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104th Congress                                            Rept. 104-205
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     Part 1
_______________________________________________________________________


 
                 DEFICIT REDUCTION LOCK-BOX ACT OF 1995

_______________________________________________________________________


                 July 25, 1995.--Ordered to be printed

                                _______


   Mr. Solomon, from the Committee on Rules, submitted the following

                              R E P O R T

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

                        [To accompany H.R. 1162]

      [Including cost estimate of the Congressional Budget Office]
  The Committee on Rules, to whom was referred the bill (H.R. 
1162) to establish a Deficit Reduction Trust Fund and provide 
for the downward adjustment of discretionary spending limits in 
appropriation bills, having considered the same, report 
favorably thereon with amendments and recommend that the bill 
as amended do pass.
  The amendments are as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:
SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Deficit Reduction Lock-box Act of 
1995''.

SEC. 2. DEFICIT REDUCTION LOCK-BOX ACCOUNT.

  (a) Establishment of Account.--Title III of the Congressional Budget 
Act of 1974 is amended by adding at the end the following new section:
                  ``deficit reduction lock-box account
  ``Sec. 314. (a) Establishment of Account.--There is established in 
the Congressional Budget Office an account to be known as the `Deficit 
Reduction Lock-box Account'. The Account shall be divided into 
subaccounts corresponding to the subcommittees of the Committees on 
Appropriations. Each subaccount shall consist of three entries: the 
`House Lock-box Balance'; the `Senate Lock-box Balance'; and the `Joint 
House-Senate Lock-box Balance'.
  ``(b) Contents of Account.--Each entry in a subaccount shall consist 
only of amounts credited to it under subsection (c). No entry of a 
negative amount shall be made.
  ``(c) Credit of Amounts to Account.--(1) The Director of the 
Congressional Budget Office (hereinafter in this section referred to as 
the `Director') shall, upon the engrossment of any appropriation bill 
by the House of Representatives and upon the engrossment of that bill 
by the Senate, credit to the applicable subaccount balance of that 
House amounts of new budget authority and outlays equal to the net 
amounts of reductions in new budget authority and in outlays resulting 
from amendments agreed to by that House to that bill.
  ``(2) The Director shall, upon the engrossment of Senate amendments 
to any appropriation bill, credit to the applicable Joint House-Senate 
Lock-box Balance the amounts of new budget authority and outlays equal 
to--
          ``(A) an amount equal to one-half of the sum of (i) the 
        amount of new budget authority in the House Lock-box Balance 
        plus (ii) the amount of new budget authority in the Senate 
        Lock-box Balance for that bill; and
          ``(B) an amount equal to one-half of the sum of (i) the 
        amount of outlays in the House Lock-box Balance plus (ii) the 
        amount of outlays in the Senate Lock-box Balance for that bill,
under section 314(c), as calculated by the Director of the 
Congressional Budget Office.
  ``(d) Definition.--As used in this section, the term `appropriation 
bill' means any general or special appropriation bill, and any bill or 
joint resolution making supplemental, deficiency, or continuing 
appropriations through the end of a fiscal year.''.
  (b) Conforming Amendment.--The table of contents set forth in section 
1(b) of the Congressional Budget and Impoundment Control Act of 1974 is 
amended by inserting after the item relating to section 313 the 
following new item:

``Sec. 314. Deficit reduction lock-box account.''
SEC. 3. TALLY DURING HOUSE CONSIDERATION.

  There shall be available to Members in the House of Representatives 
during consideration of any appropriations bill by the House a running 
tally of the amendments adopted reflecting increases and decreases of 
budget authority in the bill as reported.

SEC. 4. DOWNWARD ADJUSTMENT OF 602(a) ALLOCATIONS AND SECTION 602(b) 
                    SUBALLOCATIONS.

  (a) Allocations.--Section 602(a) of the Congressional Budget Act of 
1974 is amended by adding at the end the following new paragraph:
          ``(5) Upon the engrossment of Senate amendments to any 
        appropriation bill (as defined in section 314(d)) for a fiscal 
        year, the amounts allocated under paragraph (1) or (2) to the 
        Committee on Appropriations of each House upon the adoption of 
        the most recent concurrent resolution on the budget for that 
        fiscal year shall be adjusted downward by the amounts credited 
        to the applicable Joint House-Senate Lock-box Balance under 
        section 314(c)(2), as calculated by the Director of the 
        Congressional Budget Office, and the revised levels of budget 
        authority and outlays shall be submitted to each House by the 
        chairman of the Committee on the Budget of that House and shall 
        be printed in the Congressional Record.''.
  (b) Suballocations.--Section 602(b)(1) of the Congressional Budget 
Act of 1974 is amended by adding at the end the following new sentence: 
``Whenever an adjustment is made under subsection (a)(5) to an 
allocation under that subsection, the Director of the Congressional 
Budget Office shall make downward adjustments in the most recent 
suballocations of new budget authority and outlays under subparagraph 
(A) to the appropriate subcommittees of that committee in the total 
amounts of those adjustments under section 314(c)(2). The revised 
suballocations shall be submitted to each House by the chairman of the 
Committee on Appropriations of that House and shall be printed in the 
Congressional Record.''.

SEC. 5. PERIODIC REPORTING OF ACCOUNT STATEMENTS.

  Section 308(b)(1) of the Congressional Budget Act of 1974 is amended 
by adding at the end the following new sentence: ``Such reports shall 
also include an up-to-date tabulation of the amounts contained in the 
account and each subaccount established by section 314(a).''.
SEC. 6. DOWNWARD ADJUSTMENT OF DISCRETIONARY SPENDING LIMITS.

  The discretionary spending limit for new budget authority for any 
fiscal year set forth in section 601(a)(2) of the Congressional Budget 
Act of 1974, as adjusted in strict conformance with section 251 of the 
Balanced Budget and Emergency Deficit Control Act of 1985, shall be 
reduced by the amount of the adjustment to the section 602(a) 
allocations made under section 602(a)(5) of the Congressional Budget 
Act of 1974, as calculated by the Director of the Office of Management 
and Budget. The adjusted discretionary spending limit for outlays for 
that fiscal year, as set forth in such section 601(a)(2), shall be 
reduced as a result of the reduction of such budget authority, as 
calculated by the Director of the Office of Management and Budget based 
upon programmatic and other assumptions set forth in the joint 
explanatory statement of managers accompanying the conference report on 
that bill. Reductions (if any) shall occur upon the enactment of all 
regular appropriation bills for a fiscal year or a resolution making 
continuing appropriations through the end of that fiscal year. This 
adjustment shall be reflected in reports under sections 254(g) and 
254(h) of the Balanced Budget and Emergency Deficit Control Act of 
1985.

SEC. 7. EFFECTIVE DATE.

  (a) In General.--This Act shall apply to all appropriation bills 
making appropriations for fiscal year 1996 or any subsequent fiscal 
year.
  (b) FY96 Application.--In the case of any appropriation bill for 
fiscal year 1996 engrossed by the House of Representatives after the 
date this bill was engrossed by the House of Representatives and before 
the date of enactment of this bill, the Director of the Congressional 
Budget Office, the Director of the Office of Management and Budget, and 
the Committees on Appropriations and the Committees on the Budget of 
the House of Representatives and of the Senate shall, within 10 
calendar days after that date of enactment of this Act, carry out the 
duties required by this Act and amendments made by it that occur after 
the date this Act was engrossed by the House of Representatives.
  (c) FY96 Allocations.--The duties of the Director of the 
Congressional Budget Office and of the Committees on Budget and on 
Appropriations of the House of Representatives pursuant to this Act and 
the amendments made by it regarding appropriation bills for fiscal year 
1996 shall be based upon the revised section 602(a) allocations in 
effect on the date this Act was engrossed by the House of 
Representatives.
  (d) Definition.--As used in this section, the term ``appropriation 
bill'' means any general or special appropriation bill, and any bill or 
joint resolution making supplemental, deficiency, or continuing 
appropriations through the end of a fiscal year.

