----------                              


                            Function Summary

    This category includes funding for the Department of 
Veterans Affairs [VA], which provides benefits to veterans who 
meet various eligibility rules. Benefits include income 
security for veterans, principally disability compensation and 
pensions; veterans education, training, and rehabilitation 
services; hospital and medical care for veterans; and other 
veterans' benefits and services, such as home loan guarantees.
    The past two decades have seen extraordinary growth in the 
costs of providing benefits and services for the Nation's 23 
million veterans. The two largest categories of veterans 
spending are for income security and medical care. Spending for 
income security has increased 125 percent since 2001 and 
medical care spending has increased 141 percent. This growth 
occurred despite the declining size of the veterans population 
and reflects the increasingly generous benefits legislated by 
Congress and the aging of the veterans population.

                Summary of Committee-Reported Resolution

    The resolution calls for $128.3 billion in budget authority 
and $127.1 billion in outlays in fiscal year 2012. 
Discretionary spending, mainly veterans' health care, is $59.0 
billion in budget authority and $57.9 billion in outlays in 
fiscal year 2012. This resolution also provides for up to $52.5 
billion in advance appropriations consistent with the Veterans 
Health Care Budget and Reform Transparency Act of 2009. 
Mandatory spending in 2012 is $69.4 billion in budget authority 
and $69.3 billion in outlays. The 10-year totals for budget 
authority and outlays are $1.45 trillion and $1.44 trillion, 
respectively. The resolution matches the funding level for 
veterans' health care and other discretionary services in 
function 700 that the President requested for each of the 
fiscal years 2012-2012.
    This budget fully funds the Nation's commitment to the 
services and benefits earned by veterans through their military 
service. This includes providing benefits for approximately 4 
million veterans and eligible dependents and medical care for 
over 6 million unique patients. Those who have served in harm's 
way have earned the gratitude of their countrymen and are the 
highest priority within this budget.
                FUNCTION 750: ADMINISTRATION OF JUSTICE

                              ----------                              


                            Function Summary

    The Administration of Justice function consists of Federal 
law enforcement programs, litigation and judicial activities, 
correctional operations, and State and local justice 
assistance. Agencies within this function include: the Federal 
Bureau of Investigation; the Drug Enforcement Administration; 
Border and Transportation Security; the Bureau of Alcohol, 
Tobacco, Firearms and Explosives; the United States Attorneys; 
legal divisions within the Department of Justice; the Legal 
Services Corporation; the Federal Judiciary; and the Federal 
Bureau of Prisons. This function also includes several 
components of the Department of Homeland Security.

                Summary of Committee-Reported Resolution

    The resolution calls for $56.9 billion in budget authority 
and $53.9 billion in outlays in fiscal year 2012. Discretionary 
spending is $47.7 billion in budget authority and $50.6 billion 
in outlays in fiscal year 2012. Mandatory spending in 2012 is 
$9.3 billion in budget authority and $3.3 billion in outlays. 
The 10-year totals for budget authority and outlays are $483.2 
billion and $493.0 billion, respectively.
    From fiscal years 2000 through 2010, spending in this 
function climbed 87.5 percent, from $28.5 billion to $53.4 
billion. As noted by the Fiscal Commission, by 2015, the 
Department of Justice [DOJ] budget is projected to reach $30 
billion, nearly 50 percent greater than it was in 2005--one of 
the sharpest increases of any Federal agency. Since fiscal year 
2006, well more than 100 DOJ grants have been authorized 
through three sources: Community Oriented Policing Services 
[COPS], the Office of Justice Programs [OJP], and the Office on 
Violence Against Women [OVW]. GAO has determined that many of 
these grants--several which have been used to fund recreational 
activities, fashion shows, pool parties, and even doughnut 
eating contests--could be viewed as wasteful, overlapping and 
duplicative.
    With the Nation facing dangerous terrorist threats as well 
as a tidal wave of debt, Federal taxpayer money for the 
Department of Justice should be focused on administering 
justice, arresting and prosecuting terrorists, investigating 
crimes, and seeking punishment for those guilty of unlawful 
behavior. The Federal Government can set guidelines on how to 
address criminal issues, but it is the job of the States and 
communities to determine the best course of action in deterring 
crime. The budget resolution focuses on restoring core 
government responsibilities, building on the savings included 
in H.R. 1 by reducing duplication, excess, and unnecessary 
spending.

                    Discretionary Spending Policies

    Consolidate Justice Grants. Funding for grant programs 
totaled about $2.5 billion annually over the 2006-2008 period; 
nearly $7 billion in 2009, including $4.0 billion provided in 
the stimulus bill; and $3.3 billion in 2010. The Congressional 
Research Service [CRS] and Government Accountability Office 
[GAO] identified overlap and duplication within many of these 
grants programs. CRS suggested ``possible policy options could 
include altering the current grant programs to target funding 
for specific activities in each grant program or consolidating 
the different grant programs into one large program.'' In 
addition, these grant programs address law enforcement issues 
that are primarily State and local issues, therefore a more 
efficient allocation of resources can be made at the local 
level. One option would be to streamline grants into three 
categories--first responder, law enforcement and victims--while 
eliminating waste, inefficiency and bureaucracy.

    Accept Administration Savings Proposals. This proposal 
supports the President's funding reduction in such programs as 
the Drug Enforcement Administration's Mobile Enforcement Team, 
DOJ's Integrated Wireless Network, administrative efficiencies 
across DOJ, reducing ATF and FBI's relocation programs, 
limiting existing physical and IT infrastructure projects to a 
slower rate of growth. It also adopts management offsets and 
rescissions totaling $2.0 billion which include: administrative 
efficiencies and savings, task force and space consolidations, 
a reduction of DOJ's physical footprint, component-unique 
program savings, IT project management efficiencies, 
relocation, efficiencies, reductions to less effective grant 
programs, and rescissions of prior year balances.

    Adopt H.R. 1 Reductions. The Mark incorporates policies 
adopted by the House in H.R. 1, the Full-Year Continuing 
Appropriations Act of 2011, with reductions in programs such as 
DOJ General Legal Activities, ATF construction and law 
enforcement wireless communications.

    Adopt `YouCut' Proposals. The Mark also supports several of 
the House Republican ``YouCut'' proposals introduced during the 
111th and 112th Congresses. One proposal in Function 750 is the 
elimination of the duplicative National Drug Intelligence 
Center, which saves more than $400 million over 10 years.
                    FUNCTION 800: GENERAL GOVERNMENT

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                            Function Summary

    General Government consists of the activities of the 
Legislative Branch; the Executive Office of the President; 
general tax collection and fiscal operations of the Department 
of Treasury (including the Internal Revenue Service [IRS]); the 
Office of Personnel Management, and the real property and 
personnel costs of the General Services Administration; general 
purpose fiscal assistance to States, localities, the District 
of Columbia, and U.S. territories; and other general Government 
activities.
    Several programs in General Government have seen steady 
growth since 2008. The American Recovery and Reinvestment Act 
increased the General Services Administration's budget by $5.8 
billion, for example. The President's 2012 budget requests 
significant spending increases for this function, boosting 
discretionary spending by 27 percent and mandatory spending by 
50 percent compared to 2008 levels.

                Summary of Committee-Reported Resolution

    The resolution calls for $22.8 billion in budget authority 
and $27.2 billion in outlays in fiscal year 2012. Discretionary 
spending is $16 billion in budget authority and $18.9 billion 
in outlays in fiscal year 2012. Mandatory spending in 2012 is 
$6.7 billion in budget authority and $8.3 billion in outlays. 
The 10-year totals for budget authority and outlays are $228.8 
billion and $228.6 billion, respectively.

                      Illustrative Policy Options

    Reduce the House of Representatives' Budget. Funding levels 
in the resolution reflect the House leadership's promise to 
trim salaries and expenses of the House of Representatives by 6 
percent in fiscal year 2012, and applies this discipline to 
other non-essential departments.

    Prohibit New Construction. This budget also replicates the 
policy of the fiscal year 2011 continuing resolution, H.R. 1, 
to prohibit new construction for 1 year of government buildings 
managed by the General Services Administration.

    Adopt `YouCut' Proposals. The budget also supports several 
of the House Republican ``YouCut'' proposals introduced during 
the 111th and 112th Congresses. One example in Function 800 is 
the elimination of the Presidential Election Campaign Fund, 
which saves over $500 million over 10 years.

    Require Data Center Consolidation. The budget adopts a 
recent Government Accountability Office's recommendation to 
require consolidation of Federal data centers. Since 1998, the 
number of Federal data processing and storage facilities has 
grown from about 432 in 1998 to more than 2,000 in 2010. Data 
centers consume huge amounts of energy and space while having 
relatively low utilization rates. There is great potential for 
savings through consolidation. The Office of Management and 
Budget has launched an initiative to address this issue. This 
budget would direct the committees of jurisdiction to codify 
these efforts.

    Reduce Student Loan Repayment for Government Jobs. As the 
Nation struggles with high unemployment and uncertainty in the 
private sector, taxpayer dollars go to fund Federal jobs that 
are not only insulated from market forces, but enjoy above 
average pay and benefits, one of which is repayments for 
student loans. The budget calls for reducing this extra benefit 
that is not generally available in the private sector.

    Terminate the Election Assistance Commission [EAC]. This 
independent agency was created in 2002 as part of the Help 
America Vote Act to provide grants to States to modernize 
voting equipment. Its mission has been fulfilled. Even the 
National Association of Secretaries of State has passed 
resolutions stating that the EAC has served its purpose and 
funding is no longer necessary. EAC should be eliminated and 
any valuable functions can be transferred to the Federal 
Elections Commission.
                       FUNCTION 900: NET INTEREST

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                            Function Summary

    One of the worst effects of large, chronic budget deficits 
is the high interest cost it produces. Interest payments yield 
no government services or benefits; they are simply excess 
costs resulting from constant spending beyond the government's 
means. These costs are reflected in Function 900, which 
presents the interest paid for the Federal Government's 
borrowing less the interest received by the Federal Government 
from trust fund investments and loans to the public. It is a 
mandatory payment, with no discretionary components.
    The profligate spending of the past 2 years have driven 
deficits record peacetime levels, well above the trillion-
dollar mark. Because so much of this spending is so deeply 
entrenched, reducing the associated interest costs will require 
sustained spending restraint.

                Summary of Committee-Reported Resolution

    The reported resolution calls for $255.7 billion in 
mandatory budget authority and outlays in fiscal year 2012. The 
10-year totals for budget authority and outlays are $5.06 
trillion.
    On-budget mandatory budget authority and outlays are $372.4 
billion in fiscal year 2012, and $6.41 trillion over 10 years. 
The on-budget figures are larger than the function totals 
because the former are offset by off-budget interest payments 
to the Social Security Trust Fund, which are reflected as 
negative numbers.
                        FUNCTION 920: ALLOWANCES

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                            Function Summary

    Function 920, Allowances, is used for planning purposes to 
address the budgetary effects of proposals or assumptions that 
cross various other budget functions. Once such changes are 
enacted, the budgetary effects are distributed to the 
appropriate budget functions in past years. The function 
includes off-budget amounts associated with program integrity 
activities.

                Summary of Committee-Reported Resolution

    The function contains fiscal year 2012 spending reductions 
of $6.2 billion budget authority and $2.5 billion in outlays. 
Part of the savings come from repeal of unobligated 
discretionary stimulus funds, and consolidation of Federal job 
training programs. Over 10 years, the savings total -$61.5 
billion in budget authority and -$60.6 billion in outlays.
    Excluding the off-budget program integrity activities, the 
on-budget totals in the function are reductions of $6.2 billion 
in budget authority and $2.5 billion in outlays in fiscal year 
2012; and $53.5 billion in budget authority and $52.6 billion 
in outlays over 10 years.
            FUNCTION 950: UNDISTRIBUTED OFFSETTING RECEIPTS

                              ----------                              


                            Function Summary

    This function consists of receipts to the Treasury. 
Receipts recorded in this function are either intrabudgetary (a 
payment from one Federal agency to another, such as agency 
payments to the retirement trust funds) or proprietary (a 
payment from the public for some kind of business transaction 
with the government). The main types of receipts recorded in 
this function are: the payments Federal employees and agencies 
make to employee retirement trust funds; payments made by 
companies for the right to explore and produce oil and gas on 
the Outer Continental Shelf, and payments by those who bid for 
the right to buy or use public property or resources, such as 
the electromagnetic spectrum. These receipts are treated as 
negative spending.
    The function also contains an off-budget component that 
reflects mainly the employer share of Social Security 
contributions.

                Summary of Committee-Reported Resolution

    The resolution calls for -$99.7 billion in budget authority 
and outlays in fiscal year 2012 (with the minus signs again 
indicating receipts into the Treasury.) Over 10 years, budget 
authority and outlays total -$1.11 trillion.
    On-budget amounts are -$84.5 billion in budget authority 
and outlays in fiscal year 2012, and -$925.3 billion in budget 
authority and outlays over 10 years.

                      Illustrative Policy Options

    Federal Fleet Sales. The President's Fiscal Commission 
recommended several ways to achieve discretionary savings. This 
resolution adopts many of their proposals, such as reducing the 
Federal auto fleet by 20 percent, excluding the Department of 
Defense and the U.S. Postal Service. In 2010, the Federal 
Government reported a worldwide inventory of more than 662,000 
vehicles and spent $4.6 billion on its fleet. In addition, the 
2009 stimulus bill provided $300 million to ``green the Federal 
fleet'' by purchasing 17,205 vehicles--most of which became 
another back-door bailout for General Motors and Chrysler.
    This resolution builds on the Fiscal Commission's 
recommendation by proposing to sell a portion of the Federal 
fleet to reduce the deficit and to get rid of unneeded 
vehicles, saving hundreds of millions of dollars.

    Federal Real Property Sales. The Fiscal Commission 
highlighted potential budget savings from another area where 
the mismanagement of taxpayer-owned assets and sheer amount of 
waste is staggering: Federal real estate and other property. 
Simply put, there is very little incentive for agencies to 
dispose of unneeded properties and very few repercussions from 
holding onto these properties indefinitely. The Federal 
Government owns, leases, or manages about 1 million properties 
nationwide. Of those, non-defense buildings accounted for at 
least 400,000 of the total. Yet the government's track record 
for real estate asset sales has been poor.
    In 2009, Federal agencies received only about $50 million 
in proceeds from the sale of 2,228 assets--an average of 
$22,500 per property. Many buildings were simply given away as 
below-market-value bargains or even for free. On top of that, 
agencies reported spending $150 million in 2009 on the 
operating costs alone of properties that were already deemed to 
be unneeded and were waiting to either be sold or disposed.
    The Office of Management and Budget put forth a proposal in 
the President's fiscal year 2012 budget that would achieve $15 
billion in asset sales over three years. This resolution 
supports streamlining the asset sale process and loosening 
regulations for the disposal and sale of Federal property to 
eliminate red tape and waste, setting enforceable targets for 
asset sales, and holding government agencies accountable for 
the buildings they oversee. If done correctly, taxpayers can 
recoup billions of dollars from selling unused government 
property.

    Federal Land. In addition to Federal fleet and real 
property sales, this resolution supports examining Federalland 
to see where cost savings can be achieved by selling unneeded 
acreage in the open market--while protecting land considered a 
national treasure such as the 84 million acres managed by the 
National Park Service. Currently, the Federal Government owns 
650 million acres of land, almost 30 percent of the land area 
of the United States.
      FUNCTION 970: GLOBAL WAR ON TERRORISM AND RELATED ACTIVITIES

                              ----------                              


                            Function Summary

    This function includes funding for prosecution of the 
global war on terrorism and other closely related activities.

                Summary of Committee-Reported Resolution

    The resolution calls for $126.5 billion in budget authority 
and $117.8 billion in outlays in fiscal year 2012. This 
includes amounts equal to the President's budget request to 
account for any future House consideration of appropriations 
for the global war on terrorism and other activities. This 
function includes all of the funding requested by the 
Department of Defense for military operations and by the 
Department of State for the incremental, non-enduring civilian 
activities in Afghanistan, Pakistan, and Iraq.

    Afghanistan. The current strategy for victory in 
Afghanistan envisions a significant troop presence in the 
country through 2014. For 2012, the military's force level 
assumption is for a troop presence of 98,250 troops. 
Simultaneously, the State Department is increasing its level of 
activity as part of an integrated civil-military strategy. It 
is unclear whether the Government of Afghanistan will sustain 
the extensive security forces and infrastructure that the 
international coalition is building. Considerations of long-
term sustainability should be critically examined during 
consideration of the administration's request in this area.

