[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5340 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 5340
To provide for fiscal gap and generational accounting analysis in the
legislative process, the President's budget, and annual long-term
fiscal outlook reports.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 22, 2021
Mr. Murphy of North Carolina (for himself, Mr. Johnson of Ohio, Mr.
Weber of Texas, Mr. Budd, Mr. Bishop of North Carolina, Mr. Timmons,
Mr. Wenstrup, and Mr. Crenshaw) introduced the following bill; which
was referred to the Committee on the Budget
_______________________________________________________________________
A BILL
To provide for fiscal gap and generational accounting analysis in the
legislative process, the President's budget, and annual long-term
fiscal outlook reports.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Intergenerational Financial
Obligations Reform Act''.
SEC. 2. THE CONGRESSIONAL BUDGET OFFICE REPORT.
Section 202 of the Congressional Budget Act of 1974 (2 U.S.C. 602)
is amended--
(1) in subsection (e), by adding at the end the following:
``(4) For any legislation or resolution considered in the
Senate or the House of Representatives that would impact
revenues or mandatory spending by greater than 0.5 percent of
the gross domestic product over the following 10-fiscal-year
period and upon request relating to any other legislation or
resolution by the Chairman or Ranking Member of the Committee
on the Budget of the House of Representatives or of the
Committee on the Budget of the Senate, the Congressional Budget
Office shall provide with respect to such legislation or
resolution a report that includes--
``(A) a fiscal gap report and a generational
account report, including changes in the fiscal gap and
generational accounts relative to the baseline
estimates for purposes of each such report;
``(B) Federal deficits as of the end of the fiscal
year that is 75 years after the budget year with
respect to the legislation, under a baseline estimate
and an alternative scenario estimate; and
``(C) outstanding Treasury liabilities as of the
end of the fiscal year that is 75 years after the
budget year with respect to the legislation, under a
baseline estimate and an alternative scenario
estimate.''; and
(2) by adding at the end the following:
``(h) Definitions.--In this section:
``(1) Alternative scenario estimate.--The term `alternative
scenario estimate' means an estimate assuming laws, as in
effect during the budget year, continue to be in effect for
each subsequent fiscal year.
``(2) Baseline estimate.--The term `baseline estimate'
means an estimate based on laws enacted through the date of the
estimate.
``(3) Budget year.--The term `budget year' has the meaning
given that term in section 250(c) of the Balanced Budget and
Emergency Deficit Control Act of 1985 (2 U.S.C. 900(c)).
``(4) Direct spending.--The term `direct spending' has the
meaning given that term in section 250(c) of the Balanced
Budget and Emergency Deficit Control Act of 1985 (2 U.S.C.
900(c)).
``(5) Explicit debt.--The term `explicit debt' means the
total amount of Treasury liabilities outstanding on the last
day of the budget year.
``(6) Fiscal gap.--The term `fiscal gap' means the sum of
the explicit debt and the implicit debt.
``(7) Fiscal gap policy option.--
``(A) In general.--The term `fiscal gap policy
option' means the permanent across-the-board change in
particular (combinations of) Federal revenues or the
permanent across-the-board change in particular
(combinations of) Federal expenditures required to make
the fiscal gap equal to zero.
``(B) Timing.--The change in revenues or
expenditures for purposes of subparagraph (A)--
``(i) may be calculated under alternative
timings of when the policy change begins; and
``(ii) shall, at a minimum, include policy
change options starting 1, 5, 10, 15, and 25
fiscal years after the budget year.
``(C) Policy options.--The potential combinations
of changes in Federal revenues and Federal expenditures
that are a part of a fiscal gap policy option may
include--
``(i) income taxes imposed under chapter 1
of the Internal Revenue Code of 1986;
``(ii) taxes described in clause (i), taxes
on self-employment income under chapter 2 of
the Internal Revenue Code of 1986, employment
taxes imposed under chapters 21 and 22 of such
Code, and offsetting receipts;
``(iii) taxes and receipts described in
clause (ii), excise taxes imposed under
subtitles D and E of the Internal Revenue Code
of 1986, estate and gift taxes imposed under
subtitle B of such Code, customs duties, and
other receipts;
``(iv) discretionary appropriations (with
no changes to offsetting receipts);
``(v) direct spending and expenditures
under the Federal old-age, survivors, and
disability insurance benefits program under
title II of the Social Security Act, the
Medicare program under parts A and B of title
XVIII of the Social Security Act, and Medicare
Prescription Drug Coverage under part D of
title XVIII of the Social Security Act;
``(vi) direct spending and expenditures
described in clause (v) and all other direct
spending including the supplemental nutrition
assistance program, supplemental security
income benefits, child, earned income, and
other tax credits, child nutrition programs,
the temporary assistance for needy families
program, housing assistance programs, and
civilian and military retirement programs; and
``(vii) discretionary appropriations and
direct spending, except interest payments on
outstanding Treasury liabilities.
