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108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-566

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



 
 PROVIDING FOR CONSIDERATION OF H.R. 4663, SPENDING CONTROL ACT OF 2004

                                _______
                                

   June 24 (legislative day, June 23), 2004.--Referred to the House 
                   Calendar and ordered to be printed

                                _______
                                

Mr. Hastings of Washington, from the Committee on Rules, submitted the 
                               following

                              R E P O R T

                       [To accompany H. Res. 692]

    The Committee on Rules, having had under consideration 
House Resolution 692, by a record vote of 9 to 2, report the 
same to the House with the recommendation that the resolution 
be adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for consideration of H.R. 4663, the 
Spending Control Act of 2004, under a structured rule. The rule 
provides one hour of general debate equally divided and 
controlled by the chairman and ranking minority member of the 
Committee on the Budget. The rule waives all points of order 
against the bill and against its consideration.
    The rule makes in order only those amendments printed in 
this report. The rule provides that the amendments printed in 
this report shall be considered only in the order printed in 
this report, may be offered only by a Member designated in this 
report, shall be considered as read, shall be debatable for the 
time specified in this report equally divided and controlled by 
the proponent and an opponent, shall not be subject to 
amendment, and shall not be subject to a demand for a division 
of the question in the House or in the Committee of the Whole.
    The rule waives all points of order against the amendments 
printed in this report, except that upon adoption of an 
amendment in the nature of a substitute, only the last 
amendment printed in this report shall be in order. Finally, 
the rule provides one motion to recommit with or without 
instructions.

                            COMMITTEE VOTES

    Pursuant to clause 3(b) of House rule XIII the results of 
each record vote on an amendment or motion to report, together 
with the names of those voting for and against, are printed 
below:

Rules Committee record vote No. 294

    Date: June 24, 2004 (legislative day of June 23, 2004).
    Measure: H.R. 4663--Spending Control Act of 2004.
    Motion by: Mr. Frost.
    Summary of motion: To make in order and provide the 
appropriate waivers for the amendment offered by Representative 
Spratt which restores the original Pay-As-You-Go (PAYGO) rules 
as they were originally established under the 1990 Budget 
Enforcement Act and extended in 1997. Requires that the net 
cost of all mandatory spending increases and all tax cuts 
enacted within a session be fully offset.
    Results: Defeated 2 to 9.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Nay; 
Reynolds--Nay; Frost--Yea; McGovern--Yea; Dreier--Nay.

Rules Committee record vote No. 295

    Date: June 24, 2004 (legislative day of June 23, 2004).
    Measure: H.R. 4663--Spending Control Act of 2004.
    Motion by: Mr. Frost.
    Summary of motion: To make in order and provide the 
appropriate waivers for the amendment in the nature of a 
substitute offered by Representative Stenholm which reinstates 
for two years the provisions of the Budget Enforcement Act 
which expired in 2002. Provides for a pay-as-you-go rule for 
legislation that would increase the deficit and set 
discretionary spending limits. The discretionary spending 
limits would be set at the levels proposed in the President's 
budget for two years, with separate categories for highway and 
mass transit funding to reflect the House-passed transportation 
bill. A separate vote would be required to consider legislation 
that would increase the discretionary spending limits or waive 
the pay-as-you-go requirement. Makes amendments to the Budget 
Act to apply budget act points of order to unreported 
legislation and provide more information regarding budget act 
waivers.
    Results: Defeated 2 to 9.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Nay; 
Reynolds--Nay; Frost--Yea; McGovern--Yea; Dreier--Nay.

Rules Committee record vote No. 296

    Date: June 24, 2004 (legislative day of June 23, 2004).
    Measure: H.R. 4663--Spending Control Act of 2004.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order and provide the 
appropriate waivers for the amendment offered by 
Representatives Stenholm and Castle which requires the Rules 
Committee to include a justification for budget act waivers in 
reports accompanying rules for consideration of legislation 
requiring waivers. Applies budget act points of order to 
unreported legislation. Requires CBO cost estimates to include 
a projection of the cost of debt servicing (interest). Provides 
for inclusion of budget compliance statements prepared by the 
Budget Committee regarding budgetary implications in committee 
reports.
    Results: Defeated 2 to 9.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Nay; 
Reynolds--Nay; Frost--Yea; McGovern--Yea; Dreier--Nay.

Rules Committee record vote No. 297

    Date: June 24, 2004 (legislative day of June 23, 2004).
    Measure: H.R. 4663--Spending Control Act of 2004.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order and provide the 
appropriate waivers for the amendment offered by Representative 
Kirk which amends the rules of the House to allow a Member to 
raise a point of order against a rule or order that would waive 
section 302(f)(1) or 311(a)(1) of the Congressional Budget Act 
of 1974.
    Results: Defeated 2 to 9.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Nay; 
Reynolds--Nay; Frost--Yea; McGovern--Yea; Dreier--Nay.

Rules Committee record vote No. 298

    Date: June 24, 2004 (legislative day of June 23, 2004).
    Measure: H.R. 4663--Spending Control Act of 2004.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order and provide the 
appropriate waivers for the amendment offered by Representative 
Hensarling which converts the annual budget process to a two-
year biennial cycle beginning in the 110th Congress.
    Results: Defeated 2 to 9.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Nay; 
Reynolds--Nay; Frost--Yea; McGovern--Yea; Dreier--Nay.

Rules Committee record vote No. 299

    Date: June 24, 2004 (legislative day of June 23, 2004).
    Measure: H.R. 4663--Spending Control Act of 2004.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order en bloc and provide the 
appropriate waivers for the amendments offered by 
Representative Young of Florida which: (1) amend House rules to 
set the membership of the Budget Committee to be consistent 
with the original 1973 recommendations of the Joint Study 
Committee on Budget Control; and (2) establish a Joint 
Committee to Conduct a Comprehensive Review of the 
Congressional Budget Process.
    Results: Defeated 2 to 9.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings (WA)--Nay; Myrick--Nay; Sessions--Nay; 
Reynolds--Nay; Frost--Yea; McGovern--Yea; Dreier--Nay.

Rules Committee record vote No. 300

    Date: June 24, 2004 (legislative day of June 23, 2004).
    Measure: H.R. 4663--Spending Control Act of 2004.
    Motion by: Mr. Goss.
    Summary of motion: To report the resolution.
    Results: Agreed to 9 to 2.
    Vote by Members: Goss--Yea; Linder--Yea; Pryce--Yea; Diaz-
Balart--Yea; Hastings (WA)--Yea; Myrick--Yea; Sessions--Yea; 
Reynolds--Yea; Frost--Nay; McGovern--Nay; Dreier--Yea.

                  SUMMARY OF AMENDMENTS MADE IN ORDER

    (Summaries derived from information provided by the 
amendment sponsor.)
    1. Brady (TX/Turner (TX): Establishes a Federal Sunset 
Commission to review all federal agencies and programs for 
their efficiency, effectiveness, redundancy and need. (10 
minutes)
    2. Chocola: Replaces the 20 budget functions with a one-
page budget that divides spending into the following five 
categories: mandatory spending, defense discretionary spending, 
non-defense discretionary, emergency spending and interest. 
Establishes a new emergency category that would be comprised of 
both a rainy day reserve fund for non-military emergencies and 
funding for military operations authorized by either a 
declaration of war or the use of military force. The rainy day 
fund would be equal to a rolling average of the five preceding 
years' emergency spending. (10 minutes)
    3. Hastings (WA)/Castle: Eliminates the requirement of 
providing budget authority and outlays for the functional 
categories in the budget resolution. Grants the House and 
Senate Budget Committees the discretion to include such 
functional categories, if any, they deem appropriate in the 
budget resolution. The required contents of the budget 
resolution would include: (1) total of new budget authority and 
outlays; (2) revenues; (3) surplus or deficit; and (4) public 
debt. (10 minutes)
    4. Hensarling: Imposes an entitlement cap whereby the total 
level of direct spending is limited to inflation and the growth 
in a given program's beneficiary population. Inflation will be 
the higher of either the Consumer Price Index or whatever 
inflator (if any) is currently applicable to each program. This 
entitlement cap will be enforced by an across-the-board 
sequester of nonexempt accounts in the amount of any excess 
above the cap. Certain protected programs could only face a 
maximum two percent reduction. The entitlement cap will not 
apply to Social Security. Provides that the new Medicare 
prescription drug benefit will be excluded from the cap until 
the program is fully phased-in. A sequester to enforce the cap 
will not reduce the funding of certain exempt programs. In 
addition to Social Security, substitute retirement programs 
such as Tier I railroad and CSRS for federal retirees, and 
other earned entitlements such as Medicare Part A, the newly 
redrawn list will consist of those programs that fulfill 
Constitutional requirements, meet government commitments, and 
regulate economic institutions. In the event of a sequester, 
the funding of certain protected programs could only be reduced 
by a maximum of two percent. These so-called ``2% programs'' 
include Medicare Parts B-D, veterans, military and federal 
retiree benefits, as well as certain low-income programs. 
Requires the President's budget to include an analysis of the 
long-term unfunded obligations of current entitlements, a 
report on any increases enacted in the prior session of 
Congress, and the impact of any proposals included in the 
President's budget submission. The Congressional Budget Office 
(CBO) will provide such estimates with each reported bill. (10 
minutes)
    5. Hensarling: Provides for an automatic continuing 
resolution in the event that an agreement is not reached on 
spending levels by the legal deadline. The federal government 
will operate at the prior fiscal year's level. (10 minutes)
    6. Kirk: Requires the Congressional Budget Office to 
prepare an annual analysis that compares budgeted entitlement 
spending to actual entitlement spending, with an account-by-
account breakdown to show spending trends and variances. (10 
minutes)
    7. Ryan (WI)/Gutknecht: Converts the current non-binding 
budget resolution into a joint budget resolution that if signed 
by the President would have the force of law. In addition, if 
the President vetoes the budget resolution, Congress is allowed 
to proceed on its own under a concurrent budget resolution. (10 
minutes)
    8. Ryan (WI)/Neugebauer: Establishes Budget Protection 
Accounts which would allow Congress to target spending during 
the appropriation and direct spending processes and redirect 
that spending for deficit reduction at the end of the fiscal 
year. (10 minutes)
    9. Ryan (WI)/Stenholm/Castle: Initiates enhanced rescission 
for the President to propose the elimination of wasteful 
spending identified in appropriation bills. The proposal must 
be transmitted to Congress accompanied by legislative language 
for the rescissions and any necessary reduction in the spending 
limits. Provides for expedited consideration through the 
legislative process. (10 minutes)
    10. Young (FL): Increases the fiscal year 2005 
discretionary 302(a) allocation to Appropriations Committee to 
ensure that the transportation guarantees contemplated in TEALU 
and Vision 100 are fully met. The FY 2005 Budget Resolution did 
not provide the budgetary resources to meet these guarantees 
and without these resources the Transportation/Treasury 
Appropriations bill will not be able to honor the funding 
levels guaranteed in TEALU and Vision 100. (10 minutes)
    11. Young (FL): Strikes section 2 of the bill (Extension of 
Discretionary Spending Limits). (10 minutes)
    12. Young (FL): Changes the start date of the fiscal year 
to November 1. (10 minutes)
    13. Young (FL): Requires sunsetting of all Federal programs 
(except earned entitlements) effective October 1, 2006, unless 
reauthorized prior to that date. (10 minutes)
    14. Young (FL): Strikes the provisions relating to 
limitations on advance appropriations. (10 minutes)
    15. Spratt: Amendment in the Nature of a Substitute. 
Restores the original Pay-As-You-Go (PAYGO) rules as they were 
originally established under the 1990 Budget Enforcement Act 
and extended in 1997. Requires that the net cost of all 
mandatory spending increases and all tax cuts enacted within a 
session be fully offset. Renews discretionary spending limits. 
(30 minutes)
    16. Hensarling: Amendment in the Nature of a Substitute. 
Establishes joint budget resolution signed by the President 
with the force of law, requiring President and Congress to 
commit to same budget before spending money. Replaces 20 
functions with one-page budget, setting spending for five 
categories: mandatory, non-defense, defense, interest, and 
emergencies. Permits biennial budgeting if President and 
Congress agree in advance. Non-military emergencies must be 
handled with ``rainy day'' fund; spending from fund must be for 
sudden, urgent, unforeseen, and temporary emergencies. Provides 
government shutdown protection with automatic continuing 
resolution. Requires two-thirds supermajority vote in both 
houses for over-budget spending. Such points of order are 
protected from being waived in the House by a process used to 
guard against unfunded mandates. Eliminates automatic tax 
increases. Establishes ``Family Budget Protection Accounts'' to 
allow Congress to redirect savings found during appropriations 
process to tax relief or deficit reduction at the end of fiscal 
year. Limits growth in entitlement spending to inflation 
adjustment for each program and population growth; 
discretionary caps allow growth for inflation, with firewall 
separating defense, non-defense, and emergency spending. Limits 
protected by points of order and enforced by sequesters. 
Expands programs eligible for sequester; exempts Social 
Security and Medicare Part A; protects Medicare Parts B, C, and 
D, Medicaid, veterans, military, federal retiree benefits, and 
certain low-income programs from reductions greater than 2%; 
President can exempt defense or homeland security accounts for 
national security. Sunsets every voluntary entitlement program 
and all discretionary programs in FY08 and FY09 to allow cost-
benefit analysis of continued funding (exempts earned 
benefits). Creates point of order to freeze program funding 
where authorization has lapsed. Provides expedited 
Congressional consideration of proposed presidential 
rescissions. Commission recommends cutting waste, fraud, and 
abuse; proposals receive expedited Congressional consideration 
(including in defense and entitlement spending). Requires use 
of nominal dollars to compare current spending with proposed 
spending. Requires agencies to fund government share of 
accruing costs of pension, retiree pay, and retiree health 
benefits earned by federal civilian and military employees (no 
change to retiree benefits). Defines public debt accurately by 
excluding debt government owes to itself. Risk-assumed 
budgeting provides for consideration of long-term liabilities 
of business-related federal insurance programs. (30 minutes)
    17. Kirk: Amendment in the Nature of a Substitute. The 
current emergency appropriations procedure will be replaced by 
a ``rainy day fund'' reserve account for emergencies, which is 
built up over time and drawn down as needed. Budget projections 
for the coming year will be compared to actual spending for the 
previous year, not inflation-adjusted ``baselines.'' Federal 
spending above a set cap will trigger a spending sequester that 
imposes automatic, across-the-board spending reductions. Social 
Security and Medicare accounts will be protected from spending 
cuts. Discretionary spending must stay within an annual cap, 
set by Congress every year. Enhanced Rescissions of Budget 
Authority Identified by the President as Wasteful Spending. The 
President would be given authority to eliminate wasteful 
spending, by proposing a rescission package of spending. 
Congress will consider the President's proposed rescission 
package though expedited debate and an up-or-down vote. The 
President will appoint a bipartisan Commission to make 
recommendations on proposals to eliminate waste, fraud, and 
abuse in the Federal budget. The Commission will prepare a 
report to Congress that includes a list of wasteful or 
duplicative programs that should be reviewed by Congress. 
Through accrual accounting, Federal funding of pensions and 
retirement benefits for federal employees and uniformed 
services personnel will be properly accounted for in the annual 
budget. Using accrual accounting principles, the budget will 
note the present value costs of health benefits for federal 
employees and uniformed services personnel. Federal debt to the 
public would break out a separate accounting of intra-
governmental debt. The limit on Federal debt to the public 
would be adjusted to apply solely to publicly issued Treasury 
securities. PAYGO rules related to spending are extended until 
2007. (30 minutes)
    18. Young (FL): Amendment in the Nature of a Substitute. 
The amendment would: (1) require sequestration of mandatory 
spending in the event that OMB baseline estimates of mandatory 
spending exceed previous estimates due to enacted legislation; 
(2) require baseline estimates to exclude emergency spending; 
(3) provide an exception for outlay components of certain 
expiring receipts legislation when making estimates of 
mandatory spending legislation; (4) change the start date of 
the fiscal year to November (5) require sunsetting of all 
Federal programs (except earned entitlements) effective October 
1, 2006, unless reauthorized prior to that date; (6) requires 
an adjustment to Appropriations Committee 302(a) allocations to 
ensure that the transportation guarantees contemplated in TEALU 
and Vision 100 are fully met; and (7) make technical and 
conforming changes to the Balanced Budget and Emergency Deficit 
Control Act of 1985. (30 minutes)
    19. Young (FL): Strikes any provision that establishes, 
extends, or enforces discretionary spending limits. (10 
minutes)

                    TEXT OF AMENDMENTS MADE IN ORDER

(Subject to appropriate page and line number adjustments to conform to 
        the text of H.R. 4663)

1. An Amendment To Be Offered by Representative Brady of Texas, or His 
                   Designee, Debatable for 10 Minutes

  Page 2, after line 3, insert the following: ``TITLE I--
EXTENSION OF DISCRETIONARY SPENDING LIMITS AND PAY-AS-YOU-GO 
REQUIREMENTS''.
  Redesignate sections 2 through 9 as sections 101 through 108, 
respectively, and on page 10, after line 21, add the following 
new title:

      TITLE II--ESTABLISHMENT OF FEDERAL AGENCY SUNSET COMMISSION

SEC. 201. REVIEW AND ABOLISHMENT OF FEDERAL AGENCIES.

  (a) Schedule for Review.--Not later than one year after the 
date of the enactment of this Act, the Federal Agency Sunset 
Commission established under section 202 (in this title 
referred to as the ``Commission'') shall submit to Congress a 
schedule for review by the Commission, at least once every 12 
years (or less, if determined appropriate by Congress), of the 
abolishment or reorganization of each agency.
  (b) Review of Agencies Performing Related Functions.--In 
determining the schedule for review of agencies under 
subsection (a), the Commission shall provide that agencies that 
perform similar or related functions be reviewed concurrently 
to promote efficiency and consolidation.
  (c) Abolishment of Agencies.--
          (1) In general.--Each agency shall--
                  (A) be reviewed according to the schedule 
                created pursuant to this section; and
                  (B) be abolished not later than one year 
                after the date that the Commission completes 
                its review of the agency pursuant to such 
                schedule, unless the agency is reauthorized by 
                the Congress.
          (2) Extension.--The deadline for abolishing an agency 
        may be extended for an additional two years after the 
        date described in paragraph (1)(B) if the Congress 
        enacts legislation extending such deadline by a vote of 
        a super majority of the House of Representatives and 
        the Senate.

SEC. 202. ESTABLISHMENT OF COMMISSION.

  (a) Establishment.--There is established a commission to be 
known as the ``Federal Agency Sunset Commission''.
  (b) Composition.--The Commission shall be composed of 12 
members (in this title referred to as the ``members'') who 
shall be appointed as follows:
          (1) Six members shall be appointed by the Speaker of 
        the House of Representatives, one of whom may include 
        the Speaker of the House of Representatives, with 
        minority members appointed with the consent of the 
        minority leader of the House of Representatives.
          (2) Six members shall be appointed by the majority 
        leader of the Senate, one of whom may include the 
        majority leader of the Senate, with minority members 
        appointed with the consent of the minority leader of 
        the Senate.
  (c) Qualifications of Members.--
          (1) In general.--(A) Of the members appointed under 
        subsection (b)(1), four shall be members of the House 
        of Representatives (not more than two of whom may be of 
        the same political party), and two shall be an 
        individual described in subparagraph (C).
          (B) Of the members appointed under subsection (b)(2), 
        four shall be members of the Senate (not more than two 
        of whom may be of the same political party) and two 
        shall be an individual described in subparagraph (C).
          (C) An individual under this subparagraph is an 
        individual--
                  (i) who is not a member of Congress; and
                  (ii) with expertise in the operation and 
                administration of Government programs.
          (2) Continuation of membership.--If a member was 
        appointed to the Commission as a Member of Congress and 
        the member ceases to be a Member of Congress, that 
        member shall cease to be a member of the Commission. 
        The validity of any action of the Commission shall not 
        be affected as a result of a member becoming ineligible 
        to serve as a member for the reasons described in this 
        paragraph.
  (d) Initial Appointments.--All initial appointments to the 
Commission shall be made not later than 90 days after the date 
of the enactment of this Act.
  (e) Chairman; Vice Chairman.--
          (1) Initial chairman.--An individual shall be 
        designated by the Speaker of the House of 
        Representatives from among the members initially 
        appointed under subsection (b)(1) to serve as chairman 
        of the Commission for a period of 2 years.
          (2) Initial vice-chairman.--An individual shall be 
        designated by the majority leader of the Senate from 
        among the individuals initially appointed under 
        subsection (b)(2) to serve as vice-chairman of the 
        Commission for a period of two years.
          (3) Alternate appointments of chairmen and vice-
        chairmen.--Following the termination of the two-year 
        period described in paragraphs (1) and (2), the Speaker 
        and the majority leader shall alternate every two years 
        in appointing the chairman and vice-chairman of the 
        Commission.
  (f) Terms of Members.--
          (1) Members of congress.--Each member appointed to 
        the Commission who is a member of Congress shall serve 
        for a term of six years, except that, of the members 
        first appointed under paragraphs (1) and (2) of 
        subsection (b), 2 members shall be appointed to serve a 
        term of three years under each such paragraph.
          (2) Other members.--Each member of the Commission who 
        is not a member of Congress shall serve for a term of 
        three years.
          (3) Term limit.--(A) A member of the Commission who 
        is a member of Congress and who serves more than three 
        years of a term may not be appointed to another term as 
        a member.
          (B) A member of the Commission who is not a member of 
        Congress and who serves as a member of the Commission 
        for more than 56 months may not be appointed to another 
        term as a member.
  (g) Powers of Commission.--
          (1) Hearings and sessions.--The Commission may, for 
        the purpose of carrying out this title, hold such 
        hearings, sit and act at such times and places, take 
        such testimony, and receive such evidence as the 
        Commission considers appropriate. The Commission may 
        administer oaths to witnesses appearing before it.
          (2) Obtaining information.--The Commission may secure 
        directly from any department or agency of the United 
        States information necessary to enable it to carry out 
        its duties under this title. Upon request of the 
        Chairman, the head of that department or agency shall 
        furnish that information to the Commission in a full 
        and timely manner.
          (3) Subpoena power.--(A) The Commission may issue a 
        subpoena to require the attendance and testimony of 
        witnesses and the production of evidence relating to 
        any matter under investigation by the Commission.
          (B) If a person refuses to obey an order or subpoena 
        of the Commission that is issued in connection with a 
        Commission proceeding, the Commission may apply to the 
        United States district court in the judicial district 
        in which the proceeding is held for an order requiring 
        the person to comply with the subpoena or order.
          (4) Immunity.--The Commission is an agency of the 
        United States for purposes of part V of title 18, 
        United States Code (relating to immunity of witnesses).
          (5) Contract authority.--The Commission may contract 
        with and compensate government and private agencies or 
        persons for services without regard to section 3709 of 
        the Revised Statutes (41 U.S.C. 5).
  (h) Commission Procedures.--
          (1) Meetings.--The Commission shall meet at the call 
        of the Chairman.
          (2) Quorum.--Seven members of the Commission shall 
        constitute a quorum but a lesser number may hold 
        hearings.
  (i) Personnel Matters.--
          (1) Compensation.--Members shall not be paid by 
        reason of their service as members.
          (2) Travel expenses.--Each member shall receive 
        travel expenses, including per diem in lieu of 
        subsistence, in accordance with sections 5702 and 5703 
        of title 5, United States Code.
          (3) Director.--The Commission shall have a Director 
        who shall be appointed by the Chairman. The Director 
        shall be paid at a rate not to exceed the maximum rate 
        of basic pay payable for GS-15 of the General Schedule.
          (4) Staff.--The Director may appoint and fix the pay 
        of additional personnel as the Director considers 
        appropriate.
          (5) Applicability of certain civil service laws.--The 
        Director and staff of the Commission shall be appointed 
        subject to the provisions of title 5, United States 
        Code, governing appointments in the competitive 
        service, and shall be paid in accordance with the 
        provisions of chapter 51 and subchapter III of chapter 
        53 of that title relating to classification and General 
        Schedule pay rates.
  (j) Other Administrative Matters.--
          (1) Postal and printing services.--The Commission may 
        use the United States mails and obtain printing and 
        binding services in the same manner and under the same 
        conditions as other departments and agencies of the 
        United States.
          (2) Administrative support services.--Upon the 
        request of the Commission, the Administrator of General 
        Services shall provide to the Commission, on a 
        reimbursable basis, the administrative support services 
        necessary for the Commission to carry out its duties 
        under this title.
          (3) Experts and consultants.--The Commission may 
        procure temporary and intermittent services under 
        section 3109(b) of title 5, United States Code.
  (k) Sunset of Commission.--The Commission shall terminate on 
December 31, 2026, unless reauthorized by Congress.

SEC. 203. REVIEW OF EFFICIENCY AND NEED FOR FEDERAL AGENCIES.

  (a) In General.--The Commission shall review the efficiency 
and public need for each agency in accordance with the criteria 
described in section 204.
  (b) Recommendations; Report to Congress.--The Commission 
shall submit to Congress and the President not later than 
September 1 of each year a report containing--
          (1) an analysis of the efficiency of operation and 
        public need for each agency to be reviewed in the year 
        in which the report is submitted pursuant to the 
        schedule submitted to Congress under section 201;
          (2) recommendations on whether each such agency 
        should be abolished or reorganized;
          (3) recommendations on whether the functions of any 
        other agencies should be consolidated, transferred, or 
        reorganized in an agency to be reviewed in the year in 
        which the report is submitted pursuant to the schedule 
        submitted to Congress under section 201; and
          (4) recommendations for administrative and 
        legislative action with respect to each such agency, 
        but not including recommendations for appropriation 
        levels.
  (c) Draft Legislation.--The Commission shall submit to 
Congress and the President not later than September 1 of each 
year a draft of legislation to carry out the recommendations of 
the Commission under subsection (b).
  (d) Information Gathering.--The Commission shall--
          (1) conduct public hearings on the abolishment of 
        each agency reviewed under subsection (b);
          (2) provide an opportunity for public comment on the 
        abolishment of each such agency;
          (3) require the agency to provide information to the 
        Commission as appropriate; and
          (4) consult with the General Accounting Office, the 
        Office of Management and Budget, the Comptroller 
        General, and the chairman and ranking minority members 
        of the committees of Congress with oversight 
        responsibility for the agency being reviewed regarding 
        the operation of the agency.
  (e) Use of Program Inventory.--The Commission shall use the 
program inventory prepared under section 208 in reviewing the 
efficiency and public need for each agency under subsection 
(a).

SEC. 204. CRITERIA FOR REVIEW.

  The Commission shall evaluate the efficiency and public need 
for each agency pursuant to section 203(a) using the following 
criteria:
          (1) The effectiveness, and the efficiency of the 
        operation of, the programs carried out by each such 
        agency.
          (2) Whether the programs carried out by the agency 
        are cost-effective.
          (3) Whether the agency has acted outside the scope of 
        its original authority, and whether the original 
        objectives of the agency have been achieved.
          (4) Whether less restrictive or alternative methods 
        exist to carry out the functions of the agency.
          (5) The extent to which the jurisdiction of, and the 
        programs administered by, the agency duplicate or 
        conflict with the jurisdiction and programs of other 
        agencies.
          (6) The potential benefits of consolidating programs 
        administered by the agency with similar or duplicative 
        programs of other agencies, and the potential for 
        consolidating such programs.
          (7) The number and types of beneficiaries or persons 
        served by programs carried out by the agency.
          (8) The extent to which any trends, developments, and 
        emerging conditions that are likely to affect the 
        future nature and extent of the problems or needs that 
        the programs carried out by the agency are intended to 
        address.
          (9) The extent to which the agency has complied with 
        the provisions contained in the Government Performance 
        and Results Act of 1993 (Public Law 103-62; 107 Stat. 
        285).
          (10) The promptness and effectiveness with which the 
        agency seeks public input and input from State and 
        local governments on the efficiency and effectiveness 
        of the performance of the functions of the agency.
          (11) Whether the agency has worked to enact changes 
        in the law that are intended to benefit the public as a 
        whole rather than the specific business, institution, 
        or individuals that the agency regulates.
          (12) The extent to which the agency has encouraged 
        participation by the public as a whole in making its 
        rules and decisions rather than encouraging 
        participation solely by those it regulates.
          (13) The extent to which the public participation in 
        rulemaking and decisionmaking of the agency has 
        resulted in rules and decisions compatible with the 
        objectives of the agency.
          (14) The extent to which the agency complies with 
        section 552 of title 5, United States Code (commonly 
        known as the ``Freedom of Information Act'').
          (15) The extent to which the agency complies with 
        equal employment opportunity requirements regarding 
        equal employment opportunity.
          (16) The extent of the regulatory, privacy, and 
        paperwork impacts of the programs carried out by the 
        agency.
          (17) The extent to which the agency has coordinated 
        with State and local governments in performing the 
        functions of the agency.
          (18) The potential effects of abolishing the agency 
        on State and local governments.
          (19) The extent to which changes are necessary in the 
        authorizing statutes of the agency in order that the 
        functions of the agency can be performed in the most 
        efficient and effective manner.

SEC. 205. COMMISSION OVERSIGHT.

  (a) Monitoring of Implementation of Recommendations.--The 
Commission shall monitor implementation of laws enacting 
provisions that incorporate recommendations of the Commission 
with respect to abolishment or reorganization of agencies.
  (b) Monitoring of Other Relevant Legislation.--
          (1) In general.--The Commission shall review and 
        report to Congress on all legislation introduced in 
        either house of Congress that would establish--
                  (A) a new agency;
                  (B) a new program to be carried out by an 
                existing agency.
          (2) Report to congress.--The Commission shall include 
        in each report submitted to Congress under paragraph 
        (1) an analysis of whether--
                  (A) the functions of the proposed agency or 
                program could be carried out by one or more 
                existing agencies;
                  (B) the functions of the proposed agency or 
                program could be carried out in a less 
                restrictive manner than the manner proposed in 
                the legislation; and
                  (C) the legislation provides for public input 
                regarding the performance of functions by the 
                proposed agency or program.

SEC. 206. RULEMAKING AUTHORITY.

  The Commission may promulgate such rules as necessary to 
carry out this title.

SEC. 207. RELOCATION OF FEDERAL EMPLOYEES.

  If the position of an employee of an agency is eliminated as 
a result of the abolishment of an agency in accordance with 
this title, there shall be a reasonable effort to relocate such 
employee to a position within another agency.

SEC. 208. PROGRAM INVENTORY.

  (a) Preparation.--The Comptroller General and the Director of 
the Congressional Budget Office, in cooperation with the 
Director of the Congressional Research Service, shall prepare 
an inventory of Federal programs (in this title referred to as 
the ``program inventory'') within each agency.
  (b) Purpose.--The purpose of the program inventory is to 
advise and assist the Congress and the Commission in carrying 
out the requirements of this title. Such inventory shall not in 
any way bind the committees of the Senate or the House of 
Representatives with respect to their responsibilities under 
this title and shall not infringe on the legislative and 
oversight responsibilities of such committees. The Comptroller 
General shall compile and maintain the inventory and the 
Director of the Congressional Budget Office shall provide 
budgetary information for inclusion in the inventory.
  (c) Inventory Content.--The program inventory shall set forth 
for each program each of the following matters:
          (1) The specific provision or provisions of law 
        authorizing the program.
          (2) The committees of the Senate and the House of 
        Representatives which have legislative or oversight 
        jurisdiction over the program.
          (3) A brief statement of the purpose or purposes to 
        be achieved by the program.
          (4) The committees which have jurisdiction over 
        legislation providing new budget authority for the 
        program, including the appropriate subcommittees of the 
        Committees on Appropriations of the Senate and the 
        House of Representatives.
          (5) The agency and, if applicable, the subdivision 
        thereof responsible for administering the program.
          (6) The grants-in-aid, if any, provided by such 
        program to State and local governments.
          (7) The next reauthorization date for the program.
          (8) A unique identification number which links the 
        program and functional category structure.
          (9) The year in which the program was originally 
        established and, where applicable, the year in which 
        the program expires.
          (10) Where applicable, the year in which new budget 
        authority for the program was last authorized and the 
        year in which current authorizations of new budget 
        authority expire.
  (d) Budget Authority.--The report also shall set forth for 
each program whether the new budget authority provided for such 
programs is--
          (1) authorized for a definite period of time;
          (2) authorized in a specific dollar amount but 
        without limit of time;
          (3) authorized without limit of time or dollar 
        amounts;
          (4) not specifically authorized; or
          (5) permanently provided,
as determined by the Director of the Congressional Budget 
Office.
  (e) CBO Information.--For each program or group of programs, 
the program inventory also shall include information prepared 
by the Director of the Congressional Budget Office indicating 
each of the following matters:
          (1) The amounts of new budget authority authorized 
        and provided for the program for each of the preceding 
        four fiscal years and, where applicable, the four 
        succeeding fiscal years.
          (2) The functional and subfunctional category in 
        which the program is presently classified and was 
        classified under the fiscal year 2001 budget.
          (3) The identification code and title of the 
        appropriation account in which budget authority is 
        provided for the program.
  (f) Mutual Exchange of Information.--The General Accounting 
Office, the Congressional Research Service, and the 
Congressional Budget Office shall permit the mutual exchange of 
available information in their possession which would aid in 
the compilation of the program inventory.
  (g) Assistance by Executive Branch.--The Office of Management 
and Budget, and the Executive agencies and the subdivisions 
thereof shall, to the extent necessary and possible, provide 
the General Accounting Office with assistance requested by the 
Comptroller General in the compilation of the program 
inventory.

SEC. 209. DEFINITION OF AGENCY.

  As used in this title, the term ``agency'' has the meaning 
given that term by section 105 of title 5, United States Code, 
except that such term includes an advisory committee as that 
term is defined in section 102(2) of the Federal Advisory 
Committee Act.

SEC. 210. OFFSET OF AMOUNTS APPROPRIATED.

  Amounts appropriated to carry out this title shall be offset 
by a reduction in amounts appropriated to carry out programs of 
other Federal agencies.
                              ----------                              


2. An Amendment To Be Offered by Representative Chocola of Indiana, or 
                 His Designee, Debatable for 10 Minutes

  Page 2, after line 3, insert the following:

 TITLE I--EXTENSION OF DISCRETIONARY SPENDING LIMITS AND PAY-AS-YOU-GO 
                              REQUIREMENTS

  Redesignate sections 2 through 9 as sections 101 through 108, 
respectively; on page 5, lines 23 and 24, strike ``paragraphs'' 
and insert ``paragraph''; on page 6, line 5, insert quotation 
marks after the period and strike line 6 and all that follows 
thereafter through page 7, line 12; on page 7, line 13, strike 
``(c)'' and insert ``(b)''; and on page 7, strike line 25 and 
insert the following: ``covered by subsection (b) or (c) of 
section 316 of the Congressional Budget Act of 1974''.
  At the end, add the following new titles:

                 TITLE II--ONE-PAGE BUDGET RESOLUTIONS

SEC. 201. ONE-PAGE BUDGET RESOLUTIONS.

  (a) Content of Annual Concurrent Resolutions on the Budget.--
Section 301(a)(4) of the Congressional Budget Act of 1974 is 
amended to read as follows:
          ``(4) subtotals of new budget authority and outlays 
        for nondefense discretionary spending, defense 
        discretionary spending, direct spending (excluding 
        interest), interest, and emergencies (for the reserve 
        fund in section 316(b) and for military operations in 
        section 316(c));''.
  (b) Additional Matters in Concurrent Resolution.--Section 
301(b) of the Congressional Budget Act of 1974 is amended as 
follows:
          (1) Strike paragraphs (2), (4), and (6) through (9).
          (2) After paragraph (1), insert the following new 
        paragraph:
          ``(2) require such other congressional procedures, 
        relating to the budget, as may be appropriate to carry 
        out the purposes of this Act;''.
          (3) At the end of paragraph (3), insert ``and'' and 
        redesignate paragraph (5) as paragraph (4) and in such 
        paragraph strike the semicolon and insert a period.
  (c) Required Contents of Report.--Section 301(e)(2) of the 
Congressional Budget Act of 1974 is amended as follows:
          (1) Redesignate subparagraphs (A), (B), (C), (D), 
        (E), and (F) as subparagraphs (B), (C), (E), (F), and 
        (G), respectively.
          (2) Before subparagraph (B) (as redesignated), insert 
        the following new subparagraph:
                  ``(A) new budget authority and outlays for 
                each major functional category, based on 
                allocations of the total levels set forth 
                pursuant to subsection (a)(1);''.
          (3) In subparagraph (C) (as redesignated), strike 
        ``mandatory'' and insert ``direct spending''.
  (d) Additional Contents of Report.--Section 301(e)(3) of the 
Congressional Budget Act of 1974 is amended by striking ``and'' 
at the end of subparagraph (D), by striking the period and 
inserting ``; and'' at the end of subparagraph (E), and by 
adding at the end the following new subparagraph:
                  ``(F) reconciliation directives described in 
                section 310.''.
  (e) President's Budget Submission to the Congress.--(1) The 
first two sentences of section 1105(a) of title 31, United 
States Code, are amended to read as follows:
``On or after the first Monday in January but not later than 
the first Monday in February of each year the President shall 
submit a budget of the United States Government for the 
following fiscal year which shall set forth the following 
levels:
          ``(A) totals of new budget authority and outlays;
          ``(B) total Federal revenues and the amount, if any, 
        by which the aggregate level of Federal revenues should 
        be increased or decreased by bills and resolutions to 
        be reported by the appropriate committees;
          ``(C) the surplus or deficit in the budget;
          ``(D) subtotals of new budget authority and outlays 
        for nondefense discretionary spending, defense 
        discretionary spending, direct spending (excluding 
        interest), interest, and emergencies (for the reserve 
        fund in section 316(b) and for military operations in 
        section 316(c)); and
          ``(E) the public debt.
Each budget submission shall include a budget message and 
summary and supporting information and, as a separately 
delineated statement, the levels required in the preceding 
sentence for at least each of the 4 ensuing fiscal years.''.
  (2) The third sentence of section 1105(a) of title 31, United 
States Code, is amended by inserting ``submission'' after 
``budget''.
  (f) Conforming Amendments to Section 310 Regarding 
Reconciliation Directives.--(1) Section 310(a) of such Act is 
amended by striking ``A'' and inserting ``The joint explanatory 
statement accompanying the conference report on a''.
  (2) The first sentence of section 310(b) of such Act is 
amended by striking ``If'' and inserting ``If the joint 
explanatory statement accompanying the conference report on''.
  (3) Section 310(c)(1) of such Act is amended by inserting 
``the joint explanatory statement accompanying the conference 
report on'' after ``pursuant to''.

                         TITLE III--EMERGENCIES

SEC. 301. REPEAL OF ADJUSTMENTS FOR EMERGENCIES.

  (a) Elimination of Emergency Designation.--Sections 
251(b)(2)(A), 252(e), and 252(d)(4)(B) of the Balanced Budget 
and Emergency Deficit Control Act of 1985 are repealed.
  (b) Elimination of Adjustments.--Section 314(b) of the 
Congressional Budget Act of 1974 is amended by striking 
paragraph (1) and by redesignating paragraphs (2) through (5) 
as paragraphs (1) through (4), respectively.
  (c) Conforming Amendment.--Clause 2 of rule XXI of the Rules 
of the House of Representatives is amended by repealing 
paragraph (e) and by redesignating paragraph (f) as paragraph 
(e).

SEC. 302. OMB EMERGENCY CRITERIA.

  (a) Definition of Emergency.--Section 3 of the Congressional 
Budget and Impoundment Control Act of 1974 is amended by adding 
at the end the following new paragraph:
          ``(11)(A) The term `emergency' means a situation 
        that--
                  ``(i) requires new budget authority and 
                outlays (or new budget authority and the 
                outlays flowing therefrom) for the prevention 
                or mitigation of, or response to, loss of life 
                or property, or a threat to national security; 
                and
                  ``(ii) is unanticipated.
          ``(B) As used in subparagraph (A), the term 
        `unanticipated' means that the situation is--
                  ``(i) sudden, which means quickly coming into 
                being or not building up over time;
                  ``(ii) urgent, which means a pressing and 
                compelling need requiring immediate action;
                  ``(iii) unforeseen, which means not predicted 
                or anticipated as an emerging need; and
                  ``(iv) temporary, which means not of a 
                permanent duration.''.
  (b) Conforming Amendment.--The term `emergency' has the 
meaning given to such term in section 3 of the Congressional 
Budget and Impoundment Control Act of 1974.''.

SEC. 303. DEVELOPMENT OF GUIDELINES FOR APPLICATION OF EMERGENCY 
                    DEFINITION.

  Not later than 5 months after the date of enactment of this 
Act, the chairmen of the Committees on the Budget (in 
consultation with the President) shall, after consulting with 
the chairmen of the Committees on Appropriations and applicable 
authorizing committees of their respective Houses and the 
Directors of the Congressional Budget Office and the Office of 
Management and Budget, jointly publish in the Congressional 
Record guidelines for application of the definition of 
emergency set forth in section 3(11) of the Congressional 
Budget and Impoundment Control Act of 1974.

SEC. 304. RESERVE FUND FOR EMERGENCIES IN PRESIDENT'S BUDGET.

  Section 1105(f) of title 31, United States Code is amended by 
adding at the end the following new sentences: ``Such budget 
submission shall also comply with the requirements of 
subsections (b) and (c) of section 316 of the Congressional 
Budget Act of 1974 and, in the case of any budget authority 
requested for an emergency, such submission shall include a 
detailed justification of why such emergency is an emergency 
within the meaning of section 3(11) of the Congressional Budget 
Act of 1974.''.

SEC. 305. BUDGETING FOR EMERGENCIES.

  (a) Emergencies.--Title III of the Congressional Budget Act 
of 1974 is amended by adding at the end the following new 
section:

                             ``EMERGENCIES

  ``Sec. 316. (a) Adjustments.--
          ``(1) In general.--After the reporting of a bill or 
        joint resolution or the submission of a conference 
        report thereon that provides budget authority for any 
        emergency as identified pursuant to subsection (d) that 
        is not covered by subsection (c)--
                  ``(A) the chairman of the Committee on the 
                Budget of the House of Representatives or the 
                Senate shall determine and certify, pursuant to 
                the guidelines referred to in section 303 of 
                the Spending Control Act of 2004, the portion 
                (if any) of the amount so specified that is for 
                an emergency within the meaning of section 
                3(11); and
                  ``(B) such chairman shall make the adjustment 
                set forth in paragraph (2) for the amount of 
                new budget authority (or outlays) in that 
                measure and the outlays flowing from that 
                budget authority.
          ``(2) Matters to be adjusted.--The adjustments 
        referred to in paragraph (1) are to be made to the 
        allocations made pursuant to the appropriate concurrent 
        resolution on the budget pursuant to section 302(a) and 
        shall be in an amount not to exceed the amount reserved 
        for emergencies pursuant to the requirements of 
        subsection (b).
  ``(b) Reserve Fund for Nonmilitary Emergencies.--The amount 
set forth in the reserve fund for emergencies for budget 
authority and outlays for a fiscal year pursuant to section 
301(a)(4) shall equal--
          ``(1) the average of the enacted levels of budget 
        authority for emergencies (other than those covered by 
        subsection (c)) in the 5 fiscal years preceding the 
        current year; and
          ``(2) the average of the levels of outlays for 
        emergencies in the 5 fiscal years preceding the current 
        year flowing from the budget authority referred to in 
        paragraph (1), but only in the fiscal year for which 
        such budget authority first becomes available for 
        obligation.
  ``(c) Treatment of Emergencies To Fund Certain Military 
Operations.--Whenever the Committee on Appropriations reports 
any bill or joint resolution that provides budget authority for 
any emergency that is a threat to national security and the 
funding of which carries out a military operation authorized by 
a declaration of war or a joint resolution authorizing the use 
of military force (or economic assistance funding in 
furtherance of such operation) and the report accompanying that 
bill or joint resolution, pursuant to subsection (d), 
identifies any provision that increases outlays or provides 
budget authority (and the outlays flowing therefrom) for such 
emergency, the enactment of which would cause the total amount 
of budget authority or outlays provided for emergencies for the 
budget year in the joint resolution on the budget (pursuant to 
section 301(a)(4)) to be exceeded:
          ``(1) Such bill or joint resolution shall be referred 
        to the Committee on the Budget of the House or the 
        Senate, as the case may be, with instructions to report 
        it without amendment, other than that specified in 
        paragraph (2), within 5 legislative days of the day in 
        which it is reported from the originating committee. If 
        the Committee on the Budget of either House fails to 
        report a bill or joint resolution referred to it under 
        this subparagraph within such 5-day period, the 
        committee shall be automatically discharged from 
        further consideration of such bill or joint resolution 
        and such bill or joint resolution shall be placed on 
        the appropriate calendar.
          ``(2) An amendment to such a bill or joint resolution 
        referred to in this subsection shall only consist of an 
        exemption from section 251 of the Balanced Budget and 
        Emergency Deficit Control Act of 1985 of all or any 
        part of the provisions that provide budget authority 
        (and the outlays flowing therefrom) for such emergency 
        if the committee determines, pursuant to the guidelines 
        referred to in section 303 of the Spending Control Act 
        of 2004, that such budget authority is for an emergency 
        within the meaning of section 3(11).
          ``(3) If such a bill or joint resolution is reported 
        with an amendment specified in paragraph (2) by the 
        Committee on the Budget of the House of Representatives 
        or the Senate, then the budget authority and resulting 
        outlays that are the subject of such amendment shall 
        not be included in any determinations under section 
        302(f) or 311(a) for any bill, joint resolution, 
        amendment, motion, or conference report.
  ``(d) Committee Notification of Emergency Legislation.--
Whenever the Committee on Appropriations or any other committee 
of either House (including a committee of conference) reports 
any bill or joint resolution that provides budget authority for 
any emergency, the report accompanying that bill or joint 
resolution (or the joint explanatory statement of managers in 
the case of a conference report on any such bill or joint 
resolution) shall identify all provisions that provide budget 
authority and the outlays flowing therefrom for such emergency 
and include a statement of the reasons why such budget 
authority meets the definition of an emergency pursuant to the 
guidelines referred to in section 303 of the Spending Control 
Act of 2004.''.
  (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 315 the following new item:

``Sec. 316. Emergencies.''.

SEC. 306. APPLICATION OF SECTION 306 TO EMERGENCIES IN EXCESS OF 
                    AMOUNTS IN RESERVE FUND.

  Section 306 of the Congressional Budget Act of 1974 is 
amended by inserting at the end the following new sentence: 
``No amendment reported by the Committee on the Budget (or from 
the consideration of which such committee has been discharged) 
pursuant to section 316(c) may be amended.''.

SEC. 307. UP-TO-DATE TABULATIONS.

  Section 308(b)(2) of the Congressional Budget Act of 1974 is 
amended by striking ``and'' at the end of subparagraph (B), by 
striking the period at the end of subparagraph (C) and 
inserting ``; and'', and by adding at the end the following new 
subparagraph:
                  ``(D) shall include an up-to-date tabulation 
                of amounts remaining in the reserve fund for 
                emergencies.''.
                              ----------                              


3. An Amendment To Be Offered by Representative Hastings of Washington, 
               or His Designee, Debatable for 10 Minutes

  At the end, add the following new section:

SEC.    . ESTABLISHMENT OF MACROECONOMIC CONGRESSIONAL BUDGETS.

  (a) Macroeconomic Categories.--Section 301(a) of the 
Congressional Budget Act of 1974 (2 U.S.C. 632(a)) is amended 
by striking paragraph (4) and by redesignating paragraphs (5) 
through (7) as paragraphs (4) through (6), respectively.
  (b) Additional Matters.--Section 301(b) of the Congressional 
Budget Act of 1974 (2 U.S.C. 632(b)) is amended by striking 
``and'' at the end of paragraph (8), by striking the period and 
inserting ``; and'' at the end of paragraph (9), and by adding 
at the end the following new paragraph:
          ``(10) set forth appropriate levels for each fiscal 
        year covered by such concurrent resolution for new 
        budget authority and outlays for each major functional 
        category established by the Committees on the Budget 
        (after consultation with each other), based on 
        allocations of the total levels set forth pursuant to 
        subsection (a)(1).''.
                              ----------                              


4. An Amendment To Be Offered by Representative Hensarling of Texas, or 
                 His Designee, Debatable for 10 Minutes

  Page 2, after line 3, insert the following:

 TITLE I--EXTENSION OF DISCRETIONARY SPENDING LIMITS AND PAY-AS-YOU-GO 
                              REQUIREMENTS

  Redesignate sections 2 through 9 as sections 101 through 108, 
respectively, and, at the end, add the following new titles:

   TITLE II--SPENDING CAPS ON GROWTH OF ENTITLEMENTS AND MANDATORIES

SEC. 201. SPENDING CAPS ON GROWTH OF ENTITLEMENTS AND MANDATORIES.

  (a) Control of Entitlements and Mandatories.--The Balanced 
Budget and Emergency Deficit Control Act of 1985 is amended by 
adding after section 252 the following new section:

``SEC. 252A. ENFORCING CONTROLS ON DIRECT SPENDING.

  ``(a) Cap on Growth of Entitlements.--Effective for fiscal 
year 2005 and for each ensuing fiscal year, the total level of 
direct spending for all direct spending programs, projects, and 
activities (excluding social security) for any such fiscal year 
shall not exceed the total level of spending for all such 
programs, projects, and activities for the previous fiscal year 
after the direct spending for each such program, project, or 
activity is increased by the higher of the change in the 
Consumer Price Index for All Urban Consumers or the inflator 
(if any) applicable to that program, project, or activity and 
the growth in eligible population for such, project, or 
activity.
  ``(b) Sequestration.--Within 15 days after Congress adjourns 
to end a session (other than of the second session of the One 
Hundred Eighth Congress), and on the same day as a 
sequestration (if any) under section 251, there shall be a 
sequestration to reduce the amount of direct spending for the 
fiscal year beginning in the year the Congress adjourns by any 
amount necessary to reduce such spending to the level set forth 
in subsection (a) unless that amount is less than $250,000,000.
  ``(c) Uniform Reductions; Limitations.--The amount required 
to be sequestered for the fiscal year under subsection (a) 
shall be obtained from nonexempt direct spending accounts by 
actions taken in the following order:
          ``(1) First.--The reductions in the programs 
        specified in section 256(a) (National Wool Act and 
        special milk), section 256(b) (student loans), and 
        section 256(c) (foster care and adoption assistance) 
        shall be made.
          ``(2) Second.--Any additional reductions that may be 
        required shall be achieved by reducing each remaining 
        nonexempt direct spending account by the uniform 
        percentage necessary to achieve those additional 
        reductions, except that--
                  ``(A) the low-income programs specified in 
                section 256(d) shall not be reduced by more 
                than 2 percent;
                  ``(B) the retirement and veterans benefits 
                specified in sections 256(f), (g), and (h) 
                shall not be reduced by more than 2 percent in 
                the manner specified in that section; and
                  ``(C) the medicare programs shall not be 
                reduced by more than 2 percent in the manner 
                specified in section 256(i).
        The limitations set forth in subparagraphs (A), (B), 
        and (C) shall be applied iteratively, and after each 
        iteration the uniform percentage applicable to all 
        other programs under this paragraph shall be increased 
        (if necessary) to a level sufficient to achieve the 
        reductions required by this paragraph.
  ``(d) Exclusion of Medicare Prescription Drug Program Until 
Fully Operational.--For purposes of this section with respect 
to the limitation under subsection (a) for a fiscal year before 
fiscal year 2008, direct spending programs and direct spending 
shall not be construed to include part D of title XVIII of the 
Social Security Act (or spending under part C of such title 
that is attributable to such part D).''.
  (b) Table of Contents Amendment.--The table of contents set 
forth in 250(c) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended by adding after the item 
relating to section 252 the following new item:

``Sec. 252A. Enforcing controls on direct spending.''.

SEC. 202. EXEMPT PROGRAMS AND ACTIVITIES.

  Section 255 of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended to read as follows:

``SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES.

