    [Weekly Compilation of Presidential Documents Volume 29, Number 31 (Monday, August 9, 1993)]
    [Pages 1570-1573]
    [Online from the Government Publishing Office, www.gpo.gov]

    <R04>
    Executive Order 12857--Budget Control

     August 4, 1993

        By the authority vested in me as President of the United States by
    the Constitution and the laws of the United States of America, including
    section 1105 of title 31, United States Code, it is hereby ordered as
    follows:
        Section 1. Purpose. The purpose of this order is to create a
    mechanism to monitor total costs of direct spending programs, and, in
    the event that actual or projected costs exceed targeted levels, to
    require that the budget address adjustments in direct spending.
        Sec. 2. Establishment of Direct Spending Targets. (a) In General.
    The initial direct spending targets for each of fiscal years 1994
    through 1997 shall equal total outlays for all direct spending except
    net interest and deposit insurance as determined by the Director of the
    Office of Management and Budget (Director) under subsection (b).
        (b) Initial Report by Director. (1) Not later than 30 days after the
    date of enactment of the Omnibus Budget Reconciliation Act of 1993
    (OBRA), the Director shall submit a report to the Congress setting forth
    projected direct spending targets for each of fiscal years 1994 through
    1997.
        (2) The Director's projections shall be based on legislation enacted
    as of 5 days before the report is submitted under paragraph

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    (1). To the extent feasible, the Director shall use the same economic
    and technical assumptions used in preparing the concurrent resolution on
    the budget for fiscal year 1994 (H. Con. Res. 64).
        (c) Adjustments. Direct spending targets shall be subsequently
    adjusted by the Director under Section 6.
        Sec. 3. Annual Review of Direct Spending and Receipts by President.
    As part of each budget submitted under section 1105(a) of title 31,
    United States Code, the Director shall provide an annual review of
    direct spending and receipts, which shall include (1) information
    supporting the adjustment of direct spending targets pursuant to Section
    6, (2) information on total outlays for programs covered by the direct
    spending targets, including actual outlays for the prior fiscal year and
    projected outlays for the current fiscal year and the 5 succeeding
    fiscal years, and (3) information on the major categories of Federal
    receipts, including a comparison between the levels of those receipts
    and the levels projected as of the date of enactment of OBRA.
        Sec. 4. Special Direct Spending Message by President. (a) Trigger.
    In the event that the information submitted under Section 3 indicates--
        (1) that actual outlays for direct spending in the prior fiscal year
    exceeded the applicable direct spending target, or
        (2) that outlays for direct spending for the current or budget year
    are projected to exceed the applicable direct spending targets, the
    Director shall include in the budget a special direct spending message
    meeting the requirements of subsection (b) of this Section.
        (b) Contents. (1) The special direct spending message shall include:
        (A) An explanation of any adjustments to the direct spending targets
    pursuant to Section 6.
        (B) An analysis of the variance in direct spending over the adjusted
    direct spending targets.
        (C) The President's recommendations for addressing the direct
    spending overages, if any, in the prior, current, or budget year.
        (2) The recommendations may consist of any of the following:
        (A) Proposed legislative changes to reduce outlays, increase
    revenues, or both, in order to recoup or eliminate the overage for the
    prior, current, and budget years in the current year, the budget year,
    and the 4 out-years.
        (B) Proposed legislative changes to reduce outlays, increase
    revenues, or both, in order to recoup or eliminate part of the overage
    for the prior, current, and budget year in the current year, the budget
    year, and the 4 out-years, accompanied by a finding by the President
    that, because of economic conditions or for other specified reasons,
    only some of the overage should be recouped or eliminated by outlay
    reductions or revenue increases, or both.
        (C) A proposal to make no legislative changes to recoup or eliminate
    any overage, accompanied by a finding by the President that, because of
    economic conditions or for other specified reasons, no legislative
    changes are warranted.
        (3) Any proposed legislative change under paragraph (2) to reduce
    outlays may include reductions in direct spending or in the
    discretionary spending limits under section 601 of the Congressional
    Budget Act of 1974.
        Sec. 5. Proposed Special Direct Spending Resolution. If the
    President recommends reductions consistent with subsection 4(b)(2)(A) or
    (B), the special direct spending message shall include the text of a
    special direct spending resolution implementing the President's
    recommendations through reconciliation directives instructing the
    appropriate committees of the House of Representatives and Senate to
    determine and recommend changes in laws within their jurisdictions to
    reduce outlays or increase revenues by specified amounts. If the
    President recommends no reductions pursuant to Section 4(b)(2)(C), the
    special direct spending message shall include the text of a special
    resolution concurring in the President's recommendation of no
    legislative action.
        Sec. 6. Adjustments To Direct Spending Targets. (a) Required Annual
    Adjustments. Prior to the submission of the President's budget for each
    of fiscal years 1995 through 1997, the Director shall adjust the direct
    spending targets in accordance with this Section. Any such adjustments
    shall be reflected