    Pakistan. The U.S. Government's activities in Pakistan are 
civilian-led and focused on working with Pakistan to disrupt 
violent groups that destabilize the region and bolstering the 
Government of Pakistan's resolve in combating these elements. 
As the Commander of U.S. forces in Afghanistan has concluded, 
success in Pakistan is vital to the success of our efforts in 
Afghanistan: ``Afghanistan and Pakistan have, in many ways, 
merged into a single problem set, and the way forward in 
Afghanistan is incomplete without a strategy that includes and 
assists Pakistan.''

    Iraq. With the conclusion of major combat operations and 
the scheduled withdrawal of all U.S. military forces by the end 
of 2011, the State Department will assume the lead role in 
executing the U.S. Government's mission in Iraq. The 
incremental and transitory costs associated with the assumption 
of this role are appropriately included in this function, while 
those that will be of an enduring nature continue to be funded 
in the State Department's base budget in Function 150. The 
Committee intends to exercise close scrutiny of the State 
Department's request to ensure that costs are appropriately 
categorized.
                                REVENUE

                              ----------                              


                         Pro-Growth Tax Reform

    A pro-growth tax system should be simple, efficient, and 
fair. The U.S. tax code fails on all three counts.
    The system is notoriously complex, as individuals, 
families, and employers spend more than 6 billion hours and 
more than $160 billion a year trying to negotiate a labyrinth 
of deductions. The code is also patently unfair, as many of the 
deductions and preferences in the system--which serve to narrow 
the tax base--are mainly used by a relatively small class of 
mostly higher-income individuals. Washington should not be in 
the business of picking winners and losers.
    Finally, the U.S. tax structure is highly inefficient, as 
tax considerations rather than economic fundamentals often 
distort individual decisions to work, save, and invest, which 
leads to a misallocation of resources and slower economic 
growth.
    This budget attacks all three of these problems with a set 
of fundamental reforms drawn from a broad consensus of economic 
experts and based on the principle that government should never 
take a dollar from one of its citizens unless that dollar is 
needed for a vital national purpose.
    It draws on the commonly held view that the key to pro-
growth tax reform is lowering tax rates while broadening the 
tax base--that is, letting individuals keep more of the money 
they earn, while getting rid of distortions, loopholes, and 
preferences that divert economic resources from their most 
efficient uses.
    The recommendations of the President's Fiscal Commission 
were clear on this point: lower tax rates are critical to 
economic growth. The commission's proposal offered a growth-
oriented, simplified code, with individual tax brackets as low 
as 8 percent, 14 percent, and 23 percent--and reduced the 
corporate tax rate to as low as 26 percent. This budget builds 
upon the clear bipartisan consensus that lower rates and a 
broader base are key guideposts for pro-growth tax reform.
    In addition, this budget starts by asking not what is the 
``right mix'' of tax increases and spending cuts to balance the 
budget, but what is the purpose of government--and then raising 
only as much revenue as the Federal Government needs to 
efficiently fund those missions that rightly belong in its 
domain, while maximizing economic growth and job creation.

                Simplifying the Tax Code for Individuals

    Major proposals in this area are:

     Reject the President's call to raise taxes. 
Instead, keep overall revenue as a share of the economy at 
historical averages between 18 percent and 19 percent, a level 
compatible with growth, and--if the spending restraints in this 
budget are enacted--sufficient to fund government operations 
over time.

     Reform the tax code by consolidating the current 
six brackets and cutting the top individual rate from 35 
percent to 25 percent.

     Broaden the tax base to keep revenue as a share of 
the economy at levels sufficient to fund critical missions that 
rightly belong in the domain of the Federal Government (as 
outlined elsewhere in this budget).

    In 1981, President Reagan inherited a stagnant economy and 
a tax code that featured 16 brackets, with a top rate of 70 
percent. When he left office in 1989, the tax code had been 
simplified down to just three brackets, with a top rate of 28 
percent. Reagan's tax reforms proved to be a cornerstone of the 
unprecedented economic boom that occurred in the decade during 
his presidency and continued in the decade that followed.
    Over time, additional brackets, credits and carve-outs have 
grown on the tax code like weeds. In the past 10 years alone, 
there have been nearly 4,500 changes made to the tax code. The 
current version for individuals has six brackets, with a top 
rate of 35 percent (which is set to climb to nearly 40 percent 
after the end of 2012). Individuals react negatively toward the 
tax code partly because it is complex and attempts to steer 
them toward certain activities and away from others. In 
addition, there are always a few ``surprises'' that end up 
raising their tax bills. One such surprise--the alternative 
minimum tax [AMT]--was initially designed to hit very high-
income taxpayers, but instead ensnares a growing number of 
middle-class households because of a flawed design.
    Creating new brackets and raising top rates is an idea that 
is often touted as a way to raise revenue by making only 
wealthy Americans bear a greater share of the burden. Most 
economists disagree. Economic theory suggests, and most 
empirical studies prove, that marginal tax-rate hikes--tax 
increases that reduce incentives to work, save and invest for 
additional income above a certain cutoff--reduce economic 
output, while marginal rate reductions increase output, mainly 
by letting people keep more of each dollar they earn and 
thereby strengthening incentives to work, produce, and invest 
in the future.
    Lower economic output mutes the revenue effect of top-rate 
tax increases. Top rates have risen and fallen dramatically in 
the past, with little overall effect on tax revenue as a share 
of the economy. The United States has set the top individual 
rate as high as 90 percent and as low as 28 percent, but income 
tax revenue has remained fairly steady despite these sharp rate 
swings.
    The biggest driver of revenue to the Federal Government is 
not higher rates--it is economic growth. Growth is the key to 
fiscal sustainability--and low rates are the key to growth.
    Nor are the effects of marginal tax-rate increases confined 
to wealthy households. Three quarters of the Nation's small 
businesses file as individuals, meaning that higher individual 
rates make it harder for these vital enterprises to compete. 
Small businesses are responsible for almost two-thirds of the 
jobs created in the United States in the past 15 years, and 
almost 50 percent of small-business profits are taxed at the 
top two rates. Hence raising these rates means increasing taxes 
on the most successful job creators in America.
    Raising taxes on capital is another idea that purports to 
affect the wealthy but actually hurts all participants in the 
economy. Mainstream economics, not to mention common sense, 
teaches that raising taxes on any activity generally results in 
less of it. Economics and common sense also teach that the size 
of a Nation's Capital stock--the pool of saved money available 
for investment and job creation--has an effect on employment, 
productivity, and wages. Tax reform should promote savings and 
investment because more savings and more investment mean a 
larger stock of capital available for job creation. That means 
more jobs, more productivity, and higher wages for all American 
workers.
    The negative effects of high rates and punitive taxes on 
savings are compounded when a large mix of exemptions, 
deductions, and credits are added in. These distortions, 
sometimes referred to as ``tax expenditures,'' are similar to 
government spending: instead of markets directing economic 
resources to their most efficient uses, the government directs 
resources to politically favored uses, creating a drag on 
growth.
    The key difference is that, with spending, the government 
collects the money first in the form of taxes from those who 
earned it, and reallocates it elsewhere. With tax expenditures, 
government agrees not to collect the money as long as it is put 
to a government-approved use. Other tax expenditures literally 
do take the form of spending through the tax code, because they 
``return'' more money than the taxes owed.
    Tax expenditures have a huge impact on the Federal budget, 
resulting in more than $1 trillion in forgone revenue each year 
(although the exact definition of ``tax expenditure'' is 
subject to debate). To put that number in perspective, $1 
trillion is roughly the total amount the government collects 
each year in Federal income taxes.
    Eliminating large tax expenditures would not be for the 
purpose of increasing total tax revenues. Instead, when offset 
by lower rates, it would have a doubly positive impact on the 
economy--it would stop diverting economic resources to less 
productive uses, while making possible the lower tax rates that 
provide greater incentives for economic growth.
    President Reagan's tax reforms inaugurated an era of great 
prosperity. It is time to reclaim his legacy and once again 
enact a fundamental reform of the tax code as the final step in 
rebuilding the foundations for economic growth: spending 
restraint, reasonable and predictable regulations, sound money, 
and a simple tax code with low rates.

   Stopping Job-Destroying Tax Hikes by Repealing the Health Care Law

    The health-care law enacted last year contained roughly 
$800 billion in new taxes and tax increases--the result of 
dozens of changes to tax law that added complexity and 
unfairness to the code.

     New taxes on employers make American businesses 
less competitive. The new law hits all businesses that do not 
purchase a one-size-fits-all, federally approved health 
insurance plan for their workers to pay a large tax penalty as 
a consequence. Employers and labor groups pointed out that this 
new tax would result in mass layoffs or in millions of workers 
losing their coverage. As a result, the administration has 
granted hundreds waivers to exempt certain businesses and 
unions from the new law, according to the Department of Health 
and Human Services. But government should not be granting 
waivers based on political connections--it should repeal this 
harmful tax before it does any more damage.

     Higher taxes on wages and investment income will 
discourage hiring and eat into America's capital stock. The new 
law imposes a 0.9-percent surtax on wages and a 3.8-percent 
surtax on interest, dividends, and capital gains. Both taxes 
apply only to filers in the top two income brackets, but as 
discussed elsewhere in this section, those filers include small 
businesses employing millions of Americans, and the new taxes 
on capital will reduce the pool of capital available for 
investment and job creation.

     The new ``Cadillac Tax'' on high-cost employer-
provided health plans does not resolve the inequitable 
treatment of health care costs in the tax code. The new health 
care law would, starting in 2018, impose a new tax on high-
cost, employer-provided health plans. The tax was meant to 
encourage employers to offer a greater percentage of 
compensation in the form of wages rather than health benefits. 
Instead of dealing with the inequitable tax treatment of 
health-care costs in a straightforward way, by simplifying the 
code, this tax would add an additional layer of complexity, 
while being used to fund a new open-ended health-care 
entitlement.

    The U.S. economy needs more jobs, not more job-destroying 
taxes. The U.S. health-care sector needs more new treatments 
and cures, not fewer. And U.S. citizens deserve a tax code that 
does not discriminate between, for example, the self-employed 
and those employed by large companies. Repealing the new 
health-care law is the first step toward fulfilling all three 
of these goals and implementing true patient-centered health 
care in America.
    This budget starts with the proposition that first, 
Congress must do no harm. It assumes that Congress will not 
allow huge, across-the-board tax increases to hit the economy 
in 2013, when current law calls for the tax cuts that were 
enacted in 2001 and 2003 to expire. And it assumes that 
Congress will not let the AMT ensnare growing numbers of 
middle-class taxpayers.
    The new, simplified code outlined in this budget will 
continue to raise sufficient revenue to fund the government by 
broadening the tax base, eliminating or limiting as necessary 
nearly all existing tax deductions, exclusions, and other 
special provisions. These carve-outs have distorted economic 
activity and necessitated high tax rates that hurt growth. 
Broadening the tax base will make the tax code simpler, fairer 
and more conducive to economic growth and job creation.
    Taken together, these reforms will promote prosperity and 
help put government back onto a sustainable fiscal path.

               Making the Corporate Code More Competitive

    Major proposals in this area include the following.

     Encourage economic growth and job creation by 
lowering the corporate tax rate from 35 percent, which is the 
highest in the developed world, to a much more competitive 25 
percent.

     Remove distortions from the code by eliminating or 
modifying deductions, credits and special carve-outs that leave 
many companies paying no tax at all.

    The United States currently labors under the highest 
corporate income tax rate in the developed world. Corporate 
income taxes create large distortions in economic activity, 
changing corporate behavior in ways that reduce efficiency and 
create a drag on growth.
    The perverse incentives created by the tax do a lot of 
damage, yet the tax itself raises relatively little revenue: 
only 10 percent of the total Federal tax take comes from taxing 
corporate income. A 2005 report from the non-partisan 
Congressional Budget Office reinforced this conclusion, stating 
that ``distortions that the corporate income tax induces are 
large compared with the revenues that the tax generates.''
    The problem with the corporate income tax is that 
corporations are not taxpayers--they are tax collectors. Taxes 
on corporate income are borne by shareholders, employees, and 
customers. Investors pay the cost in diminished returns. 
Workers pay the cost in lower wages. And consumers pay the cost 
in higher prices.
    Workers in particular could benefit from a reduction in the 
corporate tax rate. Another recent study from the CBO concluded 
that ``domestic labor bears slightly more than 70 percent of 
the burden'' of the corporate income tax.
    Instead of making the corporate tax code more competitive 
by reducing rates across the board, Congress has responded to 
corporate complaints about this high tax burden by filling the 
code with loopholes and special carve-outs. The biggest 
corporations that can afford the best lawyers have figured out 
how to use the code to avoid paying taxes altogether. It is the 
smaller companies that suffer disproportionately from an unfair 
and complex corporate tax code and high corporate rates.
    Lowering corporate rates is a reform that is long overdue. 
This simple policy change would provide an immediate boost to a 
lagging economy by increasing wages, lowering costs, and 
providing greater returns on investments in U.S. companies. It 
would bring the U.S. corporate tax rate closer the rates of 
other developed nations, helping American businesses compete in 
the international marketplace on a level playing field.
    This reform would also boost investment flows in the United 
States and encourage more foreign companies to do business and 
create jobs in the U.S. economy. It would lessen incentives for 
U.S.-based multinational corporations to avoid high U.S. taxes 
by keeping their profits offshore. That would encourage these 
companies to reinvest their profits and capital in the United 
States.
    This budget would offset lower rates with a broader base, 
scaling back or eliminating entirely the deductions and credits 
that have skewed corporate behavior and benefitted the largest 
corporations disproportionately. Government should not be in 
the business of picking winners and losers in the market. A 
single low, fair and simple rate is as good for American 
businesses as it is for the individual Americans they employ.
                                ------                                

    This budget, by lowering tax rates and broadening the tax 
base, follows the same principles that guided the tax proposals 
recommended by the President's Fiscal Commission. But rather 
than allowing government's share of the economy to rise to 21 
percent, as the commission's proposals would allow, this budget 
includes real spending restraint that enables government's 
share of the economy to remain below its historical average of 
19 percent.
    This is important, not because 19 percent is a magic 
number, but because Washington should not solve its spending 
problems by taking even more money from taxpayers. American 
families have had to cut their own budgets in the past few 
years, and it is time for Washington to do the same. By 
returning government to its proper roles, this budget brings 
spending in line with taxes--not the other way around.
    In addition to reorienting the tax code with pro-growth 
incentives, this budget fixes a major problem that has 
distorted economic activity in the United States. Its reforms 
are meant to be permanent changes in law, not temporary booster 
shots or short-term cuts with built-in expiration dates. 
American families and businesses need--and deserve--certainty 
and predictability when it comes to taxes, so they can plan for 
their economic futures.
    Keeping families and businesses in a state of uncertainty 
about taxes is unfair, and it hurts the economy. This budget 
ends the gimmickry and gives citizens a fair and simple tax 
code that they can count on.
    This budget is a principled beginning, a solid first step 
along a long-term path to prosperity for America. Economists 
have shown that lowering overall rates and broadening the tax 
base will promote economic growth and support job creation by 
the private sector. There are many good ideas on that front--
growth-oriented tax plans that could strengthen the economy and 
support the Nation's funding priorities. Congressman Woodall, 
for instance, has submitted a fundamental tax reform plan for 
consideration by the Ways and Means Committee that would 
eliminate taxes on wages, corporations, self-employment, 
capital gains, and gift and death taxes in favor of a personal 
consumption tax that would provide the economic certainty that 
American businesses, entrepreneurs, and taxpayers desire. 
Congress should consider this and the full myriad of pro-growth 
plans as it moves toward tax reform.
                      The Long-Term Budget Outlook

                              ----------                              


    As noted previously, the Federal budget trends of the next 
10 years, daunting as they are, reflect only the first surge of 
spending and debt that threaten the government's fiscal 
stability, and the economy's potential for growth. Beyond that 
budget window, conditions continue to worsen, driven by 
unsustainable rates of spending growth and promises of 
government benefits that cannot be kept. Therefore, Congress 
must examine the longer-term effects of its fiscal policy 
choices.
    The Congressional Budget Office [CBO] has conducted such an 
analysis of the policies in this budget.\9\ It shows that the 
reforms outlined in this proposal would put the Federal budget 
on the path to balance and the American economy on the path to 
prosperity. The discussion below describes these long-term 
effects, and compares them to those likely to result from the 
President's budget.
---------------------------------------------------------------------------
    \9\See CBO's Long-Term Analysis of a Budget Proposal by Chairman 
Ryan at http://www.cbo.gov/doc.cfm?index=12128.
---------------------------------------------------------------------------