  Amend the title so as to read:

    A bill to establish procedures to provide for a deficit 
reduction lock-box and related downward adjustment of 
discretionary spending limits.
                        Purposes of Legislation

    H.R. 1162, the Deficit Reduction Lock-box Act of 1995, as 
proposed to be amended by the Committee establishes a procedure 
to ensure that savings from cuts in Appropriations measures 
during House and Senate consideration will be captured for 
deficit reduction. The legislation amends the Congressional 
Budget Act of 1974 to establish a deficit reduction Lock-box 
process and provides for the downward adjustment of the 
discretionary spending caps.

                        Committee Consideration

    On July 11, 1995, the Rules Committee's Subcommittee on 
Legislative & Budget Process held a joint subcommittee hearing 
on Lock-Box proposals with the Government Reform and 
Oversight's Subcommittee on Government Management, Information 
and Technology.
    Witnesses testifying in favor of establishing a Lock-Box 
process included Rep. Michael Crapo (R-ID), Rep. Bill Brewster 
(D-OK), Rep. Edward Royce (R-CA), Rep. Jane Harman (D-CA), Rep. 
Dick Zimmer and Rep. Mark Foley (R-FL). In addition, testimony 
was heard from OMB Director Alice Rivlin and CBO Deputy 
Director James Blum.
    The Committee met on July 20, 1995 to mark-up H.R. 1162. 
The Committee ordered H.R. 1162 favorably reported with 
amendments by a voice vote. During the mark-up, a Chairman's 
Mark was offered as an amendment in the nature of a substitute 
to be considered as original text for the purpose of amendment. 
Seven amendments to the Chairman's Mark, pertaining to the 
function of the lock-box mechanism, tally of floor amendments 
on appropriations bills, reduction of the discretionary 
spending caps, and technical corrections were offered en bloc 
and adopted by voice vote. An amendment pertaining to 
retroactive application was defeated by a record vote of 2-9. 
The amendment in the nature of a substitute, as amended, was 
agreed to by voice vote. The Committee then ordered the bill to 
be favorably reported to the House, with amendment, by voice 
vote.

                               Background

    Proposals to capture savings made during consideration of 
appropriations bills and credit them toward deficit reduction--
commonly known as Lock-box proposals--have been offered 
repeatedly in recent years. The various proposals, although 
differing in their approach, all seek to ensure that reductions 
in spending achieved through the legislative process are used 
for deficit reduction, and that the spending ``saved'' is not 
allocated to other programs. The main tools proposed for 
achieving this goal are lowering allocations and suballocations 
of new budget authority and outlays made under the Budget 
Resolution (referred to in budget language as ``602(a) 
allocations'' and ``602(b) suballocations'') and lowering the 
discretionary spending limits (as established and adjusted 
periodically under the Budget Enforcement Act of 1990).
    Many members have become increasingly concerned about this 
issue in recent years, when funds ``cut'' from appropriations 
bills through floor amendments were subsequently ``spent'' on 
other projects (particularly through the conference committee 
process), rather than being credited for deficit reduction. One 
high profile example of this came in 1993 during consideration 
of the FY 1994 VA-HUD Appropriations Act when funds cut from 
termination costs for the Advanced Solid Rocket Motor (ASRM) 
were channeled to the national aerospace plane and other 
programs.
    A variety of Lock-box proposals were introduced in the 
103rd Congress to address these issues, including H.R. 3145 
(referred to as the ``Make our Cuts Count'' proposal), offered 
by Rep. Crapo; H.R. 5282, offered by Rep. Spratt (D-SC); H.R. 
4057 (the ``Deficit Reduction Lock-Box Act of 1994''), also 
offered by Rep. Schumer; and H.R. 4434 (the ``Common Cents 
Budget Reform Act of 1994'') offered by Rep. John Kasich (R-
OH), Rep. Stenholm (D-TX), Rep. Tim Penny (D-MN) and others. 
Although similar legislation was also introduced during this 
period in the Senate, the 103rd Congress adjourned without 
taking action on the Lock-box issue.
    Following enactment of the Omnibus Budget Reconciliation 
Act of 1993 (OBRA), President Clinton announced the creation, 
by Executive Order, of a Deficit Reduction Fund, to ``lock in'' 
savings resulting from that Act. The August 4, 1993, Executive 
Order 12858 was part of a pledge the President made during 
Senate consideration of OBRA 1993, that the Administration 
would guarantee that net savings resulting from the spending 
reductions and tax increases in that bill would be earmarked 
for deficit reduction. The Deficit Reduction Fund, established 
in the Treasury, is to be credited with amounts equivalent to 
the net deficit reduction achieved from the Act. These amounts 
are not to be available for new spending or to finance measures 
that increase the deficit. Information about this Fund is now 
included in the President's budget.
    In the 104th Congress, the issue of Lock-box has arisen in 
several contexts, beginning with House passage of H.R. 2, the 
Line Item Veto Act, which included Lock-box language to allow 
the President to propose reductions in the appropriate 
discretionary spending limits by some or all of the amounts of 
his proposed rescissions. The Senate version of the Line Item 
Veto, S. 4, required the President to reduce the discretionary 
spending limits by the amount the measure vetoed sought to 
spend. A conference on the Line Item Veto is still pending.
    During initial House consideration of H.R. 1158, the 
Emergency Supplemental Disaster Assistance and Rescissions Act 
for FY 1995, the House adopted provisions to apply net savings 
in budget authority from the bill to a Deficit Reduction Trust 
Fund and to authorize the Secretary of the Treasury to use the 
amounts in the fund solely for the purpose of reducing the 
public debt.
    As passed by the House, H.R. 1158 also required the 
Director of OMB to reduce discretionary spending limits by the 
aggregate amount of spending reductions in the bill, including 
the out-year effect of the rescissions. These provisions were 
modified in conference to reflect the Senate's position and the 
final conference report on H.R. 1158 included only an 
authorization for the Director of OMB to adjust downward the 
discretionary caps for fiscal years 1995-98. The Conference 
Report on H.R. 1158 was adopted by the House on May 18, 1995 
and by the Senate on May 25, 1995. It was vetoed by the 
President on June 7, 1995.
    On June 29, 1995, the House passed a compromise version of 
the Emergency Supplemental Disaster Assistance and Rescissions 
Act in the form of H.R. 1944, which included the identical 
Lock-Box language that was in the vetoed bill, H.R. 1158. The 
Senate passed this measure on July 21, 1995 and the bill now 
awaits action by the President.
    During the FY 1996 appropriations cycle, a bi-partisan 
group, including Reps. Brewster (D-OK), Harman (D-CA), Foley 
(R-FL), Neumann (R-WI), Royce (R-CA) and Largent (R-OK) has 
attempted to attach various forms of Lock-box language to 
individual appropriations bills by seeking waivers from the 
Rules Committee. The Rules Committee has denied these requests, 
based on technical concerns about the proposed language and the 
Committee's interest in seeking broad consensus on a workable 
Lock-box mechanism. Efforts to allow consideration of these 
proposals during floor debate on various FY 1996 appropriations 
bills have been defeated through votes on the previous question 
on the House floor.
    In addition to seeking to establish a Lock-Box procedure by 
statute that would cover the full appropriations process, 
several members have sought to implement the Lock-box concept 
for the House alone. These members have argued that the Senate 
may be slow to accept this deficit reduction idea, and so the 
House should take the lead. Their purpose has been to ensure 
that savings achieved by the House are not syphoned off for 
other spending during the conference committee stage of 
consideration of appropriations bills.
    On June 30, Rep. Royce (R-CA) introduced H. Res. 182 to 
amend the Rules of the House to require the Chairman of the 
Appropriations Committee to reduce section 602(b)(1) 
suballocations to reflect floor amendments to general 
appropriation bills. This measure, which reflects only a change 
in House Rules, would not have to be adopted by the Senate or 
signed by the President. A similar proposal to effectuate a 
Lock-box procedure through House Rules was introduced on July 
17, 1995 by Rep. Brewster (D-OK) in the form of H. Res. 191.
    H.R. 1162, a bi-partisan Lock-box proposal that provides 
the foundation for the legislation reported by the Committee, 
was introduced by Rep. Crapo (R-ID) on March 8, 1995. The 
Committee applauds Rep. Crapo for pioneering this concept, 
persevering to achieve bi-partisan cooperation, and ensuring 
that a workable final product is achieved. As introduced, H.R. 
1162 sought to establish a Deficit Reduction Trust Fund and 
provide for the downward adjustment of discretionary spending 
limits in appropriation bills. This measure is identical to 
H.R. 4057, which Rep. Schumer filed in the latter half of the 
103rd Congress.
    On June 29, 1995, a bi-partisan group of 70 freshman 
members wrote to Speaker Gingrich requesting immediate floor 
consideration of H.R. 1162. In that letter, the freshmen, led 
by Rep. Foley (R-FL), wrote ``[c]utting spending and 
eliminating the deficit requires fundamental change to our 
budget process without loopholes.'' H.R. 1162 currently has 56 
bi-partisan co-sponsors. The freshman members have worked to 
keep the House focused on this issue, hosting and attending 
many meetings to iron out the details and ensure speedy passage 
of a measure that can work.
    The Committee is committed to developing effective 
procedures to enforce fiscal discipline and assist the Congress 
in meeting its obligation to achieve a balanced federal budget 
by the year 2002 and for the years beyond. The Lock-box 
mechanism should be an important tool in this effort, by 
ensuring that decisions to cut spending for the purpose of 
deficit reduction made by a majority of the House and the 
Senate are enforced and cannot be circumvented. Not only is 
this important for fiscal accountability, but it is also 
important to the credibility of the Congress with the American 
people. The Committee strongly believes that our procedures 
should make it clear that a cut is really a cut. The Committee 
believes that H.R. 1162, as amended, meets this requirement.
                      Procedures Under Current Law