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    in the targets used in the report under Section 3 and message (if any)
    under Section 4.
        (b) Adjustment for Increases in Beneficiaries. (1) The Director
    shall adjust the direct spending targets for increases (if any) in
    actual or projected numbers of beneficiaries under direct spending
    programs for which the number of beneficiaries is a variable in
    determining costs.
        (2) The adjustment shall be made by--
        (A) computing, for each program under paragraph (1), the percentage
    change between (i) the annual average number of beneficiaries under that
    program (including actual numbers of beneficiaries for the prior fiscal
    year and projections for the budget and subsequent fiscal years) to be
    used in the President's budget with which the adjustments will be
    submitted, and (ii) the annual average number of beneficiaries used in
    the adjustments made by the Director in the previous year (or, in the
    case of adjustments made in 1994, the annual average number of
    beneficiaries used in the Director's initial report under Section 2(b));
        (B) applying the percentages computed under subparagraph (A) to the
    projected levels of outlays for each program consistent with the direct
    spending targets in effect immediately prior to the adjustment; and
        (C) adding the results of the calculations required by subparagraph
    (B) to the direct spending targets in effect immediately prior to the
    adjustment.
        (3) No adjustment shall be made for any program for a fiscal year in
    which the percentage increase computed under paragraph (2)(A) is less
    than or equal to zero.
        (c) Adjustments for Revenue Legislation. The Director shall adjust
    the targets as follows:
        (1) they shall be increased by the amount of any increase in
    receipts; or
        (2) they shall be decreased by the amount of any decrease in
    receipts, resulting from receipts legislation enacted after the date of
    enactment of OBRA, except legislation enacted in response to the message
    transmitted under Section 4.
        (d) Adjustments To Reflect Congressional Decisions. Upon enactment
    of a reconciliation bill enacted in response to a message submitted
    under Section 4, the Director shall adjust direct spending targets for
    the current year, the budget year, and each outyear through 1997 by--
        (1) increasing the target for the current year and the budget year
    by the amount stated for that year in that reconciliation bill (but if a
    separate vote was required by Congressional rules, only if that vote has
    occurred); and
        (2) decreasing the target for the current, budget, and outyears
    through 1997 by the amount of reductions in direct spending enacted in
    that reconciliation bill.
        (e) Designated Emergencies. The Director shall adjust the targets to
    reflect the costs of legislation that is designated as an emergency by
    Congress and the President under section 252(e) of the Balanced Budget
    and Emergency Deficit Control Act of 1985.
        Sec. 7. Relationship to Balanced Budget and Emergency Deficit
    Control Act. Recommendations pursuant to Section 4 shall include a
    provision specifying that reductions in outlays or increases in receipts
    resulting from that legislation shall not be taken into account for
    purposes of any budget enforcement procedures under the Balanced Budget
    and Emergency Deficit Control Act of 1985.
        Sec. 8. Estimating Margin. For any fiscal year for which the overage
    is less than one-half of 1 percent of the direct spending target for
    that year, the procedures set forth in Section 4 shall not apply.
        Sec. 9. Means-Tested Programs. In making recommendations under
    Section 4, the Director shall seriously consider all other alternatives
    before proposing reductions in means-tested programs.
        Sec. 10. Effective Date. This order shall take effect upon enactment
    of OBRA. This order shall apply to direct spending targets for fiscal
    years 1994 through 1997 and shall expire at the end of fiscal year 1997.
                                                William J. Clinton
    The White House,
    August 4, 1993.

    [Filed with the Office of the Federal Register, 10:15 a.m., August 5,
    1993]

    Note: This Executive order was published in the Federal Register on
    August 6.

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