                          Government Spending

    Under the President's budget, as re-estimated by CBO, the 
Federal Government will spend $46 trillion over the next 
decade. Government spending runs at record post-World War II 
levels, never falling below 23 percent of the economy in this 
decade, and rises to more than 24 percent by 2021.
    Beyond that point, the President's budget not only fails to 
curb the unsustainable spending trajectory--it makes matters 
worse. Even with more favorable economic assumptions, the 
administration's own Office of Management and Budget projects 
that spending under the President's budget will continually 
grow faster than the economy in 2022 and beyond.\10\
---------------------------------------------------------------------------
    \10\See Long Range Budget Projections for the FY 2012 Budget at 
http://www.whitehouse.gov/omb/budget/Supplemental.
---------------------------------------------------------------------------
    CBO has not directly estimated the long-term impact of the 
President's budget. But the ``alternative fiscal scenario'' 
presented in CBO's The Long-Term Budget Outlook (June 2010) is 
similar, but not identical to the President's policy.\11\ The 
alternative fiscal scenario differs from CBO's standard 
``current-law baseline'' projection. The baseline estimate 
assumes that everything scheduled to occur in law--including 
significant changes in spending or tax laws, such as a lapse of 
the 2001 and 2003 tax rates--will occur as expected. The 
alternative fiscal scenario, by contrast, assumes Congress will 
continue various spending and tax policies that it has 
generally extended in the past. Under this projection, CBO 
estimates mandatory spending will soon crowd out all other 
priorities in the Federal budget, with spending on Medicare, 
Medicaid, health insurance exchange subsidies, Social Security, 
and interest on the national debt eclipsing all anticipated 
revenue by 2025. Borrowing and spending by the public sector 
will crowd out investment and growth in the private sector. In 
the years ahead, government spending will skyrocket to record 
levels that a free economy simply cannot sustain.
---------------------------------------------------------------------------
    \11\See the CBO June 2010 Long-Term Budget Outlook at http://
www.cbo.gov/doc.cfm?index=11579 for a description of the Alternative 
Fiscal Scenario.
---------------------------------------------------------------------------
    This budget, The Path to Prosperity, charts a brighter 
future. With responsible spending cuts now and structural 
reforms of government spending programs going forward, the 
budget ensures government spending remains on a sustainable 
path. Under that budget, Federal spending will fall below 20 
percent of the economy by 2018. Through reforms, it holds 
spending close to 20 percent of GDP through 2030, when it 
begins to fall, reaching 14.75 percent of GDP by 2050. (CBO's 
analysis does not extend past 2050.) Within this fiscal 
restraint, the budget nevertheless continues to increase 
funding levels for government's core responsibilities and 
advance national priorities--albeit at a more sustainable rate. 
As the economy grows, government spending as a share of the 
economy will steadily recede over the decades ahead.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                                Deficits

    According to the CBO, the President's budget will result in 
a record fourth straight deficit in excess of $1 trillion, and 
climb above that mark in the last 3 years of the 10-year budget 
window (through 2021). His budget never reaches ``primary 
balance''--balancing the budget excluding interest payments--
meaning it fails to clear even the low bar the administration 
set for itself in justifying its claims of sustainability. The 
deficit path ahead commits America to economic decline and a 
diminished future.
    This budget charts a sustainable path going forward, 
ultimately erasing the entire budget deficit. It brings the 
deficit below $1 trillion in fiscal year 2012, whereas the 
President's budget produces a record fourth-straight trillion-
dollar budget next year. Over the next decade, this budget 
results in $4.4 trillion of deficit reduction compared to 
President Obama's budget. This surpasses the President's low 
benchmark of sustainability by reaching primary balance in 
2015.
    According to the CBO, this budget charts a path to complete 
balance. By 2040, the CBO estimates that this budget will 
produce annual surpluses and begin paying down the national 
debt. By contrast, under the status quo, as measured by the 
alternative fiscal scenario, the annual deficit would grow to 
consume nearly one-fifth of the entire U.S. economy by 2040.

   TABLE 11.--COMMITTEE-REPORTED BUDGET VS. THE CBO ALTERNATIVE FISCAL
                                SCENARIO
            [CBO long term analysis; as a percentage of GDP]
------------------------------------------------------------------------
                                 2022       2030       2040       2050
------------------------------------------------------------------------
                    Committee Reported FY 2012 BudgetTotal Revenues..............   18\1/2\         19         19         19
Total Spending..............   20\1/4\    20\3/4\    18\3/4\    14\3/4\
    Deficit (-) or Surplus..        -2    -1\3/4\      \1/4\     4\1/4\
Debt Held by the Public.....        70         64         48         10                       Alternative Fiscal ScenarioTotal Revenues..............   19\1/4\    19\1/4\    19\1/4\    19\1/4\
Total Spending..............   26\3/4\    32\1/4\    38\1/2\    45\1/4\
    Deficit (-) or Surplus..   -7\1/2\        -13   -19\1/4\        -26
Debt Held by the Public.....        95        146        233        344
------------------------------------------------------------------------

                                  Debt

    By continuing Washington's spending spree, the President's 
budget adds $10.4 trillion to the debt over the next decade. 
Under his budget, debt held by the public would double by 2016 
compared with the President's first year in office, and triple 
by the end of the budget window. By failing to address the 
unsustainable growth of mandatory spending programs, the 
President's budget commits the Nation to a crushing burden of 
debt. The CBO estimates that under the President's budget, debt 
held by the public will approach 90 percent of the entire 
economy by 2021. The explosive growth of debt will continue in 
the years beyond. Under the alternative fiscal scenario, CBO 
projects debt as a share of the economy to grow to 146 percent 
in 2030, 233 percent in 2040, and an unfathomable 344 percent 
in 2050. In analyzing the economic impact of the debt levels in 
the alternative fiscal scenario, CBO was unable to model the 
economic effects because debt levels were so large that CBO 
could not calculate their effects.
    The CBO has warned that ``persistent deficits and 
continually mounting debt would have several negative economic 
consequences for the United States * * * a growing level of 
Federal debt would also increase the probability of a sudden 
fiscal crisis.''\12\
---------------------------------------------------------------------------
    \12\Congressional Budget Office. Federal Debt and the Risk of a 
Fiscal Crisis. July 27, 2010. http://www.cbo.gov/ftpdocs/116xx/
doc11659/07-27--Debt--FiscalCrisis--Brief.pdf.
---------------------------------------------------------------------------
    The Path to Prosperity lifts the crushing burden of debt, 
making it possible for the economy to grow and for Americans to 
prosper. This budget would cut trillions of dollars from the 
debt relative to the current path in every year of their long-
term analysis. In 2022, the debt would be more than 25 percent 
lower than would be the case under the status quo; 56 percent 
less in 2030; and 79 percent less in 2040. By 2050, this budget 
would reduce debt relative to the size of the economy to only 
10 percent.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                     Section-by-Section Description

                              ----------                              


    The Concurrent Resolution on the Budget establishes an 
overall budgetary framework, which includes: aggregate levels 
of total new budget authority and outlays; total Federal 
revenues and the amount by which revenues should be changed; 
the surplus or deficit; new budget authority and outlays for 
each major functional category; the debt held by the public; 
and the debt subject to the statutory limit.
    The Congressional Budget Act of 1974 allows a procedure by 
which the Concurrent Resolution on the Budget may include 
directives to authorizing committees to submit legislation 
achieving specified changes in revenue and mandatory spending 
levels. The House reported Concurrent Resolution on the Budget 
for fiscal year 2012 does not include such ``reconciliation'' 
directives. The House has the ability to initiate fast-track 
procedures through its Rules Committee. The Senate can only 
generate these fast-track procedures through the incorporation 
of reconciliation directives that are adopted as part of a 
conference report on the Concurrent Resolution on the Budget. 
At the time of the reporting of this resolution, the Senate 
Committee on the Budget had not scheduled a markup of the 
Concurrent Resolution on the Budget. It is unclear whether the 
Senate will take up, much less pass, a Concurrent Resolution on 
the Budget this year. The House Committee on the Budget decided 
to meet its responsibility to report a budget. If the Senate 
passes a Concurrent Resolution on the Budget, then the two 
houses will have the opportunity to resolve a number of issues, 
including the budget levels, the enforcement language, and the 
question of whether reconciliation is included.

  SECTION 1. CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2012

    Subsection (a), in accordance with section 301(a) of the 
Congressional Budget Act of 1974, establishes the levels for 
fiscal year 2012, and each of the nine years following the 
budget year, fiscal years 2012 through 2021.
    For fiscal year 2012, the concurrent resolution establishes 
a binding ceiling on spending and a floor on revenue. The 
accompanying report provides a lump sum allocation of 
discretionary spending authority to the Committee on 
Appropriations of the House that in turn distributes to its 
twelve subcommittees for spending on the various programs, 
projects and activities that need to be funded on an annual 
basis through appropriations measures. Allocations are also 
given to committees other than appropriations, though in 
addition to the fiscal year 2012, these committees may not 
exceed the 10-year period covered by the Concurrent Resolution 
on the Budget.
    This 10-year period of fiscal years 2012 through 2021 is 
important because bills or amendments that increase direct 
spending above this 10-year level, in addition to the fiscal 
year 2012 level, will be subject to a point of order on the 
floor of the House and prevent their consideration. This is the 
case with measures reducing revenue below the level provided 
for in the resolution for the same time periods.
    Subsection (b) sets out the table of contents of the 
resolution.

                Title I--Recommended Levels and Amounts

              SECTION 101. RECOMMENDED LEVELS AND AMOUNTS

    Consistent with section 301 of the Congressional Budget Act 
of 1974, this section establishes the recommended levels for 
revenue, reduction in revenue, total new budget authority, 
total budget outlays, surpluses or deficits, debt held by the 
public, and the debt subject to the statutory limit. The 
recommended level of revenue operates as a floor against which 
all revenue bills are measured pursuant to section 311 of the 
Budget Act. Similarly, the recommended levels of new budget 
authority and budget outlays serve as a ceiling on the 
consideration of subsequent spending. The surplus or deficit 
levels reflect only on-budget outlays and revenue and hence do 
not reflect most outlays and receipts related to the Social 
Security Program and certain Postal Service operations. The 
debt subject to statutory limit aggregates refers to the 
portion of gross Federal debt issued by the Treasury to the 
public or another government fund or account, whereas the debt 
held by the public is the amount of debt issued and held by 
entities or individuals other than the U.S. Government.

                SECTION 102. MAJOR FUNCTIONAL CATEGORIES

    As further required by section 301(a) of the Budget Act, 
section 102 establishes the appropriate budgetary levels for 
the functional categories for the current fiscal year, 2011, 
the budget year, fiscal year 2012, and fiscal years 2012 
through 2021.
    The functions are as follows:
          050 National Defense
          150 International Affairs
          250 General Science, Space, and Technology
          270 Energy
          300 Natural Resources and Environment
          350 Agriculture
          370 Commerce and Housing Credit
          400 Transportation
          450 Community and Regional Development
          500 Education, Training, Employment, and Social 
        Services
          550 Health
          570 Medicare
          600 Income Security
          650 Social Security
          700 Veterans Benefits and Services
          750 Administration of Justice
          800 General Government
          900 Net Interest
          920 Allowances
          950 Undistributed Offsetting Receipts
          970 Global War on Terrorism and Related Activities
    The functional levels included in section 102 of the 
Concurrent Resolution on the Budget for Fiscal Year 2012 are 
expected to change through the adoption of a Manager's 
Amendment to be offered by the Chairman of the House Committee 
on the Budget. This amendment will be offered to correct 
technical aspects and certain functional totals and aggregates 
included in the concurrent resolution as reported.
    Specifically, the Manager's Amendment makes a correction to 
the reported resolution to fully reflect debt service costs and 
the savings associated with an assumed Federal civilian pay 
freeze and a reduction in the Federal civilian workforce. Both 
policies were assumed in the Concurrent Resolution on the 
Budget but were not reflected in the reported resolution's 
budget levels. The correction has no impact on budget levels 
for fiscal year 2012, but leads to a gradual increase in 
interest outlays that rises to $48 billion by 2021. It is 
entirely offset by savings from the pay freeze and workforce 
reduction. The Manager's Amendment is expected to change the 
appropriate function levels and limits to incorporate those 
assumptions and make other technical changes.

                     Title II--Long-Term Budgeting

                    SECTION 201. LONG-TERM BUDGETING

    This section sets out the recommended budget levels for 
certain budget areas for each of fiscal years 2030, 2040, and 
2050 as a percent of the gross domestic product of the United 
States as follows:
Federal Revenues
          FY2030: 19 percent
          FY2040: 19 percent
          FY2050: 19 percent
Budget Outlays
          FY2030: 20.75 percent
          FY2040: 18.75 percent
          FY2050: 14.75 percent
Deficit (-) or Surplus
          FY2030: -1.75 percent
          FY2040: 0.25 percent
          FY2050: 4.25 percent
Debt Held by the Public
          FY2030: 64 percent
          FY2040: 48 percent
          FY2050: 10 percent

                 Title III--Reserves and Contingencies

           SECTION 301. COSTS OF THE GLOBAL WAR ON TERRORISM

    Under the Congressional Budget Act of 1974, a measure 
causing direct or discretionary spending over the level 
provided by the Concurrent Resolution on the Budget is subject 
to a point of order. This section allows the Chairman of the 
Committee on the Budget to raise the level in the resolution 
for measures increasing such spending for fiscal year 2012 if 
it is for the global war on terrorism and related activities. 
The amount by which the Chairman is authorized to raise that 
level is capped, however, by the amount assumed in the 
resolution for that purpose--the level of the cap for those 
adjustments is the amount set in Function 970 (section 102(21) 
of this resolution). That level is $126.5 billion, an amount 
equal to the President's request for fiscal year 2012.

                      SECTION 302. EFFECTIVE DATE

    At the beginning of the 112th Congress, House Resolution 5 
was adopted to set the rules for that Congress. One section of 
that resolution allowed a provision of legislation to be 
declared an emergency, and hence the budgetary effects of the 
provision would not be counted for budget enforcement purposes. 
The provision in House Resolution 5 as adopted, however, 
expires on the adoption of the Concurrent Resolution on the 
Budget. This section extends that date through 31 May 2011 with 
the expectation that the Concurrent Resolution on the Budget 
would be adopted before that date.

            SECTION 303. RESERVE FUND FOR HEALTH CARE REFORM

    This section allows the Chairman of the Committee on the 
Budget to revise the allocations of spending authority provided 
to committees and adjust other budgetary enforcement amounts in 
this resolution for a measure that repeals the Patient 
Protection and Affordable Care Act (Public Law 111-148) or the 
Health Care and Education Reconciliation Act of 2010 (Public 
Law 111-152). Those measures are the health care reform bills 
enacted into law in 2010.

   SECTION 304. RESERVE FUND FOR THE SUSTAINABLE GROWTH RATE OF THE 
                            MEDICARE PROGRAM

    This section allows the Chairman of the Committee on the 
Budget to revise the allocations of spending authority provided 
to committees and adjust other budgetary enforcement amounts in 
this resolution for a measure amending or superseding the 
system for updating payments under section 1848 of the Social 
Security Act, as long as such measure is deficit-neutral for 
the period of fiscal years 2012 through 2021.

     SECTION 305. RESERVE FUND FOR DEFICIT-NEUTRAL REVENUE MEASURES

    This section allows the Chairman of the Committee on the 
Budget to revise the allocations of spending authority provided 
to the Committee on Ways and Means for legislation that 
decreases revenue. The Chairman of the Committee on the Budget 
may adjust the allocations and aggregates of this concurrent 
resolution if such measure would not increase the deficit over 
fiscal years 2012 through 2021.

   SECTION 306. DEFICIT-NEUTRAL RESERVE FUND FOR RURAL COUNTIES AND 
                                SCHOOLS

    The reserve fund accommodates any legislation that 
reauthorizes the Secure Rural Schools and Community Self-
Determination Act (Public Law 106-393), to the extent that such 
legislation does not increase the deficit or direct spending in 
fiscal year 2012, fiscal years 2012 through 2016, or fiscal 
years 2012 through 2021. That law provides economic assistance 
to States and counties containing National Forest System lands 
and public domain lands managed by the Bureau of Land 
Management for the benefit of public schools, roads, and other 
purposes.