    The Congressional Budget Act of 1974 (as amended) provides 
for the allocation and suballocation of total spending amounts 
recommended in the Budget Resolution to the committees with 
jurisdiction over legislation providing such spending. All 
discretionary spending and some mandatory spending is allocated 
to, and suballocated by, the House and Senate Appropriations 
Committees.
    Permanent requirements with respect to this process are set 
forth in Section 302 of the Act (temporary requirements are 
established by Section 602 of the Act). Section 302(a) requires 
that the spending allocations to committees be set forth in the 
joint explanatory statement accompanying the conference report 
on a budget resolution. Section 302(b) requires that each 
committee to which allocations were made subdivide its 
allocations among its subcommittees or programs and report them 
promptly to its House. The House and Senate Appropriations 
Committees must suballocate by subcommittee, not by program. 
The suballocations made by committees must not exceed the total 
allocation for that committee.
    Section 302(e) provides that a committee may report an 
alteration of its suballocations to its House at any time, but 
the alteration must be consistent with any legislative actions 
already taken. Each year, the House and Senate Appropriations 
Committees usually revise the suballocations made under their 
allocations at lest several times.
    Section 302(c) prohibits the consideration of a committee's 
spending legislation until it has made the required 
suballocations. Section 302(f) bars the consideration of any 
spending legislation that would exceed one or more of a 
committee's spending suballocations. The House applies this 
prohibition only to new discretionary budget authority and new 
entitlement authority, not to budget authority arising 
automatically under permanent law.
    The Budget Enforcement Act (BEA) of 1990 added a new title 
VI to the Congressional Budget Act of 1974 which in part 
replaced the requirements under Section 302 on a temporary 
basis. The temporary procedures implemented by Title VI have 
been extended through FY 98.
    The spending allocation and suballocation procedures in 
Section 602 generally follow those set forth in Section 302 
with two major exceptions. First, under Section 602(a), the 
allocations made to committees of the House, including the 
Appropriations Committee, must be made for each of the five 
years covered by the Budget Resolution. Second, under Section 
602(b), only the House and Senate Appropriations Committees 
must suballocate their spending allocations. In both the House 
and the Senate, the suballocations made by the Appropriations 
Committees are for the first year only. The BEA made the point 
of order in Section 302(f) against violating a spending 
suballocation applicable to the Section 602(b) suballocations.
    Beginning with FY 1991, the allocations of new 
discretionary budget authority and outlays to the House and 
Senate Appropriations Committees have been consistent with the 
discretionary spending limits established by the BEA. In 
addition to constraining the spending allocations made under 
the Budget Resolution, the statutory discretionary spending 
limits are used in the sequestration process.
    The Budget Resolution for FY 1996 (H. Con. Res. 67) 
established discretionary spending limits for FY 1999-2002 
which conform to the goal of a balanced budget by FY 2002. 
These discretionary spending limits are to be used for the 
spending allocation and suballocation process under Sections 
302 and 602 of the Congressional Budget Act and do not affect 
the statutory limits used for sequestration. The revised limits 
are well below both the current statutory limits and the 
President's proposed revision of those limits.