  ``(a) Social Security Benefits; Tier I Railroad Retirement 
Benefits; and Certain Medicare Benefits.--(1) Benefits payable 
under the old-age, survivors, and disability insurance program 
established under title II of the Social Security Act, and 
benefits payable under section 3(a), 3(f)(3), 4(a), or 4(f) of 
the Railroad Retirement Act of 1974, shall be exempt from 
reduction under any order issued under this part.
  ``(2) Payments made under part A of title XVIII (relating to 
part A medicare hospital insurance benefits) of the Social 
Security Act and payments made under part C of such title 
(relating to the Medicare Advantage program) insofar as they 
are attributable to part A of such title shall be exempt from 
reduction under any order issued under this part.
  ``(b) Descriptions and Lists.--The following budget accounts 
or activities shall be exempt from sequestration:
          ``(1) net interest;
          ``(2) all payments to trust funds from excise taxes 
        or other receipts or collections properly creditable to 
        those trust funds;
          ``(3) all payments from one Federal direct spending 
        budget account to another Federal budget account; and 
        all intragovernmental funds including those from which 
        funding is derived primarily from other Government 
        accounts, except to the extent that such funds are 
        augmented by direct appropriations for the fiscal year 
        for which the order is in effect;
          ``(4) activities resulting from private donations, 
        bequests, or voluntary contributions to the Government;
          ``(5) payments from any revolving fund or trust-
        revolving fund (or similar activity) that provides 
        deposit insurance or other Government insurance, 
        Government guarantees, or any other form of contingent 
        liability, to the extent those payments result from 
        contractual or other legally binding commitments of the 
        Government at the time of any sequestration;
          ``(6) credit liquidating and financing accounts;
          ``(7) the following accounts, which largely fulfill 
        requirements of the Constitution or otherwise make 
        payments to which the Government is committed:
                  ``Administration of Territories, Northern 
                Mariana Islands Covenant grants (14-0412-0-1-
                806);
                  ``Armed Forces Retirement Home Trust Fund, 
                payment of claims (84-8930-0-7-705);
                  ``Bureau of Indian Affairs, miscellaneous 
                payments to Indians (14-230-0-1-452);
                  ``Bureau of Indian Affairs, miscellaneous 
                trust funds, tribal trust funds (14-9973-0-7-
                999);
                  ``Claims, defense;
                  ``Claims, judgments, and relief act (20-185-
                0-1-806);
                  ``Compact of Free Association, economic 
                assistance pursuant to Public Law 99 (14-0414-
                0-1-806);
                  ``Compensation of the President (11-0001-0-1-
                802);
                  ``Customs Service, miscellaneous permanent 
                appropriations (20-9992-0-2-852);
                  ``Eastern Indian land claims settlement fund 
                (14-2202-0-1-806);
                  ``Farm Credit Administration, Limitation on 
                Administration Expenses (78-4131-0-3-351);
                  ``Farm Credit System Financial Assistance 
                Corporation, interest payments (20-1850-0-1-
                351);
                  ``Internal Revenue collections of Puerto Rico 
                (20-5737-0-2-852);
                  ``Panama Canal Commission, operating expenses 
                and capital outlay (95-5190-0-2-403);
                  ``Payments of Vietnam and USS Pueblo 
                prisoner-of-war claims (15-0104-0-1-153);
                  ``Payments to copyright owners (03-5175-0-2-
                376);
                  ``Payments to health care trust funds (75-
                0580-0-1-571);
                  ``Payments to social security trust funds 
                (75-0404-0-1-651);
                  ``Payments to the United States territories, 
                fiscal assistance (14-0418-0-1-801);
                  ``Payments to widows and heirs of deceased 
                Members of Congress (00-0215-0-1-801);
                  ``Pension Benefit Guaranty Corporation Fund 
                (16-4204-0-3-601);
                  ``Salaries of Article III judges;
                  ``Washington Metropolitan Area Transit 
                Authority, interest payments (46-0300-0-1-401);
          ``(8) the following noncredit special, revolving, or 
        trust-revolving funds:
                  ``Coinage profit fund (20-5811-0-2-803);
                  ``Comptroller of the Currency;
                  ``Director of the Office of Thrift 
                Supervision;
                  ``Exchange Stabilization Fund (20-4444-0-3-
                155);
                  ``Federal Housing Finance Board;
                  ``Foreign Military Sales trust fund (11-
                82232-0-7-155);
                  ``National Credit Union Administration, 
                central liquidating facility (25-4470-0-3-373);
                  ``National Credit Union Administration, 
                credit union insurance fund (25-4468-0-3-373);
                  ``National Credit Union Administration 
                operating fund (25-4056-0-3-373); and
                  ``Resolution Trust Corporation Revolving Fund 
                (22-4055-0-3-373);
          ``(9) Thrift Savings Fund;
          ``(10) appropriations for the District of Columbia to 
        the extent they are appropriations of locally raised 
        funds;
          ``(11)(A) any amount paid as regular unemployment 
        compensation by a State from its account in the 
        Unemployment Trust Fund (established by section 904(a) 
        of the Social Security Act);
          ``(B) any advance made to a State from the Federal 
        unemployment account (established by section 904(g) of 
        such Act) under title XII of such Act and any advance 
        appropriated to the Federal unemployment account 
        pursuant to section 1203 of such Act; and
          ``(C) any payment made from the Federal Employees 
        Compensation Account (as established under section 909 
        of such Act) for the purpose of carrying out chapter 85 
        of title 5, United States Code, and funds appropriated 
        or transferred to or otherwise deposited in such 
        Account; and
          ``(12)(A) FDIC, Bank Insurance Fund (51-4064-0-3-
        373);
          ``(B) FDIC, FSLIC Resolution Fund (51-4065-0-3-373); 
        and
          ``(C) FDIC, Savings Association Insurance Fund (51-
        4066-0-3-373);
  ``(c) Federal Retirement and Disability Accounts.--The 
following Federal retirement and disability accounts shall be 
exempt from reduction under any order issued under this part:
          ``Civil service retirement and disability fund (24-
        8135-0-7-602).
          ``Black Lung Disability Trust Fund (20-8144-0-7-601).
          ``Foreign Service Retirement and Disability Fund (19-
        8186-0-7-602).
          ``District of Columbia Judicial Retirement and 
        Survivors Annuity Fund (20-8212-0-7-602).
          ``Judicial Survivors' Annuities Fund (10-8110-0-7-
        602).
          ``Payments to the Railroad Retirement Accounts (60-
        0113-0-1-601).
          ``Tax Court Judges Survivors Annuity Fund (23-8115-0-
        7-602).
          ``Employees Life Insurance Fund (24-8424-0-8-602).
  ``(d) Federal Administrative Expenses.--
          ``(1) Notwithstanding any provision of law other than 
        paragraph (3), administrative expenses incurred by the 
        departments and agencies, including independent 
        agencies, of the Government in connection with any 
        program, project, activity, or account shall be subject 
        to reduction pursuant to any sequestration order, 
        without regard to any exemption, exception, limitation, 
        or special rule otherwise applicable with respect to 
        such program, project, activity, or account, and 
        regardless of whether the program, project, activity, 
        or account is self-supporting and does not receive 
        appropriations.
          ``(2) Payments made by the Government to reimburse or 
        match administrative costs incurred by a State or 
        political subdivision under or in connection with any 
        program, project, activity, or account shall not be 
        considered administrative expenses of the Government 
        for purposes of this section, and shall be subject to 
        sequestration to the extent (and only to the extent) 
        that other payments made by the Government under or in 
        connection with that program, project, activity, or 
        account are subject to that reduction or sequestration; 
        except that Federal payments made to a State as 
        reimbursement of administrative costs incurred by that 
        State under or in connection with the unemployment 
        compensation programs specified in subsection (a)(11) 
        shall be subject to reduction or sequestration under 
        this part notwithstanding the exemption otherwise 
        granted to such programs under that subsection.
          ``(3) Notwithstanding any other provision of law, the 
        administrative expenses of the following programs shall 
        be exempt from sequestration:
                  ``(A) Comptroller of the Currency.
                  ``(B) Federal Deposit Insurance Corporation.
                  ``(C) Office of Thrift Supervision.
                  ``(D) National Credit Union Administration.
                  ``(E) National Credit Union Administration, 
                central liquidity facility.
                  ``(F) Federal Retirement Thrift Investment 
                Board.
                  ``(G) Resolution Funding Corporation.
                  ``(H) Resolution Trust Corporation.
                  ``(I) Board of Governors of the Federal 
                Reserve System.
  ``(e) Veterans' Programs.--The following programs shall be 
exempt from reduction under any order issued under this part:
          ``General Post Funds (36-8180-0-7-705).
          ``Veterans Insurance and Indemnities (36-0120-0-1-
        701).
          ``Service-Disabled Veterans Insurance Funds (36-4012-
        0-3-701).
          ``Veterans Reopened Insurance Fund (36-4010-0-3-701).
          ``Servicemembers' Group Life Insurance Fund (36-4009-
        0-3-701).
          ``Post-Vietnam Era Veterans Education Account (36-
        8133-0-7-702).
          ``National Service Life Insurance Fund (36-8132-0-7-
        701).
          ``United States Government Life Insurance Fund (36-
        8150-0-7-701).
          ``Veterans Special Life Insurance Fund (36-8455-0-8-
        701).
  ``(f) Optional Exemption of Defense and Homeland Security 
Accounts.--
          ``(1) In general.--The President may, with respect to 
        any defense or homeland security account, exempt that 
        account from sequestration or provide for a lower 
        uniform percentage reduction than would otherwise 
        apply.
          ``(2) Limitation.--The President may not use the 
        authority provided by paragraph (1) unless the 
        President notifies the Congress of the manner in which 
        such authority will be exercised on or before the date 
        specified in section 254(a) for the budget year.''.

SEC. 203. EXCEPTIONS, LIMITATIONS, AND SPECIAL RULES.

  (a) In General.--Section 256 of the Balanced Budget and 
Emergency Deficit Control Act of 1985 is amended to read as 
follows:

``SEC. 256. EXCEPTIONS, LIMITATIONS, AND SPECIAL RULES.

  ``(a) National Wool Act and the Special Milk Program.--
Automatic spending increases are increases in outlays due to 
changes in indexes in the following programs:
          ``(1) National Wool Act; and
          ``(2) Special milk program.
In those programs all amounts other than the automatic spending 
increases shall be exempt from reduction under any 
sequestration order.
  ``(b) Student Loans.--For all student loans under part B or D 
of title IV of the Higher Education Act of 1965 made during the 
period when a sequestration order under section 254 is in 
effect as required by section 252 or 253, origination fees 
under sections 438(c)(2) and 455(c) of that Act shall each be 
increased by 0.50 percentage point.
  ``(c) Foster Care and Adoption Assistance Programs.--Any 
sequestration order shall make the reduction otherwise required 
under the foster care and adoption assistance programs 
(established by part E of title IV of the Social Security Act) 
only with respect to payments and expenditures made by States 
in which increases in foster care maintenance payment rates or 
adoption assistance payment rates (or both) are to take effect 
during the fiscal year involved, and only to the extent that 
the required reduction can be accomplished by applying a 
uniform percentage reduction to the Federal matching payments 
that each such State would otherwise receive under section 474 
of that Act (for such fiscal year) for that portion of the 
State's payments attributable to the increases taking effect 
during that year. No State's matching payments from the 
Government for foster care maintenance payments or for adoption 
assistance maintenance payments may be reduced by a percentage 
exceeding the applicable domestic sequestration percentage. No 
State may, after the date of the enactment of this Act, make 
any change in the timetable for making payments under a State 
plan approved under part E of title IV of the Social Security 
Act which has the effect of changing the fiscal year in which 
expenditures under such part are made.
  ``(d) Low-Income Programs.--(1) Benefit payments or payments 
to States or other entities for the programs listed in 
paragraph (2) shall not be reduced by more than 2 percent under 
any sequestration order. When reduced under an end-of-session 
sequestration order, those benefit reductions shall occur 
starting with the payment made at the start of January. When 
reduced under a within-session sequestration order, those 
benefit reductions shall occur starting with the next periodic 
payment.
  ``(2) The programs referred to in paragraph (1) are the 
following:
          ``Child Nutrition (12-3539-0-1-605).
          ``Food Stamp Programs (12-3505-0-1-605).
          ``Grants to States for Medicaid (75-0512-0-1-551).
          ``State Children's Health Insurance Fund (75-0515-0-
        1-551).
          ``Supplemental Security Income Program (75-0406-0-1-
        609).
          ``Temporary Assistance for Needy Families (75-1552-0-
        1-609).
          ``Special supplemental nutrition program for women, 
        infants, and children (WIC) (12-3510-0-1-605).
  ``(e) Veterans' Medical Care.--The maximum permissible 
reduction in budget authority for Veterans' medical care (36-
0160-0-1-703) for any fiscal year, pursuant to an order issued 
under section 254, shall be 2 percent.
  ``(f) Federal Retirement Programs.--
          ``(1) For each of the programs listed in paragraph 
        (2) and except as provided in paragraph (3), monthly 
        (or other periodic) benefit payments shall be reduced 
        by the uniform percentage applicable to direct spending 
        sequestrations for such programs, which shall in no 
        case exceed 2 percent under any sequestration order. 
        When reduced under an end-of-session sequestration 
        order, those benefit reductions shall occur starting 
        with the payment made at the start of January or 7 
        weeks after the order is issued, whichever is later. 
        When reduced under a within-session sequestration 
        order, those benefit reductions shall occur starting 
        with the next periodic payment.
          ``(2) The programs subject to paragraph (1) are:
                  ``Central Intelligence Agency Retirement and 
                Disability Fund (56-3400-0-1-054).
                  ``Comptrollers General Retirement System (05-
                0107-0-1-801).
                  ``Judicial Officers' Retirement Fund (10-
                8122-0-7-602).
                  ``Claims Judges' Retirement Fund (10-8124-0-
                7-602).
                  ``Pensions for former Presidents (47-0105-0-
                1-802).
                  ``National Oceanic and Atmospheric 
                Administration Retirement (13-1450-0-1-306).
                  ``Railroad Industry Pension Fund (60-8011-0-
                7-601).
                  ``Retired pay, Coast Guard (70-0602-0-1-403).
                  ``Retirement pay and medical benefits for 
                commissioned officers, Public Health Service 
                (75-0379-0-1-551).
                  ``Payments to Civil Service Retirement and 
                Disability Fund (24-0200-0-1-805).
                  ``Payments to the Foreign Service Retirement 
                and Disability Fund (72-1036-0-1-153).
                  ``Payments to Judiciary Trust Funds (10-0941-
                0-1-752).
  ``(g) Veterans Programs.--To achieve the total percentage 
reduction required by any order issued under this part, the 
percentage reduction that shall apply to payments under the 
following programs shall in no event exceed 2 percent:
          ``Canteen Service Revolving Fund (36-4014-0-3-705).
          ``Medical Center Research Organizations (36-4026-0-3-
        703).
          ``Disability Compensation Benefits (36-0102-0-1-701).
          ``Education Benefits (36-0137-0-1-702).
          ``Vocational Rehabilitation and Employment Benefits 
        (36-0135-0-1-702).
          ``Pensions Benefits (36-0154-0-1-701).
          ``Burial Benefits (36-0139-0-1-701).
          ``Guaranteed Transitional Housing Loans For Homeless 
        Veterans Program Account (36-1119-0-1-704).
          ``Housing Direct Loan Financing Account (36-4127-0-1-
        704).
          ``Housing Guaranteed Loan Financing Account (36-4129-
        0-3-704).
          ``Vocational Rehabilitation and Education Direct Loan 
        Financing Account (36-4259-0-3-702).
  ``(h) Military Health Care and Retirement.--To achieve the 
total percentage reduction in military retirement required by 
any order issued under this part, the percentage reduction that 
shall apply to payments under the Military retirement fund (97-
8097-0-7-602), payments to the military retirement fund (97-
0040-0-1-054), and the Defense Health Program (97-0130-0-1-051) 
shall in no event exceed 2 percent.
  ``(i) Medicare Program.--
          ``(1) Calculation of reduction in individual payment 
        amounts.--To achieve the total percentage reduction in 
        those programs required by any order issued under this 
        part, the percentage reduction that shall apply to 
        payments under the health insurance programs under 
        title XVIII of the Social Security Act (other than 
        payments described in section 255(a)(2)) that are 
        subject to such order for services furnished after any 
        sequestration order is issued shall be such that the 
        reduction made in payments under that order shall 
        achieve the required total percentage reduction in 
        those payments for that fiscal year as determined on a 
        12-month basis. However, the percentage reduction under 
        any such program shall in no case exceed 2 percent 
        under any sequestration order.
          ``(2) Timing of application of reductions.--If a 
        reduction is made under paragraph (1) in payment 
        amounts pursuant to a sequestration order, the 
        reduction shall be applied to payment for services 
        furnished after the effective date of the order.
          ``(3) No increase in beneficiary charges in 
        assignment-related cases.--If a reduction in payment 
        amounts is made under paragraph (1) for services for 
        which payment under part B of title XVIII of the Social 
        Security Act is made on the basis of an assignment 
        described in section 1842(b)(3)(B)(ii), in accordance 
        with section 1842(b)(6)(B), or under the procedure 
        described in section 1870(f)(1) of such Act, the person 
        furnishing the services shall be considered to have 
        accepted payment of the reasonable charge for the 
        services, less any reduction in payment amount made 
        pursuant to a sequestration order, as payment in full.
          ``(4) Application to parts c and d.--The reductions 
        otherwise required under parts C and D of title XVIII 
        of the Social Security Act with respect to a fiscal 
        year shall be applied to the calendar year that begins 
        after the end of the fiscal year to which the 
        applicable sequestration order applies.
  ``(j) Federal Pay.--
          ``(1) In general.--For purposes of any order issued 
        under section 254, new budget authority to pay Federal 
        personnel shall be reduced by the applicable uniform 
        percentage, but no sequestration order may reduce or 
        have the effect of reducing the rate of pay to which 
        any individual is entitled under any statutory pay 
        system (as increased by any amount payable under 
        section 5304 of title 5, United States Code, or section 
        302 of the Federal Employees Pay Comparability Act of 
        1990) or the rate of any element of military pay to 
        which any individual is entitled under title 37, United 
        States Code, or any increase in rates of pay which is 
        scheduled to take effect under section 5303 of title 5, 
        United States Code, section 1009 of title 37, United 
        States Code, or any other provision of law.
          ``(2) Definitions.--For purposes of this subsection:
                  ``(A) The term `statutory pay system' shall 
                have the meaning given that term in section 
                5302(1) of title 5, United States Code.
                  ``(B) The term `elements of military pay' 
                means--
                          ``(i) the elements of compensation of 
                        members of the uniformed services 
                        specified in section 1009 of title 37, 
                        United States Code,
                          ``(ii) allowances provided members of 
                        the uniformed services under sections 
                        403a and 405 of such title, and
                          ``(iii) cadet pay and midshipman pay 
                        under section 203(c) of such title.
                  ``(C) The term `uniformed services' shall 
                have the meaning given that term in section 
                101(3) of title 37, United States Code.
  ``(k) Child Support Enforcement Program.--Any sequestration 
order shall accomplish the full amount of any required 
reduction in expenditures under sections 455 and 458 of the 
Social Security Act by reducing the Federal matching rate for 
State administrative costs under such program, as specified 
(for the fiscal year involved) in section 455(a) of such Act, 
to the extent necessary to reduce such expenditures by that 
amount.
  ``(l) Extended Unemployment Compensation.--(1) A State may 
reduce each weekly benefit payment made under the Federal-State 
Extended Unemployment Compensation Act of 1970 for any week of 
unemployment occurring during any period with respect to which 
payments are reduced under an order issued under this title by 
a percentage not to exceed the percentage by which the Federal 
payment to the State under section 204 of such Act is to be 
reduced for such week as a result of such order.
  ``(2) A reduction by a State in accordance with subparagraph 
(A) shall not be considered as a failure to fulfill the 
requirements of section 3304(a)(11) of the Internal Revenue 
Code of 1954.
  ``(m) Commodity Credit Corporation.--
          ``(1) Powers and authorities of the commodity credit 
        corporation.--This title shall not restrict the 
        Commodity Credit Corporation in the discharge of its 
        authority and responsibility as a corporation to buy 
        and sell commodities in world trade, to use the 
        proceeds as a revolving fund to meet other obligations 
        and otherwise operate as a corporation, the purpose for 
        which it was created.
          ``(2) Reduction in payments made under contracts.--
        (A) Payments and loan eligibility under any contract 
        entered into with a person by the Commodity Credit 
        Corporation prior to the time any sequestration order 
        has been issued shall not be reduced by an order 
        subsequently issued. Subject to subparagraph (B), after 
        any sequestration order is issued for a fiscal year, 
        any cash payments made by the Commodity Credit 
        Corporation--
                  ``(i) under the terms of any one-year 
                contract entered into in or after such fiscal 
                year and after the issuance of the order; and
                  ``(ii) out of an entitlement account,
        to any person (including any producer, lender, or 
        guarantee entity) shall be subject to reduction under 
        the order.
          ``(B) Each contract entered into with producers or 
        producer cooperatives with respect to a particular crop 
        of a commodity and subject to reduction under 
        subparagraph (A) shall be reduced in accordance with 
        the same terms and conditions. If some, but not all, 
        contracts applicable to a crop of a commodity have been 
        entered into prior to the issuance of any sequestration 
        order, the order shall provide that the necessary 
        reduction in payments under contracts applicable to the 
        commodity be uniformly applied to all contracts for 
        succeeding crops of the commodity, under the authority 
        provided in paragraph (3).
          ``(3) Delayed reduction in outlays permissible.--
        Notwithstanding any other provision of this title, if 
        any sequestration order is issued with respect to a 
        fiscal year, any reduction under the order applicable 
        to contracts described in paragraph (2) may provide for 
        reductions in outlays for the account involved to occur 
        in the fiscal years following the fiscal year to which 
        the order applies.
          ``(4) Uniform percentage rate of reduction and other 
        limitations.--All reductions described in paragraph (2) 
        that are required to be made in connection with any 
        sequestration order with respect to a fiscal year--
                  ``(A) shall be made so as to ensure that 
                outlays for each program, project, activity, or 
                account involved are reduced by a percentage 
                rate that is uniform for all such programs, 
                projects, activities, and accounts, and may not 
                be made so as to achieve a percentage rate of 
                reduction in any such item exceeding the rate 
                specified in the order; and
                  ``(B) with respect to commodity price support 
                and income protection programs, shall be made 
                in such manner and under such procedures as 
                will attempt to ensure that--
                          ``(i) uncertainty as to the scope of 
                        benefits under any such program is 
                        minimized;
                          ``(ii) any instability in market 
                        prices for agricultural commodities 
                        resulting from the reduction is 
                        minimized; and
                          ``(iii) normal production and 
                        marketing relationships among 
                        agricultural commodities (including 
                        both contract and non-contract 
                        commodities) are not distorted.
                In meeting the criterion set out in clause 
                (iii) of subparagraph (B) of the preceding 
                sentence, the President shall take into 
                consideration that reductions under an order 
                may apply to programs for two or more 
                agricultural commodities that use the same type 
                of production or marketing resources or that 
                are alternative commodities among which a 
                producer could choose in making annual 
                production decisions.
          ``(5) Certain authority not to be limited.--Nothing 
        in this title shall limit or reduce in any way any 
        appropriation that provides the Commodity Credit 
        Corporation with funds to cover the Corporation's net 
        realized losses.
  ``(n) Postal Service Fund.--Notwithstanding any other 
provision of law, any sequestration of the Postal Service Fund 
shall be accomplished by a payment from that Fund to the 
General Fund of the Treasury, and the Postmaster General of the 
United States shall make the full amount of that payment during 
the fiscal year to which the presidential sequestration order 
applies.
  ``(o) Effects of Sequestration.--The effects of sequestration 
shall be as follows:
          ``(1) Budgetary resources sequestered from any 
        account other than an entitlement trust, special, or 
        revolving fund account shall revert to the Treasury and 
        be permanently canceled.
          ``(2) Except as otherwise provided, the same 
        percentage sequestration shall apply to all programs, 
        projects, and activities within a budget account (with 
        programs, projects, and activities as delineated in the 
        appropriation Act or accompanying report for the 
        relevant fiscal year covering that account, or for 
        accounts not included in appropriation Acts, as 
        delineated in the most recently submitted President's 
        budget).
          ``(3) Administrative regulations or similar actions 
        implementing a sequestration shall be made within 120 
        days of the sequestration order. To the extent that 
        formula allocations differ at different levels of 
        budgetary resources within an account, program, 
        project, or activity, the sequestration shall be 
        interpreted as producing a lower total appropriation, 
        with that lower appropriation being obligated as though 
        it had been the pre-sequestration appropriation and no 
        sequestration had occurred.
          ``(4) Except as otherwise provided, obligations in 
        sequestered direct spending accounts shall be reduced 
        in the fiscal year in which a sequestration occurs and 
        in all succeeding fiscal years.
          ``(5) If an automatic spending increase is 
        sequestered, the increase (in the applicable index) 
        that was disregarded as a result of that sequestration 
        shall not be taken into account in any subsequent 
        fiscal year.
          ``(6) Except as otherwise provided, sequestration in 
        accounts for which obligations are indefinite shall be 
        taken in a manner to ensure that obligations in the 
        fiscal year of a sequestration and succeeding fiscal 
        years are reduced, from the level that would actually 
        have occurred, by the applicable sequestration 
        percentage.''.
  (b) Conforming Amendment.--The table of contents set forth in 
250(c) of the Balanced Budget and Emergency Deficit Control Act 
of 1985 is amended by amending the item relating to section 256 
to read as follows:

``Sec. 256. Exceptions, limitations, and special rules.''.

SEC. 204. TECHNICAL AND CONFORMING AMENDMENTS.

  The Balanced Budget and Emergency Deficit Control Act of 1985 
is amended as follows:
          (1) Section 251(a)(1) is amended by inserting ``, 
        section 252A,'' after ``section 252''.
          (2) Section 254(c)(4)(B) is amended by inserting ``or 
        section 252A'' after ``section 252''.
          (3) Section 254(c) is amended by redesignating 
        paragraph (5) as paragraph (6) and by inserting after 
        paragraph (4) the following new paragraph:
          ``(5) Direct spending control sequestration 
        reports.--The preview reports shall set forth, for the 
        current year and the budget year, estimates for each of 
        the following:
                  ``(A) The total level of direct spending for 
                all programs, projects, and activities 
                (excluding social security).
                  ``(B) The sequestration percentage or (if the 
                required sequestration percentage is greater 
                than the maximum allowable percentage for 
                medicare) percentages necessary to comply with 
                section 252A.''.
          (4) Section 254(f) is amended by redesignating 
        paragraphs (4) and (5) as paragraphs (5) and (6) and by 
        inserting after paragraph (3) the following new 
        paragraph:
          ``(4) Direct spending control sequestration 
        reports.--The final reports shall contain all the 
        information required in the direct spending control 
        sequestration preview reports. In addition, these 
        reports shall contain, for the budget year, for each 
        account to be sequestered, estimates of the baseline 
        level of sequesterable budgetary resources and 
        resulting outlays and the amount of budgetary resources 
        to be sequestered and resulting outlay reductions. The 
        reports shall also contain estimates of the effects on 
        outlays of the sequestration in each outyear for direct 
        spending programs.''.
          (5) Section 258C(a)(1) is amended by inserting ``, 
        252A,'' after ``section 252''.

     TITLE III--LONG-TERM UNFUNDED OBLIGATIONS AND OTHER AMENDMENTS

SEC. 301. LONG-TERM UNFUNDED OBLIGATIONS.

  (a) In General.--Title IV of the Congressional Budget Act of 
1974 is amended by adding at the end the following:

                 PART C--LONG-TERM UNFUNDED OBLIGATIONS

``SEC. 441. ANALYSIS OF LONG-TERM UNFUNDED OBLIGATIONS.

  ``Beginning in fiscal year 2006, the President's budget shall 
include an analysis of long-term unfunded obligations. This 
analysis shall include:
          ``(1) An analysis of the impact of long-term unfunded 
        obligations in applicable entitlement programs on the 
        long-term level of unified budget outlays and the 
        unified budget surplus or deficit, in relation to the 
        projected level of the Gross Domestic Product.
          ``(2) A report on the impact of legislation enacted 
        during the previous session of Congress that increases 
        the long-term unfunded obligation in any applicable 
        group of entitlement program.
          ``(3) An analysis of the impact of legislation 
        proposed in the President's budget on the long-term 
        unfunded obligation in any applicable entitlement 
        program.

``SEC. 442. STANDARD FOR DETERMINING INCREASE IN LONG-TERM UNFUNDED 
                    OBLIGATION.

  ``For the purpose of this part, legislation shall be 
considered to increase the long-term unfunded obligation of an 
applicable group of entitlement programs if it either--
          ``(1) increases the excess of the discounted present 
        value of the expenditures of programs in the group 
        above the discounted present value of the dedicated 
        receipts of programs in the group over a long-term 
        estimating period by more than an applicable threshold; 
        or
          ``(2) increases the dollar level of the expenditures 
        of programs in the group above the dedicated receipts 
        of programs in the group above the dedicated receipts 
        of programs in the group in the last year of the 
        estimating period by more than the applicable 
        threshold.

``SEC. 443. LONG-TERM UNFUNDED OBLIGATION ANALYSES BY CONGRESSIONAL 
                    BUDGET OFFICE.

  The Director of the Congressional Budget Office shall, to the 
extent practicable, prepare for each bill or resolution of a 
public character reported by any committee of the House of 
Representatives or the Senate (except the Committee on 
Appropriations of each House), and submit to such committee--
          ``(1) an estimate of any increase of the long-term 
        unfunded obligation of any applicable entitlement 
        program which would be incurred in carrying out such 
        bill or resolution as measured by the increase of the 
        excess of the discounted present value of the 
        expenditures of such program above the discounted 
        present value of the dedicated receipts of such program 
        over a long-term estimating period by more than an 
        applicable threshold; and
          ``(2) an estimate of any increase in the dollar level 
        of the expenditures of such program above the dedicated 
        receipts of such program above the dedicated receipts 
        of such program in the last year of the estimating 
        period by more than the applicable threshold.
The estimates and description so submitted shall be included in 
the report accompanying such bill or resolution if timely 
submitted to such committee before such report is filed.

``SEC. 444. DEFINITIONS.

  ``As used in this part--
          ``(1) the term `applicable entitlement program' shall 
        be defined as any one of the following programs:
                  ``(A) Old Age, Survivors, and Disability 
                Insurance.
                  ``(B) Medicare (combined hospital insurance 
                and supplemental medical insurance).
                  ``(C) Civilian retirement and disability 
                (combined Civil Service Retirement System and 
                Federal Employees Retirement System).
                  ``(D) Foreign Service Retirement and 
                Disability (combined Foreign Service Retirement 
                and Disability System and Foreign Service 
                Pension System).
                  ``(E) Retired Employees Health Benefits.
                  ``(F) Military Retirement System.
                  ``(G) Uniformed Services Retiree Health Care 
                System.
                  ``(H) Railroad Retirement System (combined 
                Rail Industry Pension Fund, Social Security 
                Equivalent Benefit Account, and National 
                Railroad Retirement Investment Trust).
                  ``(I) Supplemental Security Income (SSI).
                  ``(J) For estimates made on or after January 
                1, 2006, veterans disability compensation.
                  ``(K) Any other entitlement program with 
                regularly available long-term estimates.
          ``(2) The term `entitlement program with regularly 
        available long-term estimates' means a program for 
        which the Director of the Congressional Budget Office, 
        in consultation with the Committees on the Budget of 
        the House of Representatives and the Senate and the 
        Director of the Office of Management and Budget, has 
        determined that it is feasible to make long-term 
        estimates of expenditures and dedicated receipts based 
        on explicit demographic, economic, and other estimating 
        assumptions. The Director shall notify the House and 
        Senate Committees on the Budget in writing, whenever he 
        or she makes such a determination.
          ``(3) The term `applicable group of entitlement 
        programs' shall be defined as any of the following:
                  ``(A) Old Age, Survivors, and Disability 
                Insurance.
                  ``(B) All applicable entitlement programs 
                except Old Age, Survivors, and Disability 
                Insurance.
          ``(4) The term `long-term estimating period' shall be 
        defined as 75 years, starting with the current year, 
        for all applicable entitlement programs except for Old 
        Age, Survivors, and Disability Insurance. For Old Age, 
        Survivors, and Disability Insurance, the term shall be 
        defined as the infinite period of years utilized in the 
        most recent annual report of the Board of Trustees 
        provided pursuant to section 201(c)(2) of the Social 
        Security Act.
          ``(5) The term `last year of the estimating period' 
        shall be defined as the 75th year of the long-term 
        estimating period.
          ``(6) The term `dedicated receipts' shall be defined, 
        for all applicable entitlement programs other than 
        Medicare, as taxes and fees received from the public, 
        payments received from Federal agencies on behalf of 
        Federal agency employees who are participants in the 
        program, transfers received by the program under 
        section 7(c)(2) of the Railroad Retirement Act of 1974 
        (45 U.S.C. 231f(c)(2)), and transfers from the general 
        fund of amounts equivalent to income tax receipts under 
        section 86 of the Internal Revenue Code. Dedicated 
        receipts shall not include payments from the general 
        fund to amortize a program's unfunded liability or 
        payments of interest on a program's trust fund 
        holdings. For Medicare, `dedicated receipts' shall be 
        defined according to section 801(c)(3) of the Medicare 
        Prescription Drug, Improvement, and Modernization Act 
        of 2003.
          ``(7) The term `expenditures' shall be defined, for 
        all applicable entitlement programs other than 
        Medicare, to include benefit payments, administrative 
        expenses to the extent paid from a dedicated fund, and 
        transfers to other programs made under section 7(c)(2) 
        of the Railroad Retirement Act of 1974 (45 U.S.C. 
        231f(c)(2)). For Medicare, `expenditures' shall be 
        defined according to section 801(c)(4) of the Medicare 
        prescription Drug, Improvement, and Modernization Act 
        of 2003.
          ``(8) The term `applicable threshold' shall be 
        defined as:
                  ``(A) For a group of applicable entitlement 
                programs over a long-term estimating period--
                          ``(i) 0.02 percent of the present 
                        value of the taxable payroll of the 
                        group of programs over the estimating 
                        period, for legislation affecting Old 
                        Age, Survivors, and Disability 
                        Insurance or Medicare; and
                          ``(ii) 1 percent of the present value 
                        of the expenditures over the estimating 
                        period of the programs in the group 
                        that are affected by the legislation.
                  ``(B) For a group of applicable entitlement 
                programs in the last year of the estimating 
                period--
                          ``(i) 0.02 percent of the taxable 
                        payroll of the group of programs in 
                        that year, for legislation affecting 
                        Old Age, Survivors, and Disability 
                        Insurance or Medicare;
                          ``(ii) 0.01 percent of Gross Domestic 
                        Product in that year; or
                          ``(iii) 1 percent of the expenditures 
                        in that year of the programs in the 
                        group that are affected by the 
                        legislation.''.
  (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 adding after the item 
relating to section 428 the following:



                ``Part C--Long-Term Unfunded Obligations

``Sec. 441. Analysis of long-term unfunded obligations.
``Sec. 442. Standard for determining increase in long-term unfunded 
          obligation.
``Sec. 443. Long-term unfunded obligation analyses by congressional 
          budget office.
``Sec. 444. Definitions.
                    ____________________________________________________

5. An Amendment To Be Offered by Representative Hensarling of Texas, or 
                 His Designee, Debatable for 10 Minutes

  At the end, add the following new section:

SEC.   . GOVERNMENT SHUTDOWN PROTECTION.

  (a) In General.--Chapter 13 of title 31, United States Code, 
is amended by inserting after section 1310 the following new 
section:

``Sec. 1311. Continuing appropriations

  ``(a)(1) If any regular appropriation bill for a fiscal year 
does not become law before the beginning of such fiscal year or 
a joint resolution making continuing appropriations is not in 
effect, there are appropriated, out of any money in the 
Treasury not otherwise appropriated, and out of applicable 
corporate or other revenues, receipts, and funds, such sums as 
may be necessary to continue any project or activity for which 
funds were provided in the preceding fiscal year--
          ``(A) in the corresponding regular appropriation Act 
        for such preceding fiscal year; or
          ``(B) if the corresponding regular appropriation bill 
        for such preceding fiscal year did not become law, then 
        in a joint resolution making continuing appropriations 
        for such preceding fiscal year.
  ``(2) Appropriations and funds made available, and authority 
granted, for a project or activity for any fiscal year pursuant 
to this section shall be at a rate of operations not in excess 
of the lower of--
          ``(A) the rate of operations provided for in the 
        regular appropriation Act providing for such project or 
        activity for the preceding fiscal year;
          ``(B) in the absence of such an Act, the rate of 
        operations provided for such project or activity 
        pursuant to a joint resolution making continuing 
        appropriations for such preceding fiscal year;
          ``(C) the rate of operations provided for in the 
        regular appropriation bill as passed by the House of 
        Representatives or the Senate for the fiscal year in 
        question, except that the lower of these two versions 
        shall be ignored for any project or activity for which 
        there is a budget request if no funding is provided for 
        that project or activity in either version; or
          ``(D) the annualized rate of operations provided for 
        in the most recently enacted joint resolution making 
        continuing appropriations for part of that fiscal year 
        or any funding levels established under the provisions 
        of this Act.
  ``(3) Appropriations and funds made available, and authority 
granted, for any fiscal year pursuant to this section for a 
project or activity shall be available for the period beginning 
with the first day of a lapse in appropriations and ending with 
the earlier of--
          ``(A) the date on which the applicable regular 
        appropriation bill for such fiscal year becomes law 
        (whether or not such law provides for such project or 
        activity) or a continuing resolution making 
        appropriations becomes law, as the case may be; or
          ``(B) the last day of such fiscal year.
  ``(b) An appropriation or funds made available, or authority 
granted, for a project or activity for any fiscal year pursuant 
to this section shall be subject to the terms and conditions 
imposed with respect to the appropriation made or funds made 
available for the preceding fiscal year, or authority granted 
for such project or activity under current law.
  ``(c) Appropriations and funds made available, and authority 
granted, for any project or activity for any fiscal year 
pursuant to this section shall cover all obligations or 
expenditures incurred for such project or activity during the 
portion of such fiscal year for which this section applies to 
such project or activity.
  ``(d) Expenditures made for a project or activity for any 
fiscal year pursuant to this section shall be charged to the 
applicable appropriation, fund, or authorization whenever a 
regular appropriation bill or a joint resolution making 
continuing appropriations until the end of a fiscal year 
providing for such project or activity for such period becomes 
law.
  ``(e) This section shall not apply to a project or activity 
during a fiscal year if any other provision of law (other than 
an authorization of appropriations)--
          ``(1) makes an appropriation, makes funds available, 
        or grants authority for such project or activity to 
        continue for such period; or
          ``(2) specifically provides that no appropriation 
        shall be made, no funds shall be made available, or no 
        authority shall be granted for such project or activity 
        to continue for such period.
  ``(f) For purposes of this section, the term `regular 
appropriation bill' means any annual appropriation bill making 
appropriations, otherwise making funds available, or granting 
authority, for any of the following categories of projects and 
activities:
          ``(1) Agriculture, rural development, Food and Drug 
        Administration, and related agencies programs.
          ``(2) The Departments of Commerce, Justice, and 
        State, the Judiciary, and related agencies.
          ``(3) The Department of Defense.
          ``(4) The government of the District of Columbia and 
        other activities chargeable in whole or in part against 
        the revenues of the District.
          ``(5) Energy and water development.
          ``(6) Foreign operations, export financing, and 
        related programs.
          ``(7) The Department of Homeland Security.
          ``(8) The Department of the Interior and related 
        agencies.
          ``(9) The Departments of Labor, Health and Human 
        Services, and Education, and related agencies.
          ``(10) The Legislative Branch.
          ``(11) Military construction, family housing, and 
        base realignment and closure for the Department of 
        Defense.
          ``(12) The Departments of Transportation and 
        Treasury, and independent agencies.
          ``(13) The Departments of Veterans Affairs and 
        Housing and Urban Development, and sundry independent 
        agencies, boards, commissions, corporations, and 
        offices.''.
  (b) Clerical Amendment.--The analysis of chapter 13 of title 
31, United States Code, is amended by inserting after the item 
relating to section 1310 the following new item:

``1311. Continuing appropriations.''.
                    ____________________________________________________

 6. An Amendment To Be Offered by Representative Kirk of Illinois, or 
                 His Designee, Debatable for 10 Minutes

  At the end, add the following new section:

SEC.    . ANNUAL CBO REPORTS ON ENTITLEMENT SPENDING.

  Section 202(e) of the Congressional Budget Act of 1974 is 
amended by adding at the end the following new paragraph:
          ``(4) On or before February 15 of each year, the 
        Director shall submit to the Committees on the Budget 
        of the House of Representatives and the Senate, a 
        report for the fiscal year ending on September 30 of 
        the preceding year, with respect to entitlement 
        spending, including (A) a comparison of actual spending 
        for entitlements, on an account by account basis, with 
        projected spending for such entitlements assumed in the 
        concurrent resolution of the budget for that fiscal 
        year and (B) an identification of those entitlements 
        for which the actual spending exceeded the projected 
        spending.''.
                              ----------                              


 7. An Amendment To Be Offered by Representative Ryan of Wisconsin, or 
                 His Designee, Debatable for 10 Minutes

  At the end, add the following new sections:

SEC.   . JOINT BUDGET RESOLUTIONS.

  (a) Definitions.--Paragraph (4) of section 3 of the 
Congressional Budget Act of 1974 is amended to read as follows:
          ``(4) the term `joint resolution on the budget' 
        means--
                  ``(A) a joint resolution setting forth the 
                congressional budget for the United States 
                Government for a fiscal year as provided in 
                section 301; and
                  ``(B) any other joint resolution revising the 
                congressional budget for the United States 
                Government for a fiscal year as described in 
                section 304.''.
  (b) Joint Resolution on the Budget.--(1) Section 301(a) of 
the Congressional Budget Act of 1974 is amended by striking 
``concurrent resolution'' each place it appears including in 
the caption and inserting ``joint resolution''.
  (2) Section 301(b) of such Act is amended by striking 
``concurrent resolution'' each place it appears including in 
the caption and inserting ``joint resolution''.
  (3) Section 301(c) of such Act is amended by striking 
``concurrent resolution'' each place it appears and inserting 
``joint resolution''.
  (4) Section 301(e) of such Act is amended by striking 
``concurrent resolution'' each place it appears and inserting 
``joint resolution''.
  (5) Section 301(f) of such Act is amended by striking 
``concurrent resolution'' each place it appears and inserting 
``joint resolution''.
  (6) Section 301(g) of such Act is amended by striking 
``concurrent resolution'' each place it appears and inserting 
``joint resolution''.
  (7) Section 301(h) of such Act is amended by striking 
``concurrent resolution'' and inserting ``joint resolution''.
  (8) Section 301(i) of such Act is amended by striking 
``concurrent resolution'' each place it appears and inserting 
``joint resolution''.
  (9) The section heading of section 301 of such Act is amended 
by striking ``ANNUAL ADOPTION OF CONCURRENT'' and inserting 
``ANNUAL ADOPTION OF JOINT''.
  (10) The table of contents set forth in section 1(b) of the 
Congressional Budget and Impoundment Control Act of 1974 is 
amended by striking ``Annual adoption of the concurrent'' in 
the item relating to section 301 and inserting ``Annual 
adoption of the joint''.
  (11) Section 302 of such Act is amended by striking 
``concurrent resolution'' each place it appears and inserting 
``joint resolution''.
  (12) Section 303 of such Act, including the heading, is 
amended by striking ``concurrent resolution'' each place it 
appears and inserting ``joint resolution''.
  (13) The table of contents set forth in section 1(b) of the 
Congressional Budget and Impoundment Control Act of 1974 is 
amended by striking ``Concurrent'' in the item relating to 
section 303 and inserting ``Joint''.
  (14) Section 304 of such Act is amended by striking 
``concurrent resolution'', including in the heading, each place 
it appears and inserting ``joint resolution''.
  (15) The table of contents set forth in section 1(b) of the 
Congressional Budget and Impoundment Control Act of 1974 is 
amended by striking ``Concurrent'' in the item relating to 
section 304 and inserting ``Joint''.
  (16) Section 305 of such Act is amended by striking 
``concurrent resolution'', including in the heading, each place 
it appears and inserting ``joint resolution''.
  (17) Section 308 of such Act is amended by striking 
``concurrent resolution'' each place it appears and inserting 
``joint resolution''.
  (18) Section 310 of such Act is amended by striking 
``concurrent resolution'' each place it appears and inserting 
``joint resolution''.
  (19) Section 311 of such Act is amended by striking 
``concurrent resolution'' each place it appears and inserting 
``joint resolution''.

SEC.    . BUDGET REQUIRED BEFORE SPENDING BILLS MAY BE CONSIDERED; 
                    FALL-BACK PROCEDURES IF PRESIDENT VETOES JOINT 
                    BUDGET RESOLUTION.

  (a) Amendments to Section 302.--Section 302(a) of the 
Congressional Budget Act of 1974 is amended by striking 
paragraph (5).
  (b) Amendments to Section 303 and Conforming Amendments.--(1) 
Section 303 of the Congressional Budget Act of 1974 is 
amended--
          (A) in subsection (b), by striking paragraph (2), by 
        inserting ``or'' at the end of paragraph (1), and by 
        redesignating paragraph (3) as paragraph (2); and
          (B) by striking its section heading and inserting the 
        following new section heading: ``consideration of 
        budget-related legislation before budget becomes law''.
  (2) Section 302(g)(1) of the Congressional Budget Act of 1974 
is amended by striking ``and, after April 15, section 303(a)''.
  (3)(A) Section 904(c)(1) of the Congressional Budget Act of 
1974 is amended by inserting ``303(a),'' before ``305(b)(2),''.
  (B) Section 904(d)(2) of the Congressional Budget Act of 1974 
is amended by inserting ``303(a),'' before ``305(b)(2),''.
  (C) Subsection (e) of section 904 of the Congressional Budget 
Act of 1974 is repealed.
  (c) Expedited Procedures Upon Veto of Joint Resolution on the 
Budget.--(1) Title III of the Congressional Budget Act of 1974 
is amended by adding after section 315 the following new 
section:

   ``EXPEDITED PROCEDURES UPON VETO OF JOINT RESOLUTION ON THE BUDGET

  ``Sec. 316. (a) Special Rule.--If the President vetoes a 
joint resolution on the budget for a fiscal year, the majority 
leader of the House of Representatives or Senate (or his 
designee) may introduce a concurrent resolution on the budget 
or joint resolution on the budget for such fiscal year. If the 
Committee on the Budget of either House fails to report such 
concurrent or joint resolution referred to it within five 
calendar days (excluding Saturdays, Sundays, or legal holidays 
except when that House of Congress is in session) after the 
date of such referral, the committee shall be automatically 
discharged from further consideration of such resolution and 
such resolution shall be placed on the appropriate calendar.
  ``(b) Procedure in the House of Representatives and the 
Senate.--
          ``(1) Except as provided in paragraph (2), the 
        provisions of section 305 for the consideration in the 
        House of Representatives and in the Senate of joint 
        resolutions on the budget and conference reports 
        thereon shall also apply to the consideration of 
        concurrent resolutions on the budget introduced under 
        subsection (a) and conference reports thereon.
          ``(2) Debate in the Senate on any concurrent 
        resolution on the budget or joint resolution on the 
        budget introduced under subsection (a), and all 
        amendments thereto and debatable motions and appeals in 
        connection therewith, shall be limited to not more than 
        10 hours and in the House such debate shall be limited 
        to not more than 3 hours.
  ``(c) Contents of Concurrent Resolutions.--Any concurrent 
resolution on the budget introduced under subsection (a) shall 
be in compliance with section 301.
  ``(d) Effect of Concurrent Resolution on the Budget.--
Notwithstanding any other provision of this title, whenever a 
concurrent resolution on the budget described in subsection (a) 
is agreed to, then the aggregates, allocations, and 
reconciliation directives (if any) contained in the report 
accompanying such concurrent resolution or in such concurrent 
resolution shall be considered to be the aggregates, 
allocations, and reconciliation directives for all purposes of 
sections 302, 303, and 311 for the applicable fiscal years and 
such concurrent resolution shall be deemed to be a joint 
resolution for all purposes of this title and the Rules of the 
House of Representatives and any reference to the date of 
enactment of a joint resolution on the budget shall be deemed 
to be a reference to the date agreed to when applied to such 
concurrent resolution.''.
  (2) 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 315 the 
following new item:

``Sec. 316. Expedited procedures upon veto of joint resolution on the 
          budget.''.

  (e) Limitation on Contents of Budget Resolutions.--Section 
305 of the Congressional Budget Act of 1974 is amended by 
adding at the end the following new subsection:
  ``(e) Limitation on Contents.--(1) It shall not be in order 
in the House of Representatives or in the Senate to consider 
any joint resolution on the budget or any amendment thereto or 
conference report thereon that contains any matter referred to 
in paragraph (2).
  ``(2) Any joint resolution on the budget or any amendment 
thereto or conference report thereon that contains any matter 
not permitted in section 301(a) or (b) shall not be treated in 
the House of Representatives or the Senate as a budget 
resolution under subsection (a) or (b) or as a conference 
report on a budget resolution under subsection (c) of this 
section.''.
                              ----------                              


 8. An Amendment To Be Offered by Representative Ryan of Wisconsin, or 
                 His Designee, Debatable for 10 Minutes

  At the end, add the following new sections:

SEC.   . ESTABLISHMENT OF BUDGET PROTECTION MANDATORY ACCOUNT.

  (a) Budget Protection Mandatory Account.--Title III of the 
Congressional Budget Act of 1974 is amended by adding at the 
end the following new sections:

                 ``BUDGET PROTECTION MANDATORY ACCOUNT

  ``Sec. 316. (a) Establishment of Account.--The chairman of 
the Committee on the Budget of the House of Representatives and 
of the Senate shall each maintain an account to be known as the 
`Budget Protection Mandatory Account'. The Account shall be 
divided into entries corresponding to the House or Senate 
committees, as applicable, that received allocations under 
section 302(a) in the most recently adopted concurrent 
resolution on the budget, except that it shall not include the 
Committee on Appropriations of that House and each entry shall 
consist of the `First Year Budget Protection Balance' and the 
`Five Year Budget Protection Balance'.
  ``(b) Components.--Each entry shall consist only of amounts 
credited to it under subsection (c). No entry of a negative 
amount shall be made.
  ``(c) Crediting of Amounts to Account.--(1) Whenever a Member 
or Senator, as the case may be, offers an amendment to a bill 
that reduces the amount of mandatory budget authority provided 
either under current law or proposed to be provided by the bill 
under consideration, that Member or Senator may state the 
portion of such reduction achieved in the first year covered by 
the most recently adopted concurrent resolution on the budget 
and in addition the portion of such reduction achieved in the 
first five years covered by the most recently adopted 
concurrent resolution on the budget that shall be--
          ``(A) credited to the First Year Budget Protection 
        Balance and the Five Year Budget Protection Balance in 
        the House or Senate, as applicable;
          ``(B) used to offset an increase in other new budget 
        authority;
          ``(C) allowed to remain within the applicable section 
        302(a) allocation; or
          ``(D) used to offset a decrease in receipts.
If no such statement is made, the amount of reduction in new 
budget authority resulting from the amendment shall be credited 
to the First Year Budget Protection Balance and the Five Year 
Budget Protection Balance, as applicable, if the amendment is 
agreed to.
  ``(2) Except as provided by paragraph (3), the chairman of 
the Committee on the Budget of the House or Senate, as 
applicable, shall, upon the engrossment of any bill, other than 
an appropriation bill, by the House or Senate, as applicable, 
credit to the applicable entry balances amounts of new budget 
authority and outlays equal to the net amounts of reductions in 
budget authority and in outlays resulting from amendments 
agreed to by that House to that bill.
  ``(3) When computing the net amounts of reductions in budget 
authority and in outlays resulting from amendments agreed to by 
the House or Senate, as applicable, to a bill, the chairman of 
the Committee on the Budget of that House shall only count 
those portions of such amendments agreed to that were so 
designated by the Members or Senators offering such amendments 
as amounts to be credited to the First Year Budget Protection 
Balance and the Five Year Budget Protection Balance, or that 
fall within the last sentence of paragraph (1).
  ``(4) The chairman of the Committee on the Budget of the 
House and of the Senate shall each maintain a running tally of 
the amendments adopted reflecting increases and decreases of 
budget authority in the bill as reported to its House. This 
tally shall be available to Members or Senators during 
consideration of any bill by that House.
  ``(d) Calculation of Lock-Box Savings in House and Senate.--
For the purposes of enforcing section 302(a), upon the 
engrossment of any bill, other than an appropriation bill, by 
the House or Senate, as applicable, the amount of budget 
authority and outlays calculated pursuant to subsection (c)(3) 
shall be counted against the 302(a) allocation provided to the 
applicable committee or committees of that House which reported 
the bill as if the amount calculated pursuant to subsection 
(c)(3) was included in the bill just engrossed.
  ``(e) 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 
fiscal year 2005 or any subsequent fiscal year, as the case may 
be.''.