                      Title IV--Budget Enforcement

               SECTION 401. DISCRETIONARY SPENDING LIMITS

    Subsection (a) sets out spending limits for each of the 
fiscal years 2012 through 2021. In the resolution as reported, 
these amounts have not been identified. They will, however, be 
set prior to a vote on final passage of the concurrent 
resolution through a Manager's Amendment on the floor of the 
House.
    Subsection (b) sets out an enforcement mechanism for the 
spending limits. A bill that causes the spending limit to be 
exceeded would trigger a point of order against the 
consideration of that bill (or amendment or conference report).

                  SECTION 402: ADVANCE APPROPRIATIONS

    Subsection (a) sets out spending limits for each of the 
fiscal years 2012 through 2021. It is anticipated that a 
Manager's Amendment will be adopted to conform the reported 
resolution limits to the assumptions in the resolution.
    Subsection (b) sets out the programs that may receive 
advance appropriations. Those are either referred to in this 
report in the section as ``Accounts Identified for Advance 
Appropriations'' or for certain veterans health programs set in 
subsection (c).
    Subsection (c) specifically sets a limit on the amount of 
total allowable advance appropriations for fiscal year 2013. It 
allows advance appropriations of up to $52.5 billion for fiscal 
year 2013 for Veterans Medical Services, Veterans Medical 
Support and Compliance, and Veterans Medical Facilities. It 
also allows up to $28.852 billion for other programs named in 
this report and referred to in subsection (b). This total is 
the same as the limit included in the fiscal year Concurrent 
Resolution on the Budget for 2010, the last year in which 
Congress adopted conference report on the Concurrent Resolution 
on the Budget.
    Subsection (d) defines advance appropriations as any new 
discretionary budget authority provided in a bill or joint 
resolution making general or continuing appropriations for 
fiscal year 2013.
    Subsection (e) provides the Chairman of the Committee on 
the Budget with certain adjustment authority. At the time this 
report is filed, it is unclear what the final discretionary 
appropriations level will be. The adjustment authority allows 
the list and the amount to be changed to take into account the 
final appropriations measure for fiscal year 2011.

                 SECTION 403. CONCEPTS AND DEFICITIONS

    Section 403 requires the chairman of the Committee on the 
Budget to adjust levels and allocations in this budget 
resolution upon enactment of legislation that changes concepts 
or definitions.

         SECTION 404. ADJUSTMENTS OF AGGREGATES AND ALLOCATIONS

    Section 404 sets out a special enforcement procedure for 
measures reducing revenue. The Concurrent Resolution on the 
Budget allows a certain amount of revenue loss before it 
normally would cause a measure to be subject to a point of 
order. This section restricts the measures that may cause the 
revenue loss provided for in the concurrent resolution.
    Subsection (a) sets out the rule for this resolution that 
the enforceable revenue levels are the March 2011 Congressional 
Budget Office baseline. Hence any measure that decreases 
revenue relative to that baseline would be in violation of the 
Concurrent Resolution on the Budget unless it is specifically 
provided for in this section. The enforceable baseline level 
provided for in this subsection can be adjusted downward as the 
specific bills are enacted, but the adjustments must stop once 
the revenue floor is set in the resolution. It allows an amount 
of revenue adjustments to be made, but that is limited to the 
amount between the revenue in the March 2011 baseline and the 
revenue floor in the Concurrent Resolution on the Budget.
    Subsection (b) specifies the revenue measures that can be 
adjusted for the budgetary effects of measures:
     Extending the Economic Growth and Tax Relief 
Reconciliation Act of 2001;
     Extending the Jobs and Growth Tax Relief 
Reconciliation Act of 2003;
     Adjusting the Alternative Minimum Tax exemption 
amounts to prevent a larger number of taxpayers as compared 
with tax year 2008 from being subject to the Alternative 
Minimum Tax or of allowing the use of nonrefundable personal 
credits against the Alternative Minimum Tax, or both as 
applicable;
     Extending the estate, gift, and generation-
skipping transfer tax provisions of title III of the Tax 
Relief, Unemployment Insurance Reauthorization, and Job 
Creation Act of 2010;
     20 percent deduction in income to small 
businesses;
     trade agreements;
     The repeal of the tax increases set forth in the 
Patient Protection and Affordable Care Act and the Health Care 
and Education Affordability Reconciliation Act of 2010;
     Measures reforming the tax code and lowering tax 
rates.
    Measures reforming the Patient Protection and Affordable 
Care Act and the Health Care [PPACA] and Education 
Affordability Reconciliation Act of 2010 [HERA] are also 
allowed a revenue adjustment, but only to the extent they are 
deficit neutral in the fiscal years 2012 through 2021. To the 
extent revenue increases are used to achieve deficit neutrality 
during this period, those revenue raisers may only be either 
(or both):
    1. repealing the individual mandate included in PPACA/HERA;
    2. modifying the subsidies to purchase health insurance as 
set in PPACA/HERA.
    Subsection (c) sets out a procedure to facilitate 
legislation to subject mandatory spending to annual 
appropriations. Under current law, there are impediments to 
reassessing mandatory spending since if such spending is 
eliminated, the purpose for which that spending is intended is 
no longer served on the mandatory side of the budget. Even if 
it were to authorize the spending, the Committee on 
Appropriations would have to find additional resources within 
its allocation.
    Under this procedure, should an authorizing committee want 
to retain the purpose, but determines it more appropriately 
should be subject to annual appropriations, it can, at the same 
time it eliminates the direct spending, authorize 
appropriations for the program. If that direct spending 
legislation is enacted, the Chairman of the Committee on the 
Budget may increase the allocation to the Committee on 
Appropriations by a corresponding amount for discretionary 
spending for the same purpose in fiscal year 2012.
    This effectively holds the Committee on Appropriations 
harmless if it appropriates money under the terms of that 
authorization--both the discretionary caps set out in section 
401 of this resolution and the allocation under 302(a) set out 
under the terms of the Congressional Budget Act of 1974 are 
adjusted.

             SECTION 405. LIMITATION ON LONG-TERM SPENDING

    Section 405 prohibits the consideration of measures 
increasing mandatory spending above $5 billion for any 10-year 
window within a 40-year period.

        SECTION 406. BUDGETARY TREATMENT OF CERTAIN TRANSACTIONS

    Subsection (a) provides that administrative expenses 
related to Social Security and the United States Post Office in 
the allocation to the Committee on Appropriations. This 
language is necessary to ensure that the Committee on 
Appropriations retains control of administrative expenses 
through the congressional budget process.
    Subsection (b) clarifies that the allocation to the 
Committee on Appropriations of the House, which is enforceable 
through points of order under the Congressional Budget Act of 
1974, would be enforced using estimates of the budgetary 
effects of a measure that include any off-budget discretionary 
amounts.
    Subsection (c) allows the Chairman of the Committee on the 
Budget to adjust the spending or revenue levels of the 
Concurrent Resolution on the Budget for legislation, if 
reported by the Committee on Oversight and Government Reform, 
that reforms the Federal retirement system. The Chairman may 
make the adjustments only if they do not cause a net increase 
in the deficit in fiscal year 2012 and fiscal years 2012 
through 2021.

   SECTION 407. APPLICATION AND EFFECT OF CHANGES IN ALLOCATIONS AND 
                               AGGREGATES

    Subsection (a) details the allocation and aggregate 
adjustment procedures required to accommodate legislation for 
the reserve funds in this resolution. It provides that the 
adjustments shall apply while the legislation is under 
consideration and take effect upon enactment of the 
legislation. In addition, the subsection requires the 
adjustments to be printed in the Congressional Record.
    Subsection (b) notes, for purposes of enforcement, 
aggregate and allocation levels resulting from adjustments made 
pursuant to this resolution will have the same effect as if 
adopted in the original levels of Title I of this Concurrent 
Resolution on the Budget.
    Subsection (c) explains that the Committee on the Budget 
determines the budgetary levels and estimates which are 
required to enforce points of order under the Congressional 
Budget Act. This can be read in conjunction with clause 4 of 
Rule XXIX of the Rules of the House of Representatives which 
adds additional authority for the Chairman of the Committee on 
the Budget to act on the behest of the Committee in advising 
about the budgetary consequences of legislation.
    Subsection (d) provides an exemption for legislation for 
which the Chairman of the Committee on the Budget has made 
adjustments in the allocations or aggregates of the resolution 
and that complies with this Concurrent Resolution on the 
Budget. By such an exemption, such legislation is subject to 
neither the Cut-As-You-Go point of order (clause 10 of rule XXI 
of the Rules of the House of Representatives) nor section 405 
of this resolution (the long-term spending point of order).

                   SECTION 408. FAIR VALUE ESTIMATES

    Subsection (a) provides specific authority for the Chairman 
or Ranking Member of the Committee on the Budget to request a 
supplemental estimate for any program affecting or establishing 
Federal loans or loan guarantees. Normally such a measure would 
be scored on a ``net present value'' basis under the terms of 
the Federal Credit Reform Act found Title V of the 
Congressional Budget Act of 1974. The supplemental estimate 
would be scored using ``fair value'' which generally 
incorporates market risk.
    Subsection (b) allows the Chairman of the Committee on the 
Budget to use the supplemental estimate referred to in 
subsection (a) to be used for enforcing compliance with the 
resolution.

               SECTION 409. EXERCISE OF RULEMAKING POWERS

    Subsection (a) provides for general technical application 
of the legislative text of the resolution.
    Subsection (b) deletes redundant or extraneous provisions 
from House Resolution 5.

                            Title V--Policy

            SECTION 501. POLICY STATEMENT ON MEDICARE REFORM

    Subsection (a) sets out a number of findings.
    Subsection (b) states that the policy of the Concurrent 
Resolution on the Budget is ``to protect those in and near 
retirement from any disruptions to their Medicare benefits and 
offer future beneficiaries the same health care options 
available to Members of Congress.''
    Subsection (c) sets out the assumptions of the Concurrent 
Resolution on the Budget for the parameters of future Medicare 
reforms.

            SECTION 502. POLICY STATEMENT ON SOCIAL SECURITY

    Subsection (a) sets out a number of findings.
    Subsection (b) states the Concurrent Resolution on the 
Budget's policy on Social Security.

          SECTION 503. POLICY STATEMENT ON BUDGET ENFORCEMENT

    Subsection (a) sets out a number of findings.
    Subsection (b) states that in order to control spending and 
debt under control, certain statutory reforms are necessary: 
statutory spending limits for 2012 through 2021; increases in 
the debt limit be accompanied by enforcement mechanisms that 
provide for across-the-board spending cuts and expedited 
consideration for legislation that would reduce spending that 
would avoid such an across-the-board spending reductions.

                     Title VI--Senses of the House

 SECTION 601. SENSE OF THE HOUSE THAT A RESPONSIBLE DEFICIT REDUCTION 
 PLAN MUST CONSIDER ALL PROGRAMS, INCLUDING THOSE AT THE PENTAGON AND 
                  THE OTHER NATIONAL SECURITY AGENCIES

    This sense of the House expressed the view that all 
programs should be reviewed when considering deficit reduction.

   SECTION 602. SENSE OF THE HOUSE REGARDING THE IMPORTANCE OF CHILD 
                          SUPPORT ENFORCEMENT

    This sense of the House expresses the sense that the 
authorizing committees are encouraged to ensure that States 
have the resources to collect child support owed to families 
and then to pass 100 percent of support on to families without 
financial penalty.
                    The Congressional Budget Process

                              ----------                              


    The spending and revenue levels established in the budget 
resolution are executed through two parallel, but separate, 
mechanisms: allocations to the appropriations and authorizing 
committees; and, when necessary, reconciliation directives to 
the authorizing committees.
    As required under section 302(a) of the Congressional 
Budget Act of 1974, the discretionary spending levels 
established in the budget resolution are allocated to the 
Appropriations Committee and the mandatory spending levels are 
allocated to each of the authorizing committees with mandatory 
spending authority. These allocations appear in the report 
accompanying the budget resolution, and they are enforced 
through points of order (see the section of this report titled: 
``Enforcing the Budget Resolution''.) Amounts provided under 
``current law'' encompass programs that affect direct 
spending--entitlements and other programs that have spending 
authority or offsetting receipts. Amounts subject to 
discretionary action refer to programs that require subsequent 
legislation to provide the necessary spending authority. 
Amounts provided under ``reauthorizations'' reflect amounts 
assumed to be provided in subsequent legislation reauthorizing 
expiring mandatory programs.
    Allocations of budget authority and outlays are provided 
for each of the authorizing committees for the current year 
(fiscal year 2011), the budget year (fiscal year 2012), and the 
10-year period (fiscal years 2012 through 2021). Section 302 of 
the Congressional Budget Act (as modified by the Balanced 
Budget Act of 1997) requires that allocations of budget 
authority be provided in the report accompanying the budget 
resolution for the 1st fiscal year and at least the 4 ensuing 
fiscal years (except for the Committee on Appropriations, which 
receives an allocation only for the budget year).

                        Appropriations Committee

    The report accompanying the budget resolution allocates to 
the Committee on Appropriations a lump sum of discretionary 
budget authority assumed in the resolution and corresponding 
outlays.

                     TERM OF THE 302(A) ALLOCATION

    The allocation to the Appropriations Committee is for the 
fiscal year commencing on 1 October 2012. Unlike the 
authorizing committees, the Appropriations Committee does not 
receive a 5-year allocation of budget authority and outlays.

                           302(B) ALLOCATION

    Upon receiving its 302(a) allocation, the Appropriations 
Committee is required to divide the allocation among its 12 
subcommittees. The amount each subcommittee receives 
constitutes its allocation pursuant to section 302(b) of the 
Congressional Budget Act.

                         Authorizing Committees

    The authorizing committees are allocated a lump sum of new 
budget authority along with the corresponding outlays. The 
committees may be allocated additional budget authority 
categorized as subject to discretionary action. This occurs 
when the budget resolution assumes a new or expanded mandatory 
program or a reduction in an existing program. Such spending 
authority must be provided through subsequent legislation and 
is not controlled through the annual appropriations process.

                     TERM OF THE 302(A) ALLOCATION

    Because the spending authority for the authorizing 
committees is multi-year or permanent, the allocations are for 
the forthcoming budget year commencing on 1 October, and a 10-
year total for fiscal years 2012 through 2021.
    Unlike the Appropriations Committee, each of the 
authorizing committees is provided a single allocation of new 
budget authority (divided between current law and discretionary 
action) that is not provided through annual appropriations. 
These committees are not required to file 302(b) allocations. 
Bills first effective in fiscal year 2011 will be measured 
against the revised level for that year included in the fiscal 
year 2012 budget resolution and also the 10-year period of 
fiscal year 2012 through 2021. Bills first effective in fiscal 
year 2012 will be measured against the level of the budget 
year, fiscal year 2012 of the budget resolution, and also the 
10-year period of fiscal year 2012-21.

                              Adjustments

    In addition to the adjustments made under the Congressional 
Budget Act, the budget resolution also provides the Chairman of 
the House Budget Committee with the authority to make certain 
adjustments in the aggregates and allocations, in certain 
circumstances.
    In section 301, the authority of Chairman of the Committee 
on the Budget may adjust the aggregates and allocations of this 
resolution if it is designated as a related to the Global War 
on Terrorism but only through 31 May 2011. This adjustment is 
capped at the level found in function 970. Spending above that 
level must be offset.
    In section 302, the authority of Chairman of the Committee 
on the Budget is extended to omit the budget costs of a 
provision of a bill or amendment if it is designated as an 
emergency or related to the Global War on Terrorism [GWOT]. 
While not adjustments, the designations act in the same 
fashion. Specifically, this designation was included in H. Res. 
5, the organizing resolution for the 112th Congress but under 
the terms of that resolution, it expires upon the adoption of 
this concurrent resolution on the budget. This budget 
resolution extends that time to 31 May 2011. After that, 
emergency and GWOT spending in fiscal year 2011 must be offset.

                              Enforcement

    To enforce the allocations, any Member may raise a point of 
order against spending legislation that exceeds a committee's 
allocation (see the section titled ``Enforcing the Budget 
Resolution'' in this report). The enforcement periods for 
spending under section 302(f) of the Congressional Budget Act 
are for the first year the legislation is effective, and the 
10-year period commencing with that year.