                        Analysis of Legislation

    H.R. 1162 as introduced would establish a Deficit Reduction 
Trust Fund in the Treasury for amounts contained in the deficit 
reduction Lock-box provision of any appropriation Act 
(including any general or special appropriation bill, and any 
bill or joint resolution making supplemental, deficiency or 
continuing appropriations). It would provide that each 
appropriation bill being marked-up by the Appropriations 
Committee of either House contain an account entitled ``Deficit 
Reduction Lock-box,'' reflecting unused spending 
suballocations.
    In addition, H.R. 1162 would provide for the downward 
adjustment of the discretionary spending limit for new budget 
authority set forth in section 601(a)(2) of the Congressional 
Budget Act, as adjusted in strict conformance with section 251 
of the Balanced Budget and Emergency Deficit Control Act of 
1985, to be reduced by the amount of budget authority 
transferred to the Deficit Reduction Fund for that fiscal year. 
This amount is to be calculated by the Director of the Office 
of Management and Budget. The discretionary spending limit for 
outlays shall be reduced accordingly.
    The Rules Committee amendment to H.R. 1162 makes certain 
important changes to this model, preserving flexibility for 
members and the Appropriations Committees while establishing 
effective enforcement to ensure that savings are credited 
toward deficit reduction through a Lock-box mechanism.
    The Rules Committee amendment to H.R. 1162 amends Title III 
of the Congressional Budget Act of 1974 by adding at the end a 
new Section 314. This Section establishes, in the Congressional 
Budget Office (CBO) a ``Deficit Reduction Lock-box Account,'' 
to be divided into subaccounts corresponding to each of the 
subcommittees of the Committees on Appropriations. Each 
subaccount shall consist of three entries: the ``House Lock-box 
Balance''; the ``Senate Lock-box Balance''; and the ``Joint 
House-Senate Lock-box Balance''. No negative entries into these 
subaccounts shall be made.
    The amendments provides that the Director of the CBO shall 
credit to the applicable subaccount balance for each House 
amounts of new budget authority and outlays equal to the net 
amounts of reductions resulting from amendments agreed to by 
each House to that bill. This credit shall be made upon 
engrossment of any appropriation bill by the House and by the 
Senate.
    In addition, the amendment provides that the Director of 
CBO shall credit to the applicable Joint-House Senate Lock-box 
Balance the amounts of new budget authority and outlays equal 
to one half the sum of the amounts in the House Lock-box 
Balance and the amounts in the Senate Lock-box Balance. The 
credit shall be made upon engrossment of any appropriation bill 
by the Senate. In other words, the amount of savings credited 
to the Joint House-Senate Lock-box Balance for any 
appropriation bill shall be an amount that splits the 
difference between savings agreed to through cutting amendments 
by the House and savings agreed to through cutting amendments 
by the Senate.
    The amendment defines ``appropriation bill'' to include any 
general or special appropriations bill, and any bill or joint 
resolution making supplemental, deficiency, or continuing 
appropriations through the end of a fiscal year.
    To help ensure that members and the public are aware of 
actions taken through the amendment process on each 
appropriation bill in the House, the Rules Committee amendment 
provides that there shall be a running tally kept of the 
amendments adopted by the House reflecting increases and 
decreases of budget authority in the bill as reported by the 
Appropriations Committee. This provision is designed to inform 
members about the level of savings for the Lock-box 
accomplished by each amendment--and to ensure that people 
understand that amendments designed to add back money into a 
spending bill would be reducing the total savings that could be 
credited to the Deficit Reduction Lock-box.
    To guarantee that savings credited to the Lock-box are 
truly ``locked in'' for deficit reduction, the amendment 
provides for the downward adjustment of the 602(a) allocations 
for the House and the Senate, upon engrossment of any 
amendments to any appropriation bill by the Senate. The 602(a) 
allocation will be reduced by the amount credited to the Joint 
House-Senate Lock-box for that bill, as calculated by the 
Director of CBO. The revised levels of budget authority and 
outlays shall be submitted to each House by the Chairman of the 
Committee on the Budget of that House and such revisions shall 
be printed in the Congressional Record. When this occurs, the 
Director of CBO shall make downward adjustments in the most 
recent suballocations (602(b)'s) to the appropriate 
subcommittees to reflect the new, lower 602(a) allocations. 
These revised suballocations shall be submitted to each House 
by the Chairman of the Committee on Appropriations for that 
House and shall be printed in the Congressional Record.
    By reducing the 602(a) allocations before the House-Senate 
conference on any appropriation bill, this provision locks in 
savings for deficit reduction and ensures that conferees cannot 
spend money set aside for deficit reduction. This provision 
also attempts to ensure that savings cannot be syphoned off 
from one appropriations bill to be spent in another. The 
revisions in the 602(b) suballocations that follow from the 
revised 602(a) allocations are done in a formulaic manner to 
reflect mathematical consistency.
    An amendment is made to Section 308(b)(1) of the 
Congressional Budget Act of 1974 to require that reports made 
under that Section include an up-to-date tabulation of the 
amounts contained in the Deficit Reduction Lock-box Account and 
each subaccount.
    The amendment further provides for a downward adjustment in 
the discretionary spending limit for new budget authority set 
forth in section 601(a)(2) of the Budget Act, as adjusted in 
strict conformance with section 251 of the Balanced Budget and 
Emergency Deficit Control Act of 1985 by the amount of the 
adjustment to the 602(a) allocation. The discretionary spending 
limit for outlays shall be similarly adjusted. Both adjustments 
shall be based on calculations by the Director of the Office of 
Management and Budget (OMB) and they shall be reflected in 
reports under sections 254(g) and 254(h) of the Balanced Budget 
and Emergency Deficit Control Act of 1985.
    Finally, the Rules Committee amendment provides generally 
that this Lock-box legislation shall apply to all appropriation 
bills for FY 1996 that are engrossed in the House after the 
engrossment in the House of this Act or any appropriation bill 
in any subsequent year. The amendment further provides that the 
CBO, the OMB, the Committees on Appropriations and the 
Committees on the Budget of the House and the Senate shall, 
within 10 days after the enactment of this Lock-box 
legislation, fulfill the duties specified in this legislation 
for any appropriation bill engrossed by the House after the 
date that this legislation was engrossed by the House and 
before the date that this legislation is enacted into law. The 
effect of this provision is to calculate savings for FY96 
appropriation bills, even though such bills may have moved 
through the process before the Lock-box was enacted into law.
    In order to ensure that savings are captured from the 
earliest possible date, the amendment further provides that the 
requirements of this legislation pertaining to the CBO, and the 
Committees on Appropriations and on the Budget of the House 
shall be based on the 602(a) allocations in effect on the date 
that this legislation is engrossed by the House.
    The clear intention of the Rules Committee amendment to 
H.R. 1162 is to ensure that a true ``hammer'' exists to force 
savings for deficit reduction as soon as possible within the 
appropriations cycle for the coming fiscal year, while 
recognizing that the FY 1996 appropriations cycle is already 
underway. The Committee recognizes that this legislation must 
be approved by the Senate and signed by the President, however, 
it has sought to lock in the starting point for calculating 
savings based upon House action on this legislation.
                       Section-by-Section Summary

Sec. 1. Short title

    The short title of the Act is the ``Deficit Reduction Lock-
box Act of 1995.''

Sec. 2. Deficit reduction lock-box account

    Subsection (a) of the bill would add a new section 314 to 
Title III of the Congressional Budget Act of 1974, entitled, 
``Deficit Reduction Lock-Box Account.'' Section 314(a) would 
establish a ``Deficit Reduction Lock-box Account'' in the 
Congressional Budget Office. The Account would be divided into 
13 subaccounts corresponding to the 13 subcommittees of the 
Committees on Appropriations. Each subaccount would consist of 
three entries: the ``House Lock-box Balance,'' the ``Senate 
Lock-box Balance,'' and the ``Joint House-Senate Lock-box 
Balance.''
    Section 314(b) provides that each entry in a subaccount 
would consist only of amounts credited to it under subsection 
(c), but that no negative amount would be entered.
    Section 314(c)(1) specifies the manner in which amounts are 
to be credited to the subaccount of each House. Each entry for 
the House and Senate would consist of amounts credited to it by 
the Director of the Congressional Budget Office upon the 
engrossment of any appropriations bill or resolution by the 
House and by the Senate. The amount to be credited to the 
balance of the House involved would equal the amounts 
reductions in budget authority and outlays resulting from 
amendments agreed to by that House, as calculated by the 
Director.
    Section 314(c)(2) specifies the manner in which amounts are 
to be credited to the Joint House-Senate Lock-box Balance. The 
joint balance would be the average of the House and Senate 
balances for that bill at the time the Senate bill is 
engrossed, as calculated by the Director.
    Section 314(d) defines appropriations bill as any general 
or special appropriation bill, and any bill or joint resolution 
making supplemental, deficiency, or continuing appropriations 
through the end of a fiscal year.
    Section 2(b) of the bill contains a conforming amendment to 
the table of contents of the Budget Act reflecting of addition 
of the new section 314 ``Deficit Reduction Lock-box Account.''