SEC.   . ESTABLISHMENT OF BUDGET PROTECTION DISCRETIONARY ACCOUNT.

               ``BUDGET PROTECTION DISCRETIONARY ACCOUNT

  ``Sec. 317. (a) Establishment of Account.--The chairman of 
the Committee on the Budget of the House of Representatives and 
of the Senate shall each maintain an account to be known as the 
`Budget Protection Discretionary Account'. The Account shall be 
divided into entries corresponding to the subcommittees of the 
Committee on Appropriations of that House and each entry shall 
consist of the `Budget Protection Balance'.
  ``(b) Components.--Each entry shall consist only of amounts 
credited to it under subsection (c). No entry of a negative 
amount shall be made.
  ``(c) Crediting of Amounts to Account.--(1) Whenever a Member 
or Senator, as the case may be, offers an amendment to an 
appropriation bill to reduce new budget authority in any 
account, that Member or Senator may state the portion of such 
reduction that shall be--
          ``(A) credited to the Budget Protection Balance;
          ``(B) used to offset an increase in new budget 
        authority in any other account;
          ``(C) allowed to remain within the applicable section 
        302(b) suballocation or
          ``(D) used to offset a decrease in receipts.
If no such statement is made, the amount of reduction in new 
budget authority resulting from the amendment shall be credited 
to the Budget Protection Balance, as applicable, if the 
amendment is agreed to.
  ``(2) Except as provided by paragraph (3), the chairman of 
the Committee on the Budget of the House or Senate, as 
applicable, shall, upon the engrossment of any appropriation 
bill by the House or Senate, as applicable, credit to the 
applicable entry balances amounts of new budget authority and 
outlays equal to the net amounts of reductions in budget 
authority and in outlays resulting from amendments agreed to by 
that House to that bill.
  ``(3) When computing the net amounts of reductions in new 
budget authority and in outlays resulting from amendments 
agreed to by the House or Senate, as applicable, to an 
appropriation bill, the chairman of the Committee on the Budget 
of that House shall only count those portions of such 
amendments agreed to that were so designated by the Members 
offering such amendments as amounts to be credited to the 
Budget Protection Balance, or that fall within the last 
sentence of paragraph (1).
  ``(4) The chairman of the Committee on the Budget of the 
House and of the Senate shall each maintain a running tally of 
the amendments adopted reflecting increases and decreases of 
budget authority in the bill as reported to its House. This 
tally shall be available to Members or Senators during 
consideration of any bill by that House.
  ``(d) Calculation of Lock-Box Savings in House and Senate.--
(1) For the purposes of enforcing section 302(a), upon the 
engrossment of any appropriation bill by the House or Senate, 
as applicable, the amount of budget authority and outlays 
calculated pursuant to subsection (c)(3) shall be counted 
against the 302(a) allocation provided to the Committee on 
Appropriations as if the amount calculated pursuant to 
subsection (c)(3) was included in the bill just engrossed.
  ``(2) For purposes of enforcing section 302(b), upon the 
engrossment of any appropriation bill by the House or Senate, 
as applicable, the 302(b) allocation provided to the 
subcommittee for the bill just engrossed shall be deemed to 
have been reduced by the amount of budget authority and outlays 
calculated, pursuant to subsection (c)(3).
  ``(e) 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 
fiscal year 2005 or any subsequent fiscal year, as the case may 
be.''.
  (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 315 the following new items:

``Sec. 316. Budget protection mandatory account.
``Sec. 317. Budget protection discretionary account.''.

SEC.    . REVENUE ADJUSTMENT.

  If an amendment is designated to be used to offset a decrease 
in receipts for a fiscal year pursuant to section 316(c)(1)(D) 
or section 317(c)(1)(D) of the Congressional Budget Act of 
1974, then the applicable level of revenues for such fiscal 
year for purposes of section 311(a) of such Act shall be 
reduced by the amount of such amendment.
                              ----------                              


 9. An Amendment To Be Offered by Representative Ryan of Wisconsin, or 
                 His Designee, Debatable for 10 Minutes

  At the end, add the following new section:

SEC.   . ENHANCED CONSIDERATION OF CERTAIN PROPOSED RESCISSIONS.

  (a) In General.--Part B of title X of the Congressional 
Budget and Impoundment Control Act of 1974 (2 U.S.C. 681 et 
seq.) is amended by redesignating sections 1013 through 1017 as 
sections 1014 through 1018, respectively, and by inserting 
after section 1012 the following new section:

        ``ENHANCED CONSIDERATION OF CERTAIN PROPOSED RESCISSIONS

  ``Sec. 1013. (a) Proposed Rescission of Budget Authority 
Identified as Wasteful Spending.--The President may propose, at 
the time and in the manner provided in subsection (b), the 
rescission of any budget authority provided in an appropriation 
Act that he identifies as wasteful spending. If the President 
proposes a rescission of budget authority, he may also propose 
to reduce the appropriate discretionary spending limits for new 
budget authority and outlays flowing therefrom set forth in 
section 251(c) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 by an amount that does not exceed the 
amount of the proposed rescission. Funds made available for 
obligation under this procedure may not be proposed for 
rescission again under this section.
  ``(b) Transmittal of Special Message.--
          ``(1) The President may transmit to Congress a 
        special message proposing to rescind amounts of budget 
        authority and include with that special message a draft 
        bill that, if enacted, would only rescind that budget 
        authority unless the President also proposes a 
        reduction in the appropriate discretionary spending 
        limits set forth in section 251(c) of the Balanced 
        Budget and Emergency Deficit Control Act of 1985. That 
        bill shall clearly identify the amount of budget 
        authority that is proposed to be rescinded for each 
        program, project, or activity to which that budget 
        authority relates.
          ``(2) In the case of an appropriation Act that 
        includes accounts within the jurisdiction of more than 
        one subcommittee of the Committee on Appropriations, 
        the President in proposing to rescind budget authority 
        under this section shall send a separate special 
        message and accompanying draft bill for accounts within 
        the jurisdiction of each subcommittee.
          ``(3) Each special message shall specify, with 
        respect to the budget authority proposed to be 
        rescinded, the following:
                  ``(A) The amount of budget authority which he 
                proposes to be rescinded.
                  ``(B) Any account, department, or 
                establishment of the Government to which such 
                budget authority is available for obligation, 
                and the specific project or governmental 
                functions involved.
                  ``(C) The reasons why the budget authority 
                should be rescinded, including why he considers 
                it to be wasteful spending.
                  ``(D) To the maximum extent practicable, the 
                estimated fiscal, economic, and budgetary 
                effect (including the effect on outlays and 
                receipts in each fiscal year) of the proposed 
                rescission.
                  ``(E) All facts, circumstances, and 
                considerations relating to or bearing upon the 
                proposed rescission and the decision to effect 
                the proposed rescission, and to the maximum 
                extent practicable, the estimated effect of the 
                proposed rescission upon the objects, purposes, 
                and programs for which the budget authority is 
                provided.
                  ``(F) A reduction in the appropriate 
                discretionary spending limits set forth in 
                section 251(c) of the Balanced Budget and 
                Emergency Deficit Control Act of 1985, if 
                proposed by the President.
  ``(c) Procedures for Expedited Consideration.--
          ``(1)(A) Before the close of the second legislative 
        day of the House of Representatives after the date of 
        receipt of a special message transmitted to Congress 
        under subsection (b), the majority leader or minority 
        leader of the House of Representatives shall introduce 
        (by request) the draft bill accompanying that special 
        message. If the bill is not introduced as provided in 
        the preceding sentence, then, on the third legislative 
        day of the House of Representatives after the date of 
        receipt of that special message, any Member of that 
        House may introduce the bill.
          ``(B) The bill shall be referred to the Committee on 
        Appropriations. The committee shall report the bill 
        without substantive revision and with or without 
        recommendation. The bill shall be reported not later 
        than the seventh legislative day of that House after 
        the date of receipt of that special message. If that 
        committee fails to report the bill within that period, 
        that committee shall be automatically discharged from 
        consideration of the bill, and the bill shall be placed 
        on the appropriate calendar.
          ``(C) A vote on final passage of the bill shall be 
        taken in the House of Representatives on or before the 
        close of the 10th legislative day of that House after 
        the date of the introduction of the bill in that House. 
        If the bill is passed, the Clerk of the House of 
        Representatives shall cause the bill to be engrossed, 
        certified, and transmitted to the Senate within one 
        calendar day of the day on which the bill is passed.
          ``(2)(A) A motion in the House of Representatives to 
        proceed to the consideration of a bill under this 
        section shall be highly privileged and not debatable. 
        An amendment to the motion shall not be in order, nor 
        shall it be in order to move to reconsider the vote by 
        which the motion is agreed to or disagreed to.
          ``(B) Debate in the House of Representatives on a 
        bill under this section shall not exceed 4 hours, which 
        shall be divided equally between those favoring and 
        those opposing the bill. A motion to further limit 
        debate shall not be debatable. It shall not be in order 
        to move to recommit a bill under this section or to 
        move to reconsider the vote by which the bill is agreed 
        to or disagreed to.
          ``(C) Appeals from decisions of the Chair relating to 
        the application of the Rules of the House of 
        Representatives to the procedure relating to a bill 
        under this section shall be decided without debate.
          ``(D) Except to the extent specifically provided in 
        the preceding provisions of this subsection, 
        consideration of a bill under this section shall be 
        governed by the Rules of the House of Representatives. 
        It shall not be in order in the House of 
        Representatives to consider any rescission bill 
        introduced pursuant to the provisions of this section 
        under a suspension of the rules or under a special 
        rule.
          ``(3) A bill transmitted to the Senate pursuant to 
        paragraph (1)(D) shall be referred to its Committee on 
        Appropriations. That committee shall report the bill 
        without substantive revision and with or without 
        recommendation. The bill shall be reported not later 
        than the seventh legislative day of the Senate after it 
        receives the bill. A committee failing to report the 
        bill within such period shall be automatically 
        discharged from consideration of the bill, and the bill 
        shall be placed upon the appropriate calendar.
          ``(4)(A) A motion in the Senate to proceed to the 
        consideration of a bill under this section shall be 
        privileged and not debatable. An amendment to the 
        motion shall not be in order, nor shall it be in order 
        to move to reconsider the vote by which the motion is 
        agreed to or disagreed to.
          ``(B) Debate in the Senate on a bill under this 
        section, and all debatable motions and appeals in 
        connection therewith (including debate pursuant to 
        subparagraph (C)), shall not exceed 10 hours. The time 
        shall be equally divided between, and controlled by, 
        the majority leader and the minority leader or their 
        designees.
          ``(C) Debate in the Senate or any debatable motion or 
        appeal in connection with a bill under this section 
        shall be limited to not more than 1 hour, to be equally 
        divided between, and controlled by, the mover and the 
        manager of the bill, except that in the event the 
        manager of the bill is in favor of any such motion or 
        appeal, the time in opposition thereto, shall be 
        controlled by the minority leader or his designee. Such 
        leaders, or either of them, may, from time under their 
        control of the passage of a bill, allot additional time 
        to any Senator during the consideration of any 
        debatable motion or appeal.
          ``(D) A motion in the Senate to further limit debate 
        on a bill under this section is not debatable. A motion 
        to recommit a bill under this section is not in order.
  ``(d) Amendment and Divisions Prohibited.--No amendment to a 
bill considered under this section shall be in order in either 
the House of Representatives or the Senate. It shall not be in 
order to demand a division of the question in the House of 
Representatives (or in a Committee of the Whole) or in the 
Senate. No motion to suspend the application of this subsection 
shall be in order in either House, nor shall it be in order in 
either House to suspend the application of this subsection by 
unanimous consent.
  ``(e) Requirement To Make Available for Obligation.--Any 
amount of budget authority proposed to be rescinded in a 
special message transmitted to Congress under subsection (b) 
shall be made available for obligation on the day after the 
date on which either House rejects the bill transmitted with 
that special message.
  ``(f) Definitions.--For purposes of this section:
          ``(1) The term `appropriation Act' means any general 
        or special appropriation Act, and any Act or joint 
        resolution making supplemental, deficiency, or 
        continuing appropriations.
          ``(2) The term `legislative day' means, with respect 
        to either House of Congress, any day of session.
          ``(3) The term `rescind' means, with respect to an 
        appropriation Act, to reduce the amount of budget 
        authority appropriated in that Act, and reducing budget 
        authority shall include reducing obligation limitations 
        set forth in that Act.''.
  (b) Exercise of Rulemaking Powers.--Section 904 of the 
Congressional Budget Act of 1974 (2 U.S.C. 621 note) is 
amended--
          (1) in subsection (a), by striking ``and 1017'' and 
        inserting ``1012, and 1017''; and
          (2) in subsection (d), by striking ``section 1017'' 
        and inserting ``sections 1012 and 1017''.
  (c) Conforming Amendments.--
          (1) Section 1011 of the Congressional Budget Act of 
        1974 (2 U.S.C. 682(5)) is amended by repealing 
        paragraphs (3) and (5) and by redesignating paragraph 
        (4) as paragraph (3).
          (2) Section 1014 of such Act (2 U.S.C. 685) is 
        amended--
                  (A) in subsection (b)(1), by striking ``or 
                the reservation''; and
                  (B) in subsection (e)(1), by striking ``or a 
                reservation'' and by striking ``or each such 
                reservation''.
          (3) Section 1015(a) of such Act (2 U.S.C. 686) is 
        amended by striking ``is to establish a reserve or'', 
        by striking ``the establishment of such a reserve or'', 
        and by striking ``reserve or'' each other place it 
        appears.
          (4) Section 1017 of such Act (2 U.S.C. 687) is 
        amended--
                  (A) in subsection (a), by striking 
                ``rescission bill introduced with respect to a 
                special message or'';
                  (B) in subsection (b)(1), by striking 
                ``rescission bill or'', by striking ``bill or'' 
                the second place it appears, by striking 
                ``rescission bill with respect to the same 
                special message or'', and by striking ``, and 
                the case may be,'';
                  (C) in subsection (b)(2), by striking ``bill 
                or'' each place it appears;
                  (D) in subsection (c), by striking 
                ``rescission'' each place it appears and by 
                striking ``bill or'' each place it appears;
                  (E) in subsection (d)(1), by striking 
                ``rescission bill or'' and by striking ``, and 
                all amendments thereto (in the case of a 
                rescission bill)'';
                  (F) in subsection (d)(2)--
                          (i) by striking the first sentence;
                          (ii) by amending the second sentence 
                        to read as follows: ``Debate on any 
                        debatable motion or appeal in 
                        connection with an impoundment 
                        resolution shall be limited to 1 hour, 
                        to be equally divided between, and 
                        controlled by, the mover and the 
                        manager of the resolution, except that 
                        in the event that the manager of the 
                        resolution is in favor of any such 
                        motion or appeal, the time in 
                        opposition thereto shall be controlled 
                        by the minority leader or his 
                        designee.'';
                          (iii) by striking the third sentence; 
                        and
                          (iv) in the fourth sentence, by 
                        striking ``rescission bill or'' and by 
                        striking ``amendment, debatable 
                        motion,'' and by inserting `debatable 
                        motion';
                  (G) in paragraph (d)(3), by striking the 
                second and third sentences; and
                  (H) by striking paragraphs (4), (5), (6), and 
                (7) of paragraph (d).
  (d) Clerical Amendments.--The table of sections for subpart B 
of title X of the Congressional Budget and Impoundment Control 
Act of 1974 is amended by redesignating the item relating to 
sections 1014 through 1018 as items 1015 through 1019, 
respectively, and by inserting after the item relating to 
section 1012 the following new item:

``Sec. 1013. Enhanced consideration of certain proposed rescissions.''.
                    ____________________________________________________

 10. An Amendment To Be Offered by Representative Young of Florida, or 
                 His Designee, Debatable for 10 Minutes

    At the appropriate place in the bill, insert the following 
new section:
    Sec.     . Special Rule for Fiscal Year 2005.--For purposes 
of ensuring the full funding of the transportation guarantees 
in fiscal year 2005, the amounts provided for fiscal year 2005 
for discretionary new budget authority and outlays allocated to 
the House Committee on Appropriations as though under section 
302(a) of the Congressional Budget Act of 1974 shall be 
increased by no less than $2,057,000,000 in budget authority 
and $634,000,000 in outlays.
                              ----------                              


 11. An Amendment To Be Offered by Representative Young of Florida, or 
                 His Designee, Debatable for 10 Minutes

    Strike section 2 of the bill.
                              ----------                              


 12. An Amendment To Be Offered by Representative Young of Florida, or 
                 His Designee, Debatable for 10 Minutes

  At the end, add the following new section:

SEC.    . CHANGE OF FISCAL YEAR.

  (a) Fiscal Year To Begin November 1.--Section 1102 of title 
31, United States Code, is amended by striking ``October 1'' 
and inserting ``November 1'' and by striking ``September 30'' 
and inserting ``October 31''.
  (b) Title of Appropriation Acts.--Section 105 of title 1, 
United States Code, is amended by striking ``September 30'' and 
inserting ``October 31''.
  (c) Transition to New Fiscal Year.--(1) As soon as 
practicable, the President shall prepare and submit to the 
Congress--
          (A) after consultation with the Committees on 
        Appropriations of the House of Representatives and the 
        Senate, budget estimates for the United States 
        Government for the period commencing October 1, 2005, 
        and ending October 31, 2005, in such form and detail as 
        he may determine; and
          (B) propose legislation he considers appropriate with 
        respect to changes in law necessary to provide 
        authorizations of appropriations for that period.
  (2) The Director of the Office of Management and Budget shall 
provide, by regulation or otherwise, for the orderly transition 
of all departments, agencies, and instrumentalities of the 
United States Government and the government of the District of 
Columbia from the use of the fiscal year in effect on the date 
of enactment of this Act to the use of the new fiscal year 
prescribed by section 1102 of title 31, United States Code, (as 
amended by subsection (a)). The Director shall prepare and 
submit to the Congress such additional proposed legislation as 
he considers necessary to accomplish this objective.
  (d) Effective Date.--This section and the amendments made by 
it (except for subsection (c)) apply to fiscal year 2006 and 
subsequent fiscal years.
                              ----------                              


 13. An Amendment To Be Offered by Representative Young of Florida, or 
                 His Designee, Debatable for 10 Minutes

  At the end, add the following new section:

SEC.    . SUNSETTING OF DISCRETIONARY PROGRAMS AND UNEARNED 
                    ENTITLEMENTS.

  (a) Fiscal Year 2007.--Effective October 1, 2006, 
authorizations for all programs (except earned entitlements) 
shall terminate unless such programs are reauthorized after the 
date of enactment of this Act and before October 1, 2006.
  (b) Definitions.--For purposes of subsection (a), the term 
``earned entitlement'' means an entitlement earned by service 
or paid for in total or in part by assessments or contributions 
such as social security, veterans' benefits, retirement 
programs, and medicare.
                              ----------                              


 14. An Amendment To Be Offered by Representative Young of Florida, or 
                 His Designee, Debatable for 10 Minutes

    Strike section 5 of the bill.
                              ----------                              


    15. An Amendment in the Nature of a Substitute To Be Offered by 
Representative Spratt of South Carolina, or His Designee, Debatable for 
                               30 Minutes

  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Budget Enforcement Act of 
2004''.

SEC. 2. EXTENSION OF DISCRETIONARY SPENDING LIMITS.

  (a) Discretionary Spending Limits.--(1) Section 251(c)(1) of 
the Balanced Budget and Emergency Deficit Control Act of 1985 
(relating to fiscal year 2004) is amended--
          (A) in subparagraph (A), by striking 
        ``$31,834,000,000'' and inserting ``$28,052,000,000''; 
        and
          (B) in subparagraph (B), by striking 
        ``$1,462,000,000'' and inserting ``$1,436,000,000'' and 
        by striking ``$6,629,000,000'' and inserting 
        ``$6,271,000,000''.
  (2) Section 251(c)(2) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended by inserting a dash 
after ``2005'', by redesignating the remaining portion of such 
paragraph as subparagraph (D) and by moving it two ems to the 
right, and by inserting after the dash the following new 
subparagraphs:
                  ``(A) for the general purpose discretionary 
                category: $832,474,000,000 in new budget 
                authority and $870,895,000,000 in outlays;
                  ``(B) for the highway category: 
                $30,585,000,000 in outlays; and
                  ``(C) for the mass transit category: 
                $1,554,000,000 in new budget authority and 
                $6,787,000,000 in outlays; and''.
  (3) Section 251(c)(3) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended by inserting a dash 
after ``2006'', by redesignating the remaining portion of such 
paragraph as subparagraph (D) and by moving it two ems to the 
right, and by inserting after the dash the following new 
subparagraphs:
                  ``(A) for the general purpose discretionary 
                category: $856,879,000,000 in new budget 
                authority and $865,993,000,000 in outlays;
                  ``(B) for the highway category: 
                $33,271,000,000 in outlays; and
                  ``(C) for the mass transit category: 
                $1,671,000,000 in new budget authority and 
                $7,585,000,000 in outlays; and''.
  (4) Section 251(c) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended by redesignating 
paragraphs (4) through (9) as paragraphs (7) through (12) and 
inserting after paragraph (3) the following new paragraphs:
          ``(4) with respect to fiscal year 2007--
                  ``(A) for the highway category: 
                $35,248,000,000 in outlays; and
                  ``(B) for the mass transit category: 
                $1,785,000,000 in new budget authority and 
                $8,110,000,000 in outlays;
          ``(5) with respect to fiscal year 2008--
                  ``(A) for the highway category: 
                $36,587,000,000 in outlays; and
                  ``(B) for the mass transit category: 
                $1,890,000,000 in new budget authority and 
                $8,517,000,000 in outlays; and
          ``(6) with respect to fiscal year 2009--
                  ``(A) for the highway category: 
                $37,682,000,000 in outlays; and
                  ``(B) for the mass transit category: 
                $2,017,000,000 in new budget authority and 
                $8,968,000,000 in outlays;''.
  (b) Definitions.--Section 250(c)(4) of the Balanced Budget 
and Emergency Deficit Control Act of 1985 is amended--
          (1) in subparagraph (B), by--
                  (A) striking ``the Transportation Equity Act 
                for the 21st Century and the Surface 
                Transportation Extension Act of 2003'' and 
                inserting ``the Transportation Equity Act: A 
                Legacy for Users''; and
                  (B) inserting before the period at the end 
                the following new clauses:
                  ``(v) 69-8158-0-7-401 (Motor Carrier Safety 
                Grants).
                  ``(vi) 69-8159-0-7-401 (Motor Carrier Safety 
                Operations and Programs).'';
          (2) in subparagraph (C), by--
                  (A) inserting ``(and successor accounts)'' 
                after ``budget accounts''; and
                  (B) striking ``the Transportation Equity Act 
                for the 21st Century and the Surface 
                Transportation Extension Act of 2003 or for 
                which appropriations are provided pursuant to 
                authorizations contained in those Acts (except 
                that appropriations provided pursuant to 
                section 5338(h) of title 49, United States 
                Code, as amended by the Transportation Equity 
                Act for the 21st Century, shall not be included 
                in this category)'' and inserting ``the 
                Transportation Equity Act: A Legacy for Users 
                or for which appropriations are provided 
                pursuant to authorizations contained in that 
                Act''; and
          (3) in subparagraph (D)(ii), by striking ``section 
        8103 of the Transportation Equity Act for the 21st 
        Century'' and inserting ``section 8103 of the 
        Transportation Equity Act: A Legacy for Users''.

SEC. 3. ADJUSTMENTS TO ALIGN HIGHWAY SPENDING WITH REVENUES.

  Subparagraphs (B) through (E) of section 251(b)(1) of the 
Balanced Budget and Emergency Deficit Control Act of 1985 are 
amended to read as follows:
                  ``(B) Adjustment to align highway spending 
                with revenues.--(i) When the President submits 
                the budget under section 1105 of title 31, 
                United States Code, OMB shall calculate and the 
                budget shall make adjustments to the highway 
                category for the budget year and each outyear 
                as provided in clause (ii)(I)(cc).
                  ``(ii)(I)(aa) OMB shall take the actual level 
                of highway receipts for the year before the 
                current year and subtract the sum of the 
                estimated level of highway receipts in 
                subclause (II) plus any amount previously 
                calculated under item (bb) for that year.
                  (bb) OMB shall take the current estimate of 
                highway receipts for the current year and 
                subtract the estimated level of receipts for 
                that year.
                  ``(cc) OMB shall add one-half of the sum of 
                the amount calculated under items (aa) and (bb) 
                to the obligation limitations set forth in the 
                section 8103 of the Transportation Equity Act: 
                A Legacy for Users and, using current 
                estimates, calculate the outlay change 
                resulting from the change in obligations for 
                the budget year and the first outyear and the 
                outlays flowing therefrom through subsequent 
                fiscal years. After making the calculations 
                under the preceding sentence, OMB shall adjust 
                the amount of obligations set forth in that 
                section for the budget year and the first 
                outyear by adding one-half of the sum of the 
                amount calculated under items (aa) and (bb) to 
                each such year.
                  ``(II) The estimated level of highway 
                receipts for the purposes of this clause are--
                          ``(aa) for fiscal year 2004, 
                        $30,572,000,000;
                          ``(bb) for fiscal year 2005, 
                        $34,260,000,000;
                          ``(cc) for fiscal year 2006, 
                        $35,586,000,000;
                          ``(dd) for fiscal year 2007, 
                        $36,570,000,000;
                          ``(ee) for fiscal year 2008, 
                        $37,603,000,000; and
                          ``(ff) for fiscal year 2009, 
                        $38,651,000,000.
                  ``(III) In this clause, the term `highway 
                receipts' means the governmental receipts 
                credited to the highway account of the Highway 
                Trust Fund.
          ``(C) In addition to the adjustment required by 
        subparagraph (B), when the President submits the budget 
        under section 1105 of title 31, United States Code, for 
        fiscal year 2006, 2007, 2008, or 2009, OMB shall 
        calculate and the budget shall include for the budget 
        year and each outyear an adjustment to the limits on 
        outlays for the highway category and the mass transit 
        category equal to--
                  ``(i) the outlays for the applicable category 
                calculated assuming obligation levels 
                consistent with the estimates prepared pursuant 
                to subparagraph (D), as adjusted, using current 
                technical assumptions; minus
                  ``(ii) the outlays for the applicable 
                category set forth in the subparagraph (D) 
                estimates, as adjusted.
          ``(D)(i) When OMB and CBO submit their final 
        sequester report for fiscal year 2004, that report 
        shall include an estimate of the outlays for each of 
        the categories that would result in fiscal years 2005 
        through 2009 from obligations at the levels specified 
        in section 8103 of the Transportation Equity Act: A 
        Legacy for Users using current assumptions.
          ``(ii) When the President submits the budget under 
        section 1105 of title 31, United States Code, for 
        fiscal year 2006, 2007, 2008, or 2009, OMB shall adjust 
        the estimates made in clause (i) by the adjustments by 
        subparagraphs (B) and (C).
          ``(E) OMB shall consult with the Committees on the 
        Budget and include a report on adjustments under 
        subparagraphs (B) and (C) in the preview report.''.

SEC. 4. LEVEL OF OBLIGATION LIMITATIONS.

  (a) Highway Category.--For the purposes of section 251(b) of 
the Balanced Budget and Emergency Deficit Control Act of 1985, 
the level of obligation limitations for the highway category 
is--
          (1) for fiscal year 2004, $34,309,000,000;
          (2) for fiscal year 2005, $35,671,000,000;
          (3) for fiscal year 2006, $36,719,000,000;
          (4) for fiscal year 2007, $37,800,000,000;
          (5) for fiscal year 2008, $38,913,000,000; and
          (6) for fiscal year 2009, $40,061,000,000.
  (b) Mass Transit Category.--For the purposes of section 
251(b) of the Balanced Budget and Emergency Deficit Control Act 
of 1985, the level of obligation limitations for the mass 
transit category is--
          (1) for fiscal year 2004, $7,266,000,000;
          (2) for fiscal year 2005, $7,750,000,000;
          (3) for fiscal year 2006, $8,266,000,000;
          (4) for fiscal year 2007, $8,816,000,000;
          (5) for fiscal year 2008, $9,403,000,000; and
          (6) for fiscal year 2009, $10,029,000,000.
For purposes of this subsection, the term ``obligation 
limitations'' means the sum of budget authority and obligation 
limitations.

SEC. 5. EXTENSION OF PAY-AS-YOU-GO REQUIREMENT.

  Section 252 of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended ``2002'' both places it appears 
and inserting ``2009''.

SEC. 6. REPORTS.

  Subsections (c)(2) and (f)(2)(A) of section 254 of the 
Balanced Budget and Emergency Deficit Control Act of 1985 are 
amended by striking ``2002'' and inserting ``2006 (or 2009 
solely for purposes of enforcing the discretionary spending 
limits for the highway and mass transit categories)''.

SEC. 7. EXPIRATION.

  Section 275(b) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended by striking ``2002'' and 
inserting ``2006 (or 2009 solely for purposes of enforcing the 
discretionary spending limits for the highway and mass transit 
categories)'' and by striking ``2006'' and inserting ``2013''.

SEC. 8. TECHNICAL CORRECTIONS TO THE BALANCED BUDGET AND EMERGENCY 
                    DEFICIT CONTROL ACT OF 1985.

  Part C of the Balanced Budget and Emergency Deficit Control 
Act of 1985 is amended as follows:
          (1) In section 250(a), strike ``SEC. 256. GENERAL AND 
        SPECIAL SEQUESTRATION RULES'' and insert ``Sec. 256. 
        General and special sequestration rules'' in the item 
        relating to section 256.
          (2) In subparagraphs (F), (G), (H), (I), (J), and (K) 
        of section 250(c)(4), insert ``subparagraph'' after 
        ``described in'' each place it appears.
          (3) In section 250(c)(18), insert ``of'' after 
        ``expenses''.
          (4) In section 251(b)(1)(A), strike ``committees'' 
        the first place it appears and insert ``Committees''.
          (5) In section 251(b)(1)(C)(i), strike ``fiscal 
        years'' and insert ``fiscal year''.
          (6) In section 251(b)(1)(D)(ii), strike ``fiscal 
        years'' and insert ``fiscal year''.
          (7) In section 252(b)(2)(B), insert ``the'' before 
        ``budget year''.
          (8) In section 252(c)(1)(C)(i), strike ``paragraph 
        (1)'' and insert ``subsection (b)''.
          (9) In section 254(c)(3)(A), strike ``subsection'' 
        and insert ``section''.
          (10) In section 254(f)(4), strike ``subsection'' and 
        insert ``section'' and strike ``sequesterable'' and 
        insert ``sequestrable''.
          (11) In section 255(g)(1)(B), move the fourteenth 
        undesignated clause 2 ems to the right.
          (12) In section 255(g)(2), insert ``and'' after the 
        semicolon at the end of the next-to-last undesignated 
        clause.
          (13) In section 255(h)--
                  (A) strike ``and'' after the semicolon in the 
                ninth undesignated clause;
                  (B) insert ``and'' after the semicolon at the 
                end of the tenth undesignated clause; and
                  (C) strike the semicolon at the end and 
                insert a period.
          (14) In section 256(k)(1), strike ``paragraph (5)'' 
        and insert ``paragraph (6)''.
          (15) In section 257(b)(2)(A)(i), strike 
        ``differenes'' and insert ``differences''.
                              ----------                              


    16. An Amendment in the Nature of a Substitute To Be Offered by 
 Representative Hensarling of Texas, or His Designee, Debatable for 30 
                                Minutes

  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Family 
Budget Protection Act of 2004''.
  (b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Effective date.

                  TITLE I--A SIMPLE AND BINDING BUDGET

                  Subtitle A--Joint Budget Resolutions

Sec. 101. Declaration of purposes for the Budget Act.
Sec. 102. The timetable.
Sec. 103. Annual joint resolutions on the budget.
Sec. 104. Budget required before spending bills may be considered
Sec. 105. Amendments to effectuate joint resolutions on the budget.

                  Subtitle B--Budgeting for Emergencies

Sec. 111. Purpose.
Sec. 112. Repeal of adjustments for emergencies.
Sec. 113. OMB emergency criteria.
Sec. 114. Development of guidelines for application of emergency 
          definition.
Sec. 115. Reserve fund for emergencies in President's budget.
Sec. 116. Adjustments and reserve fund for emergencies in joint budget 
          resolutions.
Sec. 117. Application of section 306 to emergencies in excess of amounts 
          in reserve fund.
Sec. 118. Up-to-date tabulations.
Sec. 119. Prohibition on amendments to emergency reserve fund.

                   Subtitle C--Biennial Budget Option

Sec. 121. Effective date.
Sec. 122. Revision of timetable.
Sec. 123. Amendments to the Congressional Budget and Impoundment Control 
          Act of 1974.
Sec. 124. Amendments to Rules of House of Representatives.
Sec. 125. Amendments to title 31, United States Code.
Sec. 126. Two-year appropriations; title and style of appropriation 
          Acts.
Sec. 127. Multiyear authorizations.
Sec. 128. Government strategic and performance plans on a biennial 
          basis.
Sec. 129. Biennial appropriation bills.
Sec. 130. Assistance by Federal agencies to standing committees of the 
          Senate and the House of Representatives.

              Subtitle D--Prevention of Government Shutdown

Sec. 141. Amendment to title 31.

                        Subtitle E--The Baseline

Sec. 151. Elimination of inflation adjustment.
Sec. 152. The President's budget.
Sec. 153. The congressional budget.
Sec. 154. Congressional Budget Office reports to committees.
Sec. 155. Treatment of emergencies.

              TITLE II--PUTTING A LID ON THE FEDERAL BUDGET

   Subtitle A--Spending Safeguards on the Growth of Entitlements and 
                               Mandatories

Sec. 201. Spending caps on growth of entitlements and mandatories.
Sec. 202. Exempt programs and activities.
Sec. 203. Exceptions, limitations, and special rules.
Sec. 204. Point of order.
Sec. 205. Technical and conforming amendments.
Sec. 206. Establishment of Family Budget Protection Mandatory Account.

                Subtitle B--Discretionary Spending Limits

Sec. 211. Enforcing discretionary spending limits.
Sec. 212. Establishment of Family Budget Protection Discretionary 
          Account.
Sec. 213. Revenue adjustment.

               Subtitle C--Long-term Unfunded Obligations

Sec. 221. Long-term unfunded obligations.
Sec. 222. Points of order.
Sec. 223. Social security.

              TITLE III--COMBATING WASTE, FRAUD, AND ABUSE.

                         Subtitle A--Sunsetting

Sec. 301. Reauthorization of discretionary programs and unearned 
          entitlements.
Sec. 302. Point of order.
Sec. 303. Decennial sunsetting.

 Subtitle B--Enhanced Rescissions of Budget Authority Identified by the 
                     President as Wasteful Spending

Sec. 311. Enhanced consideration of certain proposed rescissions.

       Subtitle C--Commission to Eliminate Waste, Fraud, and Abuse

Sec. 331. Establishment of Commission.
Sec. 332. Duties of the Commission.
Sec. 333. Powers of the Commission.
Sec. 334. Commission personnel matters.
Sec. 335. Termination of the Commission.
Sec. 336. Congressional consideration of reform proposals.
Sec. 337. Authorization of appropriations.

                      TITLE IV--TRUTH IN ACCOUNTING

 Subtitle A--Accrual Funding of Pensions and Retirement Pay for Federal 
               Employees and Uniformed Services Personnel

Sec. 401. Civil Service Retirement System.
Sec. 402. Central Intelligence Agency Retirement and Disability System.
Sec. 403. Foreign Service Retirement and Disability System.
Sec. 404. Public Health Service Commissioned Corps Retirement System.
Sec. 405. National Oceanic and Atmospheric Administration Commissioned 
          Officer Corps Retirement System.
Sec. 406. Coast Guard Military Retirement System.

Subtitle B--Accrual Funding of Post-Retirement Health Benefits Costs for 
                            Federal Employees

Sec. 411. Federal employees health benefits fund.
Sec. 412. Funding uniformed services health benefits for all retirees.
Sec. 413. Effective date.

                  Subtitle C--Limit on the Public Debt

Sec. 421. Findings.
Sec. 422. Purpose.
Sec. 423. Limit on public debt.

                   Subtitle D--Risk-Assumed Budgeting

Sec. 431. Federal insurance programs.

         TITLE V--MAINTAINING A COMMITMENT TO THE FAMILY BUDGET

               Subtitle A--Further Enforcement Amendments

Sec. 501. Super-majority points of order in the House of Representatives 
          and the Senate.
Sec. 502. Budget resolution enforcement point of order.
Sec. 503. Point of order waiver protection.

                        Subtitle B--The Byrd Rule

Sec. 511. Limitation on Byrd Rule.

     Subtitle C--Treatment of Extraneous Appropriations in Omnibus 
                         Appropriation Measures

Sec. 521. Treatment of extraneous appropriations.

SEC. 2. EFFECTIVE DATE.

  Except as otherwise specifically provided, this Act and the 
amendments made by this Act shall become effective on the date 
of enactment of this Act and shall apply with respect to fiscal 
years beginning after September 30, 2004.

                  TITLE I--A SIMPLE AND BINDING BUDGET

                  Subtitle A--Joint Budget Resolutions

SEC. 101. DECLARATION OF PURPOSES FOR THE BUDGET ACT.

  Paragraphs (1) and (2) of section 2 of the Congressional 
Budget and Impoundment Control Act of 1974 are amended to read 
as follows:
          ``(1) to assure effective control over the budgetary 
        process;
          ``(2) to facilitate the determination each year of 
        the appropriate level of Federal revenues and 
        expenditures by the Congress and the President;''.

SEC. 102. THE TIMETABLE.

  Section 300 of the Congressional Budget Act of 1974 is 
amended to read as follows:

                              ``TIMETABLE

  ``Sec. 300. The timetable with respect to the congressional 
budget process for any fiscal year is as follows:

``On or before:     Action to be completed:
  First Monday in FePresident submits his budget........................
  February 15.......Congressional Budget Office submits report to Budget 
                    Committees.
  Not later than 6 wCommittees submit views and estimates to Budget ....
                    Committees.
  April 1...........Senate Budget Committee reports joint resolution on 
                    the budget.
  April 15..........Congress completes action on joint resolution on the 
                    budget.
  June 10...........House Appropriations Committee reports last annual .
                    appropriation bill.
  June 15...........Congress completes action on reconciliation ........
                    legislation.
  June 30...........House completes action on annual appropriation .....
                    bills.
  October 1.........Fiscal year begins.''...............................

SEC. 103. ANNUAL JOINT RESOLUTIONS ON THE BUDGET.

  (a) Content of Annual Joint Resolutions on the Budget.--
Section 301(a)(4) of the Congressional Budget Act of 1974 is 
amended to read as follows:
          ``(4) subtotals of new budget authority and outlays 
        for nondefense discretionary spending, defense 
        discretionary spending, direct spending (excluding 
        interest), and interest; and for emergencies (for the 
        reserve fund in section 316(b) and for military 
        operations in section 316(c));''.
  (b) Additional Matters in Joint Resolution.--Section 301(b) 
of the Congressional Budget Act of 1974 is amended as follows:
          (1) Strike paragraphs (2), (4), and (6) through (9).
          (2) After paragraph (3), insert ``and'' and 
        redesignate paragraph (5) as paragraph (4) and in such 
        paragraph strike the semicolon and insert a period.
  (c) Required Contents of Report.--Section 301(e)(2) of the 
Congressional Budget Act of 1974 is amended as follows:
          (1) Redesignate subparagraphs (A), (B), (C), (D), 
        (E), and (F) as subparagraphs (B), (C), (E), (F), (H), 
        and (I), respectively.
          (2) Before subparagraph (B) (as redesignated), insert 
        the following new subparagraph:
                  ``(A) new budget authority and outlays for 
                each major functional category, based on 
                allocations of the total levels set forth 
                pursuant to subsection (a)(1);''.
          (3) In subparagraph (C) (as redesignated), strike 
        ``mandatory'' and insert ``direct spending''.
          (4) After subparagraph (C) (as redesignated), insert 
        the following new subparagraph:
                  ``(D) a measure, as a percentage of gross 
                domestic product, of total outlays, total 
                Federal revenues, the surplus or deficit, and 
                new outlays for nondefense discretionary 
                spending, defense spending, and direct spending 
                as set forth in such resolution;''.
          (5) After subparagraph (F) (as redesignated), insert 
        the following new subparagraph:
                  ``(G) if the joint resolution on the budget 
                includes any allocation to a committee other 
                than the Committee on Appropriations of levels 
                in excess of current law levels, a 
                justification for not subjecting any program, 
                project, or activity (for which the allocation 
                is made) to annual discretionary 
                appropriations;''.
  (d) Additional Contents of Report.--Section 301(e)(3) of the 
Congressional Budget Act of 1974 is amended as follows:
          (1) Redesignate subparagraphs (A) and (B) as 
        subparagraphs (B) and (C), respectively, strike 
        subparagraphs (C) and (D), and redesignate subparagraph 
        (E) as subparagraph (D).
          (2) Before subparagraph (B), insert the following new 
        subparagraph:
                  ``(A) reconciliation directives described in 
                section 310;''.
  (e) President's Budget Submission to the Congress.--(1) The 
first two sentences of section 1105(a) of title 31, United 
States Code, are amended to read as follows:
``On or after the first Monday in January but not later than 
the first Monday in February of each year the President shall 
submit a budget of the United States Government for the 
following fiscal year which shall set forth the following 
levels:
          ``(A) totals of new budget authority and outlays;
          ``(B) total Federal revenues and the amount, if any, 
        by which the aggregate level of Federal revenues should 
        be increased or decreased by bills and resolutions to 
        be reported by the appropriate committees;
          ``(C) the surplus or deficit in the budget;
          ``(D) subtotals of new budget authority and outlays 
        for nondefense discretionary spending, defense 
        discretionary spending, direct spending (excluding 
        interest), and interest, and for emergencies (for the 
        reserve fund in section 316(b) and for military 
        operations in section 316(c)); and
          ``(E) the public debt.
Each budget submission shall include a budget message and 
summary and supporting information and, as a separately 
delineated statement, the levels required in the preceding 
sentence for at least each of the 9 ensuing fiscal years.''.
  (2) The third sentence of section 1105(a) of title 31, United 
States Code, is amended by inserting ``submission'' after 
``budget''.
  (f) Limitation on Contents of Budget Resolutions.--Section 
305 of the Congressional Budget Act of 1974 is amended by 
adding at the end the following new subsection:
  ``(e) Limitation on Contents.--(1) It shall not be in order 
in the House of Representatives or in the Senate to consider 
any joint resolution on the budget or any amendment thereto or 
conference report thereon that contains any matter referred to 
in paragraph (2).
  ``(2) Any joint resolution on the budget or any amendment 
thereto or conference report thereon that contains any matter 
not permitted in section 301(a) or (b) shall not be treated in 
the House of Representatives or the Senate as a budget 
resolution under subsection (a) or (b) or as a conference 
report on a budget resolution under subsection (c) of this 
section.''.

SEC. 104. BUDGET REQUIRED BEFORE SPENDING BILLS MAY BE CONSIDERED

  (a) Amendments to Section 302.--Section 302(a) of the 
Congressional Budget Act of 1974 is amended by striking 
paragraph (5).
  (b) Amendments to Section 303 and Conforming Amendments.--(1) 
Section 303 of the Congressional Budget Act of 1974 is amended 
by striking ``(a) In General.--'', by striking ``as reported to 
the House or Senate'', by striking ``to become effective'' in 
paragraph (1), and by striking subsections (b) and (c); and
  (2) by striking its section heading and inserting the 
following new section heading: ``consideration of budget-
related legislation before budget becomes law''.
  (c) Additional Amendments.--(1) Section 302(g)(1) of the 
Congressional Budget Act of 1974 is amended by striking ``and, 
after April 15, section 303''.
  (2)(A) Section 904(c)(1) of the Congressional Budget Act of 
1974 is amended by inserting ``303,'' before ``305(b)(2),''.
  (B) Section 904(d)(2) of the Congressional Budget Act of 1974 
is amended by inserting ``303,'' before ``305(b)(2),''.
  (d) Expedited Procedures Upon Veto of Joint Resolution on the 
Budget.--(1) Title III of the Congressional Budget Act of 1974 
(as amended by section 116) is further amended by adding after 
section 316 the following new section:

   ``EXPEDITED PROCEDURES UPON VETO OF JOINT RESOLUTION ON THE BUDGET

  ``Sec. 317. (a) Special Rule.--If the President vetoes a 
joint resolution on the budget for a fiscal year, the majority 
leader of the House of Representatives or Senate (or his 
designee) may introduce a concurrent resolution on the budget 
or joint resolution on the budget for such fiscal year. If the 
Committee on the Budget of either House fails to report such 
concurrent or joint resolution referred to it within five 
calendar days (excluding Saturdays, Sundays, or legal holidays 
except when that House of Congress is in session) after the 
date of such referral, the committee shall be automatically 
discharged from further consideration of such resolution and 
such resolution shall be placed on the appropriate calendar.
  ``(b) Procedure in the House of Representatives and the 
Senate.--
          ``(1) Except as provided in paragraph (2), the 
        provisions of section 305 for the consideration in the 
        House of Representatives and in the Senate of joint 
        resolutions on the budget and conference reports 
        thereon shall also apply to the consideration of 
        concurrent resolutions on the budget introduced under 
        subsection (a) and conference reports thereon.
          ``(2) Debate in the Senate on any concurrent 
        resolution on the budget or joint resolution on the 
        budget introduced under subsection (a), and all 
        amendments thereto and debatable motions and appeals in 
        connection therewith, shall be limited to not more than 
        10 hours and in the House such debate shall be limited 
        to not more than 3 hours.
  ``(c) Contents of Concurrent Resolutions.--Any concurrent 
resolution on the budget introduced under subsection (a) shall 
be in compliance with section 301.
  ``(d) Effect of Concurrent Resolution on the Budget.--
Notwithstanding any other provision of this title, whenever a 
concurrent resolution on the budget described in subsection (a) 
is agreed to, then the aggregates, allocations, and 
reconciliation directives (if any) contained in the report 
accompanying such concurrent resolution or in such concurrent 
resolution shall be considered to be the aggregates, 
allocations, and reconciliation directives for all purposes of 
sections 302, 303, and 311 for the applicable fiscal years and 
such concurrent resolution shall be deemed to be a joint 
resolution for all purposes of this title and the Rules of the 
House of Representatives and any reference to the date of 
enactment of a joint resolution on the budget shall be deemed 
to be a reference to the date agreed to when applied to such 
concurrent resolution.''.
  (2) 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 316 the 
following new item:

``Sec. 317. Expedited procedures upon veto of joint resolution on the 
          budget.''.

SEC. 105. AMENDMENTS TO EFFECTUATE JOINT RESOLUTIONS ON THE BUDGET.

  (a) Definition.--Paragraph (4) of section 3 of the 
Congressional Budget Act of 1974 is amended to read as follows:
          ``(4) the term `joint resolution on the budget' 
        means--
                  ``(A) a joint resolution setting forth the 
                budget for the United States Government for a 
                fiscal year as provided in section 301; and
                  ``(B) any other joint resolution revising the 
                budget for the United States Government for a 
                fiscal year as described in section 304.''.
  (b) Additional Amendments to the Congressional Budget and 
Impoundment Control Act of 1974.--(1)(A) Sections 301, 302, 
303, 305, 308, 310, 311, 312, 314, 405, and 904 of the 
Congressional Budget Act of 1974 (2 U.S.C. 621 et seq.) are 
amended by striking ``concurrent'' each place it appears and 
inserting ``joint''.
  (B)(i) Sections 302(d), 302(g), 308(a)(1)(A), and 310(d)(1) 
of the Congressional Budget Act of 1974 are amended by striking 
``most recently agreed to concurrent resolution on the budget'' 
each place it occurs and inserting ``most recently enacted 
joint resolution on the budget or agreed to concurrent 
resolution on the budget (as applicable)''.
  (ii) The section heading of section 301 is amended by 
striking ``adoption of concurrent resolution'' and inserting 
``joint resolutions''; and
  (iii) Section 304 of such Act is amended to read as follows:

             ``PERMISSIBLE REVISIONS OF BUDGET RESOLUTIONS

  ``Sec. 304. At any time after the joint resolution on the 
budget for a fiscal year has been enacted pursuant to section 
301, and before the end of such fiscal year, the two Houses and 
the President may enact a joint resolution on the budget which 
revises or reaffirms the joint resolution on the budget for 
such fiscal year most recently enacted.''.
  (C) Sections 302, 303, 310, and 311, of such Act are amended 
by striking ``agreed to'' each place it appears and by 
inserting ``enacted''.
  (2)(A) Paragraph (4) of section 3 of the Congressional Budget 
and Impoundment Control Act of 1974 is amended by striking 
``concurrent'' each place it appears and by inserting 
``joint''.
  (B) The table of contents set forth in section 1(b) of such 
Act is amended--
          (i) in the item relating to section 301, by striking 
        ``adoption of concurrent resolution'' and inserting 
        ``joint resolutions'';
          (ii) by striking the item relating to section 303 and 
        inserting the following:

``Sec. 303. Consideration of budget-related legislation before budget 
          becomes law.'';
          (iii) by striking ``concurrent'' and inserting 
        ``joint'' in the item relating to section 305.
  (c) Conforming Amendments to the Rules of the House of 
Representatives.--Clauses 1(e)(1), 4(a)(4), 4(b)(2), 
4(f)(1)(A), and 4(f)(2) of rule X, clause 10 of rule XVIII, and 
clause 10 of rule XX of the Rules of the House of 
Representatives are amended by striking ``concurrent'' each 
place it appears and inserting ``joint''.
  (d) Conforming Amendments to the Balanced Budget and 
Emergency Deficit Control Act of 1985.--Section 258C(b)(1) of 
the Balanced Budget and Emergency Deficit Control Act of 1985 
(2 U.S.C. 907d(b)(1)) is amended by striking ``concurrent'' and 
inserting ``joint''.
  (e) Conforming Amendments to Section 310 Regarding 
Reconciliation Directives.--(1) The side heading of section 
310(a) of the Congressional Budget Act of 1974 (as amended by 
section 105(b)) is further amended by inserting ``Joint 
Explanatory Statement Accompanying Conference Report on'' 
before ``Joint''.
  (2) Section 310(a) of such Act is amended by striking ``A'' 
and inserting ``The joint explanatory statement accompanying 
the conference report on a''.
  (3) The first sentence of section 310(b) of such Act is 
amended by striking ``If'' and inserting ``If the joint 
explanatory statement accompanying the conference report on''.
  (4) Section 310(c)(1) of such Act is amended by inserting 
``the joint explanatory statement accompanying the conference 
report on'' after ``pursuant to''.
  (f) Conforming Amendments to Section 3 Regarding Direct 
Spending.--Section 3 of the Congressional Budget and 
Impoundment Control Act of 1974 is amended by adding at the end 
the following new paragraph:
          ``(11) The term `direct spending' has the meaning 
        given to such term in section 250(c)(8) of the Balanced 
        Budget and Emergency Deficit Control Act of 1985.''.

                 Subtitle B--Budgeting for Emergencies

SEC. 111. PURPOSE.

  The purposes of this subtitle are to--
          (1) develop budgetary and fiscal procedures for 
        emergencies;
          (2) subject spending for emergencies to budgetary 
        procedures and controls; and
          (3) establish criteria for determining compliance 
        with emergency requirements.

SEC. 112. REPEAL OF ADJUSTMENTS FOR EMERGENCIES.

  (a) Elimination of Emergency Designation.--Sections 
251(b)(2)(A), 252(e), and 252(d)(4)(B) of the Balanced Budget 
and Emergency Deficit Control Act of 1985 are repealed.
  (b) Elimination of Emergency Adjustments.--Section 314(b) of 
the Congressional Budget Act of 1974 is amended by striking 
paragraph (1) and by redesignating paragraphs (2) through (5) 
as paragraphs (1) through (4), respectively.
  (c) Conforming Amendment.--Clause 2 of rule XXI of the Rules 
of the House of Representatives is amended by repealing 
paragraph (e) and by redesignating paragraph (f) as paragraph 
(e).

SEC. 113. OMB EMERGENCY CRITERIA.

