[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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