Sec. 3. Tally during House consideration

    Section 3 of the bill requires that a running tally be made 
available to Members in the House during the consideration of 
any appropriations bill resulting from the adoption of 
amendments which increase or decrease budget authority in the 
bill as reported.

Sec. 4. Downward adjustment of 602(a) allocations and section 602(b) 
        suballocation

    Section 4 of the bill provides for the downward adjustments 
of the 602(a) allocations and section 602(b) suballocation.
    Subsection (a), ``Allocations,'' amends section 602(a) of 
the Budget Act by adding a new paragraph (5) providing that, 
upon the engrossment of any appropriation bill by the House or 
Senate, the amounts allocated to the Committee on 
Appropriations of each House under the most recent budget 
resolution would be adjusted downward by the amounts credited 
to the applicable Joint House-Senate Lock-box Balance under 
section 314(c)(2), as calculated by the Director, and the 
amounts of new budget authority and outlays would be submitted 
to each House by the Budget Committee of that House.
    Subsection (b), ``Suballocations,'' amends section 
602(b)(1) of the Budget Act by adding at the end a new sentence 
providing that whenever an adjustment is made under subsection 
(a)(5) to an allocation, the Director would make downward 
adjustments in the most recent suballocations to the 
appropriate subcommittees of that House. The Chairman of the 
Committee on Appropriations of each House would submit the 
revised suballocations to that House by causing then to be 
printed in the Congressional Record.

Section 5. Periodic reporting of accounting statements

    Section 308(b)(1) of the Budget Act would be amended to 
require the Director of CBO to include in the periodic score 
keeping reports an up-to-date tabulation of the amounts 
contained in the Deficit Reduction Lock-box Account and each 
subaccount established by section 314(a).

Section 6. Downward adjustment of discretionary spending limits

    The Director of OMB would be required to adjust the 
statutory discretionary spending limits for new budget 
authority, as adjusted, by the amounts of reductions in the 
602(a) allocations made under section 602(a)(5), as calculated 
by the Director of OMB. The amounts of the adjusted 
discretionary spending for outlays would be reduced for that 
fiscal year as a result of the reduction of budget authority, 
as calculated by the Director of OMB. The reductions would be 
made upon the enactment of all regular appropriations bills for 
a fiscal year or a resolution making continuing appropriations 
through the end of that fiscal year. The adjustments would be 
reflected in the reports required to be made by the OMB 
Director under sections 254(g) and 254(h) of the Balanced 
Budget and Emergency Deficit Control Act.

Sec. 7. Effective date

    Subsection (a) provides that the bill would apply to fiscal 
1996 appropriations bills and to appropriations bills in any 
subsequent fiscal year.
    Subsection (b) provides that for fiscal year 1996, the 
provisions of the Act would apply to any appropriation bill 
passed by the House after the date on which the House passes 
this Act and before the date on which this Act is enacted into 
law. Within 10 calendar days after the date of enactment of 
this Act, the directors of CBO and OMB and the House and Senate 
Budget and Appropriations committees would carry out their 
duties under the Act retroactive to the date of House passage 
of this Act.
    Subsection (c) provides that the duties of the Director of 
CBO and the House Budget and Appropriations Committees under 
the Act for fiscal 1996 would be based on the revise section 
602(a) allocations in effect on the date the Act was passed by 
the House.
    Subsection (d) defines ``appropriation bill'' for purposes 
of this section as any general or special appropriation bill or 
any bill or joint resolution making supplemental, deficiency, 
or continuing appropriations through the end of a fiscal year.
      Matters Required Under the Rules of the House Committee Vote

    Clause 2(l)(2)(B) of rule XI requires, with respect to each 
rollcall vote on a motion to report any measure or matter of a 
public charter, and on any amendment offered to the measure or 
matter, each committee report to include the total number of 
votes cast for and against, and the names of those members 
voting for and against.

                    RULES COMMITTEE ROLLCALL NO. 171

    Date: July 20, 1995.
    Measure: H.R. 1162, Deficit Reduction Lock-box Act.
    Motion By: Mr. Frost.
    Summary of Motion: Amend bill to make provisions 
retroactively applicable to appropriations bills already 
considered this year.
    Results: Rejected, 2 to 9.
    Vote By Member: Dreier--Nay; Goss--Nay; Linder--Nay; 
Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; Waldholtz--Nay; 
Beilenson--Nay; Frost--Yea; Hall--Yea; Solomon--Nay.

                        Committee Cost Estimate

    Clause 2(l)(3)(B) of rule XI requires each committee report 
that accompanies a measure providing new budget authority, new 
spending authority, or new credit authority or changing 
revenues or tax expenditures to contain a cost estimate, as 
required by section 308(a)(1) of the Congressional Budget Act 
of 1974, as amended, and, where practicable with respect to 
estimates of new budget authority, a comparison of the total 
estimated funding level for the relevant program (or programs) 
to the appropriate levels under current law.
    Clause 7(a) of rule XIII requires committees to include 
their own cost estimates in certain committee reports, which 
include, when practicable, a comparison of the total estimated 
funding level for the relevant program (or programs) with the 
appropriate levels under current law.
    H.R. 1162 would have no direct cost to the federal 
government.

                 Congressional Budget Office Estimates

    Clause 2(l)(3)(C) of rule XI requires each committee to 
include a cost estimate prepared by the Director of the 
Congressional Budget Office, pursuant to section 403 of the 
Congressional Budget Act of 1974, if the cost estimate is 
timely submitted. The following is the CBO cost estimate as 
required:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 25, 1995.
Hon. Gerald B.H. Solomon,
Chairman, Committee on Rules,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 1162, the Deficit Reduction Lock-box Act of 1995, 
as ordered reported by the House Committee on Rules on July 20, 
1995. This estimate reflects technical changes to the 
legislation reported by the Committee that were not reflected 
in CBO's letter of July 24.
    H.R. 1162 would create a Deficit Reduction Lock-box Account 
to keep track of reductions in spending provided by 
appropriation bills. The account would have subaccounts for 
each appropriations subcommittee. Each subaccount would have 
three entries--one for the House, one for the Senate, and one 
joint House-Senate entry. When an appropriation bill passed the 
House, the House lock-box subaccount for the subcommittee with 
jurisdiction over that bill would be credited with the net 
reduction in spending resulting from all amendments to that 
bill adopted by the House. When that bill is subsequently 
passed by the Senate, the Senate lock-box subaccount is 
credited with the net reduction in spending resulting from the 
amendments to the House-passed bill adopted by the Senate. At 
the same time, the joint subaccount would be credited with one-
half of the sum of the amounts in the House subaccount and the 
Senate subaccount. Also at that time, the relevant House and 
Senate allocations of discretionary spending under section 
602(a) and 602(b) of the Congressional Budget Act would be 
reduced by the amount that is credited to the joint House-
Senate lock-box account. No further adjustment to the lock-box 
subaccounts or the allocations would be made to reflect 
decisions made in the conference on that appropriation bill or 
during consideration of the conference report.
    The legislation also provides a mechanism intended to 
reduce the statutory limits on discretionary spending for a 
fiscal year by the total amounts in all of the joint House-
Senate lock-box subaccounts for that year. This mechanism, 
however, may run afoul of constitutional requirements for 
enactment of a law. The Director of the Office of Management 
and Budget would be required to reduce the existing statutory 
caps by amounts determined by amendments adopted by the House 
and amendments adopted by the Senate. Since there is no 
requirement that the two Houses agree on the amount of the cap 
reductions, or that a provision of a bill that would determine 
the amount of the reduction be presented to the President for 
signature or veto, the adjustment procedure included in H.R. 
1162 might fall short of the constitutional requirements for 
legislative action.
    The bill would apply to all appropriation bills other than 
temporary continuing resolutions and would be retroactive to 
include appropriation bills engrossed after engrossment of the 
H.R. 1162. The bill would affect only allocations of spending 
and discretionary caps for the fiscal year covered by an 
appropriation bill.
    The bill would not directly affect discretionary spending. 
Any savings that might result from enactment of this bill would 
depend on future action on amendments to appropriation bills. 
The bill would not affect direct spending or receipts, so there 
would be no pay-as-you-go scoring under section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact on this is 
Michael Simpson.
            Sincerely,
                                           June E. O'Neill,
                                                          Director.