  Definition of Emergency.--Section 3 of the Congressional 
Budget and Impoundment Control Act of 1974 (as amended by 
section 105(e)) is further amended by adding at the end the 
following new paragraph:
          ``(12)(A) The term `emergency' means a situation 
        that--
                  ``(i) requires new budget authority and 
                outlays (or new budget authority and the 
                outlays flowing therefrom) for the prevention 
                or mitigation of, or response to, loss of life 
                or property, or a threat to national security; 
                and
                  ``(ii) is unanticipated.
          ``(B) As used in subparagraph (A), the term 
        `unanticipated' means that the situation is--
                  ``(i) sudden, which means quickly coming into 
                being or not building up over time;
                  ``(ii) urgent, which means a pressing and 
                compelling need requiring immediate action;
                  ``(iii) unforeseen, which means not predicted 
                or anticipated as an emerging need; and
                  ``(iv) temporary, which means not of a 
                permanent duration.''.
  (b) Conforming Amendment.--The term `emergency' has the 
meaning given to such term in section 3 of the Congressional 
Budget and Impoundment Control Act of 1974.''.

SEC. 114. DEVELOPMENT OF GUIDELINES FOR APPLICATION OF EMERGENCY 
                    DEFINITION.

  Not later than 5 months after the date of enactment of this 
Act, the chairmen of the Committees on the Budget (in 
consultation with the President) shall, after consulting with 
the chairmen of the Committees on Appropriations and applicable 
authorizing committees of their respective Houses and the 
Directors of the Congressional Budget Office and the Office of 
Management and Budget, jointly publish in the Congressional 
Record guidelines for application of the definition of 
emergency set forth in section 3(12) of the Congressional 
Budget and Impoundment Control Act of 1974.

SEC. 115. RESERVE FUND FOR EMERGENCIES IN PRESIDENT'S BUDGET.

  Section 1105(f) of title 31, United States Code is amended by 
adding at the end the following new sentences: ``Such budget 
submission shall also comply with the requirements of 
subsections (b) and (c) of section 316 of the Congressional 
Budget Act of 1974 and, in the case of any budget authority 
requested for an emergency, such submission shall include a 
detailed justification of why such emergency is an emergency 
within the meaning of section 3(12) of the Congressional Budget 
Act of 1974.''.

SEC. 116. ADJUSTMENTS AND RESERVE FUND FOR EMERGENCIES IN JOINT BUDGET 
                    RESOLUTIONS.

  (a) Emergencies.--Title III of the Congressional Budget Act 
of 1974 is amended by adding at the end the following new 
section:

                             ``EMERGENCIES

  ``Sec. 316. (a) Adjustments.--
          ``(1) In general.--After the reporting of a bill or 
        joint resolution or the submission of a conference 
        report thereon that provides budget authority for any 
        emergency as identified pursuant to subsection (d) that 
        is not covered by subsection (c)--
                  ``(A) the chairman of the Committee on the 
                Budget of the House of Representatives or the 
                Senate shall determine and certify, pursuant to 
                the guidelines referred to in section 114 of 
                the Family Budget Protection Act of 2004, the 
                portion (if any) of the amount so specified 
                that is for an emergency within the meaning of 
                section 3(12); and
                  ``(B) such chairman shall make the adjustment 
                set forth in paragraph (2) for the amount of 
                new budget authority (or outlays) in that 
                measure and the outlays flowing from that 
                budget authority.
          ``(2) Matters to be adjusted.--The adjustments 
        referred to in paragraph (1) are to be made to the 
        allocations made pursuant to the appropriate joint 
        resolution on the budget pursuant to section 302(a) and 
        shall be in an amount not to exceed the amount reserved 
        for emergencies pursuant to the requirements of 
        subsection (b).
  ``(b) Reserve Fund for Nonmilitary Emergencies.--The amount 
set forth in the reserve fund for emergencies for budget 
authority and outlays for a fiscal year pursuant to section 
301(a)(4) shall equal--
          ``(1) the average of the enacted levels of budget 
        authority for emergencies (other than those covered by 
        subsection (c)) in the 5 fiscal years preceding the 
        current year; and
          ``(2) the average of the levels of outlays for 
        emergencies in the 5 fiscal years preceding the current 
        year flowing from the budget authority referred to in 
        paragraph (1), but only in the fiscal year for which 
        such budget authority first becomes available for 
        obligation.
  ``(c) Treatment of Emergencies to Fund Certain Military 
Operations.--Whenever the Committee on Appropriations reports 
any bill or joint resolution that provides budget authority for 
any emergency that is a threat to national security and the 
funding of which carries out a military operation authorized by 
a declaration of war or a joint resolution authorizing the use 
of military force (or economic assistance funding in 
furtherance of such operation) and the report accompanying that 
bill or joint resolution, pursuant to subsection (d), 
identifies any provision that increases outlays or provides 
budget authority (and the outlays flowing therefrom) for such 
emergency, the enactment of which would cause the total amount 
of budget authority or outlays provided for emergencies for the 
budget year in the joint resolution on the budget (pursuant to 
section 301(a)(4)) to be exceeded:
          ``(A) Such bill or joint resolution shall be referred 
        to the Committee on the Budget of the House or the 
        Senate, as the case may be, with instructions to report 
        it without amendment, other than that specified in 
        subparagraph (B), within 5 legislative days of the day 
        in which it is reported from the originating committee. 
        If the Committee on the Budget of either House fails to 
        report a bill or joint resolution referred to it under 
        this subparagraph within such 5-day period, the 
        committee shall be automatically discharged from 
        further consideration of such bill or joint resolution 
        and such bill or joint resolution shall be placed on 
        the appropriate calendar.
          ``(B) An amendment to such a bill or joint resolution 
        referred to in this subsection shall only consist of an 
        exemption from section 251 of the Balanced Budget and 
        Emergency Deficit Control Act of 1985 of all or any 
        part of the provisions that provide budget authority 
        (and the outlays flowing therefrom) for such emergency 
        if the committee determines, pursuant to the guidelines 
        referred to in section 114 of the Family Budget 
        Protection Act of 2004, that such budget authority is 
        for an emergency within the meaning of section 3(12).
          ``(C) If such a bill or joint resolution is reported 
        with an amendment specified in subparagraph (B) by the 
        Committee on the Budget of the House of Representatives 
        or the Senate, then the budget authority and resulting 
        outlays that are the subject of such amendment shall 
        not be included in any determinations under section 
        302(f) or 311(a) for any bill, joint resolution, 
        amendment, motion, or conference report.
  ``(d) Committee Notification of Emergency Legislation.--
Whenever the Committee on Appropriations or any other committee 
of either House (including a committee of conference) reports 
any bill or joint resolution that provides budget authority for 
any emergency, the report accompanying that bill or joint 
resolution (or the joint explanatory statement of managers in 
the case of a conference report on any such bill or joint 
resolution) shall identify all provisions that provide budget 
authority and the outlays flowing therefrom for such emergency 
and include a statement of the reasons why such budget 
authority meets the definition of an emergency pursuant to the 
guidelines referred to in section 114 of the Family Budget 
Protection Act of 2004.''.
  (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 315 the following new item:

``Sec. 316. Emergencies.''.

SEC. 117. APPLICATION OF SECTION 306 TO EMERGENCIES IN EXCESS OF 
                    AMOUNTS IN RESERVE FUND.

  Section 306 of the Congressional Budget Act of 1974 is 
amended by inserting at the end the following new sentence: 
``No amendment reported by the Committee on the Budget (or from 
the consideration of which such committee has been discharged) 
pursuant to section 316(c) may be amended.''.

SEC. 118. UP-TO-DATE TABULATIONS.

  Section 308(b)(2) of the Congressional Budget Act of 1974 is 
amended by striking ``and'' at the end of subparagraph (B), by 
striking the period at the end of subparagraph (C) and 
inserting ``; and'', and by adding at the end the following new 
subparagraph:
                  ``(D) shall include an up-to-date tabulation 
                of amounts remaining in the reserve fund for 
                emergencies.''.

SEC. 119. PROHIBITION ON AMENDMENTS TO EMERGENCY RESERVE FUND.

  (a) Point of Order.--Section 305 of the Congressional Budget 
Act of 1974 (as amended by section 103(f)) is further amended 
by adding at the end the following new subsection:
  ``(f) Point of Order Regarding Emergency Reserve Fund.--It 
shall not be in order in the House of Representatives or in the 
Senate to consider an amendment to a joint resolution on the 
budget which changes the amount of budget authority and outlays 
set forth in section 301(a)(4) for emergency reserve fund.''.
  (b) Technical Amendment.--(1) Section 904(c)(1) of the 
Congressional Budget Act of 1974 is amended by inserting 
``305(e), 305(f),'' after ``305(c)(4),''.
  (2) Section 904(d)(2) of the Congressional Budget Act of 1974 
is amended by inserting ``305(e), 305(f),'' after 
``305(c)(4),''.

                   Subtitle C--Biennial Budget Option

SEC. 121. EFFECTIVE DATE.

  If--
          (1) as part of the President's budget submission 
        under section 1105(a) of title 31, United States Code, 
        during the first session of any Congress, the President 
        includes a request that the joint resolution on the 
        budget that will be considered during the first session 
        of the next Congress be for a biennium consisting of 
        two consecutive fiscal years; and
          (2) the joint resolution on the budget for the fiscal 
        year to which the President's submission relates 
        contains a provision stating that the joint resolution 
        on the budget that will be considered during the first 
        session of the next Congress shall be for a biennium 
        consisting of two consecutive fiscal years;
then the provisions of this subtitle shall take effect on 
January 1 of the calendar year in which that next Congress 
commences and apply to that Congress and each Congress 
thereafter.

SEC. 122. REVISION OF TIMETABLE.

  Section 300 of the Congressional Budget Act of 1974 (2 U.S.C. 
631) is amended to read as follows:

                              ``TIMETABLE

  ``Sec. 300. (a) In General.--Except as provided by subsection 
(b), the timetable with respect to the congressional budget 
process for any Congress (beginning with the One Hundred Tenth 
Congress or a subsequent Congress, as applicable) is as 
follows:
      

                                       ``First Session
``On or before:                        Action to be completed:

First Monday in February.............  President submits budget recommendations.
February 15..........................  Congressional Budget Office submits report to Budget Committees.
Not later than 6 weeks after budget    Committees submit views and estimates to Budget Committees.
 submission.
April 1..............................  Budget Committees report joint resolution on the biennial budget.
May 15...............................  Congress completes action on joint resolution on the biennial budget.
May 15...............................  Biennial appropriation bills may be considered in the House.
June 10..............................  House Appropriations Committee reports last biennial appropriation bill.
June 30..............................  House completes action on biennial appropriation bills.
October 1............................  Biennium begins.

                                       ``Second Session
``On or before:                        Action to be completed:

February 15..........................  President submits budget review.
Not later than 6 weeks after           Congressional Budget Office submits report to Budget Committees.
 President submits budget review.
The last day of the session..........  Congress completes action on bills and resolutions authorizing new budget
                                        authority for the succeeding biennium.


  ``(b) Special Rule.--In the case of any first session of 
Congress that begins in any year during which the term of a 
President (except a President who succeeds himself) begins, the 
following dates shall supersede those set forth in subsection 
(a):


                                       ``First Session
``On or before:                        Action to be completed:

First Monday in April................  President submits budget recommendations.
April 20.............................  Committees submit views and estimates to Budget Committees.
May 15...............................  Budget Committees report joint resolution on the biennial budget.
June 1...............................  Congress completes action on joint resolution on the biennial budget.
June 1...............................  Biennial appropriation bills may be considered in the House.
July 1...............................  House Appropriations Committee reports last biennial appropriation bill.
July 20..............................  House completes action on biennial appropriation bills.
October 1............................  Biennium begins.''.


SEC. 123. AMENDMENTS TO THE CONGRESSIONAL BUDGET AND IMPOUNDMENT 
                    CONTROL ACT OF 1974.

  (a) Declaration of Purpose.--Section 2(2) of the 
Congressional Budget and Impoundment Control Act of 1974 (2 
U.S.C. 621(2)) is amended by striking ``each year'' and 
inserting ``biennially''.
  (b) Definitions.--
          (1) Budget resolution.--Section 3(4) of such Act (2 
        U.S.C. 622(4)) is amended by striking ``fiscal year'' 
        each place it appears and inserting ``biennium''.
          (2) Biennium.--Section 3 of such Act (2 U.S.C. 622) 
        (as amended by section 111(a)) is further amended by 
        adding at the end the following new paragraph:
          ``(13) The term `biennium' means the period of 2 
        consecutive fiscal years beginning on October 1 of any 
        odd-numbered year.''.
  (c) Biennial Joint Resolution on the Budget.--
          (1) Contents of resolution.--Section 301(a) of such 
        Act (2 U.S.C. 632(a)) is amended--
                  (A) in the matter preceding paragraph (1) 
                by--
                          (i) striking ``April 15 of each 
                        year'' and inserting ``May 15 of each 
                        odd-numbered year'';
                          (ii) striking ``the fiscal year 
                        beginning on October 1 of such year'' 
                        the first place it appears and 
                        inserting ``the biennium beginning on 
                        October 1 of such year'';
                          (iii) striking ``the fiscal year 
                        beginning on October 1 of such year'' 
                        the second place it appears and 
                        inserting ``each fiscal year in such 
                        period''; and
                          (iv) striking ``each of the four 
                        ensuing fiscal years'' and inserting 
                        ``each fiscal year in the next 2 
                        bienniums'';
                  (B) in paragraph (6), by striking ``for the 
                fiscal year'' and inserting ``for each fiscal 
                year in the biennium''; and
                  (C) in paragraph (7), by striking ``for the 
                fiscal year'' and inserting ``for each fiscal 
                year in the biennium''.
          (2) Additional matters.--Section 301(b) of such Act 
        (2 U.S.C. 632(b)) is amended--
                  (A) in paragraph (3), by striking ``for such 
                fiscal year'' and inserting ``for either fiscal 
                year in such biennium''; and
                  (B) in paragraph (7), by striking ``for the 
                first fiscal year'' and inserting ``for each 
                fiscal year in the biennium''.
          (3) Views of other committees.--Section 301(d) of 
        such Act (2 U.S.C. 632(d)) is amended by inserting 
        ``(or, if applicable, as provided by section 300(b))'' 
        after ``United States Code''.
          (4) Hearings.--Section 301(e)(1) of such Act (2 
        U.S.C. 632(e)) is amended by--
                  (A) striking ``fiscal year'' and inserting 
                ``biennium''; and
                  (B) inserting after the second sentence the 
                following: ``On or before April 1 of each odd-
                numbered year (or, if applicable, as provided 
                by section 300(b)), the Committee on the Budget 
                of each House shall report to its House the 
                joint resolution on the budget referred to in 
                subsection (a) for the biennium beginning on 
                October 1 of that year.''.
          (5) Goals for reducing unemployment.--Section 301(f) 
        of such Act (2 U.S.C. 632(f)) is amended by striking 
        ``fiscal year'' each place it appears and inserting 
        ``biennium''.
          (6) Economic assumptions.--Section 301(g)(1) of such 
        Act (2 U.S.C. 632(g)(1)) is amended by striking ``for a 
        fiscal year'' and inserting ``for a biennium''.
          (7) Section heading.--The section heading of section 
        301 of such Act is amended by striking 
        ``annual'' and inserting 
        ``biennial''.
          (8) Table of contents.--The item relating to section 
        301 in the table of contents set forth in section 1(b) 
        of such Act is amended by striking ``Annual'' and 
        inserting ``Biennial''.
  (d) Committee Allocations.--Section 302 of such Act (2 U.S.C. 
633) is amended--
          (1) in subsection (a)(1) by--
                  (A) striking ``for the first fiscal year of 
                the resolution,'' and inserting ``for each 
                fiscal year in the biennium,'';
                  (B) striking ``for that period of fiscal 
                years'' and inserting ``for all fiscal years 
                covered by the resolution''; and
                  (C) striking ``for the fiscal year of that 
                resolution'' and inserting ``for each fiscal 
                year in the biennium'';
          (2) in subsection (f)(1), by striking ``for a fiscal 
        year'' and inserting ``for a biennium'';
          (3) in subsection (f)(1), by striking ``first fiscal 
        year'' and inserting ``either fiscal year of the 
        biennium'';
          (4) in subsection (f)(2)(A), by--
                  (A) striking ``first fiscal year'' and 
                inserting ``each fiscal year of the biennium''; 
                and
                  (B) striking ``the total of fiscal years'' 
                and inserting ``the total of all fiscal years 
                covered by the resolution''; and
          (5) in subsection (g)(1)(A), by striking ``April'' 
        and inserting ``May''.
  (e) Section 303 Point of Order.--Section 303 of such Act (2 
U.S.C. 634(a)) is amended by striking ``for a fiscal year'' and 
inserting ``for a biennium'' and by striking ``the first fiscal 
year'' and inserting ``each fiscal year of the biennium''.
  (f) Permissible Revisions of Joint Resolutions on the 
Budget.--Section 304 of such Act (2 U.S.C. 635) is amended--
          (1) by striking ``fiscal year'' the first two places 
        it appears and inserting ``biennium'';
          (2) by striking ``for such fiscal year''; and
          (3) by inserting before the period ``for such 
        biennium''.
  (g) Procedures for Consideration of Budget Resolutions.--
Section 305(a)(3) of such Act (2 U.S.C. 636(b)(3)) is amended 
by striking ``fiscal year'' and inserting ``biennium''.
  (h) Completion of House Committee Action on Appropriation 
Bills.--Section 307 of such Act (2 U.S.C. 638) is amended--
          (1) by striking ``each year'' and inserting ``each 
        odd-numbered year (or, if applicable, as provided by 
        section 300(b), July 1)'';
          (2) by striking ``annual'' and inserting 
        ``biennial'';
          (3) by striking ``fiscal year'' and inserting 
        ``biennium''; and
          (4) by striking ``that year'' and inserting ``each 
        odd-numbered year''.
  (i) Quarterly Budget Reports.--Section 308 of such Act (2 
U.S.C. 639) is amended by adding at the end the following new 
subsection:
  ``(d) Quarterly Budget Reports.--The Director of the 
Congressional Budget Office shall, as soon as practicable after 
the completion of each quarter of the fiscal year, prepare an 
analysis comparing revenues, spending, and the deficit or 
surplus for the current fiscal year to assumptions included in 
the congressional budget resolution. In preparing this report, 
the Director of the Congressional Budget Office shall combine 
actual budget figures to date with projected revenue and 
spending for the balance of the fiscal year. The Director of 
the Congressional Budget Office shall include any other 
information in this report that it deems useful for a full 
understanding of the current fiscal position of the Government. 
The reports mandated by this subsection shall be transmitted by 
the Director to the Senate and House Committees on the Budget, 
and the Congressional Budget Office shall make such reports 
available to any interested party upon request.''.
  (j) Completion of House Action on Regular Appropriation 
Bills.--Section 309 of such Act (2 U.S.C. 640) is amended--
          (1) by striking ``It'' and inserting ``Except 
        whenever section 300(b) is applicable, it'';
          (2) by inserting ``of any odd-numbered calendar 
        year'' after ``July'';
          (3) by striking ``annual'' and inserting 
        ``biennial''; and
          (4) by striking ``fiscal year'' and inserting 
        ``biennium''.
  (k) Reconciliation Process.--Section 310 of such Act (2 
U.S.C. 641) is amended--
          (1) in subsection (a), in the matter preceding 
        paragraph (1), by striking ``any fiscal year'' and 
        inserting ``any biennium'';
          (2) in subsection (a)(1), by striking ``such fiscal 
        year'' each place it appears and inserting ``any fiscal 
        year covered by such resolution''; and
          (3) by striking subsection (f) and redesignating 
        subsection (g) as subsection (f).
  (l) Section 311 Point of Order.--
          (1) In the house.--Section 311(a)(1) of such Act (2 
        U.S.C. 642(a)) is amended--
                  (A) by striking ``for a fiscal year'' and 
                inserting ``for a biennium'';
                  (B) by striking ``the first fiscal year'' 
                each place it appears and inserting ``either 
                fiscal year of the biennium''; and
                  (C) by striking ``that first fiscal year'' 
                and inserting ``each fiscal year in the 
                biennium''.
          (2) In the senate.--Section 311(a)(2) of such Act is 
        amended--
                  (A) in subparagraph (A), by striking ``for 
                the first fiscal year'' and inserting ``for 
                either fiscal year of the biennium''; and
                  (B) in subparagraph (B)--
                          (i) by striking ``that first fiscal 
                        year'' the first place it appears and 
                        inserting ``each fiscal year in the 
                        biennium''; and
                          (ii) by striking ``that first fiscal 
                        year and the ensuing fiscal years'' and 
                        inserting ``all fiscal years''.
          (3) Social security levels.--Section 311(a)(3) of 
        such Act is amended by--
                  (A) striking ``for the first fiscal year'' 
                and inserting ``each fiscal year in the 
                biennium''; and
                  (B) striking ``that fiscal year and the 
                ensuing fiscal years'' and inserting ``all 
                fiscal years''.
  (m) Maximum Deficit Amount Point of Order.--Section 312(c) of 
the Congressional Budget Act of 1974 (2 U.S.C. 643) is 
amended--
          (1) by striking ``for a fiscal year'' and inserting 
        ``for a biennium'';
          (2) in paragraph (1), by striking ``first fiscal 
        year'' and inserting ``either fiscal year in the 
        biennium'';
          (3) in paragraph (2), by striking ``that fiscal 
        year'' and inserting ``either fiscal year in the 
        biennium''; and
          (4) in the matter following paragraph (2), by 
        striking ``that fiscal year'' and inserting ``the 
        applicable fiscal year''.

SEC. 124. AMENDMENTS TO RULES OF HOUSE OF REPRESENTATIVES.

  (a) Clause 4(a)(1)(A) of rule X of the Rules of the House of 
Representatives is amended by inserting ``odd-numbered'' after 
``each''.
  (b) Clause 4(a)(4) of rule X of the Rules of the House of 
Representatives is amended by striking ``fiscal year'' and 
inserting ``biennium''.
  (c) Clause 4(b)(2) of rule X of the Rules of the House of 
Representatives is amended by striking ``each fiscal year'' and 
inserting ``the biennium''.
  (d) Clause 4(b) of rule X of the Rules of the House of 
Representatives is amended by striking ``and'' at the end of 
subparagraph (5), by striking the period and inserting ``; 
and'' at the end of subparagraph (6), and by adding at the end 
the following new subparagraph:
          ``(7) use the second session of each Congress to 
        study issues with long-term budgetary and economic 
        implications, which would include--
                  ``(A) hold hearings to receive testimony from 
                committees of jurisdiction to identify problem 
                areas and to report on the results of 
                oversight; and
                  ``(B) by January 1 of each odd-number year, 
                issuing a report to the Speaker which 
                identifies the key issues facing the Congress 
                in the next biennium.''.
  (e) Clause 4(e) of rule X of the Rules of the House of 
Representatives is amended by striking ``annually'' each place 
it appears and inserting ``biennially'' and by striking 
``annual'' and inserting ``biennial''.
  (f) Clause 4(f) of rule X of the Rules of the House of 
Representatives is amended--
          (1) by inserting ``during each odd-numbered year'' 
        after ``submits his budget'';
          (2) by striking ``fiscal year'' the first place it 
        appears and inserting ``biennium''; and
          (3) by striking ``that fiscal year'' and inserting 
        ``each fiscal year in such ensuing biennium''.
  (g) Clause 11(i) of rule X of the Rules of the House of 
Representatives is amended by striking ``during the same or 
preceding fiscal year''.
  (h) Clause 3(d)(2)(A) of rule XIII of the Rules of the House 
of Representatives is amended by striking ``five'' both places 
it appears and inserting ``six''.
  (i) Clause 5(a)(1) of rule XIII of the Rules of the House of 
Representatives is amended by striking ``fiscal year after 
September 15 in the preceding fiscal year'' and inserting 
``biennium after September 15 of the calendar year in which 
such biennium begins''.

SEC. 125. AMENDMENTS TO TITLE 31, UNITED STATES CODE.

  (a) Definition.--Section 1101 of title 31, United States 
Code, is amended by adding at the end the following new 
paragraph:
          ``(3) `biennium' has the meaning given to such term 
        in paragraph (13) of section 3 of the Congressional 
        Budget and Impoundment Control Act of 1974 (2 U.S.C. 
        622(13)).''.
  (b) Budget Contents and Submission to the Congress.--
          (1) Schedule.--The matter preceding paragraph (1) in 
        section 1105(a) of title 31, United States Code, is 
        amended to read as follows:
  ``(a) On or before the first Monday in February of each odd-
numbered year (or, if applicable, as provided by section 300(b) 
of the Congressional Budget Act of 1974), beginning with the 
One Hundred Tenth Congress or a subsequent Congress (as 
applicable), the President shall submit to the Congress the 
budget for the biennium beginning on October 1 of such calendar 
year. The budget transmitted under this subsection shall 
include a budget message and summary and supporting 
information. The President shall include in each budget the 
following:''.
          (2) Expenditures.--Section 1105(a)(5) of title 31, 
        United States Code, is amended by striking ``the fiscal 
        year for which the budget is submitted and the 4 fiscal 
        years after that year'' and inserting ``each fiscal 
        year in the biennium for which the budget is submitted 
        and in the succeeding 4 years''.
          (3) Receipts.--Section 1105(a)(6) of title 31, United 
        States Code, is amended by striking ``the fiscal year 
        for which the budget is submitted and the 4 fiscal 
        years after that year'' and inserting ``each fiscal 
        year in the biennium for which the budget is submitted 
        and in the succeeding 4 years''.
          (4) Balance statements.--Section 1105(a)(9)(C) of 
        title 31, United States Code, is amended by striking 
        ``the fiscal year'' and inserting ``each fiscal year in 
        the biennium''.
          (5) Government functions and activities.--Section 
        1105(a)(12) of title 31, United States Code, is amended 
        in subparagraph (A), by striking ``the fiscal year'' 
        and inserting ``each fiscal year in the biennium''.
          (6) Allowances.--Section 1105(a)(13) of title 31, 
        United States Code, is amended by striking ``the fiscal 
        year'' and inserting ``each fiscal year in the 
        biennium''.
          (7) Allowances for unanticipated and uncontrollable 
        expenditures.--Section 1105(a)(14) of title 31, United 
        States Code, is amended by striking ``that year'' and 
        inserting ``each fiscal year in the biennium for which 
        the budget is submitted''.
          (8) Tax expenditures.--Section 1105(a)(16) of title 
        31, United States Code, is amended by striking ``the 
        fiscal year'' and inserting ``each fiscal year in the 
        biennium''.
          (9) Estimates for future years.--Section 1105(a)(17) 
        of title 31, United States Code, is amended--
                  (A) by striking ``the fiscal year following 
                the fiscal year'' and inserting ``each fiscal 
                year in the biennium following the biennium'';
                  (B) by striking ``that following fiscal 
                year'' and inserting ``each such fiscal year''; 
                and
                  (C) by striking ``fiscal year before the 
                fiscal year'' and inserting ``biennium before 
                the biennium''.
          (10) Prior year outlays.--Section 1105(a)(18) of 
        title 31, United States Code, is amended--
                  (A) by striking ``the prior fiscal year,'' 
                and inserting ``each of the 2 most recently 
                completed fiscal years,'';
                  (B) by striking ``for that year'' and 
                inserting ``with respect to those fiscal 
                years''; and
                  (C) by striking ``in that year'' and 
                inserting ``in those fiscal years''.
          (11) Prior year receipts.--Section 1105(a)(19) of 
        title 31, United States Code, is amended--
                  (A) by striking ``the prior fiscal year'' and 
                inserting ``each of the 2 most recently 
                completed fiscal years'';
                  (B) by striking ``for that year'' and 
                inserting ``with respect to those fiscal 
                years''; and
                  (C) by striking ``in that year'' each place 
                it appears and inserting ``in those fiscal 
                years''.
  (c) Estimated Expenditures of Legislative and Judicial 
Branches.--Section 1105(b) of title 31, United States Code, is 
amended by striking ``each year'' and inserting ``each even-
numbered year''.
  (d) Recommendations To Meet Estimated Deficiencies.--Section 
1105(c) of title 31, United States Code, is amended--
          (1) by striking ``the fiscal year for'' the first 
        place it appears and inserting ``each fiscal year in 
        the biennium for'';
          (2) by striking ``the fiscal year for'' the second 
        place it appears and inserting ``each fiscal year of 
        the biennium, as the case may be,''; and
          (3) by striking ``that year'' and inserting ``for 
        each year of the biennium''.
  (e) Capital Investment Analysis.--Section 1105(e)(1) of title 
31, United States Code, is amended by striking ``ensuing fiscal 
year'' and inserting ``biennium to which such budget relates''.
  (f) Supplemental Budget Estimates and Changes.--
          (1) In general.--Section 1106(a) of title 31, United 
        States Code, is amended--
                  (A) in the matter preceding paragraph (1), 
                by--
                          (i) inserting ``and before February 
                        15 of each even-numbered year'' after 
                        ``Before July 16 of each year''; and
                          (ii) striking ``fiscal year'' and 
                        inserting ``biennium'';
                  (B) in paragraph (1), by striking ``that 
                fiscal year'' and inserting ``each fiscal year 
                in such biennium'';
                  (C) in paragraph (2), by striking ``4 fiscal 
                years following the fiscal year'' and inserting 
                ``4 fiscal years following the biennium''; and
                  (D) in paragraph (3), by striking ``fiscal 
                year'' and inserting ``biennium''.
          (2) Changes.--Section 1106(b) of title 31, United 
        States Code, is amended by--
                  (A) striking ``the fiscal year'' and 
                inserting ``each fiscal year in the biennium''; 
                and
                  (B) inserting ``and before February 15 of 
                each even-numbered year'' after ``Before July 
                16 of each year''.
  (g) Current Programs and Activities Estimates.--
          (1) The president.--Section 1109(a) of title 31, 
        United States Code, is amended--
                  (A) by striking ``On or before the first 
                Monday after January 3 of each year (on or 
                before February 5 in 1986)'' and inserting ``At 
                the same time the budget required by section 
                1105 is submitted for a biennium''; and
                  (B) by striking ``the following fiscal year'' 
                and inserting ``each fiscal year of such 
                period''.
          (2) Joint economic committee.--Section 1109(b) of 
        title 31, United States Code, is amended by striking 
        ``March 1 of each year'' and inserting ``within 6 weeks 
        of the President's budget submission for each odd-
        numbered year (or, if applicable, as provided by 
        section 300(b) of the Congressional Budget Act of 
        1974)''.
  (h) Year-Ahead Requests for Authorizing Legislation.--Section 
1110 of title 31, United States Code, is amended by--
          (1) striking ``May 16'' and inserting ``March 31''; 
        and
          (2) striking ``year before the year in which the 
        fiscal year begins'' and inserting ``calendar year 
        preceding the calendar year in which the biennium 
        begins''.

SEC. 126. TWO-YEAR APPROPRIATIONS; TITLE AND STYLE OF APPROPRIATION 
                    ACTS.

  Section 105 of title 1, United States Code, is amended to 
read as follows:

``Sec. 105. Title and style of appropriations Acts

  ``(a) The style and title of all Acts making appropriations 
for the support of the Government shall be as follows: `An Act 
making appropriations (here insert the object) for each fiscal 
year in the biennium of fiscal years (here insert the fiscal 
years of the biennium).'.
  ``(b) All Acts making regular appropriations for the support 
of the Government shall be enacted for a biennium and shall 
specify the amount of appropriations provided for each fiscal 
year in such period.
  ``(c) For purposes of this section, the term `biennium' has 
the same meaning as in section 3(13) of the Congressional 
Budget and Impoundment Control Act of 1974 (2 U.S.C. 
622(13)).''.

SEC. 127. MULTIYEAR AUTHORIZATIONS.

  (a) In General.--Title III of the Congressional Budget Act of 
1974 (as amended by section 116(a)) is further amended by 
adding at the end the following new section:

              ``MULTIYEAR AUTHORIZATIONS OF APPROPRIATIONS

  ``Sec. 318. (a) It shall not be in order in the House of 
Representatives or the Senate to consider any measure that 
contains a specific authorization of appropriations for any 
purpose unless the measure includes such a specific 
authorization of appropriations for that purpose for not less 
than each fiscal year in one or more bienniums.
  ``(b)(1) For purposes of this section, a specific 
authorization of appropriations is an authorization for the 
enactment of an amount of appropriations or amounts not to 
exceed an amount of appropriations (whether stated as a sum 
certain, as a limit, or as such sums as may be necessary) for 
any purpose for a fiscal year.
  ``(2) Subsection (a) does not apply with respect to an 
authorization of appropriations for a single fiscal year for 
any program, project, or activity if the measure containing 
that authorization includes a provision expressly stating the 
following: `Congress finds that no authorization of 
appropriation will be required for [Insert name of applicable 
program, project, or activity] for any subsequent fiscal 
year.'.
  ``(c) For purposes of this section, the term `measure' means 
a bill, joint resolution, amendment, motion, or conference 
report.''.
  (b) Amendment to Table of Contents.--The table of contents 
set forth in section 1(b) of the Congressional Budget and 
Impoundment Control Act of 1974 is amended by adding after the 
item relating to section 317 the following new item:

``Sec. 318. Multiyear authorizations of appropriations.''.

SEC. 128. GOVERNMENT STRATEGIC AND PERFORMANCE PLANS ON A BIENNIAL 
                    BASIS.

  (a) Strategic Plans.--Section 306 of title 5, United States 
Code, is amended--
          (1) in subsection (a), by striking ``September 30, 
        1997'' and inserting ``September 30, 2007'';
          (2) in subsection (b)--
                  (A) by striking ``at least every three 
                years'' and all that follows thereafter and 
                inserting ``at least every 4 years, except that 
                strategic plans submitted by September 30, 
                2007, shall be updated and revised by September 
                30, 2010''; and
                  (B) by striking ``five years forward'' and 
                inserting ``six years forward''; and
          (3) in subsection (c), by inserting a comma after 
        ``section'' the second place it appears and adding 
        ``including a strategic plan submitted by September 30, 
        2007, meeting the requirements of subsection (a)''.
  (b) Budget Contents and Submission to Congress.--Paragraph 
(28) of section 1105(a) of title 31, United States Code, is 
amended by striking ``beginning with fiscal year 1999, a'' and 
inserting ``beginning with fiscal year 2010, a biennial''.
  (c) Performance Plans.--Section 1115 of title 31, United 
States Code, is amended--
          (1) in subsection (a)--
                  (A) in the matter before paragraph (1)--
                          (i) by striking ``section 
                        1105(a)(29)'' and inserting ``section 
                        1105(a)(28)''; and
                          (ii) by striking ``an annual'' and 
                        inserting ``a biennial'';
                  (B) in paragraph (1) by inserting after 
                ``program activity'' the following: ``for both 
                years 1 and 2 of the biennial plan'';
                  (C) in paragraph (5) by striking ``and'' 
                after the semicolon;
                  (D) in paragraph (6) by striking the period 
                and inserting a semicolon; and inserting 
                ``and'' after the inserted semicolon; and
                  (E) by adding after paragraph (6) the 
                following:
          ``(7) cover each fiscal year of the biennium 
        beginning with the first fiscal year of the next 
        biennial budget cycle.'';
          (2) in subsection (d) by striking ``annual'' and 
        inserting ``biennial''; and
          (3) in paragraph (6) of subsection (f) by striking 
        ``annual'' and inserting ``biennial''.
  (d) Managerial Accountability and Flexibility.--Section 9703 
of title 31, United States Code, relating to managerial 
accountability, is amended--
          (1) in subsection (a)--
                  (A) in the first sentence by striking 
                ``annual''; and
                  (B) by striking ``section 1105(a)(29)'' and 
                inserting ``section 1105(a)(28)'';
          (2) in subsection (e)--
                  (A) in the first sentence by striking ``one 
                or'' before ``two years'';
                  (B) in the second sentence by striking ``a 
                subsequent year'' and inserting ``for a 
                subsequent 2-year period''; and
                  (C) in the third sentence by striking 
                ``three'' and inserting ``four''.
  (e) Strategic Plans.--Section 2802 of title 39, United States 
Code, is amended--
          (1) in subsection (a), by striking ``September 30, 
        1997'' and inserting ``September 30, 2007'';
          (2) in subsection (b), by striking ``at least every 
        three years'' and inserting ``at least every 4 years 
        except that strategic plans submitted by September 30, 
        2007, shall be updated and revised by September 30, 
        2010'';
          (3) in subsection (b), by striking ``five years 
        forward'' and inserting ``six years forward''; and
          (4) in subsection (c), by inserting a comma after 
        ``section'' the second place it appears and inserting 
        ``including a strategic plan submitted by September 30, 
        2007, meeting the requirements of subsection (a)''.
  (f) Performance Plans.--Section 2803(a) of title 39, United 
States Code, is amended--
          (1) in the matter before paragraph (1), by striking 
        ``an annual'' and inserting ``a biennial'';
          (2) in paragraph (1), by inserting after ``program 
        activity'' the following: ``for both years 1 and 2 of 
        the biennial plan'';
          (3) in paragraph (5), by striking ``and'' after the 
        semicolon;
          (4) in paragraph (6), by striking the period and 
        inserting ``; and''; and
          (5) by adding after paragraph (6) the following:
          ``(7) cover each fiscal year of the biennium 
        beginning with the first fiscal year of the next 
        biennial budget cycle.''.
  (g) Committee Views of Plans and Reports.--Section 301(d) of 
the Congressional Budget Act (2 U.S.C. 632(d)) is amended by 
adding at the end ``Each committee of the Senate or the House 
of Representatives shall review the strategic plans, 
performance plans, and performance reports, required under 
section 306 of title 5, United States Code, and sections 1115 
and 1116 of title 31, United States Code, of all agencies under 
the jurisdiction of the committee. Each committee may provide 
its views on such plans or reports to the Committee on the 
Budget of the applicable House.''.

SEC. 129. BIENNIAL APPROPRIATION BILLS.

  (a) In the House of Representatives.--Clause 2(a) of rule XXI 
of the Rules of the House of Representatives is amended by 
adding at the end the following new subparagraph:
  ``(3)(A) Except as provided by subdivision (B), an 
appropriation may not be reported in a general appropriation 
bill (other than a supplemental appropriation bill), and may 
not be in order as an amendment thereto, unless it provides new 
budget authority or establishes a level of obligations under 
contract authority for each fiscal year of a biennium.
  ``(B) Subdivision (A) does not apply with respect to an 
appropriation for a single fiscal year for any program, 
project, or activity if the bill or amendment thereto 
containing that appropriation includes a provision expressly 
stating the following: `Congress finds that no additional 
funding beyond one fiscal year will be required and the [Insert 
name of applicable program, project, or activity] will be 
completed or terminated after the amount provided has been 
expended.'.
  ``(C) For purposes of paragraph (b), the statement set forth 
in subdivision (B) with respect to an appropriation for a 
single fiscal year for any program, project, or activity may be 
included in a general appropriation bill or amendment 
thereto.''.
  (b) Conforming Amendment.--Clause 5(b)(1) of rule XXII of the 
House of Representatives is amended by striking ``or (c)'' and 
inserting ``or (3) or 2(c)''.

SEC. 130. ASSISTANCE BY FEDERAL AGENCIES TO STANDING COMMITTEES OF THE 
                    SENATE AND THE HOUSE OF REPRESENTATIVES.

  (a) Information Regarding Agency Appropriations Requests.--To 
assist each standing committee of the House of Representatives 
and the Senate in carrying out its responsibilities, the head 
of each Federal agency which administers the laws or parts of 
laws under the jurisdiction of such committee shall provide to 
such committee such studies, information, analyses, reports, 
and assistance as may be requested by the chairman and ranking 
minority member of the committee.
  (b) Information Regarding Agency Program Administration.--To 
assist each standing committee of the House of Representatives 
and the Senate in carrying out its responsibilities, the head 
of any agency shall furnish to such committee documentation, 
containing information received, compiled, or maintained by the 
agency as part of the operation or administration of a program, 
or specifically compiled pursuant to a request in support of a 
review of a program, as may be requested by the chairman and 
ranking minority member of such committee.
  (c) Summaries by Comptroller General.--Within thirty days 
after the receipt of a request from a chairman and ranking 
minority member of a standing committee having jurisdiction 
over a program being reviewed and studied by such committee 
under this section, the Comptroller General of the United 
States shall furnish to such committee summaries of any audits 
or reviews of such program which the Comptroller General has 
completed during the preceding six years.
  (d) Congressional Assistance.--Consistent with their duties 
and functions under law, the Comptroller General of the United 
States, the Director of the Congressional Budget Office, and 
the Director of the Congressional Research Service shall 
continue to furnish (consistent with established protocols) to 
each standing committee of the House of Representatives or the 
Senate such information, studies, analyses, and reports as the 
chairman and ranking minority member may request to assist the 
committee in conducting reviews and studies of programs under 
this section.

             Subtitle D--Prevention of Government Shutdown

SEC. 141. AMENDMENT TO TITLE 31.

  (a) In General.--Chapter 13 of title 31, United States Code, 
is amended by inserting after section 1310 the following new 
section:

``Sec. 1311. Continuing appropriations

  ``(a)(1) If any regular appropriation bill for a fiscal year 
(or, if applicable, for each fiscal year in a biennium) does 
not become law before the beginning of such fiscal year or a 
joint resolution making continuing appropriations is not in 
effect, there are appropriated, out of any money in the 
Treasury not otherwise appropriated, and out of applicable 
corporate or other revenues, receipts, and funds, such sums as 
may be necessary to continue any project or activity for which 
funds were provided in the preceding fiscal year--
          ``(A) in the corresponding regular appropriation Act 
        for such preceding fiscal year; or
          ``(B) if the corresponding regular appropriation bill 
        for such preceding fiscal year did not become law, then 
        in a joint resolution making continuing appropriations 
        for such preceding fiscal year.
  ``(2) Appropriations and funds made available, and authority 
granted, for a project or activity for any fiscal year pursuant 
to this section shall be at a rate of operations not in excess 
of the lower of--
          ``(A) the rate of operations provided for in the 
        regular appropriation Act providing for such project or 
        activity for the preceding fiscal year;
          ``(B) in the absence of such an Act, the rate of 
        operations provided for such project or activity 
        pursuant to a joint resolution making continuing 
        appropriations for such preceding fiscal year;
          ``(C) the rate of operations provided for in the 
        regular appropriation bill as passed by the House of 
        Representatives or the Senate for the fiscal year in 
        question, except that the lower of these two versions 
        shall be ignored for any project or activity for which 
        there is a budget request if no funding is provided for 
        that project or activity in either version; or
          ``(D) the annualized rate of operations provided for 
        in the most recently enacted joint resolution making 
        continuing appropriations for part of that fiscal year 
        or any funding levels established under the provisions 
        of this Act.
  ``(3) Appropriations and funds made available, and authority 
granted, for any fiscal year pursuant to this section for a 
project or activity shall be available for the period beginning 
with the first day of a lapse in appropriations and ending with 
the earlier of--
          ``(A) the date on which the applicable regular 
        appropriation bill for such fiscal year becomes law 
        (whether or not such law provides for such project or 
        activity) or a continuing resolution making 
        appropriations becomes law, as the case may be; or
          ``(B) the last day of such fiscal year.
  ``(b) An appropriation or funds made available, or authority 
granted, for a project or activity for any fiscal year pursuant 
to this section shall be subject to the terms and conditions 
imposed with respect to the appropriation made or funds made 
available for the preceding fiscal year, or authority granted 
for such project or activity under current law.
  ``(c) Appropriations and funds made available, and authority 
granted, for any project or activity for any fiscal year 
pursuant to this section shall cover all obligations or 
expenditures incurred for such project or activity during the 
portion of such fiscal year for which this section applies to 
such project or activity.
  ``(d) Expenditures made for a project or activity for any 
fiscal year pursuant to this section shall be charged to the 
applicable appropriation, fund, or authorization whenever a 
regular appropriation bill or a joint resolution making 
continuing appropriations until the end of a fiscal year 
providing for such project or activity for such period becomes 
law.
  ``(e) This section shall not apply to a project or activity 
during a fiscal year if any other provision of law (other than 
an authorization of appropriations)--
          ``(1) makes an appropriation, makes funds available, 
        or grants authority for such project or activity to 
        continue for such period; or
          ``(2) specifically provides that no appropriation 
        shall be made, no funds shall be made available, or no 
        authority shall be granted for such project or activity 
        to continue for such period.
  ``(f) For purposes of this section, the term `regular 
appropriation bill' means any annual appropriation bill making 
appropriations, otherwise making funds available, or granting 
authority, for any of the following categories of projects and 
activities:
          ``(1) Agriculture, rural development, Food and Drug 
        Administration, and related agencies programs.
          ``(2) The Departments of Commerce, Justice, and 
        State, the Judiciary, and related agencies.
          ``(3) The Department of Defense.
          ``(4) The government of the District of Columbia and 
        other activities chargeable in whole or in part against 
        the revenues of the District.
          ``(5) Energy and water development.
          ``(6) Foreign operations, export financing, and 
        related programs.
          ``(7) The Department of Homeland Security.
          ``(8) The Department of the Interior and related 
        agencies.
          ``(9) The Departments of Labor, Health and Human 
        Services, and Education, and related agencies.
          ``(10) The Legislative Branch.
          ``(11) Military construction, family housing, and 
        base realignment and closure for the Department of 
        Defense.
          ``(12) The Departments of Transportation and 
        Treasury, and independent agencies.
          ``(13) The Departments of Veterans Affairs and 
        Housing and Urban Development, and sundry independent 
        agencies, boards, commissions, corporations, and 
        offices.''.
  (b) Clerical Amendment.--The analysis of chapter 13 of title 
31, United States Code, is amended by inserting after the item 
relating to section 1310 the following new item:

``1311. Continuing appropriations.''.



                        Subtitle E--The Baseline



SEC. 151. ELIMINATION OF INFLATION ADJUSTMENT.

  Section 257(c) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended--
          (1) in paragraph (1) by striking ``for inflation as 
        specified in paragraph (5),''; and
          (2) by striking paragraph (5) and redesignating 
        paragraph (6) as paragraph (5).

SEC. 152. THE PRESIDENT'S BUDGET.

  (a) Paragraph (5) of section 1105(a) of title 31, United 
States Code, is amended to read as follows:
          ``(5) except as provided in subsection (b) of this 
        section, estimated expenditures and appropriations for 
        the current year and estimated expenditures and 
        proposed appropriations the President decides are 
        necessary to support the Government in the fiscal year 
        for which the budget is submitted and the 4 fiscal 
        years following that year, and, except for detailed 
        budget estimates, the percentage change from the 
        current year to the fiscal year for which the budget is 
        submitted for estimated expenditures and for 
        appropriations.''.
  (b) Section 1105(a)(6) of title 31, United States Code, is 
amended to read as follows:
          ``(6) estimated receipts of the Government in the 
        current year and the fiscal year for which the budget 
        is submitted and the 4 fiscal years after that year 
        under--
                  ``(A) laws in effect when the budget is 
                submitted; and
                  ``(B) proposals in the budget to increase 
                revenues,
        and the percentage change (in the case of each category 
        referred to in subparagraphs (A) and (B)) between the 
        current year and the fiscal year for which the budget 
        is submitted and between the current year and each of 
        the 9 fiscal years after the fiscal year for which the 
        budget is submitted.''.
  (c) Section 1105(a)(12) of title 31, United States Code, is 
amended to read as follows:
          ``(12) for each proposal in the budget for 
        legislation that would establish or expand a Government 
        activity or function, a table showing--
                  ``(A) the amount proposed in the budget for 
                appropriation and for expenditure because of 
                the proposal in the fiscal year for which the 
                budget is submitted;
                  ``(B) the estimated appropriation required 
                because of the proposal for each of the 4 
                fiscal years after that year that the proposal 
                will be in effect; and
                  ``(C) the estimated amount for the same 
                activity or function, if any, in the current 
                fiscal year,
        and, except for detailed budget estimates, the 
        percentage change (in the case of each category 
        referred to in subparagraphs (A), (B), and (C)) between 
        the current year and the fiscal year for which the 
        budget is submitted.''.
  (d) Section 1105(a)(18) of title 31, United States Code, is 
amended by inserting ``new budget authority and'' before 
``budget outlays''.
  (e) Section 1105(a) of title 31, United States Code, is 
amended by adding at the end the following new paragraphs:
          ``(35) a comparison of levels of estimated 
        expenditures and proposed appropriations for each 
        function and subfunction in the current fiscal year and 
        the fiscal year for which the budget is submitted, 
        along with the proposed increase or decrease of 
        spending in percentage terms for each function and 
        subfunction.
          ``(36) a table on sources of growth in total direct 
        spending under current law and as proposed in this 
        budget submission for the budget year and the ensuing 9 
        fiscal years, which shall include changes in outlays 
        attributable to the following: cost-of-living 
        adjustments; changes in the number of program 
        recipients; increases in medical care prices, 
        utilization and intensity of medical care; and residual 
        factors.''.
  (f) Section 1109(a) of title 31, United States Code, is 
amended by inserting after the first sentence the following new 
sentence: ``For discretionary spending, these estimates shall 
assume the levels set forth in the discretionary spending 
limits under section 251(b) of the Balanced Budget and 
Emergency Deficit Control Act of 1985, as adjusted, for the 
appropriate fiscal years (and if no such limits are in effect, 
these estimates shall assume the adjusted levels for the most 
recent fiscal year for which such levels were in effect).''.

SEC. 153. THE CONGRESSIONAL BUDGET.

  Section 301(e) of the Congressional Budget Act of 1974 (as 
amended by section 103) is further amended--
          (1) in paragraph (1), by inserting at the end the 
        following: ``The basis of deliberations in developing 
        such joint resolution shall be the estimated budgetary 
        levels for the preceding fiscal year. Any budgetary 
        levels pending before the committee and the text of the 
        joint resolution shall be accompanied by a document 
        comparing such levels or such text to the estimated 
        levels of the prior fiscal year. Any amendment offered 
        in the committee that changes a budgetary level and is 
        based upon a specific policy assumption for a program, 
        project, or activity shall be accompanied by a document 
        indicating the estimated amount for such program, 
        project, or activity in the current year.''; and
          (2) in paragraph (2), by striking ``and'' at the end 
        of subparagraph (H) (as redesignated), by striking the 
        period and inserting ``; and'' at the end of 
        subparagraph (I) (as redesignated), and by adding at 
        the end the following new subparagraph:
                  ``(J) a comparison of levels for the current 
                fiscal year with proposed spending and revenue 
                levels for the subsequent fiscal years along 
                with the proposed increase or decrease of 
                spending in percentage terms for each 
                function.''.

SEC. 154. CONGRESSIONAL BUDGET OFFICE REPORTS TO COMMITTEES.

  (a) The first sentence of section 202(e)(1) of the 
Congressional Budget Act of 1974 is amended by inserting 
``compared to comparable levels for the current year'' before 
the comma at the end of subparagraph (A) and before the comma 
at the end of subparagraph (B).
  (b) Section 202(e)(1) of the Congressional Budget Act of 1974 
is amended by inserting after the first sentence the following 
new sentence: ``Such report shall also include a table on 
sources of spending growth in total direct spending for the 
budget year and the ensuing 4 fiscal years, which shall include 
changes in outlays attributable to the following: cost-of-
living adjustments; changes in the number of program 
recipients; increases in medical care prices, utilization and 
intensity of medical care; and residual factors.''.
  (c) Section 308(a)(1)(B) of the Congressional Budget Act of 
1974 is amended by inserting ``and shall include a comparison 
of those levels to comparable levels for the current fiscal 
year'' before ``if timely submitted''.

SEC. 155. TREATMENT OF EMERGENCIES.

  Section 257(c) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 (as amended by section 151) is further 
amended by adding at the end the following new paragraph:
          ``(7) Emergencies.--Budgetary resources for 
        emergencies shall be at the level provided in the 
        reserve fund for emergencies for that fiscal year 
        pursuant to section 301(a)(4) of the Congressional 
        Budget Act of 1974.''.

             TITLE II--PUTTING A LID ON THE FEDERAL BUDGET

   Subtitle A--Spending Safeguards on the Growth of Entitlements and 
                              Mandatories

SEC. 201. SPENDING CAPS ON GROWTH OF ENTITLEMENTS AND MANDATORIES.

  (a) Control of Entitlements and Mandatories.--The Balanced 
Budget and Emergency Deficit Control Act of 1985 is amended by 
adding after section 252 the following new section:

``SEC. 252A. ENFORCING CONTROLS ON DIRECT SPENDING.