``(D) Dynamic effects.--Calculations of fiscal gap
policy options shall incorporate dynamic effects from
induced changes in labor supply, national saving, and
capital formation, as relevant to each particular
policy option among those described in subparagraphs
(C).
``(8) Fiscal gap report.--
``(A) In general.--The term `fiscal gap report'
means a report that, in accordance with this
paragraph--
``(i) specifies the amount of explicit
debt, the implicit debt, and the fiscal gap;
``(ii) provides fiscal gap policy options;
and
``(iii) incorporates a fiscal gap
sensitivity analysis.
``(B) Separate reporting for trust funds.--
``(i) In general.--A fiscal gap report
shall address each item specified in clauses
(i), (ii), and (iii) of subparagraph (A)
separately for each social insurance program.
``(ii) Fiscal gap policy options.--The
fiscal gap policy options provided for each
Federal social insurance program shall be
limited to changes in receipts and expenditures
from the applicable trust fund.
``(iii) Calculation.--
``(I) In general.--For purposes of
calculations relating to the fiscal gap
in connection with a social insurance
program, the calculations shall be
determined as the sum of--
``(aa) the projected
budget-year-end value of
Treasury securities and other
assets held in the applicable
trust fund; and
``(bb) the present
discounted value of annual
expenditures from the
applicable trust fund over
future fiscal years minus the
present discounted value of
receipts paid into the
applicable trust fund excluding
transfers from other Federal
funds over future fiscal years.
``(II) Expenditures and receipts.--
For purposes of subclause (I),
expenditures and receipts shall include
expenditures and receipts projected
through the future fiscal year
described in paragraph (15)(B).
``(iv) Limiting.--For each social insurance
program, a fiscal gap report shall separately
address each item specified in clauses (i),
(ii), and (iii) of subparagraph (A) as
specified and after limiting the calculation
under clause (iii)(I)(bb) to the closed group
of past and current adult program participants
(as described in paragraph 11(B)(i)), both
taxpayers and beneficiaries.
``(C) Scenarios.--A fiscal gap report shall address
each item specified in clauses (i), (ii), and (iii) of
subparagraph (A) under--
``(i) a baseline estimate; and
``(ii) an alternative scenario estimate.
``(D) Amounts.--A fiscal gap report shall provide
information with respect to each item specified in
clauses (i), (ii), and (iii) of subparagraph (A)--
``(i) in present-discounted dollars;
``(ii) as percentages of present-discounted
value of future gross domestic product
projected through the future fiscal year
described in paragraph (15)(B); and
``(iii) as a percentage of the amount of
taxes projected to be collected under sections
1401(b), 3101(b), and 3111(b) of the Internal
Revenue Code of 1986 through the future fiscal
year described in paragraph (15)(B).
``(9) Fiscal gap sensitivity analysis.--
``(A) In general.--The term `fiscal gap sensitivity
analysis' means estimates of changes to the fiscal gap
amounts specified in paragraph (8)(D) calculated under
alternative economic and demographic assumptions for a
given scenario described in paragraph (8)(C).
``(B) Required alternatives.--The alternative
economic assumptions for any fiscal gap sensitivity
analysis shall include the following:
``(i) Projected annual rate of population
growth that is 25 basis points larger and 25
basis points smaller than the baseline
population growth-rate projection specified
under paragraph (15)(C). In making the
estimates, the applicable agency may use
reasonable alternative symmetric basis point
variations around baseline population-growth
projections consistent with uncertainty
associated with underlying growth components of
fertility, mortality, and immigration rates.