                       Inflation Impact Statement

    Clause 2(1)(4) of rule XI requires each committee report on 
a bill or joint resolution of a public character to include an 
analytical statement describing what impact enactment of the 
measure would have on prices and costs in the operation of the 
national economy. The Committee determines that H.R. 1162 has 
no inflationary impact on the nation's economy.

                           Oversight Findings

    Clause 2(1)(3)(A) of rule XI requires each committee report 
to contain oversight findings and recommendations required 
pursuant to clause 2(b)(1) of rule X. Clause 2(b)(1) of rule X 
calls on each standing committee, other than the Committee on 
Appropriations and Budget, to review and study the 
effectiveness of laws and other matters within its 
jurisdiction.
    The Committee makes no oversight findings or 
recommendations.

 Oversight Findings and Recommendations of the Committee on Government 
                          Reform and Oversight

    Clause 2(1)(3)(D) of rule XI requires each committee report 
to contain a summary of the oversight findings and 
recommendations made by the Government Reform and Oversight 
Committee pursuant to clause 4(c)(2) of rule X, whenever such 
findings have been timely submitted.
    The Committee has received no such findings or 
recommendations.
         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

        CONGRESSIONAL BUDGET AND IMPOUNDMENT CONTROL ACT OF 1974

          * * * * * * *

                    short titles: table of contents

  Section 1. (a) Short Titles.--This Act may be cited as the 
``Congressional Budget and Impoundment Control Act of 1974''. 
Titles I through IX may be cited as the ``Congressional Budget 
Act of 1974'' and title X may be cited as the ``Impoundment 
Control Act of 1974''.
  (b) Table of Contents.--

Sec. 1. Short titles; table of contents.
Sec. 2. Declaration of purposes.
Sec. 3. Definitions.
     * * * * * * *

                 TITLE III--CONGRESSIONAL BUDGET PROCESS

Sec. 300. Timetable.
Sec. 301. Annual adoption of concurrent resolution on the budget.
Sec. 302. Committee allocations.
     * * * * * * *
Sec. 314. Deficit reduction lock-box account.
          * * * * * * *

                TITLE III--CONGRESSIONAL BUDGET PROCESS

          * * * * * * *

  reports, summaries, and projections of congressional budget actions

  Sec. 308. (a)  * * *
  (b) Up-To-Date Tabulations of Congressional Budget Action.--
          (1) The Director of the Congressional Budget Office 
        shall issue to the committees of the House of 
        Representatives and the Senate reports on at least a 
        monthly basis detailing and tabulating the progress of 
        congressional action on bills and resolutions providing 
        new budget authority, new spending authority described 
        in section 401(c)(2), or new credit authority, or 
        providing an increase or decrease in revenues or tax 
        expenditures for each fiscal year covered by a 
        concurrent resolution on the budget. Such reports shall 
        include but are not limited to an up-to-date tabulation 
        comparing the appropriate aggregate and functional 
        levels (including outlays) included in the most 
        recently adopted concurrent resolution on the budget 
        with the levels provided in bills and resolutions 
        reported by committees or adopted by either House or by 
        the Congress, and with the levels provided by law for 
        the fiscal year preceding the first fiscal year covered 
        by the appropriate concurrent resolution. Such reports 
        shall also include an up-to-date tabulation of the 
        amounts contained in the account and each subaccount 
        established by section 314(a).
          * * * * * * *
                   deficit reduction lock-box account


  Sec. 314. (a) Establishment of Account.--There is established 
in the Congressional Budget Office an account to be known as 
the ``Deficit Reduction Lock-box Account''. The Account shall 
be divided into subaccounts corresponding to the subcommittees 
of the Committees on Appropriations. Each subaccount shall 
consist of three entries: the ``House Lock-box Balance''; the 
``Senate Lock-box Balance''; and the ``Joint House-Senate Lock-
box Balance''.
  (b) Contents of Account.--Each entry in a subaccount shall 
consist only of amounts credited to it under subsection (c). No 
entry of a negative amount shall be made.
  (c) Credit of Amounts to Account.--(1) The Director of the 
Congressional Budget Office (hereinafter in this section 
referred to as the ``Director'') shall, upon the engrossment of 
any appropriation bill by the House of Representatives and upon 
the engrossment of that bill by the Senate, credit to the 
applicable subaccount balance of that House amounts of new 
budget authority and outlays equal to the net amounts of 
reductions in new budget authority and in outlays resulting 
from amendments agreed to by that House to that bill.
  (2) The Director shall, upon the engrossment of Senate 
amendments to any appropriation bill, credit to the applicable 
Joint House-Senate Lock-box Balance the amounts of new budget 
authority and outlays equal to--
          (A) an amount equal to one-half of the sum of (i) the 
        amount of new budget authority in the House Lock-box 
        Balance plus (ii) the amount of new budget authority in 
        the Senate Lock-box Balance for that bill; and
          (B) an amount equal to one-half of the sum of (i) the 
        amount of outlays in the House Lock-box Balance plus 
        (ii) the amount of outlays in the Senate Lock-box 
        Balance for that bill,
under section 314(c), as calculated by the Director of the 
Congressional Budget Office.
  (d) Definition.--As used in this section, the term 
``appropriation bill'' means any general or special 
appropriation bill, and any bill or joint resolution making 
supplemental, deficiency, or continuing appropriations through 
the end of a fiscal year.
          * * * * * * *

           TITLE VI--BUDGET AGREEMENT ENFORCEMENT PROVISIONS

          * * * * * * *

 H4  deg.SEC. 602. COMMITTEE ALLOCATIONS AND ENFORCEMENT.

   (a) Committee Spending Allocations.--
          (1)  * * *
          * * * * * * *
          (5) Upon the engrossment of Senate amendments to any 
        appropriation bill (as defined in section 314(d)) for a 
        fiscal year, the amounts allocated under paragraph (1) 
        or (2) to the Committee on Appropriations of each House 
        upon the adoption of the most recent concurrent 
        resolution on the budget for that fiscal year shall be 
        adjusted downward by the amounts credited to the 
        applicable Joint House-Senate Lock-box Balance under 
        section 314(c)(2), as calculated by the Director of the 
        Congressional Budget Office, and the revised levels of 
        budget authority and outlays shall be submitted to each 
        House by the chairman of the Committee on the Budget of 
        that House and shall be printed in the Congressional 
        Record.
  (b) Suballocations by Committees.--
          (1) Suballocations by appropriations committees.--As 
        soon as practicable after a budget resolution is agreed 
        to, the Committee on Appropriations of each House 
        (after consulting with the Committee on Appropriations 
        of the other House) shall suballocate each amount 
        allocated to it for the budget year under subsection 
        (a)(1)(A) or (a)(2) among its subcommittees. Each 
        Committee on Appropriations shall promptly report to 
        its House suballocations made or revised under this 
        paragraph. Whenever an adjustment is made under 
        subsection (a)(5) to an allocation under that 
        subsection, the Director of the Congressional Budget 
        Office shall make downward adjustments in the most 
        recent suballocations of new budget authority and 
        outlays under subparagraph (A) to the appropriate 
        subcommittees of that committee in the total amounts of 
        those adjustments under section 314(c)(2). The revised 
        suballocations shall be submitted to each House by the 
        chairman of the Committee on Appropriations of that 
        House and shall be printed in the Congressional Record.
          * * * * * * *
                           Comparative Print

    Clause 4(d) of rule XI requires that, whenever the 
Committee on Rules reports a resolution amending or repealing 
the Rules of the House of Representatives, the accompanying 
report must contain a comparative print showing the changes in 
existing rules proposed to be made by the resolution.
    This bill makes no direct change in any rule of the House.