  ``(a) Cap on Growth of Entitlements.--Effective for fiscal 
year 2005 and for each ensuing fiscal year, the total level of 
direct spending for all direct spending programs, projects, and 
activities (excluding social security) for any such fiscal year 
shall not exceed the total level of spending for all such 
programs, projects, and activities for the previous fiscal year 
after the direct spending for each such program, project, or 
activity is increased by the higher of the change in the 
Consumer Price Index for All Urban Consumers or the inflator 
(if any) applicable to that program, project, or activity and 
the growth in eligible population for such, project, or 
activity.
  ``(b) Sequestration.--Within 15 days after Congress adjourns 
to end a session (other than of the second session of the One 
Hundred Eighth Congress), and on the same day as a 
sequestration (if any) under section 251, there shall be a 
sequestration to reduce the amount of direct spending for the 
fiscal year beginning in the year the Congress adjourns by any 
amount necessary to reduce such spending to the level set forth 
in subsection (a) unless that amount is less than $250,000,000.
  ``(c) Uniform Reductions; Limitations.--The amount required 
to be sequestered for the fiscal year under subsection (a) 
shall be obtained from nonexempt direct spending accounts by 
actions taken in the following order:
          ``(1) First.--The reductions in the programs 
        specified in section 256(a) (National Wool Act and 
        special milk), section 256(b) (student loans), and 
        section 256(c) (foster care and adoption assistance) 
        shall be made.
          ``(2) Second.--Any additional reductions that may be 
        required shall be achieved by reducing each remaining 
        nonexempt direct spending account by the uniform 
        percentage necessary to achieve those additional 
        reductions, except that--
                  ``(A) the low-income programs specified in 
                section 256(d) shall not be reduced by more 
                than 2 percent;
                  ``(B) the retirement and veterans benefits 
                specified in sections 256(f), (g), and (h) 
                shall not be reduced by more than 2 percent in 
                the manner specified in that section; and
                  ``(C) the medicare programs shall not be 
                reduced by more than 2 percent in the manner 
                specified in section 256(i).
        The limitations set forth in subparagraphs (A), (B), 
        and (C) shall be applied iteratively, and after each 
        iteration the uniform percentage applicable to all 
        other programs under this paragraph shall be increased 
        (if necessary) to a level sufficient to achieve the 
        reductions required by this paragraph.
  ``(d) Exclusion of Medicare Prescription Drug Program Until 
Fully Operational.--For purposes of this section with respect 
to the limitation under subsection (a) for a fiscal year before 
fiscal year 2008, direct spending programs and direct spending 
shall not be construed to include part D of title XVIII of the 
Social Security Act (or spending under part C of such title 
that is attributable to such part D).''.
  (b) Table of Contents Amendment.--The table of contents set 
forth in 250(c) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended by adding after the item 
relating to section 252 the following new item:

``Sec. 252A. Enforcing controls on direct spending.''.

SEC. 202. EXEMPT PROGRAMS AND ACTIVITIES.

  Section 255 of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended to read as follows:

``SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES.

  ``(a) Social Security Benefits; Tier I Railroad Retirement 
Benefits; and Certain Medicare Benefits.--(1) Benefits payable 
under the old-age, survivors, and disability insurance program 
established under title II of the Social Security Act, and 
benefits payable under section 3(a), 3(f)(3), 4(a), or 4(f) of 
the Railroad Retirement Act of 1974, shall be exempt from 
reduction under any order issued under this part.
  ``(2) Payments made under part A of title XVIII (relating to 
part A medicare hospital insurance benefits) of the Social 
Security Act and payments made under part C of such title 
(relating to the Medicare Advantage program) insofar as they 
are attributable to part A of such title shall be exempt from 
reduction under any order issued under this part.
  ``(b) Descriptions and Lists.--The following budget accounts 
or activities shall be exempt from sequestration:
          ``(1) net interest;
          ``(2) all payments to trust funds from excise taxes 
        or other receipts or collections properly creditable to 
        those trust funds;
          ``(3) all payments from one Federal direct spending 
        budget account to another Federal budget account; and 
        all intragovernmental funds including those from which 
        funding is derived primarily from other Government 
        accounts, except to the extent that such funds are 
        augmented by direct appropriations for the fiscal year 
        for which the order is in effect;
          ``(4) activities resulting from private donations, 
        bequests, or voluntary contributions to the Government;
          ``(5) payments from any revolving fund or trust-
        revolving fund (or similar activity) that provides 
        deposit insurance or other Government insurance, 
        Government guarantees, or any other form of contingent 
        liability, to the extent those payments result from 
        contractual or other legally binding commitments of the 
        Government at the time of any sequestration;
          ``(6) credit liquidating and financing accounts;
          ``(7) the following accounts, which largely fulfill 
        requirements of the Constitution or otherwise make 
        payments to which the Government is committed:
                  ``Administration of Territories, Northern 
                Mariana Islands Covenant grants (14-0412-0-1-
                806);
                  ``Armed Forces Retirement Home Trust Fund, 
                payment of claims (84-8930-0-7-705);
                  ``Bureau of Indian Affairs, miscellaneous 
                payments to Indians (14-2303-0-1-452);
                  ``Bureau of Indian Affairs, miscellaneous 
                trust funds, tribal trust funds (14-9973-0-7-
                999);
                  ``Claims, defense;
                  ``Claims, judgments, and relief act (20-1895-
                0-1-806);
                  ``Compact of Free Association, economic 
                assistance pursuant to Public Law 99-658 (14-
                0415-0-1-806);
                  ``Compensation of the President (11-0001-0-1-
                802);
                  ``Customs Service, miscellaneous permanent 
                appropriations (20-9992-0-2-852);
                  ``Eastern Indian land claims settlement fund 
                (14-2202-0-1-806);
                  ``Farm Credit Administration, Limitation on 
                Administration Expenses (78-4131-0-3-351);
                  ``Farm Credit System Financial Assistance 
                Corporation, interest payments (20-1850-0-1-
                351);
                  ``Internal Revenue collections of Puerto Rico 
                (20-5737-0-2-852);
                  ``Panama Canal Commission, operating expenses 
                and capital outlay (95-5190-0-2-403);
                  ``Payments of Vietnam and USS Pueblo 
                prisoner-of-war claims (15-0104-0-1-153);
                  ``Payments to copyright owners (03-5175-0-2-
                376);
                  ``Payments to health care trust funds (75-
                0580-0-1-571);
                  ``Payments to social security trust funds 
                (75-0404-0-1-651);
                  ``Payments to the United States territories, 
                fiscal assistance (14-0418-0-1-801);
                  ``Payments to widows and heirs of deceased 
                Members of Congress (00-0215-0-1-801);
                  ``Pension Benefit Guaranty Corporation Fund 
                (16-4204-0-3-601);
                  ``Salaries of Article III judges;
                  ``Washington Metropolitan Area Transit 
                Authority, interest payments (46-0300-0-1-401);
          ``(8) the following noncredit special, revolving, or 
        trust-revolving funds:
                  ``Coinage profit fund (20-5811-0-2-803);
                  ``Comptroller of the Currency;
                  ``Director of the Office of Thrift 
                Supervision;
                  ``Exchange Stabilization Fund (20-4444-0-3-
                155);
                  ``Federal Housing Finance Board;
                  ``Foreign Military Sales trust fund (11-
                82232-0-7-155);
                  ``National Credit Union Administration, 
                central liquidating facility (25-4470-0-3-373);
                  ``National Credit Union Administration, 
                credit union insurance fund (25-4468-0-3-373);
                  ``National Credit Union Administration 
                operating fund (25-4056-0-3-373); and
                  ``Resolution Trust Corporation Revolving Fund 
                (22-4055-0-3-373);
          ``(9) Thrift Savings Fund;
          ``(10) appropriations for the District of Columbia to 
        the extent they are appropriations of locally raised 
        funds;
          ``(11)(A) any amount paid as regular unemployment 
        compensation by a State from its account in the 
        Unemployment Trust Fund (established by section 904(a) 
        of the Social Security Act);
          ``(B) any advance made to a State from the Federal 
        unemployment account (established by section 904(g) of 
        such Act) under title XII of such Act and any advance 
        appropriated to the Federal unemployment account 
        pursuant to section 1203 of such Act; and
          ``(C) any payment made from the Federal Employees 
        Compensation Account (as established under section 909 
        of such Act) for the purpose of carrying out chapter 85 
        of title 5, United States Code, and funds appropriated 
        or transferred to or otherwise deposited in such 
        Account; and
          ``(12)(A) FDIC, Bank Insurance Fund (51-4064-0-3-
        373);
          ``(B) FDIC, FSLIC Resolution Fund (51-4065-0-3-373); 
        and
          ``(C) FDIC, Savings Association Insurance Fund (51-
        4066-0-3-373).
  ``(c) Federal Retirement and Disability Accounts.--The 
following Federal retirement and disability accounts shall be 
exempt from reduction under any order issued under this part:
          ``Civil service retirement and disability fund (24-
        8135-0-7-602).
          ``Black Lung Disability Trust Fund (20-8144-0-7-601).
          ``Foreign Service Retirement and Disability Fund (19-
        8186-0-7-602).
          ``District of Columbia Judicial Retirement and 
        Survivors Annuity Fund (20-8212-0-7-602).
          ``Judicial Survivors' Annuities Fund (10-8110-0-7-
        602).
          ``Payments to the Railroad Retirement Accounts (60-
        0113-0-1-601).
          ``Tax Court Judges Survivors Annuity Fund (23-8115-0-
        7-602).
          ``Employees Life Insurance Fund (24-8424-0-8-602).
  ``(d) Federal Administrative Expenses.--
          ``(1) Notwithstanding any provision of law other than 
        paragraph (3), administrative expenses incurred by the 
        departments and agencies, including independent 
        agencies, of the Government in connection with any 
        program, project, activity, or account shall be subject 
        to reduction pursuant to any sequestration order, 
        without regard to any exemption, exception, limitation, 
        or special rule otherwise applicable with respect to 
        such program, project, activity, or account, and 
        regardless of whether the program, project, activity, 
        or account is self-supporting and does not receive 
        appropriations.
          ``(2) Payments made by the Government to reimburse or 
        match administrative costs incurred by a State or 
        political subdivision under or in connection with any 
        program, project, activity, or account shall not be 
        considered administrative expenses of the Government 
        for purposes of this section, and shall be subject to 
        sequestration to the extent (and only to the extent) 
        that other payments made by the Government under or in 
        connection with that program, project, activity, or 
        account are subject to that reduction or sequestration; 
        except that Federal payments made to a State as 
        reimbursement of administrative costs incurred by that 
        State under or in connection with the unemployment 
        compensation programs specified in subsection (a)(11) 
        shall be subject to reduction or sequestration under 
        this part notwithstanding the exemption otherwise 
        granted to such programs under that subsection.
          ``(3) Notwithstanding any other provision of law, the 
        administrative expenses of the following programs shall 
        be exempt from sequestration:
                  ``(A) Comptroller of the Currency.
                  ``(B) Federal Deposit Insurance Corporation.
                  ``(C) Office of Thrift Supervision.
                  ``(D) National Credit Union Administration.
                  ``(E) National Credit Union Administration, 
                central liquidity facility.
                  ``(F) Federal Retirement Thrift Investment 
                Board.
                  ``(G) Resolution Funding Corporation.
                  ``(H) Resolution Trust Corporation.
                  ``(I) Board of Governors of the Federal 
                Reserve System.
  ``(e) Veterans' Programs.--The following programs shall be 
exempt from reduction under any order issued under this part:
          ``General Post Funds (36-8180-0-7-705).
          ``Veterans Insurance and Indemnities (36-0120-0-1-
        701).
          ``Service-Disabled Veterans Insurance Funds (36-4012-
        0-3-701).
          ``Veterans Reopened Insurance Fund (36-4010-0-3-701).
          ``Servicemembers' Group Life Insurance Fund (36-4009-
        0-3-701).
          ``Post-Vietnam Era Veterans Education Account (36-
        8133-0-7-702).
          ``National Service Life Insurance Fund (36-8132-0-7-
        701).
          ``United States Government Life Insurance Fund (36-
        8150-0-7-701).
          ``Veterans Special Life Insurance Fund (36-8455-0-8-
        701).
  ``(f) Optional Exemption of Defense and Homeland Security 
Accounts.--
          ``(1) In general.--The President may, with respect to 
        any defense or homeland security account, exempt that 
        account from sequestration or provide for a lower 
        uniform percentage reduction than would otherwise 
        apply.
          ``(2) Limitation.--The President may not use the 
        authority provided by paragraph (1) unless the 
        President notifies the Congress of the manner in which 
        such authority will be exercised on or before the date 
        specified in section 254(a) for the budget year.''.

SEC. 203. EXCEPTIONS, LIMITATIONS, AND SPECIAL RULES.

  (a) In General.--Section 256 of the Balanced Budget and 
Emergency Deficit Control Act of 1985 is amended to read as 
follows:

``SEC. 256. EXCEPTIONS, LIMITATIONS, AND SPECIAL RULES.

  ``(a) National Wool Act and the Special Milk Program.--
Automatic spending increases are increases in outlays due to 
changes in indexes in the following programs:
          ``(1) National Wool Act; and
          ``(2) Special milk program.
In those programs all amounts other than the automatic spending 
increases shall be exempt from reduction under any 
sequestration order.
  ``(b) Student Loans.--For all student loans under part B or D 
of title IV of the Higher Education Act of 1965 made during the 
period when a sequestration order under section 254 is in 
effect as required by section 252 or 253, origination fees 
under sections 438(c)(2) and 455(c) of that Act shall each be 
increased by 0.50 percentage point.
  ``(c) Foster Care and Adoption Assistance Programs.--Any 
sequestration order shall make the reduction otherwise required 
under the foster care and adoption assistance programs 
(established by part E of title IV of the Social Security Act) 
only with respect to payments and expenditures made by States 
in which increases in foster care maintenance payment rates or 
adoption assistance payment rates (or both) are to take effect 
during the fiscal year involved, and only to the extent that 
the required reduction can be accomplished by applying a 
uniform percentage reduction to the Federal matching payments 
that each such State would otherwise receive under section 474 
of that Act (for such fiscal year) for that portion of the 
State's payments attributable to the increases taking effect 
during that year. No State's matching payments from the 
Government for foster care maintenance payments or for adoption 
assistance maintenance payments may be reduced by a percentage 
exceeding the applicable domestic sequestration percentage. No 
State may, after the date of the enactment of this Act, make 
any change in the timetable for making payments under a State 
plan approved under part E of title IV of the Social Security 
Act which has the effect of changing the fiscal year in which 
expenditures under such part are made.
  ``(d) Low-Income Programs.--(1) Benefit payments or payments 
to States or other entities for the programs listed in 
paragraph (2) shall not be reduced by more than 2 percent under 
any sequestration order. When reduced under an end-of-session 
sequestration order, those benefit reductions shall occur 
starting with the payment made at the start of January. When 
reduced under a within-session sequestration order, those 
benefit reductions shall occur starting with the next periodic 
payment.
  ``(2) The programs referred to in paragraph (1) are the 
following:
          ``Child Nutrition (12-3539-0-1-605).
          ``Food Stamp Programs (12-3505-0-1-605).
          ``Grants to States for Medicaid (75-0512-0-1-551).
          ``State Children's Health Insurance Fund (75-0515-0-
        1-551).
          ``Supplemental Security Income Program (75-0406-0-1-
        609).
          ``Temporary Assistance for Needy Families (75-1552-0-
        1-609).
          ``Special supplemental nutrition program for women, 
        infants, and children (WIC) (12-3510-0-1-605).
  ``(e) Veterans' Medical Care.--The maximum permissible 
reduction in budget authority for Veterans' medical care (36-
0160-0-1-703) for any fiscal year, pursuant to an order issued 
under section 254, shall be 2 percent.
  ``(f) Federal Retirement Programs.--
          ``(1) For each of the programs listed in paragraph 
        (2) and except as provided in paragraph (3), monthly 
        (or other periodic) benefit payments shall be reduced 
        by the uniform percentage applicable to direct spending 
        sequestrations for such programs, which shall in no 
        case exceed 2 percent under any sequestration order. 
        When reduced under an end-of-session sequestration 
        order, those benefit reductions shall occur starting 
        with the payment made at the start of January or 7 
        weeks after the order is issued, whichever is later. 
        When reduced under a within-session sequestration 
        order, those benefit reductions shall occur starting 
        with the next periodic payment.
          ``(2) The programs subject to paragraph (1) are:
                  ``Central Intelligence Agency Retirement and 
                Disability Fund (56-3400-0-1-054).
                  ``Comptrollers General Retirement System (05-
                0107-0-1-801)Payments to the Foreign Service 
                Retirement and Disability Fund (72-1036-0-1-
                153).
                  ``Judicial Officer' Retirement Fund (10-8122-
                0-7-602).
                  ``Claims Judges' Retirement Fund (10-8124-0-
                7-602).
                  ``Pensions for former Presidents (47-0105-0-
                1-802).
                  ``National Oceanic and Atmospheric 
                Administration Retirement (13-1450-0-1-306).
                  ``Railroad Industry Pension Fund (60-8011-0-
                7-601).
                  ``Retired pay, Coast Guard (70-0602-0-1-403).
                  ``Retirement pay and medical benefits for 
                commissioned officers, Public Health Service 
                (75-0379-0-1-551).
                  ``Payments to Civil Service Retirement and 
                Disability Fund (24-0200-0-1-805).
                  ``Payments to the Foreign Service Retirement 
                and Disability Fund (72-1036-0-1-153)
                  ``Payments to Judiciary Trust Funds (10-0941-
                0-1-752).
  ``(g) Veterans Programs.--To achieve the total percentage 
reduction required by any order issued under this part, the 
percentage reduction that shall apply to payments under the 
following programs shall in no event exceed 2 percent:
          ``Canteen Service Revolving Fund (36-4014-0-3-705).
          ``Medical Center Research Organizations (36-4026-0-3-
        703).
          ``Disability Compensation Benefits (36-0102-0-1-701).
          ``Education Benefits (36-0137-0-1-702).
          ``Vocational Rehabilitation and Employment Benefits 
        (36-0135-0-1-702).
          ``Pensions Benefits (36-0154-0-1-701).
          ``Burial Benefits (36-0139-0-1-701).
          ``Guaranteed Transitional Housing Loans For Homeless 
        Veterans Program Account (36-1119-0-1-704).
          ``Housing Direct Loan Financing Account (36-4127-0-1-
        704).
          ``Housing Guaranteed Loan Financing Account (36-4129-
        0-3-704).
          ``Vocational Rehabilitation and Education Direct Loan 
        Financing Account (36-4259-0-3-702).
  ``(h) Military Health and Retirement.--To achieve the total 
percentage reduction in military retirement required by any 
order issued under this part, the percentage reduction that 
shall apply to payments under the Military retirement fund (97-
8097-0-7-602), payments to the military retirement fund (97-
0040-0-1-054), and the Defense Health Program (97-0130-0-1-051) 
shall in no event exceed 2 percent.
  ``(i) Medicare Program.--
          ``(1) Calculation of reduction in individual payment 
        amounts.--To achieve the total percentage reduction in 
        those programs required by any order issued under this 
        part, the percentage reduction that shall apply to 
        payments under the health insurance programs under 
        title XVIII of the Social Security Act (other than 
        payments described in section 255(a)(2)) that are 
        subject to such order for services furnished after any 
        sequestration order is issued shall be such that the 
        reduction made in payments under that order shall 
        achieve the required total percentage reduction in 
        those payments for that fiscal year as determined on a 
        12-month basis. However, the percentage reduction under 
        any such program shall in no case exceed 2 percent 
        under any sequestration order.
          ``(2) Timing of application of reductions.--If a 
        reduction is made under paragraph (1) in payment 
        amounts pursuant to a sequestration order, the 
        reduction shall be applied to payment for services 
        furnished after the effective date of the order.
          ``(3) No increase in beneficiary charges in 
        assignment-related cases.--If a reduction in payment 
        amounts is made under paragraph (1) for services for 
        which payment under part B of title XVIII of the Social 
        Security Act is made on the basis of an assignment 
        described in section 1842(b)(3)(B)(ii), in accordance 
        with section 1842(b)(6)(B), or under the procedure 
        described in section 1870(f)(1) of such Act, the person 
        furnishing the services shall be considered to have 
        accepted payment of the reasonable charge for the 
        services, less any reduction in payment amount made 
        pursuant to a sequestration order, as payment in full.
          ``(4) Application to parts c and d.--The reductions 
        otherwise required under parts C and D of title XVIII 
        of the Social Security Act with respect to a fiscal 
        year shall be applied to the calendar year that begins 
        after the end of the fiscal year to which the 
        applicable sequestration order applies.
  ``(j) Federal Pay.--
          ``(1) In general.--For purposes of any order issued 
        under section 254, new budget authority to pay Federal 
        personnel shall be reduced by the applicable uniform 
        percentage, but no sequestration order may reduce or 
        have the effect of reducing the rate of pay to which 
        any individual is entitled under any statutory pay 
        system (as increased by any amount payable under 
        section 5304 of title 5, United States Code, or section 
        302 of the Federal Employees Pay Comparability Act of 
        1990) or the rate of any element of military pay to 
        which any individual is entitled under title 37, United 
        States Code, or any increase in rates of pay which is 
        scheduled to take effect under section 5303 of title 5, 
        United States Code, section 1009 of title 37, United 
        States Code, or any other provision of law.
          ``(2) Definitions.--For purposes of this subsection:
                  ``(A) The term `statutory pay system' shall 
                have the meaning given that term in section 
                5302(1) of title 5, United States Code.
                  ``(B) The term `elements of military pay' 
                means--
                          ``(i) the elements of compensation of 
                        members of the uniformed services 
                        specified in section 1009 of title 37, 
                        United States Code,
                          ``(ii) allowances provided members of 
                        the uniformed services under sections 
                        403a and 405 of such title, and
                          ``(iii) cadet pay and midshipman pay 
                        under section 203(c) of such title.
                  ``(C) The term `uniformed services' shall 
                have the meaning given that term in section 
                101(3) of title 37, United States Code.
  ``(k) Child Support Enforcement Program.--Any sequestration 
order shall accomplish the full amount of any required 
reduction in expenditures under sections 455 and 458 of the 
Social Security Act by reducing the Federal matching rate for 
State administrative costs under such program, as specified 
(for the fiscal year involved) in section 455(a) of such Act, 
to the extent necessary to reduce such expenditures by that 
amount.
  ``(l) Extended Unemployment Compensation.--(1) A State may 
reduce each weekly benefit payment made under the Federal-State 
Extended Unemployment Compensation Act of 1970 for any week of 
unemployment occurring during any period with respect to which 
payments are reduced under an order issued under this title by 
a percentage not to exceed the percentage by which the Federal 
payment to the State under section 204 of such Act is to be 
reduced for such week as a result of such order.
  ``(2) A reduction by a State in accordance with subparagraph 
(A) shall not be considered as a failure to fulfill the 
requirements of section 3304(a)(11) of the Internal Revenue 
Code of 1954.
  ``(m) Commodity Credit Corporation.--
          ``(1) Powers and authorities of the commodity credit 
        corporation.--This title shall not restrict the 
        Commodity Credit Corporation in the discharge of its 
        authority and responsibility as a corporation to buy 
        and sell commodities in world trade, to use the 
        proceeds as a revolving fund to meet other obligations 
        and otherwise operate as a corporation, the purpose for 
        which it was created.
          ``(2) Reduction in payments made under contracts.--
        (A) Payments and loan eligibility under any contract 
        entered into with a person by the Commodity Credit 
        Corporation prior to the time any sequestration order 
        has been issued shall not be reduced by an order 
        subsequently issued. Subject to subparagraph (B), after 
        any sequestration order is issued for a fiscal year, 
        any cash payments made by the Commodity Credit 
        Corporation--
                  ``(i) under the terms of any one-year 
                contract entered into in or after such fiscal 
                year and after the issuance of the order; and
                  ``(ii) out of an entitlement account,
        to any person (including any producer, lender, or 
        guarantee entity) shall be subject to reduction under 
        the order.
          ``(B) Each contract entered into with producers or 
        producer cooperatives with respect to a particular crop 
        of a commodity and subject to reduction under 
        subparagraph (A) shall be reduced in accordance with 
        the same terms and conditions. If some, but not all, 
        contracts applicable to a crop of a commodity have been 
        entered into prior to the issuance of any sequestration 
        order, the order shall provide that the necessary 
        reduction in payments under contracts applicable to the 
        commodity be uniformly applied to all contracts for 
        succeeding crops of the commodity, under the authority 
        provided in paragraph (3).
          ``(3) Delayed reduction in outlays permissible.--
        Notwithstanding any other provision of this title, if 
        any sequestration order is issued with respect to a 
        fiscal year, any reduction under the order applicable 
        to contracts described in paragraph (2) may provide for 
        reductions in outlays for the account involved to occur 
        in the fiscal years following the fiscal year to which 
        the order applies.
          ``(4) Uniform percentage rate of reduction and other 
        limitations.--All reductions described in paragraph (2) 
        that are required to be made in connection with any 
        sequestration order with respect to a fiscal year--
                  ``(A) shall be made so as to ensure that 
                outlays for each program, project, activity, or 
                account involved are reduced by a percentage 
                rate that is uniform for all such programs, 
                projects, activities, and accounts, and may not 
                be made so as to achieve a percentage rate of 
                reduction in any such item exceeding the rate 
                specified in the order; and
                  ``(B) with respect to commodity price support 
                and income protection programs, shall be made 
                in such manner and under such procedures as 
                will attempt to ensure that--
                          ``(i) uncertainty as to the scope of 
                        benefits under any such program is 
                        minimized;
                          ``(ii) any instability in market 
                        prices for agricultural commodities 
                        resulting from the reduction is 
                        minimized; and
                          ``(iii) normal production and 
                        marketing relationships among 
                        agricultural commodities (including 
                        both contract and non-contract 
                        commodities) are not distorted.
                In meeting the criterion set out in clause 
                (iii) of subparagraph (B) of the preceding 
                sentence, the President shall take into 
                consideration that reductions under an order 
                may apply to programs for two or more 
                agricultural commodities that use the same type 
                of production or marketing resources or that 
                are alternative commodities among which a 
                producer could choose in making annual 
                production decisions.
          ``(5) Certain authority not to be limited.--Nothing 
        in this title shall limit or reduce in any way any 
        appropriation that provides the Commodity Credit 
        Corporation with funds to cover the Corporation's net 
        realized losses.
  ``(n) Postal Service Fund.--Notwithstanding any other 
provision of law, any sequestration of the Postal Service Fund 
shall be accomplished by a payment from that Fund to the 
General Fund of the Treasury, and the Postmaster General of the 
United States shall make the full amount of that payment during 
the fiscal year to which the presidential sequestration order 
applies.
  ``(o) Effects of Sequestration.--The effects of sequestration 
shall be as follows:
          ``(1) Budgetary resources sequestered from any 
        account other than an entitlement trust, special, or 
        revolving fund account shall revert to the Treasury and 
        be permanently canceled.
          ``(2) Except as otherwise provided, the same 
        percentage sequestration shall apply to all programs, 
        projects, and activities within a budget account (with 
        programs, projects, and activities as delineated in the 
        appropriation Act or accompanying report for the 
        relevant fiscal year covering that account, or for 
        accounts not included in appropriation Acts, as 
        delineated in the most recently submitted President's 
        budget).
          ``(3) Administrative regulations or similar actions 
        implementing a sequestration shall be made within 120 
        days of the sequestration order. To the extent that 
        formula allocations differ at different levels of 
        budgetary resources within an account, program, 
        project, or activity, the sequestration shall be 
        interpreted as producing a lower total appropriation, 
        with that lower appropriation being obligated as though 
        it had been the pre-sequestration appropriation and no 
        sequestration had occurred.
          ``(4) Except as otherwise provided, obligations in 
        sequestered direct spending accounts shall be reduced 
        in the fiscal year in which a sequestration occurs and 
        in all succeeding fiscal years.
          ``(5) If an automatic spending increase is 
        sequestered, the increase (in the applicable index) 
        that was disregarded as a result of that sequestration 
        shall not be taken into account in any subsequent 
        fiscal year.
          ``(6) Except as otherwise provided, sequestration in 
        accounts for which obligations are indefinite shall be 
        taken in a manner to ensure that obligations in the 
        fiscal year of a sequestration and succeeding fiscal 
        years are reduced, from the level that would actually 
        have occurred, by the applicable sequestration 
        percentage.''.
  (b) Conforming Amendment.--The table of contents set forth in 
250(c) of the Balanced Budget and Emergency Deficit Control Act 
of 1985 is amended by amending the item relating to section 256 
to read as follows:

``Sec. 256. Exceptions, limitations, and special rules.''.

SEC. 204. POINT OF ORDER.

  (a) Entitlement Point of Order.--Section 312 of the 
Congressional Budget Act of 1974 is amended by adding at the 
end the following new subsection:
  ``(g) Entitlement Point of Order.--It shall not be in order 
in the House of Representatives or the Senate to consider any 
bill, joint resolution, amendment, or conference report that--
          ``(1) increases aggregate level of direct spending 
        for any ensuing fiscal year or
          ``(2) includes any provision that has the effect of 
        modifying the application of section 252A of the 
        Balanced Budget and Emergency Deficit Control Act of 
        1985 to any entitlement program subject to 
        sequestration or exempt from sequestration under such 
        Act.''.

SEC. 205. TECHNICAL AND CONFORMING AMENDMENTS.

  The Balanced Budget and Emergency Deficit Control Act of 1985 
is amended as follows:
          (1) Section 251(a)(1) is amended by inserting ``, 
        section 252A,'' after ``section 252''.
          (2) Section 254(c)(4)(B) is amended by inserting ``or 
        section 252A'' after ``section 252''.
          (3) Section 254(c) is amended by redesignating 
        paragraph (5) as paragraph (6) and by inserting after 
        paragraph (4) the following new paragraph:
          ``(5) Direct spending control sequestration 
        reports.--The preview reports shall set forth, for the 
        current year and the budget year, estimates for each of 
        the following:
                  ``(A) The total level of direct spending for 
                all programs, projects, and activities 
                (excluding social security).
                  ``(B) The sequestration percentage or (if the 
                required sequestration percentage is greater 
                than the maximum allowable percentage for 
                medicare) percentages necessary to comply with 
                section 252A.''.
          (4) Section 254(f) is amended by redesignating 
        paragraphs (4) and (5) as paragraphs (5) and (6) and by 
        inserting after paragraph (3) the following new 
        paragraph:
          ``(4) Direct spending control sequestration 
        reports.--The final reports shall contain all the 
        information required in the direct spending control 
        sequestration preview reports. In addition, these 
        reports shall contain, for the budget year, for each 
        account to be sequestered, estimates of the baseline 
        level of sequesterable budgetary resources and 
        resulting outlays and the amount of budgetary resources 
        to be sequestered and resulting outlay reductions. The 
        reports shall also contain estimates of the effects on 
        outlays of the sequestration in each outyear for direct 
        spending programs.''.
          (5) Section 258C(a)(1) is amended by inserting ``, 
        252A,'' after ``section 252''.

SEC. 206. ESTABLISHMENT OF FAMILY BUDGET PROTECTION MANDATORY ACCOUNT.

  (a) Budget Protection Mandatory Account.--Title III of the 
Congressional Budget Act of 1974 (as amended by section 521) is 
further amended by adding at the end the following new 
sections:

                 ``BUDGET PROTECTION MANDATORY ACCOUNT

  ``Sec. 320. (a) Establishment of Account.--The chairman of 
the Committee on the Budget of the House of Representatives and 
of the Senate shall each maintain an account to be known as the 
`Budget Protection Mandatory Account'. The Account shall be 
divided into entries corresponding to the House or Senate 
committees, as applicable, that received allocations under 
section 302(a) in the most recently adopted concurrent 
resolution on the budget, except that it shall not include the 
Committee on Appropriations of that House and each entry shall 
consist of the `First Year Budget Protection Balance' and the 
`Five Year Budget Protection Balance'.
  ``(b) Components.--Each entry shall consist only of amounts 
credited to it under subsection (c). No entry of a negative 
amount shall be made.
  ``(c) Crediting of Amounts to Account.--(1) Whenever a Member 
or Senator, as the case may be, offers an amendment to a bill 
that reduces the amount of mandatory budget authority provided 
either under current law or proposed to be provided by the bill 
under consideration, that Member or Senator may state the 
portion of such reduction achieved in the first year covered by 
the most recently adopted concurrent resolution on the budget 
and in addition the portion of such reduction achieved in the 
first five years covered by the most recently adopted 
concurrent resolution on the budget that shall be--
          ``(A) credited to the First Year Budget Protection 
        Balance and the Five Year Budget Protection Balance in 
        the House or Senate, as applicable;
          ``(B) used to offset an increase in other new budget 
        authority;
          ``(C) allowed to remain within the applicable section 
        302(a) allocation; or
          ``(D) used to offset a decrease in receipts.
If no such statement is made, the amount of reduction in new 
budget authority resulting from the amendment shall be credited 
to the First Year Budget Protection Balance and the Five Year 
Budget Protection Balance, as applicable, if the amendment is 
agreed to.
  ``(2) Except as provided by paragraph (3), the chairman of 
the Committee on the Budget of the House or Senate, as 
applicable, shall, upon the engrossment of any bill, other than 
an appropriation bill, by the House or Senate, as applicable, 
credit to the applicable entry balances amounts of new budget 
authority and outlays equal to the net amounts of reductions in 
budget authority and in outlays resulting from amendments 
agreed to by that House to that bill.
  ``(3) When computing the net amounts of reductions in budget 
authority and in outlays resulting from amendments agreed to by 
the House or Senate, as applicable, to a bill, the chairman of 
the Committee on the Budget of that House shall only count 
those portions of such amendments agreed to that were so 
designated by the Members or Senators offering such amendments 
as amounts to be credited to the First Year Budget Protection 
Balance and the Five Year Budget Protection Balance, or that 
fall within the last sentence of paragraph (1).
  ``(4) The chairman of the Committee on the Budget of the 
House and of the Senate shall each maintain a running tally of 
the amendments adopted reflecting increases and decreases of 
budget authority in the bill as reported to its House. This 
tally shall be available to Members or Senators during 
consideration of any bill by that House.
  ``(d) Calculation of Lock-Box Savings in House and Senate.--
For the purposes of enforcing section 302(a), upon the 
engrossment of any bill, other than an appropriation bill, by 
the House or Senate, as applicable, the amount of budget 
authority and outlays calculated pursuant to subsection (c)(3) 
shall be counted against the 302(a) allocation provided to the 
applicable committee or committees of that House which reported 
the bill as if the amount calculated pursuant to subsection 
(c)(3) was included in the bill just engrossed.
  ``(e) 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 
fiscal year 2005 or any subsequent fiscal year, as the case may 
be.''.

               Subtitle B--Discretionary Spending Limits

SEC. 211. ENFORCING DISCRETIONARY SPENDING LIMITS.

  (a) Discretionary Spending Limits.--Sections 251(b) and (c) 
of the Balanced Budget and Emergency Deficit Control of Act of 
1985 are amended to read as follows:
  ``(b) Discretionary Spending Limit.--As used in this part, 
the term `discretionary spending limit' means--
          ``(1) with respect to fiscal year 2005--
                  ``(A) $864,261,000,000 in new budget 
                authority of which no more than 
                $400,625,000,000 shall be for the nondefense 
                category; and
                  ``(B) $850,495,800,000 in outlays of which no 
                more than $433,158,400,000 shall be for the 
                nondefense category;
          ``(2) with respect to fiscal year 2006--
                  ``(A) $838,669,000,000 in new budget 
                authority of which no more than 
                $409,038,100,000 shall be for the nondefense 
                category; and
                  ``(B) $872,471,400,000 in outlays of which no 
                more than $448,440,900,000 shall be for the 
                nondefense category;
          ``(3) with respect to fiscal year 2007--
                  ``(A) $856,281,000,000 in new budget 
                authority of which no more than 
                $417,627,900,000 shall be for the nondefense 
                category; and
                  ``(B) $886,373,800,000 in outlays of which no 
                more than $458,828,900,000 shall be for the 
                nondefense category;
          ``(4) with respect to fiscal year 2008--
                  ``(A) $874,263,000,000 in new budget 
                authority of which no more than 
                $426,398,100,000 shall be for the nondefense 
                category; and
                  ``(B) $907,923,200,000 in outlays of which no 
                more than $466,518,700,000 shall be for the 
                nondefense category;
          ``(5) with respect to fiscal year 2009--
                  ``(A) $892,622,000,000 in new budget 
                authority of which no more than 
                $435,352,500,000 shall be for the nondefense 
                category; and
                  ``(B) $922,436,600,000 in outlays of which no 
                more than $472,403,700,000 shall be for the 
                nondefense category;
          ``(6) with respect to fiscal year 2010--
                  ``(A) $911,367,000,000 in new budget 
                authority of which no more than 
                $444,494,900,000 shall be for the nondefense 
                category; and
                  ``(B) $942,949,400,000 in outlays of which no 
                more than $483,388,200,000 shall be for the 
                nondefense category;
          ``(7) with respect to fiscal year 2011--
                  ``(A) $930,506,000,000 in new budget 
                authority of which no more than 
                $453,829,300,000 shall be for the nondefense 
                category; and
                  ``(B) $966,467,600,000 in outlays of which no 
                more than $492,649,700,000 shall be for the 
                nondefense category;
          ``(8) with respect to fiscal year 2012--
                  ``(A) $950,047,000,000 in new budget 
                authority of which no more than 
                $463,359,700,000 shall be for the nondefense 
                category; and
                  ``(B) $977,831,100,000 in outlays of which no 
                more than $502,049,800,000 shall be for the 
                nondefense category;
          ``(9) with respect to fiscal year 2013--
                  ``(A) $969,998,000,000 in new budget 
                authority of which no more than 
                $473,090,200,000 shall be for the nondefense 
                category; and
                  ``(B) $1,001,230,000,000 in outlays of which 
                no more than $511,597,600,000 shall be for the 
                nondefense category;
          ``(10) with respect to fiscal year 2014--
                  ``(A) $990,368,000,000 in new budget 
                authority of which no more than 
                $483,025,100,000 shall be for the nondefense 
                category; and
                  ``(B) $1,020,567,000,000 in outlays of which 
                no more than $521,375,000,000 shall be for the 
                nondefense category;''.
  (b) Discretionary Spending Limit Point of Order.--Section 312 
of the Congressional Budget Act of 1974 (as amended by section 
214(a)) is further amended by adding at the end the following 
new subsection:
  ``(h) Discretionary Spending Limit Point of Order.--It shall 
not be in order in the House of Representatives or the Senate 
to consider any bill, joint resolution, amendment, or 
conference report that--
          ``(1) increases the discretionary spending limits for 
        any ensuing fiscal year after the budget year; or
          ``(2) would cause the discretionary spending limits 
        for the budget year to be breached.''.
  (c) Advance Appropriation Point of Order.--Section 312 of the 
Congressional Budget Act of 1974 (as amended by this section) 
is further amended by adding at the end the following new 
subsection:
  ``(i) Advance Appropriation Point of Order.--It shall not be 
in order in the House of Representatives or the Senate to 
consider any appropriation bill or joint resolution, or 
amendment thereto or conference report thereon, that provides 
advance discretionary new budget authority that first becomes 
available for any fiscal year after the budget year at an 
amount for any program, project, or activity above the amount 
of appropriations for fiscal year 2004 for such program, 
project, or activity.''.

SEC. 212. ESTABLISHMENT OF FAMILY BUDGET PROTECTION DISCRETIONARY 
                    ACCOUNT.

  (a) Budget Protection Mandatory Account.--Title III of the 
Congressional Budget Act of 1974 is amended by adding at the 
end the following new section:

                 ``BUDGET PROTECTION MANDATORY ACCOUNT

  ``Sec. 321. (a) Establishment of Account.--The chairman of 
the Committee on the Budget of the House of Representatives and 
of the Senate shall each maintain an account to be known as the 
`Budget Protection Mandatory Account'. The Account shall be 
divided into entries corresponding to the House or Senate 
committees, as applicable, that received allocations under 
section 302(a) in the most recently adopted concurrent 
resolution on the budget, except that it shall not include the 
Committee on Appropriations of that House and each entry shall 
consist of the `First Year Budget Protection Balance' and the 
`Five Year Budget Protection Balance'.
  ``(b) Components.--Each entry shall consist only of amounts 
credited to it under subsection (c). No entry of a negative 
amount shall be made.
  ``(c) Crediting of Amounts to Account.--(1) Whenever a Member 
or Senator, as the case may be, offers an amendment to a bill 
that reduces the amount of mandatory budget authority provided 
either under current law or proposed to be provided by the bill 
under consideration, that Member or Senator may state the 
portion of such reduction achieved in the first year covered by 
the most recently adopted concurrent resolution on the budget 
and in addition the portion of such reduction achieved in the 
first five years covered by the most recently adopted 
concurrent resolution on the budget that shall be--
          ``(A) credited to the First Year Budget Protection 
        Balance and the Five Year Budget Protection Balance in 
        the House or Senate, as applicable;
          ``(B) used to offset an increase in other new budget 
        authority;
          ``(C) allowed to remain within the applicable section 
        302(a) allocation; or
          ``(D) used to offset a decrease in receipts.
If no such statement is made, the amount of reduction in new 
budget authority resulting from the amendment shall be credited 
to the First Year Budget Protection Balance and the Five Year 
Budget Protection Balance, as applicable, if the amendment is 
agreed to.
  ``(2) Except as provided by paragraph (3), the chairman of 
the Committee on the Budget of the House or Senate, as 
applicable, shall, upon the engrossment of any bill, other than 
an appropriation bill, by the House or Senate, as applicable, 
credit to the applicable entry balances amounts of new budget 
authority and outlays equal to the net amounts of reductions in 
budget authority and in outlays resulting from amendments 
agreed to by that House to that bill.
  ``(3) When computing the net amounts of reductions in budget 
authority and in outlays resulting from amendments agreed to by 
the House or Senate, as applicable, to a bill, the chairman of 
the Committee on the Budget of that House shall only count 
those portions of such amendments agreed to that were so 
designated by the Members or Senators offering such amendments 
as amounts to be credited to the First Year Budget Protection 
Balance and the Five Year Budget Protection Balance, or that 
fall within the last sentence of paragraph (1).
  ``(4) The chairman of the Committee on the Budget of the 
House and of the Senate shall each maintain a running tally of 
the amendments adopted reflecting increases and decreases of 
budget authority in the bill as reported to its House. This 
tally shall be available to Members or Senators during 
consideration of any bill by that House.
  ``(d) Calculation of Lock-Box Savings in House and Senate.--
For the purposes of enforcing section 302(a), upon the 
engrossment of any bill, other than an appropriation bill, by 
the House or Senate, as applicable, the amount of budget 
authority and outlays calculated pursuant to subsection (c)(3) 
shall be counted against the 302(a) allocation provided to the 
applicable committee or committees of that House which reported 
the bill as if the amount calculated pursuant to subsection 
(c)(3) was included in the bill just engrossed.
  ``(e) 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 
fiscal year 2005 or any subsequent fiscal year, as the case may 
be.''.
  (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 319 the following new items:

``Sec. 320. Family budget protection mandatory account.
``Sec. 321. Family budget protection discretionary account.''.

SEC. 213. REVENUE ADJUSTMENT.

  If an amendment is designated to be used to offset a decrease 
in receipts for a fiscal year pursuant to section 320(c)(1)(D) 
or section 321(c)(1)(D) of the Congressional Budget Act of 
1974, then the applicable level of revenues for such fiscal 
year for purposes of section 311(a) of such Act shall be 
reduced by the amount of such amendment.

               Subtitle C--Long-term Unfunded Obligations

SEC. 221. LONG-TERM UNFUNDED OBLIGATIONS.

  (a) In General.--Title IV of the Congressional Budget Act of 
1974 is amended by adding at the end the following:

                 PART C--LONG-TERM UNFUNDED OBLIGATIONS

``SEC. 441. ANALYSIS OF LONG-TERM UNFUNDED OBLIGATIONS.

  ``Beginning in fiscal year 2006, the President's budget shall 
include an analysis of long-term unfunded obligations. This 
analysis shall include:
          ``(1) An analysis of the impact of long-term unfunded 
        obligations in applicable entitlement programs on the 
        long-term level of unified budget outlays and the 
        unified budget surplus or deficit, in relation to the 
        projected level of the Gross Domestic Product.
          ``(2) A report on the impact of legislation enacted 
        during the previous session of Congress that increases 
        the long-term unfunded obligation in any applicable 
        group of entitlement program.
          ``(3) An analysis of the impact of legislation 
        proposed in the President's budget on the long-term 
        unfunded obligation in any applicable entitlement 
        program.

``SEC. 442. POINT OF ORDER AGAINST LEGISLATION INCREASING LONG-TERM 
                    UNFUNDED OBLIGATIONS.

  ``It shall not be in order in the House of Representatives or 
in the Senate to consider any bill, joint resolution, motion, 
amendment, or conference report that would increase the long-
term unfunded obligation in any applicable group of entitlement 
programs.

``SEC. 443. STANDARD FOR DETERMINING INCREASE IN LONG-TERM UNFUNDED 
                    OBLIGATION.

  ``For the purpose of this part, legislation shall be 
considered to increase the long-term unfunded obligation of an 
applicable group of entitlement programs if it either--
          ``(1) increases the excess of the discounted present 
        value of the expenditures of programs in the group 
        above the discounted present value of the dedicated 
        receipts of programs in the group over a long-term 
        estimating period by more than an applicable threshold; 
        or
          ``(2) increases the dollar level of the expenditures 
        of programs in the group above the dedicated receipts 
        of programs in the group above the dedicated receipts 
        of programs in the group in the last year of the 
        estimating period by more than the applicable 
        threshold.

``SEC. 444. LONG-TERM UNFUNDED OBLIGATION ANALYSES BY CONGRESSIONAL 
                    BUDGET OFFICE.

  The Director of the Congressional Budget Office shall, to the 
extent practicable, prepare for each bill or resolution of a 
public character reported by any committee of the House of 
Representatives or the Senate (except the Committee on 
Appropriations of each House), and submit to such committee--
          ``(1) an estimate of any increase of the long-term 
        unfunded obligation of any applicable entitlement 
        program which would be incurred in carrying out such 
        bill or resolution as measured by the increase of the 
        excess of the discounted present value of the 
        expenditures of such program above the discounted 
        present value of the dedicated receipts of such program 
        over a long-term estimating period by more than an 
        applicable threshold; and
          ``(2) an estimate of any increase in the dollar level 
        of the expenditures of such program above the dedicated 
        receipts of such program above the dedicated receipts 
        of such program in the last year of the estimating 
        period by more than the applicable threshold.
The estimates and description so submitted shall be included in 
the report accompanying such bill or resolution if timely 
submitted to such committee before such report is filed.

``SEC. 445. DEFINITIONS.

  ``As used in this part--
          ``(1) the term `applicable entitlement program' shall 
        be defined as any one of the following programs:
                  ``(A) Old Age, Survivors, and Disability 
                Insurance.
                  ``(B) Medicare (combined hospital insurance 
                and supplemental medical insurance).
                  ``(C) Civilian retirement and disability 
                (combined Civil Service Retirement System and 
                Federal Employees Retirement System).
                  ``(D) Foreign Service Retirement and 
                Disability (combined Foreign Service Retirement 
                and Disability System and Foreign Service 
                Pension System).
                  ``(E) Retired Employees Health Benefits.
                  ``(F) Military Retirement System.
                  ``(G) Uniformed Services Retiree Health Care 
                System.
                  ``(H) Railroad Retirement System (combined 
                Rail Industry Pension Fund, Social Security 
                Equivalent Benefit Account, and National 
                Railroad Retirement Investment Trust).
                  ``(I) Supplemental Security Income (SSI).
                  ``(J) For estimates made on or after January 
                1, 2006, veterans disability compensation.
                  ``(K) Any other entitlement program with 
                regularly available long-term estimates.
          ``(2) The term `entitlement program with regularly 
        available long-term estimates' means a program for 
        which the Director of the Congressional Budget Office, 
        in consultation with the Committees on the Budget of 
        the House of Representatives and the Senate and the 
        Director of the Office of Management and Budget, has 
        determined that it is feasible to make long-term 
        estimates of expenditures and dedicated receipts based 
        on explicit demographic, economic, and other estimating 
        assumptions. The Director shall notify the House and 
        Senate Committees on the Budget in writing, whenever he 
        or she makes such a determination.
          ``(3) The term `applicable group of entitlement 
        programs' shall be defined as any of the following:
                  ``(A) Old Age, Survivors, and Disability 
                Insurance.
                  ``(B) All applicable entitlement programs 
                except Old Age, Survivors, and Disability 
                Insurance.
          ``(4) The term `long-term estimating period' shall be 
        defined as 75 years, starting with the current year, 
        for all applicable entitlement programs except for Old 
        Age, Survivors, and Disability Insurance. For Old Age, 
        Survivors, and Disability Insurance, the term shall be 
        defined as the infinite period of years utilized in the 
        most recent annual report of the Board of Trustees 
        provided pursuant to section 201(c)(2) of the Social 
        Security Act.
          ``(5) The term `last year of the estimating period' 
        shall be defined as the 75th year of the long-term 
        estimating period.
          ``(6) The term `dedicated receipts' shall be defined, 
        for all applicable entitlement programs other than 
        Medicare, as taxes and fees received from the public, 
        payments received from Federal agencies on behalf of 
        Federal agency employees who are participants in the 
        program, transfers received by the program under 
        section 7(c)(2) of the Railroad Retirement Act of 1974 
        (45 U.S.C. 231f(c)(2)), and transfers from the general 
        fund of amounts equivalent to income tax receipts under 
        section 86 of the Internal Revenue Code. Dedicated 
        receipts shall not include payments from the general 
        fund to amortize a program's unfunded liability or 
        payments of interest on a program's trust fund 
        holdings. For Medicare, `dedicated receipts' shall be 
        defined according to section 801(c)(3) of the Medicare 
        Prescription Drug, Improvement, and Modernization Act 
        of 2003.
          ``(7) The term `expenditures' shall be defined, for 
        all applicable entitlement programs other than 
        Medicare, to include benefit payments, administrative 
        expenses to the extent paid from a dedicated fund, and 
        transfers to other programs made under section 7(c)(2) 
        of the Railroad Retirement Act of 1974 (45 U.S.C. 
        231f(c)(2)). For Medicare, `expenditures' shall be 
        defined according to section 801(c)(4) of the Medicare 
        prescription Drug, Improvement, and Modernization Act 
        of 2003.
          ``(8) The term `applicable threshold' shall be 
        defined as:
                  ``(A) For a group of applicable entitlement 
                programs over a long-term estimating period--
                          ``(i) 0.02 percent of the present 
                        value of the taxable payroll of the 
                        group of programs over the estimating 
                        period, for legislation affecting Old 
                        Age, Survivors, and Disability 
                        Insurance or Medicare; and
                          ``(ii) 1 percent of the present value 
                        of the expenditures over the estimating 
                        period of the programs in the group 
                        that are affected by the legislation.
                  ``(B) For a group of applicable entitlement 
                programs in the last year of the estimating 
                period--
                          ``(i) 0.02 percent of the taxable 
                        payroll of the group of programs in 
                        that year, for legislation affecting 
                        Old Age, Survivors, and Disability 
                        Insurance or Medicare;
                          ``(ii) 0.01 percent of Gross Domestic 
                        Product in that year; or
                          ``(iii) 1 percent of the expenditures 
                        in that year of the programs in the 
                        group that are affected by the 
                        legislation.''.
  (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 adding after the item 
relating to section 428 the following:



                 `Part C--Long-Term Unfunded Obligations

``Sec. 441. Analysis of long-term unfunded obligations.
``Sec. 442. Point of order against legislation increasing long-term 
          unfunded obligations.
``Sec. 443. Standard for determining increase in long-term unfunded 
          obligation.
``Sec. 444. Long-term unfunded obligation analyses by congressional 
          budget office.
``Sec. 445. Definitions.

SEC. 222. POINTS OF ORDER.

  Section 904 of the Congressional Budget Act of 1974 is 
amended as follows:
          (1) Subsection (c)(1) is amended by adding ``442,'' 
        after ``310(d)(2), 313,''.
          (2) Subsection (d)(2) is amended by adding ``442,'' 
        after ``310(d)(2), 313,''.

SEC. 223. SOCIAL SECURITY.

  Section 13302(a) of subtitle C of the Budget Enforcement Act 
of 1990 is amended to read as follows:
  ``(a) In General.--It shall be not be in order in the House 
of Representatives to consider any bill, or joint resolution, 
as reported, or any amendment thereto or conference report 
thereon, if, upon enactment, such legislation under 
consideration would increase the long-term unfunded obligation 
of the OASDI program, as defined in section 443 of the 
Congressional Budget Act of 1974.''.

             TITLE III--COMBATING WASTE, FRAUD, AND ABUSE.

                         Subtitle A--Sunsetting

SEC. 301. REAUTHORIZATION OF DISCRETIONARY PROGRAMS AND UNEARNED 
                    ENTITLEMENTS.