``(ii) Projected annual rates of labor
productivity growth that is 50 basis points
larger and 50 basis points smaller than the
baseline labor productivity growth-rate
projection specified under paragraph (15)(C).
In making the estimates, the applicable agency
may use reasonable alternative, symmetric
basis-point variations around baseline labor-
productivity growth rates consistent with
uncertainty associated with underlying
components of inflation rates, technological
change, capital intensity, and labor
efficiency.
``(iii) Projected discount rates that are
75 basis points larger and 75 basis points
smaller than the baseline long-term discount
rate projection specified under paragraph
(15)(D). In making the estimates, the
applicable agency may use reasonable
alternative, symmetric basis-point variations
as appropriate around baseline interest rate
projections consistent with uncertainty
associated with long-term government borrowing
rates. All interest rate variations reported
shall be consistent with maintaining a net
positive average long-term interest rate after
subtracting the long-term average labor
productivity growth rate of the economy of the
United States.
``(10) Generation.--The term `generation' means a 1-year
birth cohort of individuals of a given gender born during a
given fiscal year.
``(11) Generational account.--
``(A) In general.--The term `generational account'
means the actuarially present-valued amount per capita
for a given generation of annual net Federal tax
burdens during that generation's remaining lifetime
under a particular Federal fiscal policy.
``(B) Ages.--A report regarding generational
accounts shall include generational accounts for--
``(i) selected individual generations born
not less than 18 years before the report; and
``(ii) selected individual generations born
or who will be born after the date that is 18
years before the report, including those born
after the budget year.
``(C) Calculation.--Generational accounts of
children and future generations described in
subparagraph (B)(ii) shall be calculated such that--
``(i) their total over all members equals
the sum of--
``(I) Treasury liabilities
projected to be outstanding at the end
of the budget year; and
``(II) the present value of
projected discretionary (non-transfer)
Federal spending minus the sum of the
generational accounts of adult
generations described in subparagraph
(B)(i);
``(ii) the ratio of the generational
account of males of each generation among
children and future generations described in
subparagraph (B)(ii) to the generational
account of females born in the same year is set
equal to the ratio of the generational accounts
of males and females born 18 years before the
calculation; and
``(iii) the generational accounts of
members of children and future generations
described in subparagraph (B)(ii) increases
with the year of their births at the projected
growth rate of labor productivity.
``(12) Generational account policy effects.--
``(A) In general.--The term `generational account
policy effects' means the changes to the generational
accounts of adults described in paragraph (11)(B)(i)
and children and future generations described in
paragraph (10)(B)(ii) and to the generational net-tax-
burden gap from changes to particular (combinations of)
Federal taxes and to particular (combinations of)
Federal expenditures.
``(B) Dynamic effects.--Calculations of
generational accounts policy options shall incorporate
dynamic effects from induced changes in employment,
national saving, and capital formation, as relevant to
each particular policy option described in paragraph
(7)(C).
``(13) Generational account report.--
``(A) In general.--The term `generational account
report' means a report that, in accordance with this
paragraph, includes generational accounts and a
discussion of generational account policy effects.
``(B) Scenarios.--A generational account report
shall address generational accounts, including net
Federal tax burdens, under--
``(i) a baseline estimate; and
``(ii) an alternative scenario estimate.
``(14) Generational net-tax-burden gap.--The term
`generational net-tax-burden gap' means the ratios of the
generational account of males and females born 17 years before
the budget year to the generational accounts of males and
females, respectively, born 18 years before the budget year
minus 1 times 100.
``(15) Implicit debt.--
``(A) In general.--The term `implicit debt' means
the difference between--
``(i) the discounted present value of
projected annual Federal spending during the
period of the budget year and not less than the
ensuing 75 fiscal years, excluding spending for
net interest and principal payments on Treasury
liabilities; and
``(ii) the discounted present value of
Federal tax and non-tax receipts during the
period of the budget year and not less than the
ensuing 75 fiscal years.
``(B) Projection period.--Annual Federal
noninterest spending and receipts used to calculate
implicit debt shall be projected through a future
fiscal year, at least 75 years beyond the budget year,
and such that the accrual to the fiscal gap by
extending the calculation by 1 additional fiscal year
is within 0.1 percent of the fiscal gap without
extending the calculation by 1 fiscal year.