                       Views of Committee Members

    Clause 2(l)(5) or rule XI requires each committee, except 
the Committee on Rules, to afford a three-day opportunity for 
members of the committee to file additional, minority or 
dissenting views and to include the views in its report. 
Although the requirement does not apply to the Rules Committee, 
the Committee always makes the maximum effort to provide its 
members with an opportunity to submit their views.
    The following views were submitted:
                            ADDITIONAL VIEWS

    The ``lockbox'' initiative has been propelled into the 
public consciousness through tireless efforts of Members on 
both sides of the aisle who are committed to deficit reduction 
and seek a way to ensure that money saved by cutting amendments 
is credited to the deficit, not spent on other programs. We 
would like to commend Representatives Bill Brewster and Jane 
Harman, who have been most responsible for keeping this issue 
before the House membership. It is because of their efforts 
that this legislation was considered and reported by the Rules 
Committee.
    Initially, the ``lockbox'' was introduced to the public as 
an Executive Order (#12858) signed by President Clinton on 
August 4, 1993, in conjunction with the Omnibus Budget 
Reconciliation Act of 1993. The first ``lockbox'' bill was 
introduced in September, 1993, by Representatives Schumer, 
Brewster, Edwards, and Harman (H.R. 3205), along with 40 other 
cosponsors. Another version of the bill (H.R. 3145), introduced 
by Representative Crapo, was similar to the Schumer bill except 
that savings captured in the outyears were included in the 
lockbox. The two forces joined in 1994 behind a new bill (H.R. 
4057) and secured a total of 154 bipartisan cosponsors. The 
bill was filed in March of 1994 by Representatives Schumer, 
Crapo, Brewster, Inglis, Edwards (TX), Morella, Harman, and 
Hastert. Later that month, Representatives Stenholm, Penny and 
Kasich introduced the ``Common Sense Amendments'' (H.R. 4434), 
which contained the ``lockbox'' concept. The legislation gained 
42 cosponsors.
    The 104th Congress began with yet another bipartisan 
``lockbox'' bill (H.R. 1162) introduced by Representatives 
Crapo, Harman, Hastert, Schumer, Morella, Brewster, Shays, 
Inglis, Stenholm, and Kasich. The bill currently has 56 
cosponsors. The language, similar to H.R. 4057 from the 103rd 
Congress, contains provisions which would reduce discretionary 
spending limits including the outyear effects. Representatives 
Brewster, Minge, and Browder later introduced a ``lockbox'' 
amendment to H.R. 1158, the Emergency Supplemental/Rescissions 
bill for FY 1995. That amendment, which also included outlay 
and budget authority savings for the outyears, passed the House 
by a margin of 418-5. As scored by CBO, it would have saved 
over $60 billion in federal spending. However, the Brewster-
Minge-Browder amendment subsequently was replaced by Senate 
language eliminating the outyear savings requirement after FY 
1998.
    As the general appropriations process began for FY 1996, 
Representatives Brewster and Harman have offered the 
``lockbox'' amendments to each appropriations bill. Each time, 
the Members have come before the Rules Committee and requested 
the waivers needed to consider the ``lockbox'' amendment on the 
Floor, and each time they have been denied protection under the 
rule. We share their frustration, and sought amendments both in 
this Committee and on the Floor to allow this issue to be 
considered by the full House. We take this opportunity to 
detail the substantial legislative history to emphasize that 
this effort to strengthen deficit reduction is longstanding and 
serious. It is not going to simply go away.
    For this reason, we commend the Committee for reporting a 
bill which goes a long way toward realizing a meaningful 
``lockbox'' process. The majority members of the committee 
worked with the respective parties in good faith to try to 
devise a consensus bill. They have accepted a number of the 
amendments we offered to improve the original draft language. 
For example, the draft created a conference report ``lockbox'' 
within CBO, but did not require that it have any relationship 
to the amount of the House ``lockbox'' or the Senate 
``lockbox.'' The House and Senate ``lockboxes'' '' were merely 
accounting lists that had no impact on the deficit. Conferees 
were free to allocate all the savings adopted by either House 
to other spending rather than to deficit reduction. Our 
amendment would require that the conference report include an 
amount in the ``lockbox'' between the House and Senate levels, 
but not beyond the scope of these bills. The committee 
substitute includes a provision which will lower the amount 
available to the conferees by the average of the savings 
adopted by the House and the Senate before the conference 
begins. This ``net savings'' is a fixed number, however, and 
may not be increased by the conferees.
    We are also pleased that the majority members accepted our 
amendment to strike language setting out specific treatment for 
emergency appropriations from the bill. This language 
highlighted a way in which anyone could raid the ``lockbox'' 
and spend all the savings just by calling it an emergency.
    The majority also eliminated language in the bill which 
would have closed debate on a privileged measure revising the 
602(b) suballocations to a single amendment offered by the 
Budget Committee chairman, and would have prohibited minority 
rights on a motion to recommit. We proposed amendments to open 
up any House consideration of 602(b) suballocations and to 
preserve the rights of the minority to be heard. Although the 
motion to recommit is not require on resolutions, it is the 
minimum guarantee of minority rights. Because the bill 
structures debate on spending priorities between the chairmen 
of the Appropriations and the Budget Committees, we thought 
there ought to be an opportunity for minority members to be 
heard as well. If the House is going to be asked to approve the 
revisions, then we should have an open process to fully debate 
new spending decisions. The committee substitute strikes the 
section calling for House consideration of 602(b) revisions, 
therefore eliminating the need for these amendments.
    While we support the Committee in making these adjustments 
to the bill, we also want to express our disappointment that 
the committee substitute does not include several important 
improvements to the bill. One central theme in most of the 
``lockbox'' measures has been the inclusion of language 
capturing savings in the outyears. The committee substitute 
waters down enforcement provisions in H.R. 1162 by eliminating 
language which would have reduced the statutory caps--thereby 
locking savings into deficit reduction--in the outyears. The 
bill, as reported, will reduce the statutory caps for budget 
authority and outlays only in the first year.
    This may seem to be a technical issue; however, it will 
result in a significant difference in the amount of deficit 
reduction ultimately realized from cuts in appropriations bills 
due to the way in which budget authority translates into 
outlays. OMB estimates that 23 percent of the budget authority 
appropriated for all discretionary accounts in 1996 will not 
translate into outlays until fiscal year 1997 or later. As an 
example, CBO estimates that eliminating funding for Highway 
Demonstration projects would cut budget authority by $1.25 
billion in 1996 but would only reduce outlays by $96 million in 
that fiscal year. Under the substitute adopted by the 
Committee, actual spending would be reduced far less than the 
amount placed in the ``lockbox''. The practical effect on the 
appropriations process will not be to reduce the amount 
appropriated, but to change the mix of appropriations in favor 
of items with slower spend out rates. If the statutory caps 
were reduced for the first fiscal year, the Appropriations 
Committee would simply need to shift the mix of programs funded 
so that it appropriates money for programs that had lower first 
year outlays than the programs that Congress voted to cut in 
order to avoid breaching the reduced outlay caps for the first 
year. The appropriations committee would be able to use up the 
outyear savings by reallocating funds to programs with a slower 
spend out rate that will result in outlays in the second year 
or later. Our amendment specified that reductions in the 
discretionary spending limits on outlays would include the 
outyear impact. It would ensure that savings which do not occur 
until future years would go to deficit reduction. The 
substitute adopted by the committee will allow those savings to 
slip through the ``lockbox'' and go back into the available 
pool for spending.
    Another central element of the various ``lockbox'' 
initiatives has been creation of a separate ``lockbox'' account 
which would be increased whenever an amendment is adopted which 
cuts spending. The committee substitute takes a fundamentally 
different approach to ``locking in'' savings through 
congressional procedures and special scorekeeping 
responsibilities by the Congressional Budget Office. The 
committee adopted an amendment to strengthen this process by 
requiring OMB to reduce the discretionary caps for the first 
fiscal year. However, we continue to believe that our amendment 
creating a separate ``lockbox'' account is an important and 
valuable component of the bill.
    Finally, the substitute adopted by the committee would not 
apply the provisions of the bill retroactively to capture all 
the savings we have voted for in appropriations bills this 
fiscal year. The substitute would apply only to bills passed by 
the House after the House completes work on the ``lockbox'' 
bill. At most, we will be able to capture savings from only 
three of thirteen appropriations bills if the bill is 
considered by the House the end of this week. Unless a 
``lockbox'' bill is scheduled for Floor consideration prior to 
the August district work period, it is unlikely that any 
savings will be realized this year. We offered an amendment in 
committee to make the deficit reduction in the chairman's mark 
apply to the full year savings, but it was rejected by a vote 
of 9-2.
    We congratulate the Committee for holding a mark-up on this 
bill. One of the major purposes of a mark-up is to ensure that 
those with expertise can identify important issues and 
understand just how a bill will work. It would be fruitless if 
this effort--which clearly identifies two or three main issues 
for further deliberation--were considered in any way that 
denied the Members the opportunity to offer amendments. We hope 
that the rule for H.R. 1162 will allow consideration of Floor 
amendments on at least the following matters: (1) retroactivity 
to capture all the savings in appropriations bills this fiscal 
year (2) reductions in the statutory caps in the outyears and 
(3) creation of a separate ``lockbox'' account which would be 
increased upon adoption of cutting amendments. Many of us are 
frustrated when we make tough choices on the Floor for 
additional spending cuts, only to find that the savings does 
not go to deficit reduction but gets swallowed up for another 
program or project which may be less worthy. We believe that 
budget process reform needs to occur in a way that is workable 
and meaningful. The committee substitute makes progress toward 
this end; but several proposed improvements deserve to be 
considered as the House works its will on this important 
measure. We urge prompt action on the bill and an open 
amendment process for its consideration.