                             Reconciliation

    Section 310 of the Congressional Budget Act (2 U.S.C. 641) 
permits the budget resolution to provide for a budget 
``reconciliation'' process.
    As originally conceived in the Congressional Budget Act of 
1974, reconciliation was to be an optional process stemming 
from the second of two budget resolutions adopted during a 
session of Congress. The first resolution, taken up in the 
spring, was a nonbinding blueprint intended to guide committees 
in their spending and revenue decisions. The second resolution, 
to be passed after Labor Day, would take into account any 
significant changes in economic or fiscal conditions, and then 
either reconfirm the first resolution levels, or make 
adjustments the Budget Committees found necessary. The second 
resolution was to be binding, and if one or more committees 
were found to have breached its limits, they could be required 
to adopt legislation that would ``reconcile'' their spending or 
revenue totals to those in the budget.
    By the end of the 1970s, the second resolution had fallen 
into disuse. But the reconciliation procedure remained, and has 
come to be used as a means of making changes in entitlement or 
tax laws.
    Under reconciliation as used today, one or more committees 
are directed to make changes in the laws in their jurisdictions 
to achieve specified increases or decreases in budget authority 
or revenue. Although reconciliation directives do not prescribe 
specific policies changes--those decisions lie with the 
committees of jurisdiction--the procedure is useful in the 
House as a means of driving policy changes. Even more 
important, procedurally, is the mechanism's special protection 
in the Senate: a reconciliation bill has an automatic time 
limit for debate, and it cannot be filibustered--hence it can 
pass with just 51 votes.
    On the other hand, reconciliation in the Senate has 
significant constraints. Section 313 of the Budget Act--created 
by the late Senator Robert C. Byrd--prohibits the consideration 
of provisions in a reconciliation bill that are deemed 
``extraneous.'' There are several categories of these, but the 
most fundamental is that a reconciliation provision is 
extraneous if it does not increase or decrease spending or 
revenue. Any such provision would give rise to a point of 
order, and the provision could be stricken unless 60 Senators 
vote to waive the point of order.
    Since the early 1980s, reconciliation was employed chiefly 
to slow the growth of entitlement spending, alter tax laws, and 
reduce deficits. In the fiscal year 2010 budget resolution, 
however, Congress employed the leverage of reconciliation to 
vastly expand government. Specifically, the resolution 
instructed each of three committees--Ways and Means, Energy and 
Commerce, and Education and Labor--to report legislation 
achieving net deficit reduction of a token $1 billion over 6 
years. This transparently encouraged the committees to adopt 
major net spending increases, as long as they were offset by 
other spending reductions or, more to the point, were chased by 
higher taxes. Thus the budget offered reconciliation protection 
for the congressional majority's health care and student loan 
legislation, which contained trillions of dollars worth of 
increased spending.
    To prevent further such abuses, the House majority in the 
112th Congress included in its House rules (H. Res. 5) a 
provision prohibiting consideration of a budget resolution 
containing reconciliation directives that would result in a net 
increase in direct spending.
    Reconciliation does not apply to discretionary spending, 
which is controlled by the Committee on Appropriations.

    TABLE 12.--ALLOCATION OF SPENDING AUTHORITY TO HOUSE COMMITTEE ON
                             APPROPRIATIONS
                        [In millions of dollars]
------------------------------------------------------------------------
                                                               2012
------------------------------------------------------------------------
Discretionary Action:
    BA..................................................       1,019,402
    OT..................................................       1,170,384
Current Law Mandatory:
    BA..................................................         745,700
    OT..................................................         734,871
------------------------------------------------------------------------


   TABLE 13.--RESOLUTION BY AUTHORIZING COMMITTEE (ON-BUDGET AMOUNTS)
                        [In millions of dollars]
------------------------------------------------------------------------
                                               2012          2012-2021
------------------------------------------------------------------------
Agriculture:
  Current law:
    BA..................................          13,463         763,847
    Outlays.............................          14,649         761,094
  Resolution change:
    BA..................................          -2,315        -177,866
    Outlays.............................          -2,228        -176,005
  Total:
    BA..................................          11,148         585,981
    Outlays.............................          12,421         585,089
Armed Services:
  Current law:
    BA..................................         143,166       1,658,720
    Outlays.............................         139,128       1,653,112
  Resolution change:
    BA..................................               0               0
    Outlays.............................               0               0
  Total:
    BA..................................         143,166       1,658,720
    Outlays.............................         139,128       1,653,112
Education and Workforce:
  Current law:
    BA..................................          -8,122          58,384
    Outlays.............................          -3,382          66,620
  Resolution change:
    BA..................................          -5,111        -150,382
    Outlays.............................          -2,522        -133,808
  Total:
    BA..................................         -13,233         -91,998
    Outlays.............................          -5,904         -67,188
Energy and Commerce:
  Current law:
    BA..................................         318,581       4,545,941
    Outlays.............................         315,089       4,512,317
  Resolution change:
    BA..................................          -1,180      -1,366,323
    Outlays.............................          -1,207      -1,366,350
  Total:
    BA..................................         317,401       3,179,618
    Outlays.............................         313,882       3,145,967
Financial Services:
  Current law:
    BA..................................          28,378         140,008
    Outlays.............................          29,475         -26,268
  Resolution change:
    BA..................................          -5,986         -66,359
    Outlays.............................          -6,485         -67,488
  Total:
    BA..................................          22,392          73,649
    Outlays.............................          22,990         -93,756
Foreign Affairs:
  Current law:
    BA..................................          33,593         242,023
    Outlays.............................          27,088         248,438
  Resolution change:
    BA..................................               0               0
    Outlays.............................               0               0
  Total:
    BA..................................          33,593         242,023
    Outlays.............................          27,088         248,438
Homeland Security:
  Current law:
    BA..................................           1,630          18,660
    Outlays.............................           1,555          18,512
  Resolution change:
    BA..................................          -1,900         -16,600
    Outlays.............................          -1,900         -14,100
  Total:
    BA..................................            -270           2,060
    Outlays.............................            -345           4,412
House Administration:
  Current law:
    BA..................................              47             447
    Outlays.............................             220             642
  Resolution change:
    BA..................................               0               0
    Outlays.............................               0               0
  Total:
    BA..................................              47             447
    Outlays.............................             220             642
Judiciary:
  Current law:
    BA..................................          14,347          85,614
    Outlays.............................          10,090          87,416
  Resolution change:
    BA..................................            -387         -48,087
    Outlays.............................              -1         -47,701
  Total:
    BA..................................          13,960          37,527
    Outlays.............................          10,089          39,715
Natural Resources:
  Current law:
    BA..................................           5,984          61,750
    Outlays.............................           6,360          65,364
  Resolution change:
    BA..................................            -239         -10,735
    Outlays.............................            -190         -10,472
  Total:
    BA..................................           5,745          51,015
    Outlays.............................           6,170          54,892
Oversight and Government Reform:
  Current law:
    BA..................................          97,476       1,134,959
    Outlays.............................          93,906       1,090,281
  Resolution change:
    BA..................................          -8,102        -153,145
    Outlays.............................          -8,275        -153,302
  Total:
    BA..................................          89,374         981,814
    Outlays.............................          85,631         936,979
Science and Technology:
  Current law:
    BA..................................             120           1,254
    Outlays.............................             124           1,261
  Resolution change:
    BA..................................               0               0
    Outlays.............................               0               0
  Total:
    BA..................................             120           1,254
    Outlays.............................             124           1,261
Small Business:
  Current law:
    BA..................................               0               0
    Outlays.............................               0               0
  Resolution change:
    BA..................................               0               0
    Outlays.............................               0               0
  Total:
    BA..................................               0               0
    Outlays.............................               0               0
Transportation and Infrastructure:
  Current law:
    BA..................................          71,836         735,046
    Outlays.............................          16,234         178,408
  Resolution change:
    BA..................................         -15,471        -150,677
    Outlays.............................            -122          -4,396
  Total:
    BA..................................          56,365         584,369
    Outlays.............................          16,112         174,012
Veterans Affairs':
  Current law:
    BA..................................           1,579          56,174
    Outlays.............................           1,683          57,739
  Resolution change:
    BA..................................               0               0
    Outlays.............................               0               0
  Total:
    BA..................................           1,579          56,174
    Outlays.............................           1,683          57,739
Ways and Means:
  Current law:
    BA..................................       1,038,905      14,297,671
    Outlays.............................       1,039,300      14,298,563
  Resolution change:
    BA..................................          -8,028      -1,313,893
    Outlays.............................          -7,891      -1,314,122
  Total:
    BA..................................       1,030,877      12,983,778
    Outlays.............................       1,031,409      12,984,441
------------------------------------------------------------------------


                                                 TABLE 14.--FISCAL YEAR 2012 BUDGET RESOLUTION TOTAL SPENDING AND REVENUES: MANAGER'S AMENDMENT
                                                                                    [In billions of dollars]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
         Fiscal year              2011          2012         2013        2014        2015        2016        2017        2018        2019        2020        2021       2012-2016     2012-2021
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Summary
Total Spending:
  BA........................     3,540.321     3,442.191   3,482.292   3,589.684   3,692.433   3,877.396   4,032.855   4,187.694   4,398.917   4,605.735   4,791.985    18,083.996    40,101.181
  OT........................     3,617.800     3,528.536   3,558.360   3,582.979   3,667.478   3,855.337   3,996.283   4,123.239   4,353.765   4,547.297   4,744.812    18,192.690    39,958.085
On-budget:
  BA........................     3,040.757     2,858.545   2,835.737   2,905.952   2,970.061   3,114.578   3,224.937   3,330.942   3,490.088   3,639.728   3,767.274    14,684.873    32,137.842
  OT........................     3,120.767     2,947.916   2,915.241   2,902.944   2,949.301   3,097.060   3,193.477   3,271.881   3,450.742   3,587.701   3,726.564    14,812.462    32,042.826
Off-budget:
  BA........................       499.564       583.646     646.555     683.731     722.372     762.818     807.918     856.752     908.829     966.007   1,024.710     3,399.123     7,963.339
  OT........................       497.033       580.620     643.119     680.035     718.177     758.277     802.806     851.357     903.024     959.596   1,018.248     3,380.228     7,915.259
Revenues:
  Total.....................     2,230.199     2,533.212   2,860.329   3,093.942   3,236.738   3,377.014   3,589.281   3,744.762   3,938.622   4,142.155   4,354.210    15,101.235    34,870.265
  On-budget.................     1,664.563     1,866.454   2,127.981   2,324.503   2,425.363   2,522.695   2,693.493   2,807.893   2,958.678   3,119.794   3,286.942    11,266.996    26,133.796
  Off-budget................       565.636       666.758     732.348     769.439     811.375     854.319     895.788     936.869     979.944   1,022.361   1,067.268     3,834.239     8,736.469
Surplus/Deficit (-):
  Total.....................    -1,387.601      -995.324    -698.031    -489.037    -430.740    -478.323    -407.002    -378.477    -415.143    -405.141    -390.601    -3,091.455    -5,087.820
  On-budget.................    -1,456.204    -1,081.462    -787.260    -578.441    -523.938    -574.365    -499.984    -463.988    -492.064    -467.907    -439.622    -3,545.466    -5,909.030
  Off-budget................        68.603        86.138      89.229      89.404      93.198      96.042      92.982      85.512      76.920      62.765      49.020       454.011       821.210
  Debt Held by the Public           10,351        11,418      12,216      12,797      13,319      13,876      14,351      14,787      15,242      15,673      16,068       na            na
   (end of year)............
  Debt Subject to Limit (end        14,973        16,204      17,177      17,951      18,697      19,503      20,245      20,968      21,699      22,408      23,102       na            na
   of year).................                                                                                           By Function
National Defense (050):
  BA........................       561.172       582.626     600.283     616.451     628.847     641.976     653.695     665.679     677.884     690.273     702.903     3,070.183     6,460.618
  OT........................       640.396       593.580     597.211     606.903     618.837     635.475     643.275     650.246     666.959     679.088     691.494     3,052.006     6,383.068
International Affairs (150):
  BA........................        51.873        36.575      35.653      31.694      30.316      29.356      30.729      31.978      32.824      33.698      34.572       163.594       327.396
  OT........................        44.138        36.102      34.545      34.178      32.613      32.161      31.926      31.594      30.487      30.123      30.740       169.599       324.469
General Science, Space, and
 Technology (250):
  BA........................        28.649        27.452      27.316      27.312      27.312      27.311      27.652      28.341      29.049      29.758      30.472       136.704       281.976
  OT........................        31.037        29.798      28.242      27.763      27.469      27.506      27.646      28.114      28.684      29.344      29.946       140.777       284.511
Energy (270):
  BA........................         6.535         6.996       3.850       1.215       1.101       1.021       1.010       1.075       1.211       1.179       1.195        14.182        19.852
  OT........................        13.328        16.174      10.053       4.547       1.360       0.340       0.460       0.539       0.497       0.470       0.476        32.474        34.916
Natural Resources and
 Environment (300):
  BA........................        31.986        31.921      29.414      25.296      26.893      25.231      26.156      26.618      26.956      27.787      27.756       138.753       274.027
  OT........................        40.431        36.818      33.386      28.943      29.271      26.070      26.307      25.308      25.439      25.990      25.992       154.487       283.523
Agriculture (350):
  BA........................        26.337        19.819      18.396      16.717      17.355      17.235      16.859      17.025      17.159      17.469      17.755        89.522       175.789
  OT........................        21.703        19.559      21.989      16.469      16.688      16.505      16.069      16.180      16.283      16.579      16.873        91.210       173.193
Commerce and Housing Credit
 (370):
  BA........................        -6.720        15.275       3.998       0.666      -2.451      -3.102      -0.232       0.006       0.052       0.153       0.091        14.386        14.458
  OT........................        -6.708        17.235       2.573     -13.823     -19.253     -23.295     -23.525     -25.709     -17.268     -17.707     -19.359       -36.562      -140.129
  On-budget:
    BA......................       -10.478        14.317       4.040       0.508      -2.609      -3.260      -0.293      -0.261      -0.222      -0.128      -0.196        12.996        11.895
    OT......................       -10.466        16.275       2.611     -13.986     -19.417     -23.459     -23.592     -25.981     -17.547     -17.992     -19.650       -37.976      -142.738
  Off-budget:
    BA......................         3.758         0.958      -0.042       0.158       0.158       0.158       0.061       0.268       0.274       0.281       0.288         1.390         2.563
    OT......................         3.758         0.960      -0.038       0.163       0.164       0.165       0.068       0.272       0.278       0.285       0.291         1.414         2.609
Transportation (400):
  BA........................        84.992        64.316      64.515      64.265      60.377      68.563      65.916      70.578      66.719      67.472      68.936       322.036       661.656
  OT........................        94.664        80.431      71.264      67.722      66.084      65.957      67.036      67.451      69.869      71.551      76.853       351.457       704.218
Community and Regional
 Development (450):
  BA........................        15.832        11.572      11.344      11.280      11.206      11.117      11.219      11.497      11.779      12.065      12.354        56.519       115.434
  OT........................        24.306        23.559      20.609      18.127      14.176      12.257      11.231      10.860      11.028      11.294      11.524        88.728       144.664
Education, Training,
 Employment and Social
 Services (500):
  BA........................        57.756        67.122      63.887      66.076      69.446      73.314      75.371      76.798      78.314      79.629      80.952       339.845       730.909
  OT........................       100.278       100.012      73.071      68.044      70.450      73.310      75.665      77.013      78.385      79.806      81.047       384.887       776.803
Health (550):
  BA........................       376.350       341.873     343.733     338.064     327.012     320.409     339.663     349.840     371.826     395.908     404.674     1,671.091     3,533.001
  OT........................       375.875       346.636     340.608     320.444     315.117     325.200     342.703     347.303     368.558     382.056     400.682     1,648.006     3,489.309
Medicare (570):
  BA........................       490.879       481.521     519.903     550.105     573.252     618.945     637.938     657.067     711.486     758.271     809.106     2,743.726     6,317.594
  OT........................       490.687       481.816     520.406     550.248     573.333     619.385     638.059     657.111     711.897     758.376     809.201     2,745.188     6,319.832
Income Security (600):
  BA........................       592.287       501.664     487.498     457.308     431.150     436.659     436.985     441.467     457.183     468.308     480.687     2,314.278     4,598.908
  OT........................       603.073       501.006     487.248     456.072     429.143     438.896     434.795     434.302     454.448     465.565     477.942     2,312.364     4,579.416
Social Security (650):
  BA........................       735.080       769.060     807.668     850.744     897.641     948.701   1,006.098   1,068.714   1,135.334   1,206.195   1,278.208     4,273.814     9,968.364
  OT........................       732.595       766.217     804.387     847.118     893.490     944.153   1,000.980   1,063.315   1,129.525   1,199.780   1,271.743     4,255.365     9,920.707
  On-budget:
    BA......................       106.523        54.439      29.096      32.701      36.261      40.171      44.263      48.717      53.508      58.552      64.053       192.668       461.761
    OT......................       106.569        54.624      29.256      32.776      36.311      40.171      44.263      48.717      53.508      58.552      64.053       193.138       462.231
  Off-budget:
    BA......................       628.557       714.621     778.572     818.043     861.380     908.530     961.835   1,019.997   1,081.826   1,147.643   1,214.155     4,081.146     9,506.603
    OT......................       626.026       711.593     775.131     814.342     857.179     903.982     956.717   1,014.598   1,076.017   1,141.228   1,207.690     4,062.227     9,458.476
Veterans Benefits and
 Services (700):
  BA........................       129.331       128.339     130.024     134.143     138.167     147.410     146.323     145.412     155.091     159.680     164.381       678.083     1,448.970
  OT........................       128.435       127.140     130.025     134.055     137.851     146.868     145.704     144.751     154.407     158.979     163.622       675.939     1,443.401
Administration of Justice
 (750):
  BA........................        46.813        56.946      45.326      45.093      44.928      47.009      45.731      46.699      47.768      50.848      52.863       239.302       483.212
  OT........................        55.166        53.931      50.482      48.664      47.337      48.519      46.650      46.957      47.649      50.415      52.407       248.933       493.010
General Government (800):
  BA........................        26.337        22.762      22.185      22.232      22.183      22.217      22.453      22.979      23.559      23.915      24.356       111.579       228.841
  OT........................        27.003        27.205      23.460      22.619      22.021      21.643      21.718      22.016      22.295      22.606      23.024       116.947       228.606
Net Interest (900):
  BA........................       212.303       255.855     319.093     390.792     456.768     521.312     578.424     627.205     667.268     706.056     734.784     1,943.820     5,257.556
  OT........................       212.303       255.855     319.093     390.792     456.768     521.312     578.424     627.205     667.268     706.056     734.784     1,943.820     5,257.556
  On-budget:
    BA......................       329.803       372.558     435.109     508.435     578.063     648.083     712.300     769.605     818.115     864.371     899.690     2,542.248     6,606.329
    OT......................       329.803       372.558     435.109     508.435     578.063     648.083     712.300     769.605     818.115     864.371     899.690     2,542.248     6,606.329
  Off-budget:
    BA......................      -117.500      -116.702    -116.016    -117.644    -121.295    -126.772    -133.875    -142.401    -150.847    -158.316    -164.906      -598.428    -1,348.773
    OT......................      -117.500      -116.702    -116.016    -117.644    -121.295    -126.772    -133.875    -142.401    -150.847    -158.316    -164.906      -598.428    -1,348.773
Allowances (920):
  BA........................  ............        -6.324      -4.515     -10.535     -16.814     -22.920     -28.669     -34.159     -39.693     -45.174     -50.752       -61.109      -259.556
  OT........................  ............        -2.651      -5.674     -11.551     -17.420     -23.486     -28.520     -34.046     -39.575     -45.084     -50.639       -60.783      -258.646
  On-budget:
    BA......................  ............        -6.299      -4.386     -10.247     -16.340     -22.243     -27.786     -33.072     -38.404     -43.684     -49.060       -59.516      -251.522
    OT......................  ............        -2.626      -5.545     -11.263     -16.946     -22.809     -27.637     -32.959     -38.286     -43.594     -48.947       -59.190      -250.612
  Off-budget:
    BA......................  ............        -0.025      -0.129      -0.288      -0.474      -0.677      -0.883      -1.087      -1.289      -1.490      -1.692        -1.593        -8.034
    OT......................  ............        -0.025      -0.129      -0.288      -0.474      -0.677      -0.883      -1.087      -1.289      -1.490      -1.692        -1.593        -8.034
Undistributed Offsetting
 Receipts (950):
  BA........................       -86.894       -99.723     -97.279     -99.233    -102.254    -104.367    -110.468    -117.124    -122.853    -127.757    -133.309      -502.856    -1,114.367
  OT........................       -86.894       -99.723     -97.279     -99.233    -102.254    -104.367    -110.468    -117.124    -122.853    -127.757    -133.309      -502.856    -1,114.367
  On-budget:
    BA......................       -71.643       -84.517     -81.449     -82.695     -84.857     -85.946     -91.248     -97.099    -101.718    -105.645    -110.174      -419.464      -925.348
    OT......................       -71.643       -84.517     -81.449     -82.695     -84.857     -85.946     -91.248     -97.099    -101.718    -105.645    -110.174      -419.464      -925.348
  Off-budget:
    BA......................       -15.251       -15.206     -15.830     -16.538     -17.397     -18.421     -19.220     -20.025     -21.135     -22.112     -23.135       -83.392      -189.019
    OT......................       -15.251       -15.206     -15.830     -16.538     -17.397     -18.421     -19.220     -20.025     -21.135     -22.112     -23.135       -83.392      -189.019
Global War on Terrorism
 (970):
  BA........................       159.423       126.544      50.000      50.000      50.000      50.000      50.000      50.000      50.000      50.000      50.000       326.544       576.544
  OT........................        75.984       117.835      92.661      64.878      54.401      50.929      50.147      49.851      49.784      49.769      49.769       380.704       630.024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                    Enforcing the Budget Resolution