``(C) Federal budget projections.--The growth of
Federal noninterest spending and receipts over future
fiscal years shall be consistent with the baseline
projections of population growth, general price
inflation (Personal Consumption Expenditures index),
and labor-productivity-growth factors including
technological change, capital intensity, and labor
efficiency, as determined by the applicable agency.
``(D) Discount rates.--For purposes of calculating
the implicit debt, the discount rates shall be the
interest rate projections of the Congressional Budget
Office over the projection horizon on Treasury bonds
with prospective maturity of at least 20 years and
longer.
``(16) Net federal tax burden.--The term `net Federal tax
burden' means the difference between Federal taxes paid and
transfer payments received.
``(17) Social insurance program.--The term `social
insurance program'--
``(A) means a social insurance program that is
funded out of a Federal trust fund; and
``(B) includes the Federal old-age, survivors, and
disability insurance benefits program under title II of
the Social Security Act, the Medicare program under
parts A and B of title XVIII of the Social Security
Act, and the Medicare Prescription Drug Coverage under
part D of title XVIII of the Social Security Act.
``(18) Treasury liabilities.--The term `Treasury
liabilities' means the face amount of obligations issued under
chapter 31 of title 31, United States Code, and the face amount
of obligations whose principal and interest are guaranteed by
the United States Government (except guaranteed obligations
held by the Secretary of the Treasury)--as in section 3101(b)
of title 31.''.
SEC. 3. CBO ANNUAL REPORT.
(a) Requirement.--
(1) In general.--The Congressional Budget Office shall
produce a fiscal gap and generational accounting analysis,
which shall be reported as a separate section within its annual
``Long-Term Budget Outlook''.
(2) Definitions.--In this subsection, the terms ``fiscal
gap'' and ``generational account'' have the meanings given such
terms in subsection (h) of section 202 of the Congressional
Budget Act of 1974 (2 U.S.C. 602), as added by section 2.
(b) Public Report.--The Director of the Congressional Budget Office
shall post the report described in subsection (a) on the Congressional
Budget Office public website.
SEC. 4. GAO ANNUAL REPORT.
(a) Requirement.--
(1) In general.--The Comptroller General shall produce
annually a report on fiscal gap and generational accounting
analysis consistent with the assumptions of the Government
Accountability Office with respect to baseline projections of
population growth, general price inflation (Personal
Consumption Expenditures index), and labor-productivity-growth
factors including technological change, capital intensity, and
labor efficiency.
(2) Definitions.--In this subsection, the terms ``fiscal
gap'' and ``generational account'' have the meanings given such
terms in subsection (h) of section 202 of the Congressional
Budget Act of 1974 (2 U.S.C. 602), as added by section 2.
(b) Public Report.--The Comptroller General shall post the report
described in subsection (a) on the General Accountability Office public
website.
SEC. 5. THE PRESIDENT'S BUDGET.
Section 1105 of title 31, United States Code, is amended--
(1) in subsection (a), by adding at the end the following:
``(40) an analysis including--
``(A) a fiscal gap report and a generational
account report, including changes in the fiscal gap and
generational accounts relative to the baseline
estimates for purposes of each report;
``(B) Federal deficits as of the end of the fiscal
year that is 75 years after the budget year, under a
baseline estimate and an alternative scenario estimate;
and
``(C) outstanding Treasury liabilities as of the
end of the fiscal year that is 75 years after the
budget year, under a baseline estimate and an
alternative scenario estimate.''; and
(2) by adding at the end the following:
``(i)(1) For purposes of subsection (a)(40), the terms `alternative
scenario estimate', `baseline estimate', `fiscal gap', `fiscal gap
report', `generational account', `generational account report', and
`Treasury liabilities' have the meanings given such terms in section
202(h) of the Congressional Budget Act of 1974 (2 U.S.C. 602(h)).
``(2) For purposes of subsection (a)(40), the terms defined in
paragraph (1) shall be calculated using the assumptions of the
President of baseline projections of population growth, general price
inflation (Personal Consumption Expenditures index), and labor-
productivity-growth factors including technological change, capital
intensity, and labor efficiency.''.
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