                                   Martin Frost.
                                   Tony P. Hall.
                            DISSENTING VIEWS

    I commend the majority for developing a deficit-reduction 
lockbox proposal that improves upon H.R. 1162 as introduced by 
making it less cumbersome and more practicable. The chairman, 
Mr. Solomon, and Mr. Goss, in particular, deserve a great deal 
of credit for the work they have done to produce a measure that 
satisfies the concerns of both the lockbox proponents and the 
members of the Appropriations Committee, who will have to 
operate under a far more complex system for determining how 
much funding they have to work with.
    But the fact that general agreement has been reached on the 
details of the lockbox procedure does not change a fundamental 
problem with the measure: that it is a tool to force deeper 
cuts in the one part of the budget that is already being cut 
severely.
    On the face of it, the lockbox proposal is an appealing 
idea. It would, its supporters claim, allow us to ensure that 
the savings produced by spending-cut amendments to 
appropriations bills are used to reduce the deficit, not to 
increase spending for other purposes.
    However, the only way to show that such savings are being 
used to reduce the deficit is to reduce the amount available to 
the Appropriations Committee by the amount saved by the 
spending-cut amendments. Thus, at its heart, what the lockbox 
proposal is all about is reducing discretionary spending beyond 
the limit set in the budget resolution.
    This year's budget resolution sets spending caps for the 
next seven years at levels that will force Congress to cut 
domestic discretionary spending by $473 billion over that 
period, or by one third, in real terms, over this year's level. 
For those of us who value the federal government's contribution 
to education and job training, transportation, housing, science 
and health research, environmental protection, national parks, 
crime control, and many of the other programs that comprise the 
discretionary spending category, it make little sense to 
endorse a procedure that will likely lead to further cuts--or 
fewer opportunities to restore funds--to these programs.
    The fortunate part, from our perspective, is that the harm 
is not likely to be too great. Most House votes to cut 
appropriations bills further have involved relatively small 
sums and, because House savings from spending-cut amendments 
will be averaged with Senate savings, it is likely that the 
ultimate amount by which discretionary spending will be lowered 
will be relatively minor.
    Even Members who do wish to cut discretionary spending 
further, however, cannot dispute the fact that we already have 
an extremely effective process in place for controlled this 
type of spending. Under our existing process, Congress approves 
a total amount of spending for discretionary spending, and then 
enforces that amount by subjecting individual spending measures 
to Budget Act points of order (in effect since 1974) and to the 
threat of across-the-board cuts, or sequestration (in effect 
since 1990).
    These controls have enabled Congress to restrain the growth 
of discretionary spending to such an extent that its share of 
GDP has declined from 10.5% in 1980 to 8.2% in 1994. If 
Congress complies with the current discretionary spending caps, 
such spending will decline to just 6.8% in 1998. Domestic 
discretionary spending will have declined from 5.1% of GDP in 
1980, to 3.7% in 1994, to 3.1% in 1998.
    The lockbox procedure follows several other procedures 
Congress has considered in recent years--such as expedited 
rescission, line-item veto, separation of emergency and 
nonemergency appropriations--to apply further controls to 
discretionary spending. All of them are aimed at the wrong 
target. If our budget process is inadequate in any way, it is 
that it provides comparatively little control for the mandatory 
spending--entitlement programs--that is driving the growth of 
the federal budget.
    In contrast to the decline in discretionary spending that 
has been occurring, and will continue to occur, mandatory 
spending has grown from 9.3% of GDP in 1980 to 10.7% in 1994, 
and will equal 12.6% of GDP in 1998.
    If the plan to balance the budget by 2002 is to succeed, 
Congress must change its focus with respect to budget process 
matters. Rather than devoting our time and effort to devising 
ways to apply more controls to the part of the budget that is 
already under the strictest control, we must devotes that same 
kind of effort to addressing other parts of the budget that are 
under less effective control. That includes not only 
entitlement programs, but also tax expenditures which, like 
entitlement programs, are not reauthorized on an annual basis.
    Popular as the lockbox proposal is, the House should 
consider carefully whether we really want a complicated new 
budget procedure that focuses our deficit-reduction efforts on 
an area of the budget that is already contributing more than 
its fair share to the cause.

                                              Anthony C. Beilenson.