                              ----------                              


    The budget resolution is more than a planning document. The 
allocations of spending authority and the aggregate levels of 
both spending authority and revenues are binding on the 
Congress when it considers subsequent spending and tax 
legislation. Legislation breaching the levels set forth in the 
budget resolution is subject to points of order on the floor of 
the House of Representatives.
    Any Member of the House may raise a point of order against 
any tax or spending bill that breeches the allocations and 
aggregate spending levels established in the budget resolution. 
If the point of order is sustained, the House is precluded from 
further consideration of the measure.
    Though these points of order are important for budgetary 
discipline, in the House they may be waived by the resolutions 
structuring rules for debate on legislation and appropriations 
measures that come before it for consideration. The House 
Budget Committee believes it is important to augment these 
congressional enforcement tools with statutory controls. Such 
controls were in place as part of the Budget Enforcement Act of 
1997 [BEA], which expired at the end of 2002.

                     Major Budget Act Requirements

                             SECTION 302(F)

    Section 302 of the Congressional Budget Act prohibits the 
consideration of legislation that exceeds a committee's 
allocation of new budget authority. Section 302(f) applies to 
the budget year and the 10-year total for authorizing 
committees. For appropriations bills, however, it applies only 
to the budget year. The budget year is the first fiscal year to 
which a concurrent resolution on the budget applies. An 
exception is provided for legislation that is offset by tax 
increases above and beyond those required by the budget 
resolution.

                             SECTION 303(A)

    This section prohibits the consideration of spending and 
tax legislation before the House has passed a budget 
resolution. Section 303(a) does not apply to budget authority 
and revenue provisions first effective in a year following the 
first fiscal year to which a budget resolution applies, or to 
appropriation bills after 15 May.

                  SECTIONS 308(B)(2), 311(C), AND 312

    Under sections 308(b)(2), 311(c) and 312 of the Budget Act, 
the Budget Committee advises the presiding officer on the 
application of points of order against specific legislation 
pending before the House. House Budget Committee rules also 
authorize the chairman to poll the committee on recommendations 
to the Rules Committee to enforce the Budget Act by not waiving 
points of order against specific legislation.

                           SECTION 311(A)(1)

    Section 311(a)(1) prohibits the consideration of 
legislation that exceeds the ceiling on budget authority and 
outlays, or reduces revenue below the revenue floor. Section 
311(a)(1) applies to the budget year and 10-year total for 
bills increasing spending or reducing revenue, but only to the 
budget year for appropriations bills. Section 311 does not 
apply to spending bills that do not breach a committee's 302(a) 
allocations.

                             SECTION 401(A)

    This section of the Congressional Budget Act prohibits the 
consideration of legislation providing borrowing authority, new 
credit authority, or contract authority not subject to 
discretionary appropriations.

                           SECTION 401(B)(1)

    This section prohibits the consideration of legislation 
creating new entitlement authority in the year preceding the 
budget year. It does not apply to trust funds primarily 
financed by earmarked taxes.

 Budget-Related Controls in House Resolution 5, the Rules of the House 
                   of Representatives--112th Congress

                         CLAUSE 4 OF RULE XXIX

    This new clause specifies that the Chair of the Committee 
on the Budget is responsible for providing authoritative 
guidance concerning the impact of a legislative propositions 
related to the levels of new budget authority, outlays, direct 
spending, and new entitlement authority.

                          CLAUSE 7 OF RULE XXI

    This clause prohibits the consideration of a concurrent 
resolution on the budget containing reconciliation directives 
(section 310 of the Congressional Budget Act of 1974) that 
would cause a net increase in direct spending.

                         CLAUSE 10 OR RULE XXI

    House Res. 5 replaced the previous ``pay-as-you-go'' (pay-
go) rule with a ``cut-as-you-go'' procedure that prevents net 
increases in spending. Cut-as-you-go prevents spending 
increases disguised by revenue increases and prohibits the 
consideration of legislation that increases mandatory spending 
over 5 years or 10 years, requiring spending increases to be 
offset by spending reductions rather than revenue increases.

                         SECTION 3 OF H. RES. 5

    H. Res. 5 adopts the rules from the 111th Congress and 
incorporates additional provisions related to the budget 
process. This section requires that each general appropriations 
bill contain a ``spending reduction'' account, or ``lockbox,'' 
the contents of which is a recitation of the amount by which, 
through the amendment process, the House has reduced spending 
in other portions of the bill and indicated that such savings 
should be counted toward spending reduction. It provides that 
any other amendment that propose to increase spending must 
include an offset of an equal or greater value.
             Accounts Identified for Advance Appropriations

                              ----------                              


           ACCOUNTS IDENTIFIED FOR ADVANCE APPROPRIATIONS FOR
          FISCAL YEAR 2013 (SUBJECT TO $28.852 BILLION LIMIT)

Financial Services and General Government
Payment to Postal Service
Labor, HHS, and Education
Employment and Training Administration
Office of Job Corps
Education for the Disadvantaged
School Improvement Programs
Special Education
Career, Technical and Adult Education
Transportation, Housing and Urban Development
Tenant-based Rental Assistance
Project-based Rental Assistance

              ADVANCE APPROPRIATIONS FOR FISCAL YEAR 2013
                  (SEPARATE LIMIT OF $52.541 BILLION)

Military Construction, Veterans Affairs
VA Medical Services
VA Medical Support and Compliance
VA Medical facilities
                         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, ordered to include the total number of votes cast 
for and against on 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 roll call votes taken in the House Budget Committee on 
the Concurrent Resolution on the Budget for Fiscal Year 2012.
    On April 6, 2011 the Committee met in open session, a 
quorum being present.
    Mr. Garrett asked unanimous consent that the Chairman 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 budget aggregates, function levels, and 
other appropriate matter; that the aggregates, function totals, 
and other appropriate matter be open for amendment; and that 
amendments be considered as read.
    There was no objection to the unanimous consent requests.
    The committee adopted and ordered reported the Concurrent 
Resolution on the Budget for Fiscal Year 2012. The following 
votes were taken by the committee:
    1. An amendment offered by Representatives Yarmuth, Tonko, 
McCollum, Castor, and Honda to increase the revenues and 
decrease deficits by increasing taxes on individuals with 
incomes greater than $1,000,000.
    The amendment would increase revenues by the following 
amounts: $15 billion for fiscal year 2013, $20 billion for 
fiscal year 2014, $30 billion for fiscal year 2015, $35 billion 
for fiscal year 2016, $40 billion for fiscal year 2017, $45 
billion for fiscal year 2018, $50 billion for fiscal year 2019, 
$55 billion for fiscal year 2020, $60 billion for fiscal year 
2021.
    Revenues resulting from this provision would reduce the 
deficit.
    The amendment was not agreed to by a roll call vote of 14 
ayes and 23 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              X                KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER               X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    2. An amendment offered by Representatives Schwartz, Moore, 
Castor, Shuler, and Wasserman Schultz to increase budget 
authority and outlays for Function 550 to reflect increased 
assistance to senior citizens' nursing home care offset by 
increased revenue including eliminating tax deductions for 
domestic oil production and increased taxes on individuals 
earning over $250,000 annually.
    The budget authority and outlays for Function 550 would 
increase by: $1 billion for fiscal year 2012, $13 billion for 
fiscal year 2013, $45 billion for fiscal year 2014, $63 billion 
for fiscal year 2015, $73 billion for fiscal year 2016, $82 
billion for fiscal year 2017, $102 billion for fiscal year 
2018, $112 billion for fiscal year 2019, $131 billion for 
fiscal year 2020, $150 billion for fiscal year 2021.
    The amendment was not agreed to by a roll call vote of 14 
ayes and 21 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              X                KAPTUR
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER       X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL
 (GA)
------------------------------------------------------------------------

    3. An amendment offered by Representative T. Ryan, 
McCollum, and Castor expressing a sense of the House to prevent 
tax increases on individuals earning less than $200,000 and 
couples earning less than $250,000.
    The amendment was not agreed to by a roll call vote of 15 
ayes and 22 noes.

                           ROLLCALL VOTE NO. 3
------------------------------------------------------------------------
 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              X                KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER       X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    4. An amendment offered by Representatives Tonko, Pascrell, 
Moore, Castor, and Schwartz expressing a sense of the House 
supporting funding for seniors, military service members and 
veterans' health care and rejecting a policy to replace 
Medicare with premium support.
    The amendment was not agreed to by a roll call vote of 16 
ayes and 22 noes.

                           ROLLCALL VOTE NO. 4
------------------------------------------------------------------------
 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              X                KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER       X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    5. An amendment offered by Representatives Doggett, Castor, 
Shuler, and T. Ryan to increase funding for Function 500 to 
expand access to higher education; Function 400 to increase 
infrastructure funding; and Function 250 to expand scientific 
research and development, and dedicate the savings to deficit 
reduction. The funding is offset by increased revenue including 
eliminating tax deductions for U.S. businesses with 
international operations.
    The amendment would increase revenue levels in the 
following amounts: $6 billion for fiscal year 2012, $11 billion 
for fiscal year 2013, $11.5 billion for fiscal year 2014, $12 
billion for fiscal year 2015, $12 billion for fiscal year 2016, 
$13 billion for fiscal year 2017, $14 billion for fiscal year 
2018, $14 billion for fiscal year 2019, $15.5 billion for 
fiscal year 2020, $16 billion for fiscal year 2021.
    The amendment would increase budget authority for Function 
500 by $50 billion for fiscal year 2012 and increase outlays in 
the following amounts: $27 billion for fiscal year 2012, $14.25 
billion for fiscal year 2013, $4.95 billion for fiscal year 
2014, $1.85 billion for fiscal year 2015, $1.25 billion for 
fiscal year 2016.
    The amendment would increase budget authority for Function 
400 by $13 billion for fiscal year 2012 and increase outlays in 
the following amounts: $7.020 billion for fiscal year 2012, 
$3.705 billion for fiscal year 2013, $1.287 billion for fiscal 
year 2014, $0.481 billion for fiscal year 2015, $0.325 billion 
for fiscal year 2016.
    The amendment would increase budget authority for Function 
250 by $12 billion for fiscal year 2012 and increase outlays in 
the following amounts: $6.480 billion for fiscal year 2012, 
$3.420 billion for fiscal year 2013, $1.188 billion for fiscal 
year 2014, $0.444 billion for fiscal year 2015, $0.300 billion 
for fiscal year 2016.
    Revenues resulting from this provision, above the amounts 
needed to offset the outlay changes outlined above, would 
reduce the deficit.
    The amendment was not agreed to by a roll call vote of 16 
ayes and 22 noes.