  (a) Fiscal Year 2008.--Effective October 1, 2007, spending 
authority for each unearned entitlement and high-cost 
discretionary spending program is frozen at then current levels 
unless such spending authority is reauthorized after the date 
of enactment of this Act.
  (b) Fiscal Year 2009.--Effective October 1, 2008, spending 
authority for each discretionary spending program (not 
including high-cost discretionary spending programs) is frozen 
at then current levels unless such spending authority is 
reauthorized after the date of enactment of this Act.
  (c) Definitions.--For purposes of this title--
          (1) the term ``unearned entitlement'' means an 
        entitlement not earned by service or paid for in total 
        or in part by assessments or contributions such as 
        Social Security, veterans' benefits, retirement 
        programs, and medicare; and
          (2) the term ``high-cost discretionary program'' 
        means the most expensive one-third of discretionary 
        program within each budget function account.

SEC. 302. POINT OF ORDER.

  (a) In General.--It shall not be in order in the House of 
Representatives or the Senate to consider any bill, joint 
resolution, amendment, or conference report that includes any 
provision that appropriates funds above current levels unless 
such appropriation has been previously authorized by law.
  (b) Waiver or Suspension.--This section may be waived or 
suspended in the House of Representatives or the Senate only by 
the affirmative vote of two-thirds of the Members, duly chosen 
and sworn.

SEC. 303. DECENNIAL SUNSETTING.

  (a) First Decennial Census Year.--Effective on the first day 
of the fiscal year beginning in the first decennial census year 
after the year 2010 and each 10 years thereafter, the spending 
authority described in section 301(a) is terminated unless such 
spending authority is reauthorized after the last date the 
spending authority was required to be reauthorized under this 
title.
  (b) First Decennial Census Year.--Effective on the first day 
of the fiscal year beginning in the year after the first 
decennial census year after the year 2010 and each 10 years 
thereafter, the spending authority described in section 301(b) 
is terminated unless such spending authority is reauthorized 
after the last date the spending authority was required to be 
reauthorized under this title.

Subtitle B--Enhanced Rescissions of Budget Authority Identified by the 
                     President as Wasteful Spending

SEC. 311. ENHANCED CONSIDERATION OF CERTAIN PROPOSED RESCISSIONS.

  (a) In General.--Part B of title X of the Congressional 
Budget and Impoundment Control Act of 1974 (2 U.S.C. 681 et 
seq.) is amended by redesignating sections 1013 through 1017 as 
sections 1014 through 1018, respectively, and by inserting 
after section 1012 the following new section:

        ``ENHANCED CONSIDERATION OF CERTAIN PROPOSED RESCISSIONS

  ``Sec. 1013. (a) Proposed Rescission of Budget Authority 
Identified as Wasteful Spending.--The President may propose, at 
the time and in the manner provided in subsection (b), the 
rescission of any budget authority provided in an appropriation 
Act that he identifies as wasteful spending. If the President 
proposes a rescission of budget authority, he may also propose 
to reduce the appropriate discretionary spending limits for new 
budget authority and outlays flowing therefrom set forth in 
section 251(b) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 by an amount that does not exceed the 
amount of the proposed rescission. Funds made available for 
obligation under this procedure may not be proposed for 
rescission again under this section.
  ``(b) Transmittal of Special Message.--
          ``(1) The President may transmit to Congress a 
        special message proposing to rescind amounts of budget 
        authority and include with that special message a draft 
        bill that, if enacted, would only rescind that budget 
        authority unless the President also proposes a 
        reduction in the appropriate discretionary spending 
        limits set forth in section 251(b) of the Balanced 
        Budget and Emergency Deficit Control Act of 1985. That 
        bill shall clearly identify the amount of budget 
        authority that is proposed to be rescinded for each 
        program, project, or activity to which that budget 
        authority relates.
          ``(2) In the case of an appropriation Act that 
        includes accounts within the jurisdiction of more than 
        one subcommittee of the Committee on Appropriations, 
        the President in proposing to rescind budget authority 
        under this section shall send a separate special 
        message and accompanying draft bill for accounts within 
        the jurisdiction of each subcommittee.
          ``(3) Each special message shall specify, with 
        respect to the budget authority proposed to be 
        rescinded, the following:
                  ``(A) The amount of budget authority which he 
                proposes to be rescinded.
                  ``(B) Any account, department, or 
                establishment of the Government to which such 
                budget authority is available for obligation, 
                and the specific project or governmental 
                functions involved.
                  ``(C) The reasons why the budget authority 
                should be rescinded, including why he considers 
                it to be wasteful spending.
                  ``(D) To the maximum extent practicable, the 
                estimated fiscal, economic, and budgetary 
                effect (including the effect on outlays and 
                receipts in each fiscal year) of the proposed 
                rescission.
                  ``(E) All facts, circumstances, and 
                considerations relating to or bearing upon the 
                proposed rescission and the decision to effect 
                the proposed rescission, and to the maximum 
                extent practicable, the estimated effect of the 
                proposed rescission upon the objects, purposes, 
                and programs for which the budget authority is 
                provided.
                  ``(F) A reduction in the appropriate 
                discretionary spending limits set forth in 
                section 251(b) of the Balanced Budget and 
                Emergency Deficit Control Act of 1985, if 
                proposed by the President.
  ``(c) Procedures for Expedited Consideration.--
          ``(1)(A) Before the close of the second legislative 
        day of the House of Representatives after the date of 
        receipt of a special message transmitted to Congress 
        under subsection (b), the majority leader or minority 
        leader of the House of Representatives shall introduce 
        (by request) the draft bill accompanying that special 
        message. If the bill is not introduced as provided in 
        the preceding sentence, then, on the third legislative 
        day of the House of Representatives after the date of 
        receipt of that special message, any Member of that 
        House may introduce the bill.
          ``(B) The bill shall be referred to the Committee on 
        Appropriations. The committee shall report the bill 
        without substantive revision and with or without 
        recommendation. The bill shall be reported not later 
        than the seventh legislative day of that House after 
        the date of receipt of that special message. If that 
        committee fails to report the bill within that period, 
        that committee shall be automatically discharged from 
        consideration of the bill, and the bill shall be placed 
        on the appropriate calendar.
          ``(C) A vote on final passage of the bill shall be 
        taken in the House of Representatives on or before the 
        close of the 10th legislative day of that House after 
        the date of the introduction of the bill in that House. 
        If the bill is passed, the Clerk of the House of 
        Representatives shall cause the bill to be engrossed, 
        certified, and transmitted to the Senate within one 
        calendar day of the day on which the bill is passed.
          ``(2)(A) A motion in the House of Representatives to 
        proceed to the consideration of a bill under this 
        section shall be highly privileged and not debatable. 
        An amendment to the motion shall not be in order, nor 
        shall it be in order to move to reconsider the vote by 
        which the motion is agreed to or disagreed to.
          ``(B) Debate in the House of Representatives on a 
        bill under this section shall not exceed 4 hours, which 
        shall be divided equally between those favoring and 
        those opposing the bill. A motion to further limit 
        debate shall not be debatable. It shall not be in order 
        to move to recommit a bill under this section or to 
        move to reconsider the vote by which the bill is agreed 
        to or disagreed to.
          ``(C) Appeals from decisions of the Chair relating to 
        the application of the Rules of the House of 
        Representatives to the procedure relating to a bill 
        under this section shall be decided without debate.
          ``(D) Except to the extent specifically provided in 
        the preceding provisions of this subsection, 
        consideration of a bill under this section shall be 
        governed by the Rules of the House of Representatives. 
        It shall not be in order in the House of 
        Representatives to consider any rescission bill 
        introduced pursuant to the provisions of this section 
        under a suspension of the rules or under a special 
        rule.
          ``(3) A bill transmitted to the Senate pursuant to 
        paragraph (1)(D) shall be referred to its Committee on 
        Appropriations. That committee shall report the bill 
        without substantive revision and with or without 
        recommendation. The bill shall be reported not later 
        than the seventh legislative day of the Senate after it 
        receives the bill. A committee failing to report the 
        bill within such period shall be automatically 
        discharged from consideration of the bill, and the bill 
        shall be placed upon the appropriate calendar.
          ``(4)(A) A motion in the Senate to proceed to the 
        consideration of a bill under this section shall be 
        privileged and not debatable. An amendment to the 
        motion shall not be in order, nor shall it be in order 
        to move to reconsider the vote by which the motion is 
        agreed to or disagreed to.
          ``(B) Debate in the Senate on a bill under this 
        section, and all debatable motions and appeals in 
        connection therewith (including debate pursuant to 
        subparagraph (C)), shall not exceed 10 hours. The time 
        shall be equally divided between, and controlled by, 
        the majority leader and the minority leader or their 
        designees.
          ``(C) Debate in the Senate or any debatable motion or 
        appeal in connection with a bill under this section 
        shall be limited to not more than 1 hour, to be equally 
        divided between, and controlled by, the mover and the 
        manager of the bill, except that in the event the 
        manager of the bill is in favor of any such motion or 
        appeal, the time in opposition thereto, shall be 
        controlled by the minority leader or his designee. Such 
        leaders, or either of them, may, from time under their 
        control of the passage of a bill, allot additional time 
        to any Senator during the consideration of any 
        debatable motion or appeal.
          ``(D) A motion in the Senate to further limit debate 
        on a bill under this section is not debatable. A motion 
        to recommit a bill under this section is not in order.
  ``(d) Amendment and Divisions Prohibited.--No amendment to a 
bill considered under this section shall be in order in either 
the House of Representatives or the Senate. It shall not be in 
order to demand a division of the question in the House of 
Representatives (or in a Committee of the Whole) or in the 
Senate. No motion to suspend the application of this subsection 
shall be in order in either House, nor shall it be in order in 
either House to suspend the application of this subsection by 
unanimous consent.
  ``(e) Requirement To Make Available for Obligation.--Any 
amount of budget authority proposed to be rescinded in a 
special message transmitted to Congress under subsection (b) 
shall be made available for obligation on the day after the 
date on which either House rejects the bill transmitted with 
that special message.
  ``(f) Definitions.--For purposes of this section:
          ``(1) The term `appropriation Act' means any general 
        or special appropriation Act, and any Act or joint 
        resolution making supplemental, deficiency, or 
        continuing appropriations.
          ``(2) The term `legislative day' means, with respect 
        to either House of Congress, any day of session.
          ``(3) The term `rescind' means, with respect to an 
        appropriation Act, to reduce the amount of budget 
        authority appropriated in that Act, and reducing budget 
        authority shall include reducing obligation limitations 
        set forth in that Act.''.
  (b) Exercise of Rulemaking Powers.--Section 904 of the 
Congressional Budget Act of 1974 (2 U.S.C. 621 note) is 
amended--
          (1) in subsection (a), by striking ``and 1017'' and 
        inserting ``1012, and 1017''; and
          (2) in subsection (d), by striking ``section 1017'' 
        and inserting ``sections 1012 and 1017''.
  (c) Conforming Amendments.--
          (1) Section 1011 of the Congressional Budget Act of 
        1974 (2 U.S.C. 682(5)) is amended by repealing 
        paragraphs (3) and (5) and by redesignating paragraph 
        (4) as paragraph (3).
          (2) Section 1014 of such Act (2 U.S.C. 685) is 
        amended--
                  (A) in subsection (b)(1), by striking ``or 
                the reservation''; and
                  (B) in subsection (e)(1), by striking ``or a 
                reservation'' and by striking ``or each such 
                reservation''.
          (3) Section 1015(a) of such Act (2 U.S.C. 686) is 
        amended by striking ``is to establish a reserve or'', 
        by striking ``the establishment of such a reserve or'', 
        and by striking ``reserve or'' each other place it 
        appears.
          (4) Section 1017 of such Act (2 U.S.C. 687) is 
        amended--
                  (A) in subsection (a), by striking 
                ``rescission bill introduced with respect to a 
                special message or'';
                  (B) in subsection (b)(1), by striking 
                ``rescission bill or'', by striking ``bill or'' 
                the second place it appears, by striking 
                ``rescission bill with respect to the same 
                special message or'', and by striking ``, and 
                the case may be,'';
                  (C) in subsection (b)(2), by striking ``bill 
                or'' each place it appears;
                  (D) in subsection (c), by striking 
                ``rescission'' each place it appears and by 
                striking ``bill or'' each place it appears;
                  (E) in subsection (d)(1), by striking 
                ``rescission bill or'' and by striking ``, and 
                all amendments thereto (in the case of a 
                rescission bill)'';
                  (F) in subsection (d)(2)--
                          (i) by striking the first sentence;
                          (ii) by amending the second sentence 
                        to read as follows: ``Debate on any 
                        debatable motion or appeal in 
                        connection with an impoundment 
                        resolution shall be limited to 1 hour, 
                        to be equally divided between, and 
                        controlled by, the mover and the 
                        manager of the resolution, except that 
                        in the event that the manager of the 
                        resolution is in favor of any such 
                        motion or appeal, the time in 
                        opposition thereto shall be controlled 
                        by the minority leader or his 
                        designee.'';
                          (iii) by striking the third sentence; 
                        and
                          (iv) in the fourth sentence, by 
                        striking ``rescission bill or'' and by 
                        striking ``amendment, debatable 
                        motion,'' and by inserting `debatable 
                        motion';
                  (G) in paragraph (d)(3), by striking the 
                second and third sentences; and
                  (H) by striking paragraphs (4), (5), (6), and 
                (7) of paragraph (d).
  (d) Clerical Amendments.--The table of sections for subpart B 
of title X of the Congressional Budget and Impoundment Control 
Act of 1974 is amended by redesignating the item relating to 
sections 1014 through 1018 as items 1015 through 1019, 
respectively, and by inserting after the item relating to 
section 1012 the following new item:

``Sec. 1013. Enhanced consideration of certain proposed rescissions.''.



       Subtitle C--Commission to Eliminate Waste, Fraud, and Abuse



SEC. 331. ESTABLISHMENT OF COMMISSION.

  (a) Establishment.--There is established the Commission to 
Eliminate Waste, Fraud, and Abuse (hereafter in this subtitle 
referred to as the ``Commission'').
  (b) Membership.--
          (1) In general.--The Commission shall consist of 12 
        members, all of whom shall be appointed by the 
        President not later than 90 days after the date of 
        enactment of this Act.
          (2) Chairperson and vice chairperson.--The President 
        shall designate a chairperson and vice chairperson from 
        among the members of the Commission.
  (c) Period of Appointment; Vacancies.--Members shall be 
appointed for the life of the Commission. Any vacancy in the 
Commission shall not affect its powers, but shall be filled in 
the same manner as the original appointment.
  (d) Meetings.--
          (1) Initial meeting.--Not later than 30 days after 
        the date on which all members of the Commission have 
        been appointed, the Commission shall hold its first 
        meeting.
          (2) Subsequent meetings.--The Commission shall meet 
        at the call of the chairperson.
  (e) Quorum.--A majority of the members of the Commission 
shall constitute a quorum, but a lesser number of members may 
hold hearings.

SEC. 332. DUTIES OF THE COMMISSION.

  (a) Definitions.--In this section, the following definitions 
shall apply:
          (1) Agency.--The term ``agency'' has the meaning 
        given the term ``Executive agency'' under section 105 
        of title 5, United States Code.
          (2) Program.--The term ``program'' means any activity 
        or function of an agency.
  (b) In General.--The Commission shall--
          (1) evaluate all agencies and programs within those 
        agencies, using the criteria under subsection (c); and
          (2) submit to Congress--
                  (A) a plan with recommendations of the 
                agencies and programs that should be realigned 
                or eliminated; and
                  (B) proposed legislation to implement the 
                plan described under subparagraph (A).
  (c) Criteria.--
          (1) Duplicative.--If 2 or more agencies or programs 
        are performing the same essential function and the 
        function can be consolidated or streamlined into a 
        single agency or program, the Commission shall 
        recommend that the agency or program be realigned.
          (2) Wasteful or inefficient.--The Commission shall 
        recommend the realignment or elimination of any agency 
        or program that has wasted Federal funds by--
                  (A) egregious spending;
                  (B) mismanagement of resources and personnel; 
                or
                  (C) use of such funds for personal benefit or 
                the benefit of a special interest group.
          (3) Outdated, irrelevant, or failed.--The Commission 
        shall recommend the elimination of any agency or 
        program that--
                  (A) has completed its intended purpose;
                  (B) has become irrelevant; or
                  (C) has failed to meet its objectives.
  (d) Systematic Assessment of Programs.--
          (1) In general.--Not later than 1 year after the date 
        of enactment of this Act, the President shall--
                  (A) establish a systematic method for 
                assessing the effectiveness and accountability 
                of agency programs; and
                  (B) submit, to the Commission, assessments of 
                not less than \1/2\ of all programs covered 
                under subsection (b)(1) that use the method 
                established under subparagraph (A).
          (2) Method objectives.--The method established under 
        paragraph (1) shall--
                  (A) recognize different types of federal 
                programs;
                  (B) assess programs based primarily on the 
                achievement of performance goals (as defined 
                under section 1115(f)(4) of title 31, United 
                States Code); and
                  (C) assess programs based in part on the 
                adequacy of the program's performance measures, 
                financial management, and other factors 
                determined by the President.
          (3) Development.--The method established under 
        paragraph (1) shall not be implemented until it has 
        been reviewed and accepted by the Commission.
          (4) Consideration of assessments.--The Commission 
        shall consider assessments submitted under this 
        subsection when evaluating programs under subsection 
        (b)(1).
  (e) Common Performance Measures.--Not later than 1 year after 
the date of enactment of this Act, the President shall identify 
common performance measures for programs covered in subsection 
(b)(1) that have similar functions and, to the extent feasible, 
provide the Commission with data on such performance measures.
  (f) Report.--
          (1) In general.--Not later than 2 years after the 
        date of enactment of this Act, the Commission shall 
        submit to the President and Congress a report that 
        includes--
                  (A) the plan described under subsection 
                (b)(2)(A), with supporting documentation for 
                all recommendations; and
                  (B) the proposed legislation described under 
                subsection (b)(2)(B).
          (2) Relocation of federal employees.--The proposed 
        legislation under paragraph (1)(B) shall provide that 
        if the position of an employee of an agency is 
        eliminated as a result of the implementation of the 
        plan under paragraph (1)(A), the affected agency shall 
        make reasonable efforts to relocate such employee to 
        another position within the agency or within another 
        Federal agency.

SEC. 333. POWERS OF THE COMMISSION.

  (a) Hearings.--The Commission or, at its direction, any 
subcommittee or member of the Commission, may, for the purpose 
of carrying out this subtitle--
          (1) hold such hearings, sit and act at such times and 
        places, take such testimony, receive such evidence, and 
        administer such oaths as any member of the Commission 
        considers advisable;
          (2) require, by subpoena or otherwise, the attendance 
        and testimony of such witnesses as any member of the 
        Commission considers advisable; and
          (3) require, by subpoena or otherwise, the production 
        of such books, records, correspondence, memoranda, 
        papers, documents, tapes, and other evidentiary 
        materials relating to any matter under investigation by 
        the Commission.
  (b) Subpoenas.--
          (1) Issuance.--Subpoenas issued under subsection (a) 
        shall bear the signature of the chairperson of the 
        Commission and shall be served by any person or class 
        of persons designated by the chairperson for that 
        purpose.
          (2) Enforcement.--In the case of contumacy or failure 
        to obey a subpoena issued under subsection (a), the 
        United States district court for the judicial district 
        in which the subpoenaed person resides, is served, or 
        may be found, may issue an order requiring such person 
        to appear at any designated place to testify or to 
        produce documentary or other evidence. Any failure to 
        obey the order of the court may be punished by the 
        court as a contempt of that court.
  (c) Information From Federal Agencies.--The Commission may 
secure directly from any Federal department or agency such 
information as the Commission considers necessary to carry out 
this Act. Upon request of the chairperson of the Commission, 
the head of such department or agency shall furnish such 
information to the Commission.
  (d) Postal Services.--The Commission may use the United 
States mails in the same manner and under the same conditions 
as other departments and agencies of the Government.
  (e) Gifts.--The Commission may accept, use, and dispose of 
gifts or donations of services or property.

SEC. 334. COMMISSION PERSONNEL MATTERS.

  (a) Compensation of Members.--
          (1) Non-federal members.--Except as provided under 
        subsection (b), each member of the Commission who is 
        not an officer or employee of the Government shall not 
        be compensated.
          (2) Federal officers or employees.--All members of 
        the Commission who are officers or employees of the 
        United States shall serve without compensation in 
        addition to that received for their services as 
        officers or employees of the United States.
  (b) Travel Expenses.--The members of the Commission shall be 
allowed travel expenses, including per diem in lieu of 
subsistence, at rates authorized for employees of agencies 
under subchapter I of chapter 57 of title 5, United States 
Code, while away from their homes or regular places of business 
in the performance of services for the Commission.
  (c) Staff.--
          (1) In general.--The chairperson of the Commission 
        may, without regard to the civil service laws and 
        regulations, appoint and terminate an executive 
        director and such other additional personnel as may be 
        necessary to enable the Commission to perform its 
        duties. The employment of an executive director shall 
        be subject to confirmation by the Commission.
          (2) Compensation.--Upon the approval of the 
        chairperson, the executive director may fix the 
        compensation of the executive director and other 
        personnel without regard to chapter 51 and subchapter 
        III of chapter 53 of title 5, United States Code, 
        relating to classification of positions and General 
        Schedule pay rates, except that the rate of pay for the 
        executive director and other personnel may not exceed 
        the maximum rate payable for a position at GS-15 of the 
        General Schedule under section 5332 of such title.
          (3) Personnel as federal employees.--
                  (A) In general.--The executive director and 
                any personnel of the Commission who are 
                employees shall be employees under section 2105 
                of title 5, United States Code, for purposes of 
                chapters 63, 81, 83, 84, 85, 87, 89, and 90 of 
                that title.
                  (B) Members of commission.--Subparagraph (A) 
                shall not be construed to apply to members of 
                the Commission.
  (d) Detail of Government Employees.--Any Government employee 
may be detailed to the Commission without reimbursement, and 
such detail shall be without interruption or loss of civil 
service status or privilege.
  (e) Procurement of Temporary and Intermittent Services.--The 
chairperson of the Commission may procure temporary and 
intermittent services under section 3109(b) of title 5, United 
States Code, at rates for individuals which do not exceed the 
daily equivalent of the annual rate of basic pay prescribed for 
level V of the Executive Schedule under section 5316 of such 
title.

SEC. 335. TERMINATION OF THE COMMISSION.

  The Commission shall terminate 90 days after the date on 
which the Commission submits the report under section 232(f).

SEC. 336. CONGRESSIONAL CONSIDERATION OF REFORM PROPOSALS.

  (a) Definitions.--In this section:
          (1) Implementation bill.--The term ``implementation 
        bill'' means only a bill which is introduced as 
        provided under subsection (b), and contains the 
        proposed legislation included in the report submitted 
        to Congress under section 232, without modification.
          (2) Calendar day.--The term ``calendar day'' means a 
        calendar day other than 1 on which either House is not 
        in session because of an adjournment of more than 3 
        days to a date certain.
  (b) Introduction; Referral; and Report or Discharge.--
          (1) Introduction.--On the first calendar day on which 
        both Houses are in session, on or immediately following 
        the date on which the report is submitted to Congress 
        under section 232, a single implementation bill shall 
        be introduced (by request)--
                  (A) in the Senate by the Majority Leader of 
                the Senate, for himself and the Minority Leader 
                of the Senate, or by Members of the Senate 
                designated by the Majority Leader and Minority 
                Leader of the Senate; and
                  (B) in the House of Representatives by the 
                Speaker of the House of Representatives, for 
                himself and the Minority Leader of the House of 
                Representatives, or by Members of the House of 
                Representatives designated by the Speaker and 
                Minority Leader of the House of 
                Representatives.
          (2) Referral.--The implementation bills introduced 
        under paragraph (1) shall be referred to any 
        appropriate committee of jurisdiction in the Senate and 
        any appropriate committee of jurisdiction in the House 
        of Representatives. A committee to which an 
        implementation bill is referred under this paragraph 
        may report such bill to the respective House without 
        amendment.
          (3) Report or discharge.--If a committee to which an 
        implementation bill is referred has not reported such 
        bill by the end of the 15th calendar day after the date 
        of the introduction of such bill, such committee shall 
        be immediately discharged from further consideration of 
        such bill, and upon being reported or discharged from 
        the committee, such bill shall be placed on the 
        appropriate calendar.
  (c) Floor Consideration.--
          (1) In general.--When the committee to which an 
        implementation bill is referred has reported, or has 
        been discharged under subsection (b)(3), it is at any 
        time thereafter in order (even though a previous motion 
        to the same effect has been disagreed to) for any 
        Member of the respective House to move to proceed to 
        the consideration of the implementation bill, and all 
        points of order against the implementation bill (and 
        against consideration of the implementation bill) are 
        waived. The motion is highly privileged in the House of 
        Representatives and is privileged in the Senate and is 
        not debatable. The motion is not subject to amendment, 
        or to a motion to postpone, or to a motion to proceed 
        to the consideration of other business. A motion to 
        reconsider the vote by which the motion is agreed to or 
        disagreed to shall not be in order. If a motion to 
        proceed to the consideration of the implementation bill 
        is agreed to, the implementation bill shall remain the 
        unfinished business of the respective House until 
        disposed of.
          (2) Amendments.--An implementation bill may not be 
        amended in the Senate or the House of Representatives.
          (3) Debate.--Debate on the implementation bill, and 
        on all debatable motions and appeals in connection 
        therewith, shall be limited to not more than 10 hours, 
        which shall be divided equally between those favoring 
        and those opposing the resolution. A motion further to 
        limit debate is in order and not debatable. An 
        amendment to, or a motion to postpone, or a motion to 
        proceed to the consideration of other business, or a 
        motion to recommit the implementation bill is not in 
        order. A motion to reconsider the vote by which the 
        implementation bill is agreed to or disagreed to is not 
        in order.
          (4) Vote on final passage.--Immediately following the 
        conclusion of the debate on an implementation bill, and 
        a single quorum call at the conclusion of the debate if 
        requested in accordance with the rules of the 
        appropriate House, the vote on final passage of the 
        implementation bill shall occur.
          (5) Rulings of the chair on procedure.--Appeals from 
        the decisions of the Chair relating to the application 
        of the rules of the Senate or the House of 
        Representatives, as the case may be, to the procedure 
        relating to an implementation bill shall be decided 
        without debate.
  (d) Coordination With Action by Other House.--If, before the 
passage by 1 House of an implementation bill of that House, 
that House receives from the other House an implementation 
bill, then the following procedures shall apply:
          (1) Nonreferral.--The implementation bill of the 
        other House shall not be referred to a committee.
          (2) Vote on bill of other house.--With respect to an 
        implementation bill of the House receiving the 
        implementation bill--
                  (A) the procedure in that House shall be the 
                same as if no implementation bill had been 
                received from the other House; but
                  (B) the vote on final passage shall be on the 
                implementation bill of the other House.
  (e) Rules of Senate and House of Representatives.--This 
section is enacted by Congress--
          (1) as an exercise of the rulemaking power of the 
        Senate and House of Representatives, respectively, and 
        as such it is deemed a part of the rules of each House, 
        respectively, but applicable only with respect to the 
        procedure to be followed in that House in the case of 
        an implementation bill described in subsection (a), and 
        it supersedes other rules only to the extent that it is 
        inconsistent with such rules; and
          (2) with full recognition of the constitutional right 
        of either House to change the rules (so far as relating 
        to the procedure of that House) at any time, in the 
        same manner, and to the same extent as in the case of 
        any other rule of that House.

SEC. 337. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated such sums as may be 
necessary for carrying out this subtitle for each of the fiscal 
years 2006 through 2008.

                     TITLE IV--TRUTH IN ACCOUNTING

Subtitle A--Accrual Funding of Pensions and Retirement Pay for Federal 
               Employees and Uniformed Services Personnel

SEC. 401. CIVIL SERVICE RETIREMENT SYSTEM.

  (a) Civil Service Retirement and Disability Fund.--Chapter 83 
of title 5, United States Code, is amended--
          (1) in section 8331--
                  (A) in paragraph (17)--
                          (i) by striking ``normal cost'' and 
                        inserting ``normal cost percentage''; 
                        and
                          (ii) by inserting ``and standards 
                        (using dynamic assumptions)'' after 
                        ``practice'';
                  (B) by amending paragraph (18) to read as 
                follows:
          ``(18) `Fund balance' means the current net assets of 
        the Fund available for payment of benefits, as 
        determined by the Office in accordance with appropriate 
        accounting standards, but does not include any amount 
        attributable to--
                  ``(A) the Federal Employees' Retirement 
                System; or
                  ``(B) contributions made under the Federal 
                Employees' Retirement Contribution Temporary 
                Adjustment Act of 1983 by or on behalf of any 
                individual who became subject to the Federal 
                Employees' Retirement System;''
                  (C) by amending paragraph (19) to read as 
                follows:
          ``(19) `accrued liability' means the estimated excess 
        of the present value of all benefits payable from the 
        Fund to employees and Members, and former employees and 
        Members, subject to this subchapter, and their 
        survivors, over the present value of deductions to be 
        withheld from the future basic pay of employees and 
        Members currently subject to this subchapter and of 
        future agency contributions to be made in their 
        behalf;''
                  (D) in paragraph (27) by striking ``and'' at 
                the end;
                  (E) in paragraph (28) by striking the period 
                at the end and inserting a semicolon; and
                  (F) by adding at the end the following 
                paragraphs:
          ``(29) `dynamic assumptions' means economic 
        assumptions that are used in determining actuarial 
        costs and liabilities of a retirement system and in 
        anticipating the effects of long-term future--
                  ``(A) investment yields;
                  ``(B) increases in rates of basic pay; and
                  ``(C) rates of price inflation; and
          ``(30) `unfunded liability' means the estimated 
        excess of--
                  ``(A) the actuarial present value of all 
                future benefits payable from the Fund under 
                this subchapter based on the service of current 
                or former employees or Members, over
                  ``(B) the sum of--
                          ``(i) the actuarial present value of 
                        deductions to be withheld from the 
                        future basic pay of employees and 
                        Members currently subject to this 
                        chapter pursuant to section 8334;
                          ``(ii) the actuarial present value of 
                        the future contributions to be made 
                        pursuant to section 8334 with respect 
                        to employees and Members currently 
                        subject to this subchapter;
                          ``(iii) the Fund balance, as defined 
                        in paragraph (18), as of the date the 
                        unfunded liability is determined; and
                          ``(iv) any other appropriate amount, 
                        as determined by the Office of 
                        Personnel Management in accordance with 
                        generally accepted actuarial practices 
                        and principles.'';
          (2) in section 8334--
                  (A) in subsection (a)(1)--
                          (i) by striking the last two 
                        sentences;
                          (ii) by redesignating that 
                        subsection, as so amended, as 
                        (a)(1)(A); and
                          (iii) by adding at the end the 
                        following new subparagraphs:
  ``(B) Except as provided in subparagraph (E), each employing 
agency having any employees or Members subject to subparagraph 
(A) shall contribute from amounts available for salaries and 
expenses an amount equal to the sum of--
          ``(i) the product of--
                  ``(I) the normal cost percentage, as 
                determined for employees (other than employees 
                covered by clause (ii)), multiplied by
                  ``(II) the aggregate amount of basic pay 
                payable by the agency, for the period involved, 
                to employees (under subclause (I)) who are 
                within such agency; and
          ``(ii) the product of--
                  ``(I) the normal cost percentage, as 
                determined for Members, Congressional 
                employees, law enforcement officers, 
                firefighters, air traffic controllers, 
                bankruptcy judges, Court of Federal Claims 
                judges, United States magistrates, judges of 
                the United States Court of Appeals for the 
                Armed Forces, members of the Capitol Police, 
                nuclear materials couriers, and members of the 
                Supreme Court Police, multiplied by
                  ``(II) the aggregate amount of basic pay 
                payable by the agency for the period involved, 
                to employees and Members (under subclause (I)) 
                who are within such agency.
  ``(C) In determining the normal cost percentage to be applied 
under subparagraph (B), amounts provided for under subparagraph 
(A) shall be taken into account.
  ``(D) Contributions under this paragraph shall be paid--
          ``(i) in the case of law enforcement officers, 
        firefighters, air traffic controllers, bankruptcy 
        judges, Court of Federal Claims judges, United States 
        magistrates, judges of the United States Court of 
        Appeals for the Armed Forces, members of the Supreme 
        Court Police, nuclear materials couriers and other 
        employees, from the appropriations or fund used to pay 
        such law enforcement officers, firefighters, air 
        traffic controllers, bankruptcy judges, Court of 
        Federal Claims judges, United States magistrates, 
        judges of the United States Court of Appeals for the 
        Armed Forces, members of the Supreme Court Police, 
        nuclear materials couriers and other employees, 
        respectively;
          ``(ii) in the case of elected officials, from an 
        appropriation or fund available for payment of other 
        salaries of the same office or establishment; and
          ``(iii) in the case of employees of the legislative 
        branch paid by the Clerk of the House of 
        Representatives, from the contingent fund of the House.
  ``(E) In the case of the United States Postal Service, the 
Metropolitan Washington Airports Authority, and the government 
of the District of Columbia, an amount equal to that withheld 
under subparagraph (A) shall be contributed from the 
appropriation or fund used to pay the employee.''; and
                  (B) in subsection (k)--
                          (i) in paragraph (1)--
                                  (I) in subparagraph (A) by 
                                striking ``the first sentence 
                                of subsection (a)(1) of this 
                                section'' and inserting 
                                ``subsection (a)(1)(A)''; and
                                  (II) by amending subparagraph 
                                (B) to read as follows:
          ``(B) the amount of the contribution under subsection 
        (a)(1)(B) shall be the amount which would have been 
        contributed under such subsection if this subsection 
        had not been enacted.''; and
                          (ii) in paragraph (2)(C)(iii) by 
                        striking ``the first sentence of 
                        subsection (a)(1)'' and inserting 
                        ``subsection (a)(1)(A)''; and
          (3) in section 8348--
                  (A) by repealing subsection (f);
                  (B) by amending subsection (g) to read as 
                follows:
  ``(g)(1)(A) Not later than June 30, 2005, the Office of the 
Actuary shall determine the unfunded liability of the Fund, as 
of September 30, 2004, attributable to benefits payable under 
this chapter and make recommendations regarding its 
liquidation. After considering such recommendations, the Office 
shall establish an amortization schedule, including a series of 
annual installments commencing October 1, 2005, which provides 
for the liquidation of such liability by October 1, 2044.
  ``(B) The Office shall redetermine the unfunded liability of 
the Fund as of the close of the fiscal year, for each fiscal 
year beginning after September 30, 2004, through the fiscal 
year ending September 30, 2039, and shall establish a new 
amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
  ``(C) The Office shall redetermine the unfunded liability of 
the Fund as of the close of the fiscal year for each fiscal 
year beginning after September 30, 2039, and shall establish a 
new amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability over five years.
  ``(D) Amortization schedules established under this paragraph 
shall be set in accordance with generally accepted actuarial 
practices and principles, with interest computed at the rate 
used in the most recent valuation of the Civil Service 
Retirement System.
  ``(2) At the beginning of each fiscal year, beginning on 
October 1, 2005, the Office shall notify the Secretary of the 
Treasury of the amount of the first installment under the most 
recent amortization schedule established under paragraph (1). 
The Secretary shall credit that amount to the Fund, as a 
Government contribution, out of any money in the Treasury of 
the United States not otherwise appropriated.
  ``(3) For the purpose of carrying out paragraph (1) with 
respect to any fiscal year, the Office may--
          ``(A) require the Board of Actuaries of the Civil 
        Service Retirement System to make actuarial 
        determinations and valuations, make recommendations, 
        and maintain records in accordance with section 
        8347(f); and
          ``(B) use the latest actuarial determinations and 
        valuations made by such Board of Actuaries.'';
                  (C) in subsections (h), (i), and (m) by 
                striking ``unfunded'' and inserting ``accrued'' 
                each place it appears; and
                  (D) by adding at the end the following new 
                subsection:
  ``(n) Under regulations prescribed by the Office, the head of 
an agency may request reconsideration of any amount determined 
to be payable with respect to such agency under section 
8334(a)(1)(B)-(D). Any such request shall be referred to the 
Board of Actuaries of the Civil Service Retirement System. The 
Board of Actuaries shall review the computations of the Office 
and may make any adjustment with respect to any such amount 
which the Board determines appropriate. A determination by the 
Board of Actuaries under this subsection shall be final.''.
  (b) Government Contributions.--Section 8423 of title 5, 
United States Code, is amended--
          (1) in subsection (a)(2) by striking ``section 8422'' 
        and inserting ``section 8422(a)''; and
          (2) in subsection (b)(2) by striking ``equal annual 
        installments'' and inserting ``annual installments set 
        in accordance with generally accepted actuarial 
        practices and principles''.

SEC. 402. CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM.

  (a) Section 101 of the Central Intelligence Agency Retirement 
Act (50 U.S.C. 2001) is amended--
          (1) in paragraph (5), to read as follows:
          ``(5) Unfunded liability.--The term `unfunded 
        liability' means the estimated excess of--
                  ``(A) the actuarial present value of all 
                future benefits payable from the Fund under 
                title II of this Act based on the service of 
                current or former participants, over
                  ``(B) the sum of--
                          ``(i) the actuarial present value of 
                        deductions to be withheld from the 
                        future basic pay of participants 
                        currently subject to title II of this 
                        Act pursuant to section 211;
                          ``(ii) the actuarial present value of 
                        the future contributions to be made 
                        pursuant to section 211 with respect to 
                        participants currently subject to title 
                        II of this Act;
                          ``(iii) the Fund balance, as defined 
                        in paragraph (4), as of the date the 
                        unfunded liability is determined; and
                          ``(iv) any other appropriate amount, 
                        as determined by the Director in 
                        accordance with generally accepted 
                        actuarial practices and principles.'';
          (2) in paragraph (6)--
                  (A) by striking `` `normal cost' '' and 
                inserting `` `normal cost percentage' ''; and
                  (B) by inserting ``and standards (using 
                dynamic assumptions)'' after ``practice''; and
          (3) by adding at the end the following paragraph:
          ``(10) Dynamic assumptions.--The term `dynamic 
        assumptions' means economic assumptions that are used 
        in determining actuarial costs and liabilities of a 
        retirement system and in anticipating the effects of 
        long-term future--
                  ``(A) investment yields;
                  ``(B) increases in rates of basic pay; and
                  ``(C) rates of price inflation.'';
  (b) Section 202 of such Act (50 U.S.C. 2012) is amended by 
adding at the end the following: ``The Fund is appropriated for 
the payment of benefits as provided by this title.''.
  (c) Section 211(a)(2) of such Act (50 U.S.C. 2021(a)(2)) is 
amended to read as follows:
          ``(2) Agency contributions.--The Agency shall 
        contribute to the Fund the amount computed in a manner 
        similar to that used under section 8334(a) of title 5, 
        United States Code, pursuant to determinations of the 
        normal cost percentage of the Central Intelligence 
        Agency Retirement and Disability System by the 
        Director. Contributions under this paragraph shall be 
        paid from amounts available for salaries and 
        expenses.''; and
  (d) Section 261 of such Act (50 U.S.C. 2091) is amended--
          (1) by striking subsections (c), (d), and (e); and
          (2) by inserting after subsection (b) the following 
        new subsections:
  ``(c)(1) Not later than June 30, 2005, the Director shall 
cause to be made actuarial valuations of the Fund that 
determine the unfunded liability of the Fund, as of September 
30, 2004, attributable to benefits payable under this title and 
make recommendations regarding its liquidation. After 
considering such recommendations, the Director shall establish 
an amortization schedule, including a series of annual 
installments commencing October 1, 2005, which provides for the 
liquidation of such liability by October 1, 2044.
  ``(2) The Director shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year, for each fiscal 
year beginning after September 30, 2004, through the fiscal 
year ending September 30, 2039, and shall establish a new 
amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
  ``(3) The Director shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year for each fiscal 
year beginning after September 30, 2039, and shall establish a 
new amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability over five years.
  ``(4) Amortization schedules established under this 
subsection shall be set in accordance with generally accepted 
actuarial practices and principles, with interest computed at 
the rate used in the most recent valuation of the Civil Service 
Retirement and Disability System.
  ``(d) At the beginning of each fiscal year, beginning on 
October 1, 2005, the Director shall notify the Secretary of the 
Treasury of the amount of the first installment under the most 
recent amortization schedule established under subsection (c). 
The Secretary shall credit that amount to the Fund, as a 
Government contribution, out of any money in the Treasury of 
the United States not otherwise appropriated. For the purposes 
of Section 504 of the National Security Act of 1947, this 
amount shall be considered authorized.''.
  (e)(1) Title III of such Act (50 U.S.C. 2151 et seq.) is 
amended by adding at the end the following new section:

``SEC. 308. FULL FUNDING OF RETIREE COSTS FOR EMPLOYEES DESIGNATED 
                    UNDER SECTION 302.

  ``(a) In addition to other government contributions required 
by law, the Agency shall contribute to the Civil Service 
Retirement and Disability fund (hereinafter in this section 
referred to as the `Fund') amounts calculated in accordance 
with section 8423 of title 5, United States Code, based on the 
projected number of employees to be designated pursuant to 
section 302 of this Act. In addition, the Agency, in a manner 
similar to that established for employee contributions to the 
Fund by section 8422 of title 5, United States Code, will 
contribute an amount equal to the difference between that which 
would be contributed by the number of employees projected to be 
designated under section 302 and the amounts that are actually 
being deducted and contributed from the basic pay of an equal 
number of employees pursuant to section 8422. The amounts of 
the Agency's contributions under this subsection shall be 
determined by the Director of the Office of Personnel 
Management, in consultation with the Director, and shall be 
paid by the Agency from funds available for salaries and 
expenses. Agency employees designated pursuant to section 302 
of this Act shall, commencing with such designation, have 
deducted from their basic pay the full amount required by 
section 8422 of title 5, United States Code, and such 
deductions shall be contributed to the Fund.
  ``(b)(1) The Director of the Office of Personnel Management, 
in consultation with the Director, shall determine the total 
amount of unpaid contributions (government and employee 
contributions) and interest attributable to the number of 
individuals employed with the Agency on September 30, 2005, who 
are projected to be designated under section 302 of this Act, 
but are not yet designated under that section as of that date. 
The amount shall be referred to as the section 302 unfunded 
liability.
  ``(2) Not later than June 30, 2006, the Director of the 
Office of Personnel Management, in consultation with the 
Director, shall establish an amortization schedule, setting 
forth a series of annual installments commencing September 30, 
2006, which provides for the liquidation of the section 302 
unfunded liability by September 30, 2013.
  ``(3) At the end of each fiscal year, beginning on September 
30, 2006, the Director shall notify the Secretary of the 
Treasury of the amount of the annual installment under the 
amortization schedule established under paragraph (2) of this 
subsection. Before closing the accounts for that fiscal year, 
the Secretary shall credit that amount to the Fund, out of any 
money in the Treasury of the United States not otherwise 
appropriated.
  ``(c) Amounts paid by the Agency pursuant to this section are 
deemed to be specifically authorized by the Congress for the 
purposes of section 504 of the National Security Act of 
1947.''.
  (2) The table of contents of such Act is amended by inserting 
after the item relating to section 307 the following new item:

``Sec. 308. Full funding of retiree costs for employees designated under 
          section 302.''.

SEC. 403. FOREIGN SERVICE RETIREMENT AND DISABILITY SYSTEM.

  (a) Chapter 8 of Title I of the Foreign Service Act of 1980, 
Public Law 96-465, (22 U.S.C. 4041 et seq.) 94 Stat. 2071, as 
amended, is further amended in section 804 (22 U.S.C. 4044)--
          (1) by amending paragraph (5) to read as follows:
          ``(5) `normal cost percentage' means the entry-age 
        normal cost computed in accordance with generally 
        accepted actuarial practice and standards (using 
        dynamic assumptions) and expressed as a level 
        percentage of aggregate basic pay;'';
          (2) by amending paragraph (14) to read as follows:
          ``(14) `unfunded liability' means the estimated 
        excess of--
                  ``(A) the actuarial present value of all 
                future benefits payable from the Fund under 
                this part based on the service of current or 
                former participants, over
                  ``(B) the sum of--
                          ``(i) the actuarial present value of 
                        deductions to be withheld from the 
                        future basic pay of participants 
                        currently subject to this part pursuant 
                        to section 805;
                          ``(ii) the actuarial present value of 
                        the future contributions to be made 
                        pursuant to section 805 with respect to 
                        participants currently subject to this 
                        part;
                          ``(iii) the Fund balance, as defined 
                        in paragraph (7), as of the date the 
                        unfunded liability is determined, 
                        excluding any amount attributable to 
                        the Foreign Service Pension System, or 
                        contributions made under the Federal 
                        Employees' Retirement Contribution 
                        Temporary Adjustment Act of 1983 by or 
                        on behalf of any individual who became 
                        subject to the Foreign Service Pension 
                        System; and
                          ``(iv) any other appropriate amount, 
                        as determined by the Secretary of the 
                        Treasury in accordance with generally 
                        accepted actuarial practices and 
                        principles.''; and
          (3)(A) by striking the period at the end of paragraph 
        (15) and inserting ``; and''; and
          (B) by adding at the end the following new paragraph:
          ``(16) `dynamic assumptions' means economic 
        assumptions that are used in determining actuarial 
        costs and liabilities of a retirement system and in 
        anticipating the effects of long-term future--
                  ``(A) investment yields;
                  ``(B) increases in rates of basic pay; and
                  ``(C) rates of price inflation.'';
  (b) in section 852 (22 U.S.C. 4071a)--
          (1) in paragraph (4)--
                  (A) by striking ``normal cost'' and inserting 
                ``normal cost percentage''; and
                  (B) by striking ``by the Secretary of 
                State'';
          (2) in paragraph (7)--
                  (A) by striking ``supplemental'' and 
                inserting ``unfunded'';
                  (B) in subparagraph (B)(i) by striking 
                ``(I)'' and ``and (II) contributions for past 
                civilian and military service''; and
                  (C) in subparagraph (B)(ii) by inserting 
                before the semicolon ``with respect to 
                participants currently subject to this part''; 
                and
          (3)(A) at the end of paragraph (8) by striking 
        ``and'';
          (B) at the end of paragraph (9) by striking the 
        period and inserting ``; and''; and
          (C) by adding at the end the following new paragraph:
          ``(10) `dynamic assumptions' means economic 
        assumptions that are used in determining actuarial 
        costs and liabilities of a retirement system and in 
        anticipating the effects of long-term future--
                  ``(A) investment yields;
                  ``(B) increases in rates of basic pay; and
                  ``(C) rates of price inflation.'';
  (c) in section 805(a)(1) (22 U.S.C. 4045(a)(i))--
          (1) by striking the second sentence;
          (2) (by redesignating that subsection, as so amended, 
        as (a)(1)(A);
          (3) by redesignating the last sentence of that 
        subsection, as so amended as (a)(1)(C);
          (4) by inserting after subparagraph (A) the following 
        new subparagraph:
                  ``(B) Each employing agency having 
                participants shall contribute to the Fund the 
                amount computed in a manner similar to that 
                used under section 8334(a) of title 5, United 
                States Code, pursuant to determinations of the 
                normal cost percentage of the Foreign Service 
                Retirement and Disability System. Contributions 
                under this subparagraph shall be paid from the 
                appropriations or fund used for payment of the 
                salary of the participant.'';
          (5) in subsection (a)(2)(A) by striking ``An equal 
        amount shall be contributed by the Department'' and 
        inserting in its place ``Each employing agency having 
        participants shall contribute to the Fund the amount 
        computed in a manner similar to that used under section 
        8334(a) of title 5, United States Code, pursuant to 
        determinations of the normal cost percentage of the 
        Foreign Service Retirement and Disability System''; and
          (6) in subsection (a)(2)(B) by striking ``An equal 
        amount shall be contributed by the Department'' and 
        inserting in its place ``Each employing agency having 
        participants shall contribute to the Fund from amounts 
        available for salaries and expenses the amount computed 
        in a manner similar to that used under section 8334(a) 
        of title 5, United States Code, pursuant to 
        determinations of the normal cost percentage of the 
        Foreign Service Retirement and Disability System'';
  (d) by repealing sections 821 and 822 (22 U.S.C. 4061 and 
4062) and by adding the following new section:
  ``Sec. 821. Unfunded Liability.--(a)(1) Not later than June 
30, 2005, the Secretary of State shall cause to be made 
actuarial valuations of the Fund that determine the unfunded 
liability of the Fund, as of September 30, 2004, attributable 
to benefits payable under this subchapter and make 
recommendations regarding its liquidation. After considering 
such recommendations, the Secretary of State shall establish an 
amortization schedule, including a series of annual 
installments commencing October 1, 2004, which provides for the 
liquidation of such liability by October 1, 2044.
  ``(2) The Secretary of State shall redetermine the unfunded 
liability of the Fund as of the close of the fiscal year, for 
each fiscal year beginning after September 30, 2004, through 
the fiscal year ending September 30, 2039, and shall establish 
a new amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
  ``(3) The Secretary of State shall redetermine the unfunded 
liability of the Fund as of the close of the fiscal year for 
each fiscal year beginning after September 30, 2039, and shall 
establish a new amortization schedule, including a series of 
annual installments commencing on October 1 of the second 
subsequent fiscal year, which provides for the liquidation of 
such liability over five years.
  ``(4) Amortization schedules established under this 
subsection shall be set in accordance with generally accepted 
actuarial practices and principles, with interest computed at 
the rate used in the most recent valuation of the Foreign 
Service Retirement and Disability System.
  ``(b) At the beginning of each fiscal year, beginning on 
October 1, 2005, the Secretary of State shall notify the 
Secretary of the Treasury of the amount of the first 
installment under the most recent amortization schedule 
established under paragraph (1). The Secretary of the Treasury 
shall credit that amount to the Fund, as a Government 
contribution, out of any money in the Treasury of the United 
States not otherwise appropriated.'';
  (e) in section 857(b)(1) (22 U.S.C. 4071f(b)(1)) by striking 
``equal annual installments'' and inserting ``annual 
installments set in accordance with generally accepted 
actuarial practices and principles'';
  (f) in section 859 (22 U.S.C. 4071h) by adding ``percentage'' 
after ``normal cost'';
  (g) in section 802 (22 U.S.C. 4042) by adding at the end the 
following: ``The Fund is appropriated for the payment of 
benefits as provided by this subchapter.''; and
  (h) in section 818 (22 U.S.C. 4058) by striking ``System'' 
and inserting ``Systems under this subchapter''.

SEC. 404. PUBLIC HEALTH SERVICE COMMISSIONED CORPS RETIREMENT SYSTEM.

  (a) In General.--Title II of the Public Health Service Act 
(42 U.S.C. 202 et seq.) is amended by adding at the end the 
following new part:

  ``PART C--PUBLIC HEALTH SERVICE COMMISSIONED CORPS RETIREMENT SYSTEM

                  ``ESTABLISHMENT AND PURPOSE OF FUND

  ``Sec. 251. There is established on the books of the Treasury 
a fund to be known as the Public Health Service Commissioned 
Corps Retirement Fund (hereinafter in this part referred to as 
the `Fund'), which shall be administered by the Secretary. The 
Fund shall be used for the accumulation of funds in order to 
finance on an actuarially sound basis liabilities of the 
Department of Health and Human Services for benefits payable on 
account of retirement, disability, or death to commissioned 
officers of the Public Health Service and to their survivors 
pursuant to part A of this title.

                          ``ASSETS OF THE FUND

  ``Sec. 252. There shall be deposited into the Fund the 
following, which shall constitute the assets of the Fund:
          ``(1) Amounts paid into the Fund under section 255.
          ``(2) Any return on investment of the assets of the 
        Fund.
          ``(3) Amounts transferred into the Fund pursuant to 
        section 404(c) of the Family Budget Protection Act of 
        2004.

                        ``PAYMENT FROM THE FUND

  ``Sec. 253. There shall be paid from the Fund benefits 
payable on account of retirement, disability, or death to 
commissioned officers of the Public Health Service and to their 
survivors pursuant to part A of this title.

              ``DETERMINATION OF CONTRIBUTIONS TO THE FUND

  ``Sec. 254. (a)(1) Not later than June 30, 2005, the 
Secretary shall determine the unfunded liability of the Fund 
attributable to service performed as of September 30, 2004, 
which is `active service' for the purpose of section 212. The 
Secretary shall establish an amortization schedule, including a 
series of annual installments commencing October 1, 2005, which 
provides for the liquidation of such liability by October 1, 
2044.
  ``(2) The Secretary shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year, for each fiscal 
year beginning after September 30, 2004, through the fiscal 
year ending September 30, 2039, and shall establish a new 
amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
  ``(3) The Secretary shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year for each fiscal 
year beginning after September 30, 2039, and shall establish a 
new amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability over 5 years.
  ``(b) The Secretary shall determine each fiscal year, in 
sufficient time for inclusion in the budget request for the 
following fiscal year, the total amount of Department of Health 
and Human Services contributions to be made to the Fund during 
the fiscal year under section 255(a). That amount shall be the 
sum of--
          ``(1) the product of--
                  ``(A) the current estimate of the value of 
                the single level percentage of basic pay to be 
                determined under subsection (c)(1) at the time 
                of the most recent actuarial valuation under 
                subsection (c); and
                  ``(B) the total amount of basic pay expected 
                to be paid during that fiscal year to 
                commissioned officers of the Public Health 
                Service on active duty (other than active duty 
                for training); and
          ``(2) the product of--
                  ``(A) the current estimate of the value of 
                the single level percentage of basic pay and of 
                compensation (paid pursuant to section 206 of 
                title 37, United States Code) to be determined 
                under subsection (c)(2) at the time of the most 
                recent actuarial valuation under subsection 
                (c); and
                  ``(B) the total amount of basic pay and of 
                compensation (paid pursuant to section 206 of 
                title 37, United States Code) expected to be 
                paid during the fiscal year to commissioned 
                officers of the Reserve Corps of the Public 
                Health Service (other than officers on full-
                time duty other than for training) who are not 
                otherwise described in subparagraph (A).
  ``(c) Not less often than every four years thereafter (or by 
the fiscal year end prior to the effective date of any 
statutory change affecting benefits payable on account of 
retirement, disability, or death to commissioned officers or 
their survivors), the Secretary shall carry out an actuarial 
valuation of benefits payable on account of retirement, 
disability, or death to commissioned officers of the Public 
Health Service and to their survivors pursuant to part A of 
this title. Each such actuarial valuation shall be signed by an 
enrolled Actuary and shall include--
          ``(1) a determination (using the aggregate entry-age 
        normal cost method) of a single level percentage of 
        basic pay for commissioned officers of the Public 
        Health Service on active duty (other than active duty 
        for training); and
          ``(2) a determination (using the aggregate entry-age 
        normal cost method) of a single level percentage of 
        basic pay and of compensation (paid pursuant to section 
        206 of title 37, United States Code) of commissioned 
        officers of the Reserve Corps of the Public Health 
        Service (other than officers on full time duty other 
        than for training) who are not otherwise described in 
        paragraph (1).
  ``(d) All determinations under this section shall be in 
accordance with generally accepted actuarial principles and 
practices and, where appropriate, shall follow the general 
pattern of methods and assumptions approved by the Department 
of Defense Retirement Board of Actuaries.
  ``(e) The Secretary shall provide for the keeping of such 
records as are necessary for determining the actuarial status 
of the Fund.

                        ``PAYMENTS INTO THE FUND

  ``Sec. 255. (a) From amounts available to the Department of 
Health and Human Services for salaries and expenses, the 
Secretary shall pay into the Fund at the end of each month the 
amount that is the sum of--
          ``(1) the product of--
                  ``(A) the level percentage of basic pay 
                determined using all the methods and 
                assumptions approved for the most recent (as of 
                the first day of the current fiscal year) 
                actuarial valuation under sections 254(c)(1) 
                (except that any statutory change affecting 
                benefits payable on account of retirement, 
                disability, or death to commissioned officers 
                or their survivors that is effective after the 
                date of that valuation and on or before the 
                first day of the current fiscal year shall be 
                used in such determination); and
                  ``(B) the total amount of basic pay accrued 
                for that month by commissioned officers of the 
                Public Health Service on active duty (other 
                than active duty for training); and
          ``(2) the product of--
                  ``(A) the level percentage of basic pay and 
                of compensation (paid pursuant to section 206 
                of title 37, United States Code) determined 
                using all the methods and assumptions approved 
                for the most recent (as of the first day of the 
                current fiscal year) actuarial valuation under 
                section 254(c)(2) (except that any statutory 
                change affecting benefits payable on account of 
                retirement, disability, or death to 
                commissioned officers or their survivors that 
                is effective after the date of that valuation 
                and on or before the first day of the current 
                fiscal year shall be used in such 
                determinations); and
                  ``(B) the total amount of basic pay and of 
                compensation (paid pursuant to section 206 of 
                title 37, United States Code) accrued for that 
                month by commissioned officers of the Reserve 
                Corps of the Public Health Service (other than 
                officers on full-time duty other than for 
                training).
  ``(b) At the beginning of each fiscal year, beginning on 
October 1, 2005, the Secretary shall certify to the Secretary 
of the Treasury the amount of the first installment under the 
most recent amortization schedule established under section 
254(a). The Secretary of the Treasury shall pay into the Fund 
from the General Fund of the Treasury the amount so certified. 
Such payment shall be the contribution to the Fund for that 
fiscal year.

                    ``INVESTMENTS OF ASSETS OF FUND

  ``Sec. 256. The Secretary may request the Secretary of the 
Treasury to invest such portion of the Fund as is not, in the 
judgment of the Secretary, required to meet the current needs 
of the Fund. Such investments shall be made by the Secretary of 
the Treasury in public debt securities with maturities suitable 
to the needs of the Fund, as determined by the Secretary, and 
bearing interest at rates determined by the Secretary of the 
Treasury, taking into consideration current market yields on 
outstanding marketable obligations of the United States of 
comparable maturities. The income on such investments shall be 
credited to and form a part of the Fund.

                    ``IMPLEMENTATION YEAR EXCEPTIONS

  ``Sec. 257. (a) To avoid funding shortfalls in the first year 
should formal actuarial determinations not be available in time 
for budget preparation, the amounts used in the first year in 
sections 255(a)(1)(A) and 255(a)(2)(A) shall be set equal to 
those estimates in sections 254(b)(1)(A) and 254(b)(2)(A) if 
final determinations are not available. The original unfunded 
liability as defined in section 254(a) shall include an 
adjustment to correct for this difference between the formal 
actuarial determinations and the estimates in sections 
254(b)(1)(A) and 254(b)(2)(A).''.
  (b) Conforming Amendments.--
          (1) Condition of detail.--Section 214 of the Public 
        Health Service Act (42 U.S.C. 215) is amended by adding 
        at the end the following new subsection:
  ``(e) The Secretary shall condition any detail under 
subsection (a), (b), or (c) upon the agreement of the executive 
department, State, subdivision, Committee of the Congress, or 
institution concerned to pay to the Department of Health and 
Human Services, in advance or by way of reimbursement, for the 
full cost of the detail including that portion of the 
contributions under section 255(a) that is attributable to the 
detailed personnel.''.
          (2) Sequestration rule.--Section 256(f) of the 
        Balanced Budget and Emergency Deficit Control Act of 
        1985 (2 U.S.C. 906(f)) is amended--
                  (A) by inserting after the item relating to 
                ``payment to the foreign service retirement and 
                disability fund'' the following item: ``Payment 
                to the Public Health Service Commissioned Corps 
                Retirement Fund (75-0380-0-1-551);''; and
                  (B) by inserting after the item relating to 
                the ``Pensions for former Presidents'' the 
                following item: ``Public Health Service 
                Commissioned Corps Retirement Fund (75-8274-0-
                7-602);''.
  (c) Transfer of Appropriations.--There shall be transferred 
on October 1, 2006, into the fund established under section 251 
of the Public Health Service Act, as added by subsection (a), 
any obligated or unobligated balances of appropriations made to 
the Department of Health and Human Services that are currently 
available for benefits payable on account of retirement, 
disability, or death to commissioned officers of the Public 
Health Service and to their survivors pursuant to part A of 
title II of the Public Health Service Act, and amounts so 
transferred shall be part of the assets of the Fund.

SEC. 405. NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION COMMISSIONED 
                    OFFICER CORPS RETIREMENT SYSTEM.

  (a) In General.--The National Oceanic and Atmospheric 
Administration Commissioned Officer Corps Act of 2002 (title II 
of Public Law 107-372) is amended by inserting after section 
246 (33 U.S.C. 3046) the following new section:
  ``Sec. 246A. (a) Establishment and Purpose of NOAA 
Commissioned Officer Corps Retirement Fund.--(1) There is 
established on the books of the Treasury a fund to be known as 
the National Oceanic and Atmospheric Administration 
Commissioned Officer Corps Retirement Fund (hereinafter in this 
section referred to as the `Fund'), which shall be administered 
by the Secretary. The Fund shall be used for the accumulation 
of funds in order to finance on an actuarially sound basis 
liabilities of the Department of Commerce under military 
retirement and survivor benefit programs for the commissioned 
officers corps.
  ``(2) The term `military retirement and survivor benefit 
program' means--
          ``(A) the provisions of this title and title 10, 
        United States Code, creating entitlement to, or 
        determining, the amount of retired pay;
          ``(B) the programs under the jurisdiction of the 
        Department of Defense providing annuities for survivors 
        and members and former members of the Armed Forces, 
        including chapter 73 of title 10, section 4 of Public 
        Law 92-425, and section 5 of Public Law 96-202, as made 
        applicable to the commissioned officer corps by section 
        261.
  ``(b) Assets of the Fund.--There shall be deposited into the 
Fund the following, which shall constitute the assets of the 
Fund:
          ``(1) Amounts paid into the Fund under subsection 
        (e).
          ``(2) Any return on investment of the assets of the 
        Fund.
          ``(3) Amounts transferred into the Fund pursuant to 
        section 405(c) of the Family Budget Protection Act of 
        2004.
  ``(c) Payments From the Fund.--There shall be paid from the 
Fund benefits payable on account of military retirement and 
survivor benefit programs to commissioned officers of the 
commissioned officer corps and their survivors.
  ``(d) Determination of Contributions to the Fund.--(1)(A) Not 
later than June 30, 2004, the Secretary shall determine the 
unfunded liability of the Fund attributable to service 
performed as of September 30, 2004, which is `active service' 
for the purpose of this title. The Secretary shall establish an 
amortization schedule, including a series of annual 
installments commencing October 1, 2005, which provides for the 
liquidation of such liability by October 1, 2044.
  ``(B) The Secretary shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year, for each fiscal 
year beginning after September 30, 2004, through the fiscal 
year ending September 30, 2039, and shall establish a new 
amortization schedule, including a series of annual 
installments commencing on September 30 of the subsequent 
fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
  ``(C) The Secretary shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year for each fiscal 
year beginning after September 30, 2039, and shall establish a 
new authorization schedule, including series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability over 5 years.
  ``(2) The Secretary shall determine each fiscal year, in 
sufficient time for inclusion in the budget request for the 
following fiscal year, the total amount of Department of 
Commerce contributions to be made to the Fund during that 
fiscal year under (e). The amount shall be the product of--
          ``(A) the current estimate of the value of the single 
        level percentage of basic pay to be determined under 
        subsection (e) at the time of the most recent actuarial 
        valuation under paragraph (3); and
          ``(B) the total amount of basic pay expected to be 
        paid during that fiscal year to commissioned officers 
        of NOAA on active duty.
  ``(3) Not less often then every four years (or by the fiscal 
year end before the effective date of any statutory change 
affecting benefits payable on account of retirement, 
disability, or death to commissioned officers or their 
survivors), the Secretary shall carry out an actuarial 
valuation of benefits payable on account of military retirement 
and survivor benefit programs to commissioned officers of the 
Administration and to their survivors. Each such actuarial 
valuation shall be signed by an enrolled Actuary and shall 
include a determination (using the aggregate entry-age normal 
cost method) of a single level percentage of basic pay for 
commissioned officers on active duty.
  ``(4) All determinations under this section shall be in 
accordance with generally accepted actuarial principles and 
practices, and, where appropriate, shall follow the general 
pattern of methods and assumptions approved by the Department 
of Defense Retirement Board of Actuaries.
  ``(5) The Secretary shall provide for the keeping of such 
records as are necessary for determining the actuarial status 
of the Fund.
  ``(e) Payments Into the Fund.--(1) From amounts appropriated 
to the National Oceanic Atmospheric Administration for salaries 
and expenses, the Secretary shall pay into the Fund at the end 
of each month the amount that is the product of--
          ``(A) the level percentage of basic pay determined 
        using all the methods and assumptions approved for the 
        most recent (as of the first day of the current fiscal 
        year) actuarial valuation under subsection (d) (except 
        that any statutory change affecting benefits payable on 
        account of military retirement and survivor benefit 
        programs to commissioned officers of the Administration 
        and to their survivors that is effective date after the 
        date of that valuation and on or before the first day 
        of the current fiscal year shall be used in such 
        determination); and
          ``(B) the total amount of basic pay accrued for that 
        month by commissioned officers on active duty.
  ``(2)(A) At the beginning of each fiscal year, the Secretary 
shall determine the sum of--
          ``(i) the amount of the payment for that year under 
        the amortization of the original unfunded liability of 
        the Fund;
          ``(ii) the amount (including any negative amount) for 
        that year under the most recent amortization schedule 
        determined by the Secretary for the amortization of any 
        cumulative actuarial gain or loss to the Fund, 
        resulting from changes in benefits; and
          ``(iii) the amount (including any negative amount) 
        for that year under the most recent amortization 
        schedule determined by the Secretary for the 
        amortization or any cumulative actuarial gain or loss 
        to the Fund resulting from changes in actuarial 
        assumptions and from experience different from the 
        assumed since the last valuation.
The Secretary shall promptly certify the amount of the sum to 
the Secretary of the Treasury.
  ``(B) Upon receiving the certification pursuant to paragraph 
(1), the Secretary of the Treasury shall promptly pay into the 
Fund from the General Fund of the Treasury the amount so 
certified. Such payment shall be the contribution to the Fund 
for that fiscal year.
  ``(f) Investment of Assets of the Fund.--The Secretary may 
request the Secretary of the Treasury to invest such portion of 
the Fund as is not, in the judgment of the Secretary, required 
to meet the current needs of the Fund. Such investments shall 
be made by the Secretary of the Treasury in public debt 
securities with maturities suitable to the needs of the Fund, 
as determined by the Secretary, and bearing interest at rates 
determined by the Secretary of the Treasury, taking into 
consideration current market yields on outstanding marketable 
obligations of the United States of comparable maturities. The 
income of such investments shall be credited to and form a part 
of the Fund.
  ``(g) Implementation Year Exceptions.--(1) To avoid funding 
shortfalls in the first year should formal actuarial 
determinations not be available in time for budget preparation, 
the amounts used in the first year in subsection (e)(1)(A) 
shall be set equal to the estimate in subsection (d)(2)(A) if 
final determinations are not available. The original unfunded 
liability as determined in subsection (d)(1) shall include an 
adjustment to correct for this difference between the formal 
actuarial determinations and the estimates in subsection 
(d)(2)(A).''.
  (b) Sequestration Rule.--Section 256(f) of the Balanced 
Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
906(f)) is amended by striking ``National Oceanic and 
Atmospheric Administration retirement (13-1450-0-1-306);'' and 
inserting ``National Oceanic and Atmospheric Administration 
Commissioned Officer Corps Retirement Fund;''.
  (c) Transfer of Appropriations.--There shall be transferred 
on October 1, 2006, into the fund established under section 
246A(a) of the National Oceanic and Atmospheric Administration 
Commissioned Officer Corps Act of 2002 (title II of Public Law 
107-372, as added by subsection (a)), any obligated and 
unobligated balance of appropriations made to the Department of 
Commerce that are available as of the date of the enactment of 
this Act for benefits payable on account of military retirement 
and survivor benefit programs to commissioned officers of the 
NOAA Commissioned Officer Corps and to their survivors, and 
amounts so transferred shall be part of the assets of the Fund, 
effective October 1, 2006.
  (d) Effective Date.--Subsection (c) (relating to payments 
from the Fund) and (e) (relating to payments into the Fund) of 
section 246A of the National Oceanic and Atmospheric 
Administration Commissioned Officer Corps Act of 2002 (title II 
of Public Law 107-372, as added by subsection (a)), shall take 
effect on October 1, 2006.

SEC. 406. COAST GUARD MILITARY RETIREMENT SYSTEM.

  (a) Accrual Funding for Coast Guard Retirement.--
          (1) In general.--Chapter 11 of title 14, United 
        States Code, is amended by adding at the end the 
        following new subchapter:

          ``SUBCHAPTER V--COAST GUARD MILITARY RETIREMENT FUND


``Sec. 441. Establishment and purpose of Fund; definitions

  ``(a) Establishment of Fund; Purpose.--There is established 
on the books of the Treasury a fund to be known as the Coast 
Guard Military Retirement Fund (hereinafter in this subchapter 
referred to as the `Fund'), which shall be administered by the 
Secretary. The Fund shall be used for the accumulations of 
funds in order to finance on an actuarially sound basis 
liabilities of the Coast Guard under military retirement and 
survivor benefit programs.
  ``(b) Military Retirement and Survivor Benefit Programs 
Defined.--In this subchapter, the term `military retirement and 
survivor benefit programs' means--
          ``(1) the provisions of this title and title 10 
        creating entitlement to, or determining the amount of, 
        retired pay;
          ``(2) the programs providing annuities for survivors 
        of members and former members of the armed forces, 
        including chapter 73 of title 10, section 4 of Public 
        Law 92-425, and section 5 of Public Law 96-402; and
          ``(3) the authority provided in section 1048(h) of 
        title 10.
  ``(c) Secretary Defined.--In this subchapter, the term 
`Secretary' means the Secretary of Homeland Security when the 
Coast Guard is not operating as a service in the Navy and the 
Secretary of Defense when the Coast Guard is operating as a 
service in the Navy.

``Sec. 442. Assets of the Fund

  ``There shall be deposited into the Fund the following, which 
shall constitute the assets of the Fund:
          ``(1) Amounts paid into the Fund under section 445 of 
        this title.
          ``(2) Any return on investment of the assets of the 
        Fund.
          ``(3) Amounts transferred into the Fund pursuant to 
        section 406(d) of the Family Budget Protection Act of 
        2004.

``Sec. 443. Payments from the Fund

  ``(a) In General.--There shall be paid from the Fund the 
following:
          ``(1) Retired pay payable to persons on the retired 
        list of the Coast Guard.
          ``(2) Retired pay payable under chapter 1223 of title 
        10 to former members of the Coast Guard and the former 
        United States Lighthouse Service.
          ``(3) Benefits payable under programs that provide 
        annuities for survivors of members and former members 
        of the armed forces, including chapter 73 of title 10, 
        section 4 of Public Law 92-425, and section 5 of Public 
        Law 96-402.
          ``(4) Amounts payable under section 1048(h) of title 
        10.
  ``(b) Availability of Assets of the Fund.--The assets of the 
Fund are hereby made available for payments under subsection 
(a).

``Sec. 444. Determination of contributions to the Fund

  ``(a) Initial Unfunded Liability.--(1) Not later than June 
30, 2005, the Secretary shall determine the unfunded liability 
of the Fund attributable to service performed as of September 
30, 2004, which is `active service' for the purposes of section 
212. The Secretary shall establish an amortization schedule, 
including a series of annual installments commencing October 1, 
2005, which provides for the liquidation of such liability by 
October 1, 2044.
  ``(2) The Secretary shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year, for each 
beginning after September 30, 2004, through the fiscal year 
ending September 30, 2039, and shall establish a new 
amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
  ``(3) The Secretary shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year for each fiscal 
year beginning after September 30, 2039, and shall establish a 
new amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability over five years.
  ``(b) Annual Contributions for Current Services.--(1) The 
Secretary shall determine each fiscal year, in sufficient time 
for inclusion in the budget request for the following fiscal 
year, the total amount of Department of Homeland Security, or 
Department of Defense, contributions to be made to the Fund 
during that fiscal year under section 445(a) of this title. 
That amount shall be the sum of the following:
          ``(A) The product of--
                  ``(i) the current estimate of the value of 
                the single level percentage of basic pay to be 
                determined under subsection (c)(1)(A) at the 
                time of the most recent actuarial valuation 
                under subsection (c); and
                  ``(ii) the total amount of basic pay expected 
                to be paid during that fiscal year to members 
                of the Coast Guard on active duty (other than 
                active duty for training).
          ``(B) The product of--
                  ``(i) the current estimate of the value of 
                the single level percentage of basic pay and of 
                compensation (paid pursuant to section 206 of 
                title 37) to be determined under subsection 
                (c)(1)(B) at the time of the most recent 
                actuarial valuation under subsection (c); and
                  ``(ii) the total amount of basic pay and 
                compensation (paid pursuant to section 206 of 
                title 37) expected to be paid during that 
                fiscal year to members of the Coast Guard Ready 
                Reserve (other than members on full-time 
                Reserve duty other than for training) who are 
                not otherwise described in subparagraph 
                (A)(ii).
  ``(2) The amount determined under paragraph (1) for any 
fiscal year is the amount needed to be appropriated to the 
Department of Homeland Security for that fiscal year for 
payments to be made to the Fund during that year under section 
445(a) of this title. The President shall include not less than 
the full amount so determined in the budget transmitted to 
Congress for that fiscal year under section 1105 of title 31. 
The President may comment and make recommendations concerning 
any such amount.
  ``(c) Periodic Actuarial Valuations.--(1) Not less often than 
every four years (or before the effective date of any statutory 
change affecting benefits payable on account of retirement, 
disability, or death to members of the Coast Guard or their 
survivors), the Secretary shall carry out an actuarial 
valuation of the Coast Guard military retirement and survivor 
benefit programs. Each actuarial valuation of such programs 
shall be signed by an enrolled actuary and shall include--
          ``(A) a determination (using the aggregate entry-age 
        normal cost method) of a single level percentage of 
        basic pay for members of the Coast Guard on active duty 
        (other than active duty for training); and
          ``(B) a determination (using the aggregate entry-age 
        normal cost method) of single level percentage of basic 
        pay and of compensation (paid pursuant to section 206 
        of title 37) for members of the Ready Reserve of the 
        Coast Guard (other than members on full-time Reserve 
        duty other than for training) who are not otherwise 
        described in subparagraph (A).
  ``(2) Such single level percentages shall be used for the 
purposes of subsection (b) and section 445(a) of this title.
  ``(d) Use of Generally Accepted Actuarial Principles and 
Practices.--All determinations under this section shall be in 
accordance with generally accepted actuarial principles and 
practices and, where appropriate, shall follow the general 
pattern of methods and assumptions approved by the Department 
of Defense Retirement Board of Actuaries.
  ``(e) Records.--The Secretary shall provide for the keeping 
of such records as are necessary for determining the actuarial 
status of the Fund.

``Sec. 445. Payments into the Fund

  ``(a) Monthly Accrual Charge for Current Services.--From 
amounts appropriated to the Coast Guard for salaries and 
expenses, the Secretary shall pay into the Fund at the end of 
each month as the Department of Homeland Security, or 
Department of Defense, contribution to the Fund for that month 
the amount that is the sum of the following:
          ``(1) The product of--
                  ``(A) the level percentage of basic pay 
                determined using all the methods and 
                assumptions approved for the most recent (as of 
                the first day of the current fiscal year) 
                actuarial valuation under section 444(c)(1)(A) 
                of this title (except that any statutory change 
                in the military retirement and survivor benefit 
                systems that is effective after the date of 
                that valuation and on or before the first day 
                of the current fiscal year shall be used in 
                such determination); and
                  ``(B) the total amount of basic pay accrued 
                for that month by members of the Coast Guard on 
                active duty (other than active duty for 
                training).
          ``(2) The product of--
                  ``(A) the level percentage of basic pay and 
                compensation (accrued pursuant to section 206 
                of title 37) determined using all the methods 
                and assumptions approved for the most recent 
                (as of the first day of the current fiscal 
                year) actuarial valuation under section 
                444(c)(1)(B) of this title (except that any 
                statutory change in the military retirement and 
                survivor benefit systems that is effective 
                after the date of that valuation and on or 
                before the first day of the current fiscal year 
                shall be used in such determination); and
                  ``(B) the total amount of basic pay and of 
                compensation (paid pursuant to section 206 of 
                title 37) accrued for that month by members of 
                the Ready Reserve (other than members of full-
                time Reserve duty other than for training) who 
                are not otherwise described in paragraph 
                (1)(B).
  ``(b) Annual Payment for Unfunded Liabilities.--(1) At the 
beginning of each fiscal year, beginning on October 1, 2005, 
the Secretary shall certify to the Secretary of the Treasury 
the amount of the first installment under the most recent 
amortization schedule established under section 254(a). The 
Secretary of the Treasury shall promptly pay into the Fund from 
the General Fund of the Treasury the amount so certified. Such 
payment shall be the contribution to the Fund for that fiscal 
year.

``Sec. 446. Investment of assets of the Fund

  ``The Secretary may request the Secretary of the Treasury to 
invest such portion of the Fund as is not, in the judgment of 
the Secretary, required to meet the current needs of the Fund. 
Such investments shall be made by the Secretary of the Treasury 
in public debt securities with maturities suitable to the needs 
of the Fund, as determined by the Secretary, and bearing 
interest at rates determined by the Secretary of the Treasury, 
taking into consideration current market yields on outstanding 
marketable obligations of the United States of comparable 
maturities. The income on such investments shall be credited to 
and form a part of the Fund.''.
          (2) Technical amendments.--Such chapter is further 
        amended--
                  (A) by amending the center heading after the 
                table of sections to read as follows:

                      ``SUBCHAPTER I--OFFICERS'';

                  (B) by amending the center heading after 
                section 336 to read as follows:

                  ``SUBCHAPTER II--ENLISTED MEMBERS'';

                  (C) by amending the center heading after 
                section 373 to read as follows:

                ``SUBCHAPTER III--GENERAL PROVISIONS'';

          and
                  (D) by amending the center heading after 
                section 425 to read as follows:

                 ``SUBCHAPTER IV--SPECIAL PROVISIONS''.

          (3) Clerical amendments.--The table of sections at 
        the beginning of such chapter is amended--
                  (A) by striking ``officers'' at the beginning 
                of the table and inserting ``subchapter i--
                officers'';
                  (B) by striking ``enlisted members'' after 
                the item relating to section 336 and inserting 
                ``subchapter ii--enlisted members'';
                  (C) by striking ``general provisions'' after 
                the item relating to section 373 and inserting 
                ``subchapter iii--general provisions'';
                  (D) by striking ``special provisions'' after 
                the item relating to section 425 and inserting 
                ``subchapter iv--special provisions''; and
                  (E) by adding at the end the following:

          ``SUBCHAPTER V--COAST GUARD MILITARY RETIREMENT FUND

``441. Establishment and purpose of Fund; definitions.
``442. Assets of the Fund.
``443. Payments from the Fund.
``444. Determination of contributions to the Fund.
``445. Payments into the Fund.
``446. Investment of assets of the Fund.''.

  (b) Implementation Year Exceptions.--To avoid funding 
shortfalls in the first year of implementation of subchapter V 
of chapter 11 of title 14, United States Code, as added by 
subsection (a), if formal actuarial determinations are not 
available in time for budget preparation, the amounts used in 
the first year under sections 445(a)(1)(A) and 445(a)(2)(A) of 
such title shall be set equal to those estimates in sections 
444(b)(1)(A)(i) and 444(b)(1)(B)(i), respectively, of such 
title if final determinations are not available. The original 
unfunded liability, as defined in section 444(a) of such title, 
shall include an adjustment to correct for this difference 
between the formal actuarial determinations and the estimates 
in sections 444(b)(1)(A)(i) and 444(b)(1)(B)(i) of such title.
  (c) Conforming Amendment.--Section 256(f) of the Balanced 
Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
906(f)) is amended by striking ``Retired Pay, Coast Guard (69-
0241-0-1-403)'' and inserting ``Coast Guard Military Retirement 
Fund (69-0241-01-403)''.
  (d) Transfer of Existing Balances.--
          (1) Transfer.--There shall be transferred into the 
        Fund on October 1, 2005, any obligated and unobligated 
        balances of appropriations made to the Department of 
        Homeland Security that are currently available for 
        retired pay, and amounts so transferred shall be part 
        of the assets of the Fund.
          (2) Fund defined.--For purposes of paragraph (1), the 
        term ``Fund'' means the Coast Guard Military Retirement 
        Fund established under section 441 of title 14, United 
        States Code, as added by subsection (a).
  (e) Effective Date.--Sections 443 (relating to payments from 
the Fund) and 445 (relating to payments into the Fund) of title 
14, United States Code, as added by subsection (a), shall take 
effect on October 1, 2005.

 Subtitle B--Accrual Funding of Post-Retirement Health Benefits Costs 
                         for Federal Employees

SEC. 411. FEDERAL EMPLOYEES HEALTH BENEFITS FUND.

  (a) Section 8906 of title 5, United States Code, is amended--
          (1) by redesignating subsection (c) as subsection 
        (c)(1) and by adding at the end the following new 
        paragraphs:
  ``(2) In addition to Government contributions required by 
subsection (b) and paragraph (1), each employing agency shall 
contribute amounts as determined by the Office to be necessary 
to prefund the accruing actuarial cost of post-retirement 
health benefits for each of the agency's current employees who 
are eligible for Government contributions under this section. 
Amounts under this paragraph shall be paid by the employing 
agency separate from other contributions under this section, 
from the appropriations or fund used for payment of the salary 
of the employee, on a schedule to be determined by the Office.
  ``(3) Paragraph (2) shall not apply to the United States 
Postal Service or the government of the District of 
Columbia.''; and
          (2) by amending subsection (g)(1) to read as follows:
  ``(g)(1) Except as provided in paragraphs (2) and (3), all 
Government contributions authorized by this section for health 
benefits for an annuitant shall be paid from the Employees 
Health Benefits Fund to the extent that funds are available in 
accordance with section 8909(h)(6) and, if necessary, from 
annual appropriations which are authorized to be made for that 
purpose and which may be made available until expended.''.
  (b) Section 8909 of title 5, United States Code, is amended 
by adding at the end the following new subsection:
  ``(h)(1) Not later than June 30, 2006, the Office shall 
determine the existing liability of the Fund for post-
retirement health benefits, excluding the liability of the 
United States Postal Service for service under section 
8906(g)(2), under this chapter as of September 30, 2006. The 
Office shall establish an amortization schedule, including a 
series of annual installments commencing September 30, 2006, 
which provides for the liquidation of such liability by 
September 30, 2043.
  ``(2) At the close of each fiscal year, for fiscal years 
beginning after September 30, 2005, the Office shall determine 
the supplemental liability of the Fund for post-retirement 
health benefits, excluding the liability attributable to the 
United States Postal Service for service subject to section 
8906(g)(2), and shall establish an amortization schedule, 
including a series of annual installments commencing on 
September 30 of the subsequent fiscal year, which provides for 
liquidation of such supplemental liability over 30 years.
  ``(3) Amortization schedules established under this paragraph 
shall be set in accordance with generally accepted actuarial 
practices and principles.
  ``(4) At the end of each fiscal year on and after September 
30, 2006, the Office shall notify the Secretary of the Treasury 
of the amounts of the next installments under the most recent 
amortization schedules established under paragraphs (1) and 
(2). Before closing the accounts for the fiscal year, the 
Secretary shall credit the sum of these amounts (including in 
that sum any negative amount for the amortization of the 
supplemental liability) to the Fund, as a Government 
contribution, out of any money in the Treasury of the United 
States not otherwise appropriated.
  ``(5) For the purpose of carrying out paragraphs (1) and (2), 
the Office shall perform or arrange for actuarial 
determinations and valuations and shall prescribe retention of 
such records as it considers necessary for making periodic 
actuarial valuations of the Fund.
  ``(6) Notwithstanding subsection (b), the amounts deposited 
into the Fund pursuant to this subsection and section 
8906(c)(2) to prefund post-retirement health benefits costs 
shall be segregated within the Fund so that such amounts, as 
well as earnings and proceeds under subsection (c) attributable 
to them, may be used exclusively for the purpose of paying 
Government contributions for post-retirement health benefits 
costs. When such amounts are used in combination with amounts 
withheld from annuitants to pay for health benefits, a portion 
of the contributions shall then be set aside in the Fund as 
described in subsection (b).
  ``(7) Under this subsection, `supplemental liability' means--
          ``(A) the actuarial present value for future post-
        retirement health benefits that are the liability of 
        the Fund, less
          ``(B) the sum of--
                  ``(i) the actuarial present value of all 
                future contributions by agencies and annuitants 
                to the Fund toward those benefits pursuant to 
                section 8906;
                  ``(ii) the present value of all scheduled 
                amortization payments to the Fund pursuant to 
                paragraphs (1) and (2);
                  ``(iii) the Fund balance as of the date the 
                supplemental liability is determined, to the 
                extent that such balance is attributable to 
                post-retirement benefits; and
                  ``(iv) any other appropriate amount, as 
                determined by the Office in accordance with 
                generally accepted actuarial practices and 
                principles.''.

SEC. 412. FUNDING UNIFORMED SERVICES HEALTH BENEFITS FOR ALL RETIREES.

  Title 10, United States Code, is amended--
          (1) in the title of chapter 56, by striking 
        ``DEPARTMENT OF DEFENSE MEDICARE-ELIGIBLE'' and 
        inserting ``UNIFORMED SERVICES'';
          (2) in section 1111--
                  (A) in subsection (a)--
                          (i) by striking ``Department of 
                        Defense Medicare-Eligible'' and 
                        inserting ``Uniformed Services'';
                          (ii) by striking ``Department of 
                        Defense under''; and
                          (iii) by striking ``for medicare-
                        eligible beneficiaries'';
                  (B) in subsection (c)--
                          (i) by striking ``The Secretary of 
                        Defense may'' and inserting ``The 
                        Secretary of Defense shall'';
                          (ii) by striking ``with any other'' 
                        and inserting ``with each'';
                          (iii) by striking ``Any such 
                        agreement'' and inserting ``Such 
                        agreements''; and
                          (iv) by striking ``administering 
                        Secretary may'' and inserting 
                        ``administrative Secretary shall'';
          (3) in section 1113--
                  (A) in subsection (a)--
                          (i) by striking ``and are medicare 
                        eligible'';
                          (ii) by striking ``who are medicare 
                        eligible''; and
                          (iii) by adding at the end the 
                        following new sentence: ``For the 
                        fiscal year starting October 1, 2004, 
                        only, the payments will be solely for 
                        the costs of members or former members 
                        of a uniformed service who are entitled 
                        to retired or retainer pay and are 
                        medicare-eligible, and eligible 
                        dependents or survivors who are 
                        medicare-eligible.'';
                  (B) in subsection (c)(1), by striking ``who 
                are medicare-eligible'';
                  (C) in subsection (d), by striking ``who are 
                medicare-eligible''; and
                  (D) in subsection (f), by striking ``If'' and 
                inserting ``When'';
          (4) in section 1114, in subsection (a)(1), by 
        striking ``Department of Defense Medicare-Eligible'' 
        and inserting ``Uniformed Services'';
          (5) in section 1115--
                  (A) in subsection (b)(2), by striking ``The 
                amount determined under paragraph (1) for any 
                fiscal year is the amount needed to be 
                appropriated to the Department of Defense (or 
                to the other executive department having 
                jurisdiction over the participating uniformed 
                service)'' and inserting ``The amount 
                determined under paragraph (1), or the amount 
                determined under section 1111(c) for a 
                participating uniformed service, for any fiscal 
                year, is the amount needed to be appropriated 
                to the Department of Defense (or to any other 
                executive department having jurisdiction over a 
                participating uniformed service)'';
                  (B) in subsection (c)(2), by striking ``for 
                medicare eligible beneficiaries''; and
                  (C) by adding at the end the following new 
                subsection:
  ``(f) For the fiscal year starting October 1, 2004, only, the 
amounts in this section shall be based solely on the costs of 
medicare-eligible benefits of beneficiaries and the costs for 
their eligible dependents or survivors who are medicare-
eligible, and shall be recalculated thereafter to reflect the 
cost of beneficiaries defined in section 1111.''; and
          (6) in section 1116--
                  (A) in subsection (a)(1)(A), by striking 
                ``for medicare-eligible beneficiaries'';
                  (B) in subsection (a)(2)(A), by striking 
                ``for medicare-eligible beneficiaries''; and
                  (C) in subsection (c), by striking 
                ``subsection (a) shall be paid from funds 
                available for the health care programs'' and 
                inserting ``subsection (a) and section 1111(c) 
                shall be paid from funds available for the pay 
                of members of the participating uniformed 
                services under the jurisdiction of the 
                respective administering secretaries''.

SEC. 413. EFFECTIVE DATE.

  Except as otherwise provided, this title shall take effect 
upon enactment with respect to fiscal years beginning after 
2005.

                  Subtitle C--Limit on the Public Debt

SEC. 421. FINDINGS.

  The Congress finds the following:
          (1) Since 1997, Congress has paid down and retired 
        approximately $450,000,000,000 of the Government's debt 
        which was previously held by the public.
          (2) This reduction in the Government's debt to the 
        public should permit a lowering of the statutory debt 
        ceiling. However, the statutory definition mingles both 
        the public debt and intragovernment liabilities, the 
        latter of which do not represent resource withdrawals 
        for the economy.
          (3) Intragovernment accounts such as the social 
        security trust funds, the Civil Service Retirement and 
        Disability Fund, the Department of Defense Military 
        Retirement Fund, and the Unemployment Trust Fund 
        constitute accrued liabilities of the Government which 
        will be paid from future receipts, taxes, or borrowing. 
        If the Government issues debt to the public to fund 
        such liabilities in the future, that debt will properly 
        be subject to the debt ceiling.
          (4) Properly defining the debt of the Government 
        would permit lowering the debt ceiling to take account 
        of, and lock in, the fiscal progress that has been 
        made.

SEC. 422. PURPOSE.

  It is the purpose of this subtitle to properly define the 
public debt to exclude intragovernment obligations.

SEC. 423. LIMIT ON PUBLIC DEBT.

  Section 3101 of title 31, United States Code, is amended to 
read as follows:

``Sec. 3101. Public debt limit

  ``(a) In this section, the current redemption value of an 
obligation issued on a discount basis and redeemable before 
maturity at the option of its holder is deemed to be the face 
amount of the obligation.
  ``(b) The face amount of obligations issued under this 
chapter 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 
and intragovernmental holdings) may not be more than 
$4,393,000,000,000 outstanding at one time, subject to changes 
periodically made in that amount as provided by law.
  ``(c) For purposes of this section, the face amount, for any 
month, of any obligation issued on a discount basis that is not 
redeemable before maturity at the option of the holder of the 
obligation is an amount equal to the sum of--
          ``(1) the original issue price of the obligation, 
        plus
          ``(2) the portion of the discount on the obligation 
        attributable to periods before the beginning of such 
        month (as determined under the principles of section 
        1272(a) of the Internal Revenue Code of 1986 without 
        regard to any exceptions contained in paragraph (2) of 
        such section).
  ``(d) For purposes of this section, the term `intragovernment 
holding' is any obligation issued by the Secretary of the 
Treasury to any Federal trust fund or Government account, 
whether in respect of public money, money otherwise required to 
be deposited in the Treasury, or amounts appropriated.''.

                   Subtitle D--Risk-assumed Budgeting

SEC. 431. FEDERAL INSURANCE PROGRAMS.

  (a) In General.--The Congressional Budget Act of 1974 is 
amended by adding after title V the following new title:

     ``TITLE VI--BUDGETARY TREATMENT OF FEDERAL INSURANCE PROGRAMS

``SEC. 602. BUDGETARY TREATMENT.

  ``(a) President's Budget.--Beginning with fiscal year 2011, 
the budget of the Government pursuant to section 1105(a) of 
title 31, United States Code, shall be based on the risk-
assumed cost of Federal insurance programs.
  ``(b) Budget Accounting.--For any Federal insurance program--
          ``(1) the program account shall--
                  ``(A) pay the risk-assumed cost borne by the 
                taxpayer to the financing account, and
                  ``(B) pay actual insurance program 
                administrative costs;
          ``(2) the financing account shall--
                  ``(A) receive premiums and other income,
                  ``(B) pay all claims for insurance and 
                receive all recoveries,
                  ``(C) transfer to the program account on not 
                less than an annual basis amounts necessary to 
                pay insurance program administrative costs;
          ``(3) a negative risk-assumed cost shall be 
        transferred from the financing account to the program 
        account, and shall be transferred from the program 
        account to the general fund; and
          ``(4) all payments by or receipts of the financing 
        accounts shall be treated in the budget as a means of 
        financing.
  ``(c) Appropriations Required.--(1) Notwithstanding any other 
provision of law, insurance commitments may be made for fiscal 
year 2011 and thereafter only to the extent that new budget 
authority to cover their risk-assumed cost is provided in 
advance in an appropriation Act.
  ``(2) An outstanding insurance commitment shall not be 
modified in a manner that increases its risk-assumed cost 
unless budget authority for the additional cost has been 
provided in advance.
  ``(3) Paragraph (1) shall not apply to Federal insurance 
programs that constitute entitlements.
  ``(d) Reestimates.--The risk-assumed cost for a fiscal year 
shall be reestimated in each subsequent year. Such reestimate 
can equal zero. In the case of a positive reestimate, the 
amount of the reestimate shall be paid from the program account 
to the financing account. In the case of a negative reestimate, 
the amount of the reestimate shall be paid from the financing 
account to the program account, and shall be transferred from 
the program account to the general fund. Reestimates shall be 
displayed as a distinct and separately identified subaccount in 
the program account.
  ``(e) Administrative Expenses.--All funding for an agency's 
administration of a Federal insurance program shall be 
displayed as a distinct and separately identified subaccount in 
the program account.

``SEC. 603. TIMETABLE FOR IMPLEMENTATION OF ACCRUAL BUDGETING FOR 
                    FEDERAL INSURANCE PROGRAMS.

  ``(a) Agency Requirements.--Agencies with responsibility for 
Federal insurance programs shall develop models to estimate 
their risk-assumed cost by year through the budget horizon and 
shall submit those models, all relevant data, a justification 
for critical assumptions, and the annual projected risk-assumed 
costs to OMB with their budget requests each year starting with 
the request for fiscal year 2007. Agencies will likewise 
provide OMB with annual estimates of modifications, if any, and 
reestimates of program costs.
  ``(b) Disclosure.--When the President submits a budget of the 
Government pursuant to section 1105(a) of title 31, United 
States Code, for fiscal year 2007, OMB shall publish a notice 
in the Federal Register advising interested persons of the 
availability of information describing the models, data 
(including sources), and critical assumptions (including 
explicit or implicit discount rate assumptions) that it or 
other executive branch entities would use to estimate the risk-
assumed cost of Federal insurance programs and giving such 
persons an opportunity to submit comments. At the same time, 
the chairman of the Committee on the Budget shall publish a 
notice for CBO in the Federal Register advising interested 
persons of the availability of information describing the 
models, data (including sources), and critical assumptions 
(including explicit or implicit discount rate assumptions) that 
it would use to estimate the risk-assumed cost of Federal 
insurance programs and giving such interested persons an 
opportunity to submit comments.
  ``(c) Revision.--(1) After consideration of comments pursuant 
to subsection (b), and in consultation with the Committees on 
the Budget of the House of Representatives and the Senate, OMB 
and CBO shall revise the models, data, and major assumptions 
they would use to estimate the risk-assumed cost of Federal 
insurance programs.
  ``(2) When the President submits a budget of the Government 
pursuant to section 1105(a) of title 31, United States Code, 
for fiscal year 2008, OMB shall publish a notice in the Federal 
Register advising interested persons of the availability of 
information describing the models, data (including sources), 
and critical assumptions (including explicit or implicit 
discount rate assumptions) that it or other executive branch 
entities used to estimate the risk-assumed cost of Federal 
insurance programs.
  ``(d) Display.--
          ``(1) In general.--For fiscal years 2008, 2009, and 
        2010 the budget submissions of the President pursuant 
        to section 1105(a) of title 31, United States Code, and 
        CBO's reports on the economic and budget outlook 
        pursuant to section 202(e)(1) and the President's 
        budgets, shall for display purposes only, estimate the 
        risk-assumed cost of existing or proposed Federal 
        insurance programs.
          ``(2) OMB.--The display in the budget submissions of 
        the President for fiscal years 2008, 2009, and 2010 
        shall include--
                  ``(A) a presentation for each Federal 
                insurance program in budget-account level 
                detail of estimates of risk-assumed cost;
                  ``(B) a summary table of the risk-assumed 
                costs of Federal insurance programs; and
                  ``(C) an alternate summary table of budget 
                functions and aggregates using risk-assumed 
                rather than cash-based cost estimates for 
                Federal insurance programs.
          ``(3) CBO.--In the second session of the 109th 
        Congress and the 110th Congress, CBO shall include in 
        its estimates under section 308, for display purposes 
        only, the risk-assumed cost of existing Federal 
        insurance programs, or legislation that CBO, in 
        consultation with the Committees on the Budget of the 
        House of Representatives and the Senate, determines 
        would create a new Federal insurance program.
  ``(e) OMB, CBO, and GAO Evaluations.--(1) Not later than 6 
months after the budget submission of the President pursuant to 
section 1105(a) of title 31, United States Code, for fiscal 
year 2010, OMB, CBO, and GAO shall each submit to the 
Committees on the Budget of the House of Representatives and 
the Senate a report that evaluates the advisability and 
appropriate implementation of this title.
  ``(2) Each report made pursuant to paragraph (1) shall 
address the following:
          ``(A) The adequacy of risk-assumed estimation models 
        used and alternative modeling methods.
          ``(B) The availability and reliability of data or 
        information necessary to carry out this title.
          ``(C) The appropriateness of the explicit or implicit 
        discount rate used in the various risk-assumed 
        estimation models.
          ``(D) The advisability of specifying a statutory 
        discount rate (such as the Treasury rate) for use in 
        risk-assumed estimation models.
          ``(E) The ability of OMB, CBO, or GAO, as applicable, 
        to secure any data or information directly from any 
        Federal agency necessary to enable it to carry out this 
        title.
          ``(F) The relationship between risk-assumed accrual 
        budgeting for Federal insurance programs and the 
        specific requirements of the Balanced Budget and 
        Emergency Deficit Control Act of 1985.
          ``(G) Whether Federal budgeting is improved by the 
        inclusion of risk-assumed cost estimates for Federal 
        insurance programs.
          ``(H) The advisability of including each of the 
        programs currently estimated on a risk-assumed cost 
        basis in the Federal budget on that basis.

``SEC. 604. DEFINITIONS.

  ``For purposes of this title:
          ``(1) The term `Federal insurance program' means a 
        program that makes insurance commitments and includes 
        the list of such programs included in the joint 
        explanatory statement of managers accompanying the 
        conference report on the Comprehensive Budget Process 
        Reform Act of 1999.
          ``(2) The term `insurance commitment' means an 
        agreement in advance by a Federal agency to indemnify a 
        nonfederal entity against specified losses. This term 
        does not include loan guarantees as defined in title V 
        or benefit programs such as social security, medicare, 
        and similar existing social insurance programs.
          ``(3)(A) The term `risk-assumed cost' means the net 
        present value of the estimated cash flows to and from 
        the Government resulting from an insurance commitment 
        or modification thereof.
          ``(B) The cash flows associated with an insurance 
        commitment include--
                  ``(i) expected claims payments inherent in 
                the Government's commitment;
                  ``(ii) net premiums (expected premium 
                collections received from or on behalf of the 
                insured less expected administrative expenses);
                  ``(iii) expected recoveries; and
                  ``(iv) expected changes in claims, premiums, 
                or recoveries resulting from the exercise by 
                the insured of any option included in the 
                insurance commitment.
          ``(C) The cost of a modification is the difference 
        between the current estimate of the net present value 
        of the remaining cash flows under the terms of the 
        insurance commitment, and the current estimate of the 
        net present value of the remaining cash flows under the 
        terms of the insurance commitment as modified.
          ``(D) The cost of a reestimate is the difference 
        between the net present value of the amount currently 
        required by the financing account to pay estimated 
        claims and other expenditures and the amount currently 
        available in the financing account. The cost of a 
        reestimate shall be accounted for in the current year 
        in the budget of the Government pursuant to section 
        1105(a) of title 31, United States Code.
          ``(E) For purposes of this definition, expected 
        administrative expenses shall be construed as the 
        amount estimated to be necessary for the proper 
        administration of the insurance program. This amount 
        may differ from amounts actually appropriated or 
        otherwise made available for the administration of the 
        program.
          ``(4) The term `program account' means the budget 
        account for the risk-assumed cost, and for paying all 
        costs of administering the insurance program, and is 
        the account from which the risk-assumed cost is 
        disbursed to the financing account.
          ``(5) The term `financing account' means the 
        nonbudget account that is associated with each program 
        account which receives payments from or makes payments 
        to the program account, receives premiums and other 
        payments from the public, pays insurance claims, and 
        holds balances.
          ``(6) The term `modification' means any Government 
        action that alters the risk-assumed cost of an existing 
        insurance commitment from the current estimate of cash 
        flows. This includes any action resulting from new 
        legislation, or from the exercise of administrative 
        discretion under existing law, that directly or 
        indirectly alters the estimated cost of existing 
        insurance commitments.
          ``(7) The term `model' means any actuarial, 
        financial, econometric, probabilistic, or other 
        methodology used to estimate the expected frequency and 
        magnitude of loss-producing events, expected premiums 
        or collections from or on behalf of the insured, 
        expected recoveries, and administrative expenses.
          ``(8) The term `current' has the same meaning as in 
        section 250(c)(9) of the Balanced Budget and Emergency 
        Deficit Control Act of 1985.
          ``(9) The term `OMB' means the Director of the Office 
        of Management and Budget.
          ``(10) The term `CBO' means the Director of the 
        Congressional Budget Office.
          ``(11) The term `GAO' means the Comptroller General 
        of the United States.

``SEC. 605. AUTHORIZATIONS TO ENTER INTO CONTRACTS; ACTUARIAL COST 
                    ACCOUNT.

  ``(a) Authorization of Appropriations.--There is authorized 
to be appropriated $600,000 for each of fiscal years 2005 
through 2010 to the Director of the Office of Management and 
Budget and each agency responsible for administering a Federal 
program to carry out this title.
  ``(b) Treasury Transactions With the Financing Accounts.--The 
Secretary of the Treasury shall borrow from, receive from, lend 
to, or pay the insurance financing accounts such amounts as may 
be appropriate. The Secretary of the Treasury may prescribe 
forms and denominations, maturities, and terms and conditions 
for the transactions described above. The authorities described 
above shall not be construed to supersede or override the 
authority of the head of a Federal agency to administer and 
operate an insurance program. All the transactions provided in 
this subsection shall be subject to the provisions of 
subchapter II of chapter 15 of title 31, United States Code. 
Cash balances of the financing accounts in excess of current 
requirements shall be maintained in a form of uninvested funds, 
and the Secretary of the Treasury shall pay interest on these 
funds.
  ``(c) Appropriation of Amount Necessary To Cover Risk-Assumed 
Cost of Insurance Commitments at Transition Date.--(1) A 
financing account is established on September 30, 2010, for 
each Federal insurance program.
  ``(2) There is appropriated to each financing account the 
amount of the risk-assumed cost of Federal insurance 
commitments outstanding for that program as of the close of 
September 30, 2010.
  ``(3) These financing accounts shall be used in implementing 
the budget accounting required by this title.

``SEC. 606. EFFECTIVE DATE.

  ``(a) In General.--This title shall take effect immediately 
and shall expire on September 30, 2012.
  ``(b) Special Rule.--If this title is not reauthorized by 
September 30, 2012, then the accounting structure and budgetary 
treatment of Federal insurance programs shall revert to the 
accounting structure and budgetary treatment in effect 
immediately before the date of enactment of this title.''.
  (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 507 the following new items:

      ``TITLE VI--BUDGETARY TREATMENT OF FEDERAL INSURANCE PROGRAMS

``Sec. 601. Short title.
``Sec. 602. Budgetary treatment.
``Sec. 603. Timetable for implementation of accrual budgeting for 
          Federal insurance programs.
``Sec. 604. Definitions.
``Sec. 605. Authorizations to enter into contracts; actuarial cost 
          account.
``Sec. 606. Effective date.''.



         TITLE V--MAINTAINING A COMMITMENT TO THE FAMILY BUDGET



               Subtitle A--Further Enforcement Amendments



SEC. 501. SUPER-MAJORITY POINTS OF ORDER IN THE HOUSE OF 
                    REPRESENTATIVES AND THE SENATE.