                           ROLLCALL VOTE NO. 5
------------------------------------------------------------------------
 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              X                KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER       X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    6. An amendment offered by Representatives Honda, McCollum, 
Pascrell, Moore, Castor, Shuler, and Tonko to increase budget 
authority and outlays for Function 500 to reflect increased 
funding for elementary, secondary, and Head Start education 
programs. The funding is offset by increased revenue including 
eliminating tax deductions for domestic oil production and U.S. 
businesses with international operations, as well as raising 
taxes on individuals with annual income greater than 
$1,000,000.
    The aggregate level of budget authority in Function 500 
would increase by $4.329 billion for fiscal year 2012 and 
outlays would increase by the following amounts: $2.338 billion 
for fiscal year 2012, $1.234 billion for fiscal year 2013, 
$0.429 billion for fiscal year 2014, $0.160 billion for fiscal 
year 2015, $0.108 billion for fiscal year 2016.
    The amendment was not agreed to by a roll call vote of 16 
ayes and 22 noes.

                           ROLLCALL VOTE NO. 6
------------------------------------------------------------------------
 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              X                KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER       X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    7. An amendment offered by Representatives Wasserman 
Schultz, McCollum, Yarmuth, Castor, Schwartz, Shuler, and Honda 
to increase funding for Function 550 to reflect investment in 
the National Institutes of Health. The funding is offset by 
increased revenue including eliminating tax deductions for 
domestic oil production and U.S. businesses with international 
operations, as well as raising taxes on individuals with annual 
income greater than $1,000,000.
    The amendment would increase budget authority for function 
550 by $1.629 in fiscal year 2012 and outlays in the following 
amounts: $0.880 billion for fiscal year 2012, $0.464 billion 
for fiscal year 2013, $0.161 billion for fiscal year 2014, 
$0.060 billion for fiscal year 2015, $0.041 billion for fiscal 
year 2016.
    The amendment was not agreed to by a roll call vote of 15 
ayes and 22 noes.

                           ROLLCALL VOTE NO. 7
------------------------------------------------------------------------
 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              X                KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                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        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER       X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    8. An amendment offered by Representatives McCollum, 
Pascrell, Moore, Castor, and Honda to increase budget authority 
and outlays in Function 550 to reflect increased funding for 
food safety. The funding is offset by increased revenue 
including eliminating tax deductions for domestic oil 
production and U.S. businesses with international operations, 
as well as raising taxes on individuals with annual income 
greater than $1,000,000.
    The amendment would increase budget authority for Function 
550 by $0.628 in fiscal year 2012 and outlays in the following 
amounts: $0.339 billion for fiscal year 2012, $0.179 billion 
for fiscal year 2013, $0.062 billion for fiscal year 2014, 
$0.023 billion for fiscal year 2015, $0.016 billion for fiscal 
year 2016.
    The amendment was not agreed to by a roll call vote of 13 
ayes and 23 noes.

                           ROLLCALL VOTE NO. 8
------------------------------------------------------------------------
 Name &                      Answer    Name &                    Answer
 State     Aye       No     Present     State     Aye     No     Present
------------------------------------------------------------------------
RYAN                 X                VAN
 (WI)                                  HOLLEN
 (Chair                                (MD)
 man)                                  (Rankin
                                       g)
------------------------------------------------------------------------
GARRETT              X                SCHWARTZ     X
 (NJ)                                  (PA)
------------------------------------------------------------------------
SIMPSON              X                KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER               X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    9. An amendment offered by Representatives Pascrell, Tonko, 
McCollum, Castor, Schwartz, Shuler, and Honda to increase 
budget authority and outlays for Functions 750 and 450 to 
reflect increased funding for police officers and firefighters. 
The funding is offset by increased revenue including 
eliminating tax deductions for domestic oil production and U.S. 
businesses with international operations, as well as raising 
taxes on individuals with annual income greater than 
$1,000,000.
    The amendment would increase budget authority for Function 
750 by $0.298 in fiscal year 2012 and outlays in the following 
amounts: $0.011 billion for fiscal year 2012, $0.068 billion 
for fiscal year 2013, $0.077 billion for fiscal year 2014, 
$0.063 billion for fiscal year 2015, $0.046 billion for fiscal 
year 2016, $0.029 billion for fiscal year 2017.
    The amendment would increase budget authority for Function 
450 by $0.810 in fiscal year 2012 and outlays in the following 
amounts: $0.029 billion for fiscal year 2012, $0.185 billion 
for fiscal year 2013, $0.209 billion for fiscal year 2014, 
$0.171 billion for fiscal year 2015, $0.125 billion for fiscal 
year 2016, $0.078 billion for fiscal year 2017.
    The amendment was not agreed to by a roll call vote of 15 
ayes and 22 noes.

                           ROLLCALL VOTE NO. 9
------------------------------------------------------------------------
 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              X                KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER       X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    10. An amendment offered by Representatives Bass, McCollum, 
Castor, and Honda to increase budget authority and outlays for 
Functions 600 and 700 to reflect increased funding for 
veterans' healthcare and housing. The funding is offset by 
increased revenue including eliminating tax deductions for 
domestic oil production and U.S. businesses with international 
operations, as well as raising taxes on individuals with annual 
income greater than $1,000,000.
    The amendment would increase budget authority for Function 
600 in the amount of $0.075 in fiscal year 2012 and each fiscal 
year thereafter through fiscal year 2021 in the same amount. 
The amendment would increase outlays for Function 600 in the 
amount of $0.067 in fiscal year 2012, $0.075 for fiscal year 
2013 and for each fiscal year thereafter through fiscal year 
2021 in the same amount.
    The amendment would increase budget authority for Function 
700 in the following amounts: $0.726 billion for fiscal year 
2013, $1.214 billion for fiscal year 2014, $1.676 billion for 
fiscal year 2015, $2.072 billion for fiscal year 2016, $2.294 
billion for fiscal year 2017, $2.418 billion for fiscal year 
2018, $2.592 billion for fiscal year 2019, $2.772 billion for 
fiscal year 2020, $3.083 billion for fiscal year 2021.
    The amendment would increase outlays for Function 700 in 
the following amounts: $0.958 billion for fiscal year 2013, 
$1.259 billion for fiscal year 2014, $1.615 billion for fiscal 
year 2015, $1.972 billion for fiscal year 2016, $2.181 billion 
for fiscal year 2017, $2.341 billion for fiscal year 2018, 
$2.512 billion for fiscal year 2019, $2.721 billion for fiscal 
year 2020, $3.009 billion for fiscal year 2021.
    The amendment was not agreed to by a roll call vote of 15 
ayes and 22 noes.

                          ROLLCALL VOTE NO. 10
------------------------------------------------------------------------
 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              X                KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER       X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    11. An amendment offered by Representative Van Hollen, on 
behalf of the Democratic Members of the Committee, expressing 
the sense of the House to support the Affordable Care Act and 
``reject cuts to Medicare benefits for seniors.''
    The amendment was not agreed to by a roll call vote of 16 
ayes and 21 noes.

                          ROLLCALL VOTE NO. 11
------------------------------------------------------------------------
 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              X                KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                                  McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER       X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    12. An amendment offered by Representatives Castor, 
Pascrell, Tonko, Moore, Schwartz, Honda, Wasserman Schultz to 
add to the resolution a section expressing the sense of the 
House regarding the risks of Social Security privatization.
    The amendment was not agreed to by a roll call vote of 16 
ayes and 20 noes.

                          ROLLCALL VOTE NO. 12
------------------------------------------------------------------------
 Name &                      Answer    Name &                    Answer
 State     Aye       No     Present     State     Aye     No     Present
------------------------------------------------------------------------
RYAN                 X                VAN          X
 (WI)                                  HOLLEN
 (Chair                                (MD)
 man)                                  (Rankin
                                       g)
------------------------------------------------------------------------
GARRETT                               SCHWARTZ     X
 (NJ)                                  (PA)
------------------------------------------------------------------------
SIMPSON              X                KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                                  McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER       X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    13. An amendment offered by Representatives Blumenauer, 
McCollum, Castor, and Honda to increase budget authority and 
outlays for Function 400 to reflect funding for the New Starts 
Program offset with reduced tax subsidies for alcohol-based 
fuel.
    The amendment would increase budget authority for Function 
400 by $1 billion in fiscal year 2012 and increase outlays in 
the following amounts: $0.54 billion for fiscal year 2012, 
$0.285 billion for fiscal year 2013, $0.099 billion for fiscal 
year 2014, $0.037 billion for fiscal year 2015, $0.025 billion 
for fiscal year 2016.
    The amendment was not agreed to by a roll call vote of 15 
ayes and 22 noes.

                          ROLLCALL VOTE NO. 13
------------------------------------------------------------------------
 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              X                KAPTUR
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER       X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    14. An amendment offered by Representatives Moore, 
Schwartz, Honda, and Castor to increase budget authority and 
outlays for Function 370 to reflect funding for new and current 
Federalagencies tasked with consumer protection as a result of 
the Dodd Frank Wall Street Reform and Consumer Protection Act. 
The funding is offset by increased revenue including 
eliminating tax deductions for domestic oil production and U.S. 
businesses with international operations, as well as raising 
taxes on individuals with annual income greater than 
$1,000,000.
    The amendment would increase budget authority for Function 
370 by $0.112 billion in fiscal year 2012 and increase outlays 
in the following amounts: $0.060 billion for fiscal year 2012, 
$0.032 billion for fiscal year 2013, $0.011 billion for fiscal 
year 2014, $0.004 billion for fiscal year 2015, $0.003 billion 
for fiscal year 2016.
    The amendment was not agreed to by a roll call vote of 15 
ayes and 23 noes.

                          ROLLCALL VOTE NO. 14
------------------------------------------------------------------------
 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              X                KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER               X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    15. An amendment offered by Representatives Kaptur, 
Doggett, and Honda to increase budget authority and outlays for 
Function 750 to reflect funding for the Federal Bureau of 
Investigation to investigate financial crimes. The funding is 
offset by increased revenue including eliminating tax 
deductions for domestic oil production and U.S. businesses with 
international operations, as well as raising taxes on 
individuals with annual income greater than $1,000,000.
    The amendment would increase budget authority for Function 
750 by $0.250 billion in fiscal year 2012 and increase outlays 
in the following amounts: $0.2 billion for fiscal year 2012, 
$0.033 billion for fiscal year 2013, $0.012 billion for fiscal 
year 2014, $0.005 billion for fiscal year 2015.
    The amendment was not agreed to by a roll call vote of 15 
ayes and 23 noes.

                          ROLLCALL VOTE NO. 15
------------------------------------------------------------------------
 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              X                KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER               X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    16. An amendment offered by Representative Shuler 
expressing the sense of the House calling on budget resolutions 
to achieve deficit reductions through a combination of two-
thirds of spending cuts and one-third of tax reform.
    The amendment was not agreed to by a roll call vote of 2 
ayes, 23 noes, and 13 present.

                          ROLLCALL VOTE NO. 16
------------------------------------------------------------------------
 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              X                KAPTUR                        X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT                       X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU                      X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM                      X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH                       X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL                      X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA                         X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA                      X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE                X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR                        X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER       X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO                         X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS                          X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    17. An amendment offered by Representative Van Hollen on 
behalf of the Democratic members of the Committee creating a 
point of order against budget resolutions without a 
``Congressional Budget Office certification'' that job losses 
will not result.
    The amendment was not agreed to by a roll call vote of 16 
ayes and 22 noes.

                          ROLLCALL VOTE NO. 17
------------------------------------------------------------------------
 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              X                KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL              X                DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE                X                PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT              X                HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET              X                RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA              X                WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK                X                CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE               X                SHULER       X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES               X                TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE              X                BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA              X                ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH                X     .........
 (MI)
------------------------------------------------------------------------
ROKITA               X     .........
 (IN)
------------------------------------------------------------------------
GUINTA               X     .........
 (NH)
------------------------------------------------------------------------
WOODALL              X
 (GA)
------------------------------------------------------------------------

    18. An amendment offered by Representative Van Hollen 
expressing the sense of the House to include consideration of 
national security spending for the purpose of reducing the 
deficit.
    The amendment was agreed to by a roll call vote of 33 ayes 
and 5 noes.

                          ROLLCALL VOTE NO. 18
------------------------------------------------------------------------
 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     X                         KAPTUR       X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL     X                         DOGGETT      X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT              X                BLUMENAU     X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN                 X                McCOLLUM     X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE                 X                YARMUTH      X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE       X                         PASCRELL     X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT     X                         HONDA        X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET     X                         RYAN         X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA     X                         WASSERMA     X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR              X                MOORE        X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK       X                         CASTOR       X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE      X                         SHULER       X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES      X                         TONKO        X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE     X                         BASS         X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA     X                         ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG                X                ........
 (IN)
------------------------------------------------------------------------
AMASH       X              .........
 (MI)
------------------------------------------------------------------------
ROKITA      X              .........
 (IN)
------------------------------------------------------------------------
GUINTA      X              .........
 (NH)
------------------------------------------------------------------------
WOODALL     X
 (GA)
------------------------------------------------------------------------

    19. An amendment offered by Representative Moore and 
Chairman Ryan expressing the sense of the House regarding the 
importance of child support enforcement and ensuring 100 
percent of the payments submitted go to the children rather 
than to administrative costs.
    The amendment was agreed to by a voice vote.
    20. An amendment offered by Representative Bass to increase 
budget authority and outlays for Function 700 to match the 
President's budget for funding for veterans and to change 
budget authority and outlays for Function 920.
    The amendment would increase budget authority for Function 
700 in the following amounts: $0.726 billion for fiscal year 
2013, $1.214 billion for fiscal year 2014, $1.676 billion for 
fiscal year 2015, $2.072 billion for fiscal year 2016, $2.294 
billion for fiscal year 2017, $2.418 billion for fiscal year 
2018, $2.592 billion for fiscal year 2019, $2.772 billion for 
fiscal year 2020, $3.083 billion for fiscal year 2021.
    The amendment would increase outlays for Function 700 in 
the following amounts: $0.958 billion for fiscal year 2013, 
$1.259 billion for fiscal year 2014, $1.615 billion for fiscal 
year 2015, $1.972 billion for fiscal year 2016, $2.181 billion 
for fiscal year 2017, $2.341 billion for fiscal year 2018, 
$2.512 billion for fiscal year 2019, $2.721 billion for fiscal 
year 2020, $3.009 billion for fiscal year 2021.
    The amendment would decrease budget authority for Function 
920 in the following amounts: -$0.726 billion for fiscal year 
2013, -$1.214 billion for fiscal year 2014, -$1.676 billion for 
fiscal year 2015, -$2.072 billion for fiscal year 2016, -$2.294 
billion for fiscal year 2017, -$2.418 billion for fiscal year 
2018, -$2.592 billion for fiscal year 2019, -$2.772 billion for 
fiscal year 2020, -$3.083 billion for fiscal year 2021.
    The amendment would decrease outlays for Function 920 in 
the following amounts: -$0.958 billion for fiscal year 2013, 
-$1.259 billion for fiscal year 2014, -$1.615 billion for 
fiscal year 2015, -$1.972 billion for fiscal year 2016, -$2.181 
billion for fiscal year 2017, -$2.341 billion for fiscal year 
2018, -$2.512 billion for fiscal year 2019, -$2.721 billion for 
fiscal year 2020, -$3.009 billion for fiscal year 2021.
    The amendment was agreed to by a voice vote.
    21. An amendment offered by Chairman Ryan to make technical 
and conforming amendments to the Chairman's Mark.
    The amendment was agreed to by a voice vote.
    22. Mr. Garrett made a motion that the Committee adopt the 
aggregates, function totals, and other appropriate matter, with 
any amendments.
    The motion offered by Mr. Garrett was agreed to by voice 
vote.
    Chairman Ryan called up the Concurrent Resolution on the 
Budget for Fiscal year 2012 incorporating the aggregates, 
function totals, and other appropriate matter as previously 
agreed.
    23. Mr. Garrett made a motion that the Committee order the 
Concurrent Resolution reported with a favorable recommendation 
and that the Concurrent Resolution do pass.
    The motion offered by Mr. Garrett was agreed to by a roll 
call vote of 22 ayes and 16 noes.

                          ROLLCALL VOTE NO. 19
------------------------------------------------------------------------
 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     X                         KAPTUR               X
 (ID)                                  (OH)
------------------------------------------------------------------------
CAMPBEL     X                         DOGGETT              X
 L (CA)                                (TX)
------------------------------------------------------------------------
CALVERT     X                         BLUMENAU             X
 (CA)                                  ER (OR)
------------------------------------------------------------------------
AKIN        X                         McCOLLUM             X
 (MO)                                  (MN)
------------------------------------------------------------------------
COLE        X                         YARMUTH              X
 (OK)                                  (KY)
------------------------------------------------------------------------
PRICE       X                         PASCRELL             X
 (GA)                                  (NJ)
------------------------------------------------------------------------
McCLINT     X                         HONDA                X
 OCK                                   (CA)
 (CA)
------------------------------------------------------------------------
CHAFFET     X                         RYAN                 X
 Z (UT)                                (OH)
------------------------------------------------------------------------
STUTZMA     X                         WASSERMA             X
 N (IN)                                N
                                       SCHULTZ
                                       (FL)
------------------------------------------------------------------------
LANKFOR     X                         MOORE                X
 D (OK)                                (WI)
------------------------------------------------------------------------
BLACK       X                         CASTOR               X
 (TN)                                  (FL)
------------------------------------------------------------------------
RIBBLE      X                         SHULER               X
 (WI)                                  (NC)
------------------------------------------------------------------------
FLORES      X                         TONKO                X
 (TX)                                  (NY)
------------------------------------------------------------------------
MULVANE     X                         BASS                 X
 Y (SC)                                (CA)
------------------------------------------------------------------------
HUELSKA     X                         ........
 MP
 (KS)
------------------------------------------------------------------------
YOUNG       X                         ........
 (IN)
------------------------------------------------------------------------
AMASH       X                         ........
 (MI)
------------------------------------------------------------------------
ROKITA      X                         ........
 (IN)
------------------------------------------------------------------------
GUINTA      X                         ........
 (NH)
------------------------------------------------------------------------
WOODALL     X
 (GA)
------------------------------------------------------------------------

    Mr.Garrett asked for unanimous consent that the Chairman be 
authorized to make a motion to go to conference pursuant to 
clause 1 of House Rule XXII, the staff be authorized to make 
any necessary technical and conforming corrections in the 
resolution, and any committee amendments, and calculate any 
remaining elements required in the resolution, prior to filing 
the resolution.
    There was no objection to the unanimous consent requests.
       Other Matters to be Discussed Under the Rules of the House

                              ----------                              


     Committee on the Budget Oversight Findings and Recommendations

    Clause 3(c)(1) of rule XIII requires each committee report 
to contain oversight findings and recommendations pursuant to 
clause 2(b)(1) of rule X. The Budget Committee has no findings 
to report at the present time.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives provides that committee reports shall contain 
the statement required by Section 308(a)(1) of the 
Congressional Budget Act of 1974. This report does not contain 
such a statement because as a concurrent resolution setting 
forth a blueprint for the Congressional budget, the budget 
resolution does not provide new budget authority or new 
entitlement authority or change revenues.

                General Performance Goals and Objectives

    Clause 3(c)(4) of rule XIII requires each committee report 
to contain a statement of general performance goals and 
objectives, including outcome-related goals and objectives, for 
which the measure authorizes funding. The Budget Committee has 
no such goals and objectives to report at this time.

                       Views of Committee Members

    Clause 2(l) of rule XI requires each committee to afford a 
2-day opportunity for members of the committee to file 
additional, minority, or dissenting views and to include the 
views in its report. The following views were submitted:

                             Minority Views

                              ----------                              


                             The Challenge

    We consider this long-term budget plan at an especially 
consequential moment for our country. As a result of the 
extraordinary actions taken over the last few years, America 
avoided a second Great Depression and is slowly emerging from 
the ravages of a financial meltdown and near economic collapse. 
While the economy is improving, millions of Americans remain 
out of work through no fault of their own and thousands more 
are facing home foreclosures because they have lost their jobs. 
Our top priority must be to support a robust recovery and put 
America back to work. At the same time, we must act now to lay 
the foundation for sustained long-term economic growth. Even 
before the economic meltdown, real wages for most Americans had 
been frozen for over a decade as families faced rising costs. 
Middle class families have been squeezed. We must implement a 
plan to support small businesses, grow the economy, and ensure 
shared prosperity. That will require making strategic national 
investments to out-educate, out-innovate, and out-compete the 
rest of the world. It will also require developing and 
implementing a disciplined plan to steadily and predictably 
reduce our deficits and debt so that we establish a strong 
foundation for long-term growth.

                               Our Vision

    We all love America. We all believe America is a unique and 
special place, and believe in American exceptionalism.
    The question is: How do we keep America strong, dynamic, 
and exceptional? On that we clearly have different views from 
the Republican majority and would make different choices.
    We believe our strength springs not only from the 
undisputed benefits of a free people pursuing their ambitions 
and dreams, but also from sometimes harnessing those talents 
for important national purposes. We believe that America's 
greatness has resulted not only from a collection of 
individuals acting alone, but from our capacity to work 
together for the common good. We do not see the government as 
the enemy, but as the imperfect instrument by which we can 
accomplish together as a people what no individual or 
corporation can do alone.

                               The Choice

    We all agree that we must act now to put in place a plan to 
reduce our deficits in a steady, responsible, and predictable 
manner. The question is how we do that. As the Bipartisan 
Fiscal Commission has indicated, any responsible effort to 
reduce the deficit requires a balanced approach that addresses 
both spending and revenue. This Republican plan fails that 
simple test. Erskine Bowles and Alan Simpson, the Co-Chairs of 
the President's Bipartisan Fiscal Commission, stated that the 
Republican Budget ``falls short of the balanced, comprehensive 
approach needed to achieve the broad bipartisan agreement 
necessary to enact a responsible plan.''
    Indeed, the Republican Budget is the same tired formula of 
extending tax breaks to the rich and powerful at the expense of 
the rest of America--except this time on steroids and dressed 
up with nice-sounding sweet talk of ``reform'' that masks the 
damage it will do. To govern is to choose, and the choices made 
in the Republican Budget are wrong for America. It is not 
courageous to protect tax giveaways to big oil companies and 
other special interests while slashing investments in our kids' 
education, scientific research, and critical infrastructure. It 
is not bold to provide tax breaks to millionaires while ending 
the Medicare guarantee for seniors and sticking seniors with 
the bill for rising health care costs. It is not visionary to 
reward corporations that ship American jobs overseas while 
terminating affordable health care for tens of millions of 
Americans. It is not brave to give governors a blank check for 
their pet initiatives and a license to cut support for seniors 
in nursing homes, individuals with disabilities, and low income 
kids. And it is not fair to raise taxes on middle-income 
Americans to pay for big additional tax breaks for Wall Street 
executives and the very wealthy. Yet those are the choices made 
in the Republican Budget. Where is the shared sacrifice? We 
have American men and women putting their lives on the line in 
Iraq and Afghanistan while others hide their income in the 
Cayman Islands and Switzerland and refuse to pay their fair 
share to support our nation.
    The Bipartisan Fiscal Commission called upon all Americans 
to pay their fair share. Its budget blueprint calls for the top 
2 percent income earners to pay the same tax rates they paid 
during the booming economy of the Clinton Administration. Their 
plan also generates another $1 trillion in revenue over ten 
years by closing special interest tax loopholes and limiting 
tax expenditures.
    The Fiscal Commission also warned that very deep, immediate 
cuts would threaten the fragile economic recovery and slow job 
growth. They also recognized that America must make strategic 
investments to win in the global marketplace. The Republican 
Budget fails both these tests.
    Make no mistake, significant and sustained spending cuts 
must be part of any balanced plan to reduce the deficit. But 
America became an economic powerhouse in part because of 
targeted strategic national investments made by earlier 
generations--including huge investments in science and 
technology, the interstate highway system, and educational 
opportunities. Now, at the very moment that our global economic 
competitors are copying our successful model, this budget would 
take America back. It is a recipe for national decline.

    Don't Violate Our Commitment to Seniors, Children, and the Most 
                               Vulnerable

    Every member of this Committee knows that rising health 
care costs represent a huge challenge for the federal budget. 
But every member of this Committee should also know what every 
expert has told us--that those rising costs are not unique to 
Medicare or Medicaid. Those costs are endemic to the entire 
health care system. In fact, for 30 years, the per-beneficiary 
spending in Medicare and Medicaid has grown at virtually the 
same rate as those for the overall health system. And over the 
last decade, the per-beneficiary costs in Medicaid grew much 
more slowly that the rest of the health care system. By 
contrast, in the private market for individual coverage, 
premiums more than doubled between the years 2000 and 2008, as 
insurance industry profits quadrupled.
    Those facts make one thing clear--if we are going to slow 
the rising costs in Medicare and Medicaid without rationing 
care, we must slow the rising costs of health care throughout 
the health care system. That is exactly what the Affordable 
Health Care reform bill signed by President Obama about a year 
ago will do when fully implemented.
    The Affordable Care Act will begin to bring down the per 
capita costs of health care throughout the system--including 
Medicare. It includes virtually every cost containment 
provision recommended by health care experts. In her testimony 
before this Committee, Dr. Rivlin has said the Affordable Care 
Act would bend the health care cost curve and that repeal would 
set back efforts to create a more disciplined and effective 
health care system. Yet this Republican Budget will kill many 
of those system-wide reforms that will reduce costs throughout 
the system, including in Medicare.
    Interestingly, this Republican Budget does preserve many of 
the specific Medicare reforms made in the Affordable Care Act, 
including some of the mechanisms to slow the growth of system 
costs and eliminate excessive taxpayer subsidies to managed 
care insurance companies. In fact, the bulk of the Medicare 
savings in this ten-year budget come from the reasonable 
reforms made in the Affordable Care Act. This is especially 
startling because during the last campaign, Democrats faced a 
barrage of campaign attack ads telling seniors that we had 
slashed Medicare.
    What is new in the Republican Budget Plan is the 
termination of the Medicare guarantee for seniors. It doesn't 
reform Medicare; it deforms and dismantles it. It forces 
seniors off of Medicare and into the private insurance market. 
It does nothing to rein in the rising costs of health care, but 
transfers the bill for those rising costs to seniors. Seniors 
will pay more while insurances companies stand to reap a 
bonanza by getting all the Medicare payroll taxes and premiums. 
If your voucher amount is not sufficient to pay for the 
benefits you need, tough luck. If your doctor is not on the 
private plan, too bad. This Republican Plan simply rations 
health care and choice of doctor by income. It is very 
different from the Federal Employees Health Benefit Plan, which 
equally shares the risk of rising medical costs with 
beneficiaries.
    This Republican Budget also rips apart the safety net for 
seniors in nursing homes and assisted living facilities, as 
well as low-income kids and individuals with disabilities who 
rely on Medicaid. There is nothing courageous about targeting 
the most vulnerable in our society. Yet that is the biggest 
area of Republican cuts. ``Block granting'' Medicaid is simply 
code for deep, arbitrary cuts in support to the most vulnerable 
seniors, individuals with disabilities, and low income kids. 
Giving governors so-called ``flexibility'' is just a nice 
sounding way of giving them license to use federal taxpayer 
dollars to use to pay for their pet initiatives without 
oversight and accountability. That is not reform. Medicaid is 
already underfunded. Block granting it and cutting it further 
in the name of reform is like saving a drowning person by 
throwing them an anchor.
    The claim that dismantling the Medicare guarantee and block 
granting Medicaid is necessary to save them is simply 
Orwellian. It reminds us of the twisted statement that ``you 
have to destroy the village in order to save it.''
    Democrats welcome an honest debate about how we can build 
upon the reforms in the Affordable Care Act to strengthen and 
sustain Medicare and Medicaid. But we will vigorously oppose 
any effort to undermine the integrity of these essential 
supports for seniors and vulnerable individuals. You don't have 
to be a history buff to know that Republicans in earlier 
Congresses fought the establishment of Medicare and Social 
Security as ferociously as they are fighting the Affordable 
Care Act today.

                                 Values

    This Republican Budget is the wrong choice for America 
because it does not reflect our values and priorities, which is 
why Democrats intend to offer our own budget next week that 
will stand in stark contrast to this budget's principles. Our 
budget will reduce the deficit and remain true to our values. 
The Republican Budget does not reflect the best of the American 
experience. It recognizes the importance of individual self-
reliance that is part of the American character, but it fails 
to recognize the truth emblazoned on the Great Seal of the 
United States--that out of many, we unite as one behind shared 
values and principles to advance the common good and make 
America strong and exceptional.

                                   Chris Van Hollen.
                                   Kathy Castor.
                                   John Yarmuth.
                                   Paul Tonko.
                                   Tim Ryan.
                                   Bill Pascrell, Jr.
                                   Marcy Kaptur.
                                   Heath Shuler.
                                   Debbie Wasserman Schultz.
                                   Karen Bass.
                                   Lloyd Doggett.
                                   Betty McCollum.
                                   Allyson Y. Schwartz.
                                   Earl Blumenauer.
                                   Gwen Moore.

Additional Views of Mr. Cole, Mr. Akin, Mr. Calvert, Mr. Lankford, and 
                               Mr. Young

    During consideration of the Budget Resolution, Van Hollen 
Amendment #21 was considered and accepted by the majority for 
inclusion in the Budget Resolution. The rationale for its 
inclusion was that the amendment did not oppose what we already 
had accomplished as a Committee by reducing the President's 
Budget and accepting the $178 billion in efficiencies and cuts 
which the President found across the life of the Future Years 
Defense Plan (FYDP) (FY12-FY17).
    Unfortunately, the Democrats requested a recorded vote in 
an attempt to show a divide on the Republican side of the 
aisle. The result was a divided vote, not because we disagree 
with the Chairman, but because we are deeply skeptical of the 
Van Hollen Amendment #21.
    Like the Chairman, we agree that we have accomplished the 
stated intention of the Van Hollen Amendment, putting the 
Defense Budget on the table for real cuts over the life of the 
FYDP. However, we are concerned that this amendment will be 
taken as a sign that the Defense budget should be opened to 
larger, more robust cuts.
    Let us be clear, we are a nation at war. We have hundreds 
of thousands of forces employed in fighting or supporting the 
fight in Afghanistan and Iraq. And now the President has 
committed this country to a conflict in Libya. This is not the 
time for further cuts which would fundamentally destabilize and 
increase the risk to our forces in the field.
    Let there be no mistake. Our current FY11 budget is already 
causing serious discontinuities in the ability of DOD to budget 
for the wars and our military families. Currently, because of 
the Democrats' absolute inability to pass a Budget Resolution 
for FY11, we are stuck in a situation where the Department of 
the Navy cannot fund the planned second Virginia-class SSN, a 
DDG-51 destroyer, and a Mobile Landing Platform. The Marine 
Corps will lose one-third of its procurement budget, which will 
have real operational consequences for our deployed Marines. 
Our Army has had to issue partial stop-work orders on the 
Stryker Mobile Gun system, abandon planned HMMWV 
recapitalization, and delay procurement of critically needed 
CH-47s. The Air Force will have to reduce planned acquisition 
of operationally critical MQ-9 Reaper UAVs, and will have to 
delay the C-130 Avionics Modernization Program causing 
significant cost increases.
    These are only some of the consequences of the current 
budget situation. We must also not forget the military 
families. As a result of our current budget situation, the 
services are being forced to redirect dollars to the Operations 
& Maintenance Accounts, adversely impacting the bases at home. 
We already ask too much of our military families, but now they 
are being asked to live with even less while their fathers and 
mothers are deployed in combat.
    Additionally, we believe that the consequences of the Van 
Hollen Amendment are to fundamentally open DOD for even larger 
cuts, adversely impacting the size and structure of our forces.
    Admiral Mullen, Chairman of the Joint Chiefs of Staff, has 
stated that our deficit is a primary national security concern. 
We agree. But to cut our defense budget without due 
deliberation during this time of war is irresponsible and does 
not conform with our constitutional responsibilities.
    To engage in further cuts to the department will require a 
serious discussion about real, substantive force structure 
cuts. We support having that debate, but it is a debate that 
cannot be surreptitiously rolled into a budget resolution. It 
is one which must be brought to the floor of the House and 
considered by all of our members as a stand-alone issue, or in 
the context of the National Defense Authorization Act or 
related appropriations. We fully agree that inefficiencies 
exist in Pentagon spending and we must incentivize the DOD to 
root out such inefficiencies. Rather than simply stating that 
DOD should be ``on the table'' for cuts, Congress should 
conduct its constitutional responsibility of oversight and 
identify areas in which waste exists.
    We respectfully submit to the American people, Congress, 
and our party Conference that we have responsibly achieved the 
proposed DOD efficiencies within the budget resolution and it 
merits no further amendment. Any further action should be taken 
by the Authorizing and Appropriating Committees.

                                   Tom Cole.
                                   Ken Calvert.
                                   Todd Akin.
                                   James Lankford.
                                   Todd Young.
                                 
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