  (a) Section 904 of the Congressional Budget Act of 1974 is 
amended as follows:
          (1) In subsection 904(c)(1), insert ``312(g), (h), 
        (i), and (j),'' before ``313,'', and insert ``316, 
        318,'' before ``904(c),''.
          (2) In subsection (c) strike ``three-fifths'' each 
        place it appears and insert ``two-thirds''.
          (3)(A) In subsection (d)(2), insert ``312(g), (h), 
        (i), and (j),'' before ``313,'', and insert ``316, 
        318,'' before ``904(c),''.
          (B) In subsection (d), strike ``three-fifths'' each 
        place it appears and insert ``two-thirds''.
          (4)(A) In subsections (c)(2) and (d)(3), strike 
        ``311(a),''.
          (B) In subsections (c)(1) and (d)(2) insert 
        ``311(a),'' after ``310(d)(2),''.
          (5) In subsections (c)(1), (c)(2), (d)(2), and (d)(3) 
        by inserting ``or the House of Representatives'' after 
        ``Senate'' each place it appears.
          (6) In subsection (e), strike ``2002'' and insert 
        ``2010''.

SEC. 502. BUDGET RESOLUTION ENFORCEMENT POINT OF ORDER.

  (a) Entitlement Point of Order.--Section 312 of the 
Congressional Budget Act of 1974 (as amended by section 221(d)) 
is further amended by adding at the end the following new 
subsection:
  ``(j) Budget Resolution Enforcement Point of Order.--It shall 
not be in order in the House of Representatives or the Senate 
to consider any joint resolution on the budget for a fiscal 
year, or amendment thereto or conference report thereon, that--
          ``(1) is not consistent with the discretionary 
        spending limits set forth in section 251(b) of the 
        Balanced Budget and Emergency Deficit Control Act of 
        1985; or
          ``(2) provides for an increase in the aggregate level 
        of direct spending for the fiscal year of the 
        resolution or any ensuing fiscal year included in such 
        resolution.''.

SEC. 503. POINT OF ORDER WAIVER PROTECTION.

  Rule XIII of the Rules of the House of Representatives is 
amended by adding at the end the following new clause:
  ``8. (a) It shall not be in order to consider a rule or order 
that would waive waive the provisions of any section of the 
Congressional Budget Act of 1974 referred to in section 
904(c)(1) of such Act or of section 302 of the Family Budget 
Protection Act of 2004.
  ``(b) As disposition of a point of order under paragraph (a), 
the Chair shall put the question of consideration with respect 
to the proposition that is the subject of the point of order. A 
question of consideration under this clause shall be debatable 
for 10 minutes by the Member initiating the point of order and 
for 10 minutes by an opponent of the point of order, but shall 
otherwise be decided without intervening motion except one that 
the House adjourn or that the Committee of the Whole rise, as 
the case may be.
  ``(c) The disposition of the question of consideration under 
this clause with respect to a bill or joint resolution shall be 
considered also to determine the question of consideration 
under this clause with respect to an amendment made in order as 
original text.''.

                       Subtitle B--The Byrd Rule

SEC. 511. LIMITATION ON BYRD RULE.

  (a) Protection of Conference Reports.--Section 313 of the 
Congressional Budget Act of 1974 is amended--
          (1) in subsection (b)(1), by striking subparagraph 
        (E) through the semicolon at the end thereof and by 
        redesignating subparagraph (F) as subparagraph (E);
          (2) in subsection (c), by striking ``and again upon 
        the submission of a conference report on such a 
        reconciliation bill or resolution,'';
          (3) by striking subsection (d);
          (4) by redesignating subsection (e) as subsection 
        (d); and
          (5) in subsection (e), as redesignated--
                  (A) by striking ``, motion, or conference 
                report'' the first place it appears and 
                inserting ``, or motion''; and
                  (B) by striking ``, motion, or conference 
                report'' the second and third places it appears 
                and inserting ``or motion''.
  (b) Conforming Amendment.--The first sentence of section 
312(e) of the Congressional Budget Act of 1974 is amended by 
inserting ``, except for section 313,'' after ``Act''.

     Subtitle C--Treatment of Extraneous Appropriations in Omnibus 
                         Appropriation Measures

SEC. 521. TREATMENT OF EXTRANEOUS APPROPRIATIONS.

  (a) In General.--Title III of the Congressional Budget Act of 
1974 (as amended by section 127(a)) is further amended by 
adding at the end the following new section:

   ``TREATMENT OF EXTRANEOUS APPROPRIATIONS IN OMNIBUS APPROPRIATION 
                                MEASURES

  ``Sec. 319. (a) Point of Order.--It shall not be in order in 
the House of Representatives or the Senate to consider an 
omnibus appropriation measure, or any amendment thereto or 
conference report thereon, that appropriates funds for any 
program, project, or activity that is not within the subject-
matter jurisdiction of any subcommittee of the Committee on 
Appropriations of the House of Representatives or Senate, as 
applicable, with jurisdiction over any regular appropriation 
bill contained in such measure.
  ``(b) Definitions.--As used in this section:
          ``(1) The term `omnibus appropriation measure' means 
        any bill or joint resolution making continuing 
        appropriations for a fiscal year and that is comprised 
        of more than one regular appropriation bills.
          ``(2) The term `regular appropriation bill' means any 
        annual appropriation bill making appropriations, 
        otherwise making funds available, or granting 
        authority, for any of the following categories of 
        projects and activities:
                  ``(A) Agriculture, rural development, Food 
                and Drug Administration, and related agencies 
                programs.
                  ``(B) The Departments of Commerce, Justice, 
                and State, the Judiciary, and related agencies.
                  ``(C) The Department of Defense.
                  ``(D) The government of the District of 
                Columbia and other activities chargeable in 
                whole or in part against the revenues of the 
                District.
                  ``(E) Energy and water development.
                  ``(F) Foreign operations, export financing, 
                and related programs.
                  ``(G) The Department of Homeland Security.
                  ``(H) The Department of the Interior and 
                related agencies.
                  ``(I) The Departments of Labor, Health and 
                Human Services, and Education, and related 
                agencies.
                  ``(J) The Legislative Branch.
                  ``(K) Military construction, family housing, 
                and base realignment and closure for the 
                Department of Defense.
                  ``(L) The Departments of Transportation and 
                Treasury, and independent agencies.
                  ``(M) The Departments of Veterans Affairs and 
                Housing and Urban Development, and sundry 
                independent agencies, boards, commissions, 
                corporations, and offices.''.
  (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 318 the following new item:

``Sec. 319. Treatment of extraneous appropriations in omnibus 
          appropriation measures.''.
                    ____________________________________________________

    17. An Amendment in the Nature of a Substitute To Be Offered by 
  Representative Kirk of Illinois, or His Designee, Debatable for 30 
                                Minutes

  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Deficit 
Control Act of 2004''.
  (b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Effective date.
Sec. 3. Protection of social security and medicare benefits.

                      TITLE I--A SIMPLIFIED BUDGET

               Subtitle A--Rainy Day Fund for Emergencies

Sec. 101. Purpose.
Sec. 102. Repeal of adjustments for emergencies.
Sec. 103. OMB emergency criteria.
Sec. 104. Development of guidelines for application of emergency 
          definition.
Sec. 105. Reserve fund for emergencies in President's budget.
Sec. 106. Adjustments and reserve fund for emergencies in concurrent 
          budget resolutions.
Sec. 107. Up-to-date tabulations.
Sec. 108. Prohibition on amendments to emergency reserve fund.
Sec. 109. Content of budget resolutions.

                        Subtitle B--The Baseline

Sec. 111. Elimination of inflation adjustment.
Sec. 112. The President's budget.
Sec. 113. The congressional budget.
Sec. 114. Congressional budget office reports to committees.
Sec. 115. Treatment of emergencies.

           TITLE II--IMPLEMENTING FEDERAL SPENDING DISCIPLINE

   Subtitle A--Spending Safeguards on the Growth of Entitlements and 
                               Mandatories

Sec. 201. Spending caps on growth of entitlements and mandatories.
Sec. 202. Exempt programs and activities.
Sec. 203. Exceptions, limitations, and special rules.
Sec. 204. Point of order.
Sec. 205. Technical and conforming amendments.

                Subtitle B--Discretionary Spending Limits

Sec. 211. Enforcing discretionary spending limits.
Sec. 212. Annual joint resolution establishing discretionary spending 
          limits.

              TITLE III--COMBATING WASTE, FRAUD, AND ABUSE.

 Subtitle A--Enhanced Rescissions of Budget Authority Identified by the 
                     President as Wasteful Spending

Sec. 301. Enhanced consideration of certain proposed rescissions.

       Subtitle B--Commission to Eliminate Waste, Fraud, and Abuse

Sec. 311. Establishment of Commission.
Sec. 312. Duties of the Commission.
Sec. 313. Powers of the Commission.
Sec. 314. Commission personnel matters.
Sec. 315. Termination of the Commission.
Sec. 316. Authorization of appropriations.

                      TITLE IV--TRUTH IN ACCOUNTING

 Subtitle A--Accrual Funding of Pensions and Retirement Pay for Federal 
               Employees and Uniformed Services Personnel

Sec. 401. Civil Service Retirement System.
Sec. 402. Central Intelligence Agency Retirement and Disability System.
Sec. 403. Foreign Service Retirement and Disability System.
Sec. 404. Public Health Service Commissioned Corps Retirement System.
Sec. 405. National Oceanic and Atmospheric Administration Commissioned 
          Officer Corps Retirement System.
Sec. 406. Coast Guard Military Retirement System.

Subtitle B--Accrual Funding of Post-Retirement Health Benefits Costs for 
                            Federal Employees

Sec. 411. Federal employees health benefits fund.
Sec. 412. Funding uniformed services health benefits for all retirees.
Sec. 413. Effective date.

                  Subtitle C--Limit on the Public Debt

Sec. 421. Limit on public debt.

                        TITLE V--PAYGO EXTENSION

Sec. 501. PAYGO extension.

SEC. 2. EFFECTIVE DATE.

  Except as otherwise specifically provided, this Act and the 
amendments made by this Act shall become effective on the date 
of enactment of this Act and shall apply with respect to fiscal 
years beginning after September 30, 2005.

SEC. 3. PROTECTION OF SOCIAL SECURITY AND MEDICARE BENEFITS.

  Notwithstanding any other provision in law, nothing in titles 
I through V shall be construed to reduce benefits entitled to 
Americans through social security and medicare.

                      TITLE I--A SIMPLIFIED BUDGET

               Subtitle A--Rainy Day Fund for Emergencies

SEC. 101. PURPOSE.

  The purposes of this subtitle are to--
          (1) develop budgetary and fiscal procedures for 
        emergencies;
          (2) subject spending for emergencies to budgetary 
        procedures and controls; and
          (3) establish criteria for determining compliance 
        with emergency requirements.

SEC. 102. REPEAL OF ADJUSTMENTS FOR EMERGENCIES.

  (a) Elimination of Emergency Designation.--Sections 252(e) 
and 252(d)(4)(B) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 are repealed.
  (b) Elimination of Adjustments.--Section 314 of the 
Congressional Budget Act of 1974 is repealed.
  (c) Conforming Amendment.--Clause 2 of rule XXI of the Rules 
of the House of Representatives is amended by repealing 
paragraph (e) and by redesignating paragraph (f) as paragraph 
(e).

SEC. 103. OMB EMERGENCY CRITERIA.

  (a) Definition of Emergency.--Section 3 of the Congressional 
Budget and Impoundment Control Act of 1974 is amended by adding 
at the end the following new paragraph:
          ``(11)(A) The term `emergency' means a situation 
        that--
                  ``(i) requires new budget authority and 
                outlays (or new budget authority and the 
                outlays flowing therefrom) for the prevention 
                or mitigation of, or response to, loss of life 
                or property, or a threat to national security; 
                and
                  ``(ii) is unanticipated.
          ``(B) As used in subparagraph (A), the term 
        `unanticipated' means that the situation is--
                  ``(i) sudden, which means quickly coming into 
                being or not building up over time;
                  ``(ii) urgent, which means a pressing and 
                compelling need requiring immediate action;
                  ``(iii) unforeseen, which means not predicted 
                or anticipated as an emerging need; and
                  ``(iv) temporary, which means not of a 
                permanent duration.''.
  (b) Conforming Amendment.--Section 250(c) of the Balanced 
Budget and Emergency Deficit Control Act of 1985 is amended by 
adding at the end the following new paragraph:
          ``(20) The term `emergency' has the meaning given to 
        such term in section 3 of the Congressional Budget and 
        Impoundment Control Act of 1974.''.

SEC. 104. DEVELOPMENT OF GUIDELINES FOR APPLICATION OF EMERGENCY 
                    DEFINITION.

  Not later than 5 months after the date of enactment of this 
Act, the chairmen of the Committees on the Budget (in 
consultation with the President) shall, after consulting with 
the chairmen of the Committees on Appropriations and applicable 
authorizing committees of their respective Houses and the 
Directors of the Congressional Budget Office and the Office of 
Management and Budget, jointly publish in the Congressional 
Record guidelines for application of the definition of 
emergency set forth in section 3(11) of the Congressional 
Budget and Impoundment Control Act of 1974.

SEC. 105. RESERVE FUND FOR EMERGENCIES IN PRESIDENT'S BUDGET.

  Section 1105(f) of title 31, United States Code is amended by 
adding at the end the following new sentences: ``Such budget 
submission shall also comply with the requirements of section 
316(b) of the Congressional Budget Act of 1974 and, in the case 
of any budget authority requested for an emergency, such 
submission shall include a detailed justification of why such 
emergency is an emergency within the meaning of section 3(11) 
of the Congressional Budget Act of 1974.''.

SEC. 106. ADJUSTMENTS AND RESERVE FUND FOR EMERGENCIES IN CONCURRENT 
                    BUDGET RESOLUTIONS.

  (a) Emergencies.--Title III of the Congressional Budget Act 
of 1974 is amended by adding at the end the following new 
section:

                             ``EMERGENCIES

  ``Sec. 316. (a) Adjustments.--
          ``(1) In general.--After the reporting of a bill or 
        joint resolution or the submission of a conference 
        report thereon that provides budget authority for any 
        emergency as identified pursuant to subsection (d) that 
        is not covered by subsection (c)--
                  ``(A) the chairman of the Committee on the 
                Budget of the House of Representatives or the 
                Senate shall determine and certify, pursuant to 
                the guidelines referred to in section 104 of 
                the Deficit Control Act of 2004, the portion 
                (if any) of the amount so specified that is for 
                an emergency within the meaning of section 
                3(11); and
                  ``(B) such chairman shall make the adjustment 
                set forth in paragraph (2) for the amount of 
                new budget authority (or outlays) in that 
                measure and the outlays flowing from that 
                budget authority.
          ``(2) Matters to be adjusted.--The adjustments 
        referred to in paragraph (1) are to be made to the 
        allocations made pursuant to the appropriate concurrent 
        resolution on the budget pursuant to section 302(a) and 
        shall be in an amount not to exceed the amount reserved 
        for emergencies pursuant to the requirements of 
        subsection (b).
  ``(b) Reserve Fund for Emergencies.--
          ``(1) Amounts.--The amount set forth in the reserve 
        fund for emergencies (other than those covered by 
        subsection (c)) for budget authority and outlays for a 
        fiscal year pursuant to section 301(a)(4) shall equal--
                  ``(A) the average of the enacted levels of 
                budget authority for emergencies (other than 
                those covered by subsection (c)) in the 5 
                fiscal years preceding the current year; and
                  ``(B) the average of the levels of outlays 
                for emergencies in the 5 fiscal years preceding 
                the current year flowing from the budget 
                authority referred to in subparagraph (A), but 
                only in the fiscal year for which such budget 
                authority first becomes available for 
                obligation.
          ``(2) Average levels.--For purposes of paragraph (1), 
        the amount used for a fiscal year to calculate the 
        average of the enacted levels when one or more of such 
        5 preceding fiscal years is any of fiscal years 2000 
        through 2004 is as follows: the amount of enacted 
        levels of budget authority and the amount of new 
        outlays flowing therefrom for emergencies, but only in 
        the fiscal year for which such budget authority first 
        becomes available for obligation for each of such 5 
        fiscal years, which shall be determined by the 
        Committees on the Budget of the House of 
        Representatives and the Senate after receipt of a 
        report on such matter transmitted to such committees by 
        the Director of the Congressional Budget Office 6 
        months after the date of enactment of this section and 
        thereafter in February of each calendar year.
  ``(c) Treatment of Emergencies To Fund Certain Military 
Operations and Other Extraordinary and Critical Needs.--
Whenever the Committee on Appropriations reports any bill or 
joint resolution that provides budget authority for any 
emergency that is a threat to national security and the funding 
of which carries out a military operation authorized by a 
declaration of war or a joint resolution authorizing the use of 
military force, or for any other emergency designated by the 
President and the Congress as relating to extraordinary and 
critical needs, and the report accompanying that bill or joint 
resolution, pursuant to subsection (d), identifies any 
provision that increases outlays or provides budget authority 
(and the outlays flowing therefrom) for such emergency, the 
enactment of which would cause the total amount of budget 
authority or outlays provided for emergencies for the budget 
year in the concurrent resolution on the budget (pursuant to 
section 301(a)(4)) to be exceeded, such bill or joint 
resolution may be considered in the House or the Senate, as the 
case may be.
  ``(d) Committee Notification of Emergency Legislation.--
Whenever the Committee on Appropriations or any other committee 
of either House (including a committee of conference) reports 
any bill or joint resolution that provides budget authority for 
any emergency, the report accompanying that bill or joint 
resolution (or the joint explanatory statement of managers in 
the case of a conference report on any such bill or joint 
resolution) shall identify all provisions that provide budget 
authority and the outlays flowing therefrom for such emergency 
and include a statement of the reasons why such budget 
authority meets the definition of an emergency pursuant to the 
guidelines referred to in section 104 of the Deficit Control 
Act of 2004.''.
  (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 315 the following new item:

``Sec. 316. Emergencies.''.

SEC. 107. UP-TO-DATE TABULATIONS.

  Section 308(b)(2) of the Congressional Budget Act of 1974 is 
amended by striking ``and'' at the end of subparagraph (B), by 
striking the period at the end of subparagraph (C) and 
inserting ``; and'', and by adding at the end the following new 
subparagraph:
                  ``(D) shall include an up-to-date tabulation 
                of amounts remaining in the reserve fund for 
                emergencies.''.

SEC. 108. PROHIBITION ON AMENDMENTS TO EMERGENCY RESERVE FUND.

  (a) Point of Order.--Section 305 of the Congressional Budget 
Act of 1974 is amended by adding at the end the following new 
subsection:
  ``(e) Point of Order Regarding Emergency Reserve Fund.--It 
shall not be in order in the House of Representatives or in the 
Senate to consider an amendment to a concurrent resolution on 
the budget which changes the amount of budget authority and 
outlays set forth in section 301(a)(4) for emergency reserve 
fund.''.
  (b) Technical Amendment.--(1) Section 904(c)(1) of the 
Congressional Budget Act of 1974 is amended by inserting 
``305(e),'' after ``305(c)(4),''.
  (2) Section 904(d)(2) of the Congressional Budget Act of 1974 
is amended by inserting ``305(e),'' after ``305(c)(4),''.

SEC. 109. CONTENT OF BUDGET RESOLUTIONS.

  Section 301(a)(4) of the Congressional Budget Act of 1974 is 
amended by inserting before the semicolon at the end the 
following: ``, and for emergencies (for the reserve fund in 
section 316(b) and for military operations in section 
316(c))''.

                        Subtitle B--The Baseline

SEC. 111. ELIMINATION OF INFLATION ADJUSTMENT.

  Section 257(c) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended--
          (1) in paragraph (1) by striking ``for inflation as 
        specified in paragraph (5),''; and
          (2) by striking paragraph (5) and redesignating 
        paragraph (6) as paragraph (5).

SEC. 112. THE PRESIDENT'S BUDGET.

  (a) Paragraph (5) of section 1105(a) of title 31, United 
States Code, is amended to read as follows:
          ``(5) except as provided in subsection (b) of this 
        section, estimated expenditures and appropriations for 
        the current year and estimated expenditures and 
        proposed appropriations the President decides are 
        necessary to support the Government in the fiscal year 
        for which the budget is submitted and the 4 fiscal 
        years following that year, and, except for detailed 
        budget estimates, the percentage change from the 
        current year to the fiscal year for which the budget is 
        submitted for estimated expenditures and for 
        appropriations.''.
  (b) Section 1105(a)(6) of title 31, United States Code, is 
amended to read as follows:
          ``(6) estimated receipts of the Government in the 
        current year and the fiscal year for which the budget 
        is submitted and the 4 fiscal years after that year 
        under--
                  ``(A) laws in effect when the budget is 
                submitted; and
                  ``(B) proposals in the budget to increase 
                revenues,
        and the percentage change (in the case of each category 
        referred to in subparagraphs (A) and (B)) between the 
        current year and the fiscal year for which the budget 
        is submitted and between the current year and each of 
        the 9 fiscal years after the fiscal year for which the 
        budget is submitted.''.
  (c) Section 1105(a)(12) of title 31, United States Code, is 
amended to read as follows:
          ``(12) for each proposal in the budget for 
        legislation that would establish or expand a Government 
        activity or function, a table showing--
                  ``(A) the amount proposed in the budget for 
                appropriation and for expenditure because of 
                the proposal in the fiscal year for which the 
                budget is submitted;
                  ``(B) the estimated appropriation required 
                because of the proposal for each of the 4 
                fiscal years after that year that the proposal 
                will be in effect; and
                  ``(C) the estimated amount for the same 
                activity or function, if any, in the current 
                fiscal year,
        and, except for detailed budget estimates, the 
        percentage change (in the case of each category 
        referred to in subparagraphs (A), (B), and (C)) between 
        the current year and the fiscal year for which the 
        budget is submitted.''.
  (d) Section 1105(a)(18) of title 31, United States Code, is 
amended by inserting ``new budget authority and'' before 
``budget outlays''.
  (e) Section 1105(a) of title 31, United States Code, is 
amended by adding at the end the following new paragraphs:
          ``(35) a comparison of levels of estimated 
        expenditures and proposed appropriations for each 
        function and subfunction in the current fiscal year and 
        the fiscal year for which the budget is submitted, 
        along with the proposed increase or decrease of 
        spending in percentage terms for each function and 
        subfunction.
          ``(36) a table on sources of growth in total direct 
        spending under current law and as proposed in this 
        budget submission for the budget year and the ensuing 9 
        fiscal years, which shall include changes in outlays 
        attributable to the following: cost-of-living 
        adjustments; changes in the number of program 
        recipients; increases in medical care prices, 
        utilization and intensity of medical care; and residual 
        factors.''.
  (f) Section 1109(a) of title 31, United States Code, is 
amended by inserting after the first sentence the following new 
sentence: ``For discretionary spending, these estimates shall 
assume the levels set forth in the discretionary spending 
limits under section 251(b) of the Balanced Budget and 
Emergency Deficit Control Act of 1985, as adjusted, for the 
appropriate fiscal years (and if no such limits are in effect, 
these estimates shall assume the adjusted levels for the most 
recent fiscal year for which such levels were in effect).''.

SEC. 113. THE CONGRESSIONAL BUDGET.

  Section 301(e) of the Congressional Budget Act of 1974 (as 
amended by section 103) is further amended--
          (1) in paragraph (1), by inserting at the end the 
        following: ``The basis of deliberations in developing 
        such concurrent resolution shall be the estimated 
        budgetary levels for the preceding fiscal year. Any 
        budgetary levels pending before the committee and the 
        text of the concurrent resolution shall be accompanied 
        by a document comparing such levels or such text to the 
        estimated levels of the prior fiscal year. Any 
        amendment offered in the committee that changes a 
        budgetary level and is based upon a specific policy 
        assumption for a program, project, or activity shall be 
        accompanied by a document indicating the estimated 
        amount for such program, project, or activity in the 
        current year.''; and
          (2) in paragraph (2), by striking ``and'' at the end 
        of subparagraph (H) (as redesignated), by striking the 
        period and inserting ``; and'' at the end of 
        subparagraph (I) (as redesignated), and by adding at 
        the end the following new subparagraph:
                  ``(J) a comparison of levels for the current 
                fiscal year with proposed spending and revenue 
                levels for the subsequent fiscal years along 
                with the proposed increase or decrease of 
                spending in percentage terms for each 
                function.''.

SEC. 114. CONGRESSIONAL BUDGET OFFICE REPORTS TO COMMITTEES.

  (a) The first sentence of section 202(e)(1) of the 
Congressional Budget Act of 1974 is amended by inserting 
``compared to comparable levels for the current year'' before 
the comma at the end of subparagraph (A) and before the comma 
at the end of subparagraph (B).
  (b) Section 202(e)(1) of the Congressional Budget Act of 1974 
is amended by inserting after the first sentence the following 
new sentence: ``Such report shall also include a table on 
sources of spending growth in total direct spending for the 
budget year and the ensuing 4 fiscal years, which shall include 
changes in outlays attributable to the following: cost-of-
living adjustments; changes in the number of program 
recipients; increases in medical care prices, utilization and 
intensity of medical care; and residual factors.''.
  (c) Section 308(a)(1)(B) of the Congressional Budget Act of 
1974 is amended by inserting ``and shall include a comparison 
of those levels to comparable levels for the current fiscal 
year'' before ``if timely submitted''.
  (d) Section 202(e) of the Congressional Budget Act of 1974 is 
amended by adding at the end the following new paragraph:
          ``(4) On or before February 15 of each year, the 
        Director shall submit to the Committees on the Budget 
        of the House of Representatives and the Senate, a 
        report for the fiscal year ending on September 30 of 
        the preceding year, with respect to entitlement 
        spending, including (A) a comparison of actual spending 
        for entitlements, on an account by account basis, with 
        projected spending for such entitlements assumed in the 
        concurrent resolution of the budget for that fiscal 
        year and (B) an identification of those entitlements 
        for which the actual spending exceeded the projected 
        spending.''.

SEC. 115. TREATMENT OF EMERGENCIES.

  Section 257(c) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 (as amended by section 111) is further 
amended by adding at the end the following new paragraph:
          ``(6) Emergencies.--Budgetary resources for 
        emergencies shall be at the level provided in the 
        reserve fund for emergencies for that fiscal year 
        pursuant to section 301(a)(4) of the Congressional 
        Budget Act of 1974.''.

           TITLE II--IMPLEMENTING FEDERAL SPENDING DISCIPLINE

   Subtitle A--Spending Safeguards on the Growth of Entitlements and 
                              Mandatories

SEC. 201. SPENDING CAPS ON GROWTH OF ENTITLEMENTS AND MANDATORIES.

  (a) Control of Entitlements and Mandatories.--The Balanced 
Budget and Emergency Deficit Control Act of 1985 is amended by 
adding after section 252 the following new section:

``SEC. 252A. ENFORCING CONTROLS ON DIRECT SPENDING.

  ``(a) Cap on Growth of Entitlements.--Effective for fiscal 
year 2006 and for each ensuing fiscal year, the total level of 
direct spending for all direct spending programs, projects, and 
activities (excluding social security, medicare, and net 
interest spending) for any such fiscal year shall not exceed 
the total level of spending for all such programs, projects, 
and activities for the previous fiscal year after the direct 
spending for each such program, project, or activity is 
increased by--
          ``(1) the higher of the change in the Consumer Price 
        Index for All Urban Consumers or the inflator (if any) 
        applicable to that program, project, or activity; and
          ``(2) the growth in eligible population for such 
        program, project, or activity.
  ``(b) Sequestration.--Within 15 days after Congress adjourns 
to end a session (other than of the second session of the One 
Hundred Eighth Congress), and on the same day as a 
sequestration (if any) under section 251, there shall be a 
sequestration to reduce the amount of direct spending for the 
fiscal year beginning in the year the Congress adjourns by any 
amount necessary to reduce such spending to the level set forth 
in subsection (a) unless that amount is less than $250,000,000.
  ``(c) Uniform Reductions; Limitations.--The amount required 
to be sequestered for the fiscal year under subsection (a) 
shall be obtained from nonexempt direct spending accounts by 
actions taken in the following order:
          ``(1) First.--The reductions in the programs 
        specified in section 256(a) (National Wool Act and 
        special milk), section 256(b) (guaranteed student 
        loans), and section 256(c) (foster care and adoption 
        assistance) shall be made.
          ``(2) Second.--Any additional reductions that may be 
        required shall be achieved by reducing each remaining 
        nonexempt direct spending account by the uniform 
        percentage necessary to achieve those additional 
        reductions, except that--
                  ``(A) the low-income programs specified in 
                section 256(d) shall not be reduced by more 
                than 2 percent; and
                  ``(B) the retirement and veterans benefits 
                specified in sections 256(f), (g), and (h) 
                shall not be reduced by more than 2 percent in 
                the manner specified in that section.
        The limitations set forth in subparagraphs (A) and (B) 
        shall be applied iteratively, and after each iteration 
        the uniform percentage applicable to all other programs 
        under this paragraph shall be increased (if necessary) 
        to a level sufficient to achieve the reductions 
        required by this paragraph.''.
  (b) Table of Contents Amendment.--The table of contents set 
forth in 250(a) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended by adding after the item 
relating to section 252 the following new item:

``Sec. 252A. Enforcing controls on direct spending.''.

SEC. 202. EXEMPT PROGRAMS AND ACTIVITIES.

  Section 255 of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended to read as follows:

``SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES.

  ``(a) Social Security Benefits; Tier I Railroad Retirement 
Benefits; and Medicare Benefits.--(1) Benefits payable under 
the old-age, survivors, and disability insurance program 
established under title II of the Social Security Act, and 
benefits payable under section 3(a), 3(f)(3), 4(a), or 4(f) of 
the Railroad Retirement Act of 1974, shall be exempt from 
reduction under any order issued under this part.
  ``(2) Payments made under title XVIII (relating to medicare 
of the Social Security Act shall be exempt from reduction under 
any order issued under this part.
  ``(b) Descriptions and Lists.--The following budget accounts 
or activities shall be exempt from sequestration:
          ``(1) net interest;
          ``(2) all payments to trust funds from excise taxes 
        or other receipts or collections properly creditable to 
        those trust funds;
          ``(3) all payments from one Federal direct spending 
        budget account to another Federal budget account; and 
        all intragovernmental funds including those from which 
        funding is derived primarily from other Government 
        accounts, except to the extent that such funds are 
        augmented by direct appropriations for the fiscal year 
        for which the order is in effect;
          ``(4) activities resulting from private donations, 
        bequests, or voluntary contributions to the Government;
          ``(5) payments from any revolving fund or trust-
        revolving fund (or similar activity) that provides 
        deposit insurance or other Government insurance, 
        Government guarantees, or any other form of contingent 
        liability, to the extent those payments result from 
        contractual or other legally binding commitments of the 
        Government at the time of any sequestration;
          ``(6) credit liquidating and financing accounts;
          ``(7) the following accounts, which largely fulfill 
        requirements of the Constitution or otherwise make 
        payments to which the Government is committed:
                  ``Administration of Territories, Northern 
                Mariana Islands Covenant grants (14-0412-0-1-
                806);
                  ``Armed Forces Retirement Home Trust Fund, 
                payment of claims (84-8930-0-7-705);
                  ``Bureau of Indian Affairs, miscellaneous 
                payments to Indians (14-2303-0-1-452);
                  ``Bureau of Indian Affairs, miscellaneous 
                trust funds, tribal trust funds (14-9973-0-7-
                999);
                  ``Claims, defense;
                  ``Claims, judgments, and relief act (20-1895-
                0-1-806);
                  ``Compact of Free Association, economic 
                assistance pursuant to Public Law 99-658 (14-
                0415-0-1-806);
                  ``Compensation of the President (11-0001-0-1-
                802);
                  ``Customs Service, miscellaneous permanent 
                appropriations (20-9992-0-2-852);
                  ``Eastern Indian land claims settlement fund 
                (14-2202-0-1-806);
                  ``Farm Credit Administration, Limitation on 
                Administration Expenses (78-4131-0-3-351);
                  ``Farm Credit System Financial Assistance 
                Corporation, interest payments (20-1850-0-1-
                351);
                  ``Internal Revenue collections of Puerto Rico 
                (20-5737-0-2-852);
                  ``Panama Canal Commission, operating expenses 
                and capital outlay (95-5190-0-2-403);
                  ``Payments of Vietnam and USS Pueblo 
                prisoner-of-war claims (15-0104-0-1-153);
                  ``Payments to copyright owners (03-5175-0-2-
                376);
                  ``Payments to health care trust funds (75-
                0580-0-1-571);
                  ``Payments to social security trust funds 
                (75-0404-0-1-651);
                  ``Payments to the United States territories, 
                fiscal assistance (14-0418-0-1-801);
                  ``Payments to widows and heirs of deceased 
                Members of Congress (00-0215-0-1-801);
                  ``Pension Benefit Guaranty Corporation Fund 
                (16-4204-0-3-601);
                  ``Salaries of Article III judges;
                  ``Washington Metropolitan Area Transit 
                Authority, interest payments (46-0300-0-1-401);
          ``(8) the following noncredit special, revolving, or 
        trust-revolving funds:
                  ``Coinage profit fund (20-5811-0-2-803);
                  ``Comptroller of the Currency;
                  ``Director of the Office of Thrift 
                Supervision;
                  ``Exchange Stabilization Fund (20-4444-0-3-
                155);
                  ``Federal Housing Finance Board;
                  ``Foreign Military Sales trust fund (11-
                82232-0-7-155);
                  ``National Credit Union Administration, 
                central liquidating facility (25-4470-0-3-373);
                  ``National Credit Union Administration, 
                credit union insurance fund (25-4468-0-3-373);
                  ``National Credit Union Administration 
                operating fund (25-4056-0-3-373); and
                  ``Resolution Trust Corporation Revolving Fund 
                (22-4055-0-3-373);
          ``(9) Thrift Savings Fund;
          ``(10) appropriations for the District of Columbia to 
        the extent they are appropriations of locally raised 
        funds;
          ``(11)(A) any amount paid as regular unemployment 
        compensation by a State from its account in the 
        Unemployment Trust Fund (established by section 904(a) 
        of the Social Security Act);
          ``(B) any advance made to a State from the Federal 
        unemployment account (established by section 904(g) of 
        such Act) under title XII of such Act and any advance 
        appropriated to the Federal unemployment account 
        pursuant to section 1203 of such Act; and
          ``(C) any payment made from the Federal Employees 
        Compensation Account (as established under section 909 
        of such Act) for the purpose of carrying out chapter 85 
        of title 5, United States Code, and funds appropriated 
        or transferred to or otherwise deposited in such 
        Account;
          ``(12)(A) FDIC, Bank Insurance Fund (51-4064-0-3-
        373);
          ``(B) FDIC, FSLIC Resolution Fund (51-4065-0-3-373); 
        and
          ``(C) FDIC, Savings Association Insurance Fund (51-
        4066-0-3-373); and
          ``(13) Food Stamp Programs (12-3505-0-1-605).
  ``(c) Federal Retirement and Disability Accounts.--The 
following Federal retirement and disability accounts shall be 
exempt from reduction under any order issued under this part:
          ``Civil service retirement and disability fund (24-
        8135-0-7-602).
          ``Black Lung Disability Trust Fund (20-8144-0-7-601).
          ``Foreign Service Retirement and Disability Fund (19-
        8186-0-7-602).
          ``District of Columbia Judicial Retirement and 
        Survivors Annuity Fund (20-8212-0-7-602).
          ``Judicial Survivors' Annuities Fund (10-8110-0-7-
        602).
          ``Payments to the Railroad Retirement Accounts (60-
        0113-0-1-601).
          ``Tax Court Judges Survivors Annuity Fund (23-8115-0-
        7-602).
          ``Employees Life Insurance Fund (24-8424-0-8-602).
  ``(d) Federal Administrative Expenses.--
          ``(1) Notwithstanding any provision of law other than 
        paragraph (3), administrative expenses incurred by the 
        departments and agencies, including independent 
        agencies, of the Government in connection with any 
        program, project, activity, or account shall be subject 
        to reduction pursuant to any sequestration order, 
        without regard to any exemption, exception, limitation, 
        or special rule otherwise applicable with respect to 
        such program, project, activity, or account, and 
        regardless of whether the program, project, activity, 
        or account is self-supporting and does not receive 
        appropriations.
          ``(2) Payments made by the Government to reimburse or 
        match administrative costs incurred by a State or 
        political subdivision under or in connection with any 
        program, project, activity, or account shall not be 
        considered administrative expenses of the Government 
        for purposes of this section, and shall be subject to 
        sequestration to the extent (and only to the extent) 
        that other payments made by the Government under or in 
        connection with that program, project, activity, or 
        account are subject to that reduction or sequestration; 
        except that Federal payments made to a State as 
        reimbursement of administrative costs incurred by that 
        State under or in connection with the unemployment 
        compensation programs specified in subsection (a)(11) 
        shall be subject to reduction or sequestration under 
        this part notwithstanding the exemption otherwise 
        granted to such programs under that subsection.
          ``(3) Notwithstanding any other provision of law, the 
        administrative expenses of the following programs shall 
        be exempt from sequestration:
                  ``(A) Comptroller of the Currency.
                  ``(B) Federal Deposit Insurance Corporation.
                  ``(C) Office of Thrift Supervision.
                  ``(D) National Credit Union Administration.
                  ``(E) National Credit Union Administration, 
                central liquidity facility.
                  ``(F) Federal Retirement Thrift Investment 
                Board.
                  ``(G) Resolution Funding Corporation.
                  ``(H) Resolution Trust Corporation.
                  ``(I) Board of Governors of the Federal 
                Reserve System.
  ``(e) Veterans' Programs.--The following programs shall be 
exempt from reduction under any order issued under this part:
          ``General Post Funds (36-8180-0-7-705).
          ``Veterans Insurance and Indemnities (36-0120-0-1-
        701).
          ``Service-Disabled Veterans Insurance Funds (36-4012-
        0-701).
          ``Veterans Reopened Insurance Fund (36-4010-0-3-701).
          ``Servicemembers' Group Life Insurance Fund (36-4009-
        0-3-701).
          ``Post-Vietnam Era Veterans Education Account (36-
        8133-0-7-702).
          ``National Service Life Insurance Fund (36-8132-0-7-
        701).
          ``United States Government Life Insurance Fund (36-
        8150-0-7-701).
          ``Veterans Special Life Insurance Fund (36-8455-0-8-
        701).
  ``(f) Optional Exemption of Defense and Homeland Security 
Accounts.--
          ``(1) In general.--The President may, with respect to 
        any defense or homeland security account, exempt that 
        account from sequestration or provide for a lower 
        uniform percentage reduction than would otherwise 
        apply.
          ``(2) Limitation.--The President may not use the 
        authority provided by paragraph (1) unless the 
        President notifies the Congress of the manner in which 
        such authority will be exercised on or before the date 
        specified in section 254(a) for the budget year.''.

SEC. 203. EXCEPTIONS, LIMITATIONS, AND SPECIAL RULES.

  (a) In General.--Section 256 of the Balanced Budget and 
Emergency Deficit Control Act of 1985 is amended to read as 
follows:

``SEC. 256. EXCEPTIONS, LIMITATIONS, AND SPECIAL RULES.

  ``(a) National Wool Act and the Special Milk Program.--
Automatic spending increases are increases in outlays due to 
changes in indexes in the following programs:
          ``(1) National Wool Act; and
          ``(2) Special milk program.
In those programs all amounts other than the automatic spending 
increases shall be exempt from reduction under any 
sequestration order.
  ``(b) The Guaranteed Student Loan Program.--(1) Any 
reductions which are required to be achieved from the student 
loan programs operated pursuant to part B of title IV of the 
Higher Education Act of 1965 under any sequestration order 
shall be achieved only from loans described in paragraphs (2) 
and (3) by the application of the measures described in such 
paragraphs.
  ``(2) For any loan made during the period beginning on the 
date that a sequestration order takes effect with respect to a 
fiscal year, the rate used in computing the special allowance 
payment pursuant to section 438(b)(2)(A)(iii) of such Act for 
each of the first four special allowance payments for such loan 
shall be adjusted by reducing such rate by the lesser of--
          ``(A) 0.40 percent, or
          ``(B) the percentage by which the rate specified in 
        such section exceeds 3 percent.
  ``(3) For any loan made during the period beginning on the 
date that a sequestration order takes effect with respect to a 
fiscal year, the origination fee which is authorized to be 
collected pursuant to section 438(c)(2) of such Act shall be 
increased by 0.50 percent.
  ``(c) Foster Care and Adoption Assistance Programs.--Any 
sequestration order shall make the reduction otherwise required 
under the foster care and adoption assistance programs 
(established by part E of title IV of the Social Security Act) 
only with respect to payments and expenditures made by States 
in which increases in foster care maintenance payment rates or 
adoption assistance payment rates (or both) are to take effect 
during the fiscal year involved, and only to the extent that 
the required reduction can be accomplished by applying a 
uniform percentage reduction to the Federal matching payments 
that each such State would otherwise receive under section 474 
of that Act (for such fiscal year) for that portion of the 
State's payments attributable to the increases taking effect 
during that year. No State's matching payments from the 
Government for foster care maintenance payments or for adoption 
assistance maintenance payments may be reduced by a percentage 
exceeding the applicable domestic sequestration percentage. No 
State may, after the date of the enactment of this Act, make 
any change in the timetable for making payments under a State 
plan approved under part E of title IV of the Social Security 
Act which has the effect of changing the fiscal year in which 
expenditures under such part are made.
  ``(d) Low-Income Programs.--(1) Benefit payments or payments 
to States or other entities for the programs listed in 
paragraph (2) shall not be reduced by more than 2 percent under 
any sequestration order. When reduced under an end-of-session 
sequestration order, those benefit reductions shall occur 
starting with the payment made at the start of January. When 
reduced under a within-session sequestration order, those 
benefit reductions shall occur starting with the next periodic 
payment.
  ``(2) The programs referred to in paragraph (1) are the 
following:
          ``Child Nutrition (12-3539-0-1-605).
          ``Grants to States for Medicaid (75-0512-0-1-551).
          ``State Children's Health Insurance Fund (75-0515-0-
        1-551).
          ``Supplemental Security Income Program (75-0406-0-1-
        609).
          ``Temporary Assistance for Needy Families (75-1552-0-
        1-609).
          ``Special supplemental nutrition program for women, 
        infants, and children (WIC) (12-3510-0-1-605).
  ``(e) Veterans' Medical Care.--The maximum permissible 
reduction in budget authority for Veterans' medical care (36-
0160-0-1-703) for any fiscal year, pursuant to an order issued 
under section 254, shall be 2 percent.
  ``(f) Federal Retirement Programs.--
          ``(1) For each of the programs listed in paragraph 
        (2) and except as provided in paragraph (3), monthly 
        (or other periodic) benefit payments shall be reduced 
        by the uniform percentage applicable to direct spending 
        sequestrations for such programs, which shall in no 
        case exceed 2 percent under any sequestration order. 
        When reduced under an end-of-session sequestration 
        order, those benefit reductions shall occur starting 
        with the payment made at the start of January or 7 
        weeks after the order is issued, whichever is later. 
        When reduced under a within-session sequestration 
        order, those benefit reductions shall occur starting 
        with the next periodic payment.
          ``(2) The programs subject to paragraph (1) are:
                  ``Central Intelligence Agency Retirement and 
                Disability Fund (56-3400-0-1-054).
                  ``Comptrollers General Retirement System (05-
                0107-0-1-801)
                  ``Judicial Officers' Retirement Fund (10-
                8122-0-7-602).
                  ``Claims Judges' Retirement Fund (10-8124-0-
                7-602).
                  ``Pensions for former Presidents (47-0105-0-
                1-802).
                  ``National Oceanic and Atmospheric 
                Administration Retirement (13-1450-0-1-306).
                  ``Railroad Industry Pension Fund (60-8011-0-
                7-601).
                  ``Retired pay, Coast Guard (70-0602-0-1-403).
                  ``Retirement pay and medical benefits for 
                commissioned officers, Public Health Service 
                (75-0379-0-1-551).
                  ``Payments to Civil Service Retirement and 
                Disability Fund (24-0200-0-1-805).
                  ``Payments to the Foreign Service Retirement 
                and Disability Fund (72-1036-0-1-153)
                  ``Payments to Judiciary Trust Funds (10-0941-
                0-1-752).
  ``(g) Veterans Programs.--To achieve the total percentage 
reduction required by any order issued under this part, the 
percentage reduction that shall apply to payments under the 
following programs shall in no event exceed 2 percent:
          ``Canteen Service Revolving Fund (36-4014-0-3-705).
          ``Medical Center Research Organizations (36-4026-0-3-
        703).
          ``Disability Compensation Benefits (36-0102-0-1-701).
          ``Education Benefits (36-0137-0-1-702).
          ``Vocational Rehabilitation and Employment Benefits 
        (36-0135-0-1-702).
          ``Pensions Benefits (36-0154-0-1-701).
          ``Burial Benefits (36-0139-0-1-701).
          ``Guaranteed Transitional Housing Loans For Homeless 
        Veterans Program Account (36-1119-0-1-704).
          ``Housing Direct Loan Financing Account (36-4127-0-1-
        704).
          ``Housing Guaranteed Loan Financing Account (36-4129-
        0-3-704).
          ``Vocational Rehabilitation and Education Direct Loan 
        Financing Account (36-4259-0-3-702).
  ``(h) Military Retirement.--To achieve the total percentage 
reduction in military retirement required by any order issued 
under this part, the percentage reduction that shall apply to 
payments under the military retirement fund (97-8097-0-7-602) 
and payments to the military retirement fund (97-0040-0-1-054) 
shall in no event exceed 2 percent.
  ``(i) Federal Pay.--
          ``(1) In general.--For purposes of any order issued 
        under section 254, new budget authority to pay Federal 
        personnel shall be reduced by the applicable uniform 
        percentage, but no sequestration order may reduce or 
        have the effect of reducing the rate of pay to which 
        any individual is entitled under any statutory pay 
        system (as increased by any amount payable under 
        section 5304 of title 5, United States Code, or section 
        302 of the Federal Employees Pay Comparability Act of 
        1990) or the rate of any element of military pay to 
        which any individual is entitled under title 37, United 
        States Code, or any increase in rates of pay which is 
        scheduled to take effect under section 5303 of title 5, 
        United States Code, section 1009 of title 37, United 
        States Code, or any other provision of law.
          ``(2) Definitions.--For purposes of this subsection:
                  ``(A) The term `statutory pay system' shall 
                have the meaning given that term in section 
                5302(1) of title 5, United States Code.
                  ``(B) The term `elements of military pay' 
                means--
                          ``(i) the elements of compensation of 
                        members of the uniformed services 
                        specified in section 1009 of title 37, 
                        United States Code,
                          ``(ii) allowances provided members of 
                        the uniformed services under sections 
                        403a and 405 of such title, and
                          ``(iii) cadet pay and midshipman pay 
                        under section 203(c) of such title.
                  ``(C) The term `uniformed services' shall 
                have the meaning given that term in section 
                101(3) of title 37, United States Code.
  ``(j) Child Support Enforcement Program.--Any sequestration 
order shall accomplish the full amount of any required 
reduction in expenditures under sections 455 and 458 of the 
Social Security Act by reducing the Federal matching rate for 
State administrative costs under such program, as specified 
(for the fiscal year involved) in section 455(a) of such Act, 
to the extent necessary to reduce such expenditures by that 
amount.
  ``(k) Extended Unemployment Compensation.--(1) A State may 
reduce each weekly benefit payment made under the Federal-State 
Extended Unemployment Compensation Act of 1970 for any week of 
unemployment occurring during any period with respect to which 
payments are reduced under an order issued under this title by 
a percentage not to exceed the percentage by which the Federal 
payment to the State under section 204 of such Act is to be 
reduced for such week as a result of such order.
  ``(2) A reduction by a State in accordance with subparagraph 
(A) shall not be considered as a failure to fulfill the 
requirements of section 3304(a)(11) of the Internal Revenue 
Code of 1954.
  ``(l) Commodity Credit Corporation.--
          ``(1) Powers and authorities of the commodity credit 
        corporation.--This title shall not restrict the 
        Commodity Credit Corporation in the discharge of its 
        authority and responsibility as a corporation to buy 
        and sell commodities in world trade, to use the 
        proceeds as a revolving fund to meet other obligations 
        and otherwise operate as a corporation, the purpose for 
        which it was created.
          ``(2) Reduction in payments made under contracts.--
        (A) Payments and loan eligibility under any contract 
        entered into with a person by the Commodity Credit 
        Corporation prior to the time any sequestration order 
        has been issued shall not be reduced by an order 
        subsequently issued. Subject to subparagraph (B), after 
        any sequestration order is issued for a fiscal year, 
        any cash payments made by the Commodity Credit 
        Corporation--
                  ``(i) under the terms of any one-year 
                contract entered into in or after such fiscal 
                year and after the issuance of the order; and
                  ``(ii) out of an entitlement account,
        to any person (including any producer, lender, or 
        guarantee entity) shall be subject to reduction under 
        the order.
          ``(B) Each contract entered into with producers or 
        producer cooperatives with respect to a particular crop 
        of a commodity and subject to reduction under 
        subparagraph (A) shall be reduced in accordance with 
        the same terms and conditions. If some, but not all, 
        contracts applicable to a crop of a commodity have been 
        entered into prior to the issuance of any sequestration 
        order, the order shall provide that the necessary 
        reduction in payments under contracts applicable to the 
        commodity be uniformly applied to all contracts for 
        succeeding crops of the commodity, under the authority 
        provided in paragraph (3).
          ``(3) Delayed reduction in outlays permissible.--
        Notwithstanding any other provision of this title, if 
        any sequestration order is issued with respect to a 
        fiscal year, any reduction under the order applicable 
        to contracts described in paragraph (2) may provide for 
        reductions in outlays for the account involved to occur 
        in the fiscal years following the fiscal year to which 
        the order applies.
          ``(4) Uniform percentage rate of reduction and other 
        limitations.--All reductions described in paragraph (2) 
        that are required to be made in connection with any 
        sequestration order with respect to a fiscal year--
                  ``(A) shall be made so as to ensure that 
                outlays for each program, project, activity, or 
                account involved are reduced by a percentage 
                rate that is uniform for all such programs, 
                projects, activities, and accounts, and may not 
                be made so as to achieve a percentage rate of 
                reduction in any such item exceeding the rate 
                specified in the order; and
                  ``(B) with respect to commodity price support 
                and income protection programs, shall be made 
                in such manner and under such procedures as 
                will attempt to ensure that--
                          ``(i) uncertainty as to the scope of 
                        benefits under any such program is 
                        minimized;
                          ``(ii) any instability in market 
                        prices for agricultural commodities 
                        resulting from the reduction is 
                        minimized; and
                          ``(iii) normal production and 
                        marketing relationships among 
                        agricultural commodities (including 
                        both contract and non-contract 
                        commodities) are not distorted.
                In meeting the criterion set out in clause 
                (iii) of subparagraph (B) of the preceding 
                sentence, the President shall take into 
                consideration that reductions under an order 
                may apply to programs for two or more 
                agricultural commodities that use the same type 
                of production or marketing resources or that 
                are alternative commodities among which a 
                producer could choose in making annual 
                production decisions.
          ``(5) Certain authority not to be limited.--Nothing 
        in this title shall limit or reduce in any way any 
        appropriation that provides the Commodity Credit 
        Corporation with funds to cover the Corporation's net 
        realized losses.
  ``(m) Postal Service Fund.--Notwithstanding any other 
provision of law, any sequestration of the Postal Service Fund 
shall be accomplished by a payment from that Fund to the 
General Fund of the Treasury, and the Postmaster General of the 
United States shall make the full amount of that payment during 
the fiscal year to which the presidential sequestration order 
applies.
  ``(n) Effects of Sequestration.--The effects of sequestration 
shall be as follows:
          ``(1) Budgetary resources sequestered from any 
        account other than an entitlement trust, special, or 
        revolving fund account shall revert to the Treasury and 
        be permanently canceled.
          ``(2) Except as otherwise provided, the same 
        percentage sequestration shall apply to all programs, 
        projects, and activities within a budget account (with 
        programs, projects, and activities as delineated in the 
        appropriation Act or accompanying report for the 
        relevant fiscal year covering that account, or for 
        accounts not included in appropriation Acts, as 
        delineated in the most recently submitted President's 
        budget).
          ``(3) Administrative regulations or similar actions 
        implementing a sequestration shall be made within 120 
        days of the sequestration order. To the extent that 
        formula allocations differ at different levels of 
        budgetary resources within an account, program, 
        project, or activity, the sequestration shall be 
        interpreted as producing a lower total appropriation, 
        with that lower appropriation being obligated as though 
        it had been the pre-sequestration appropriation and no 
        sequestration had occurred.
          ``(4) Except as otherwise provided, obligations in 
        sequestered direct spending accounts shall be reduced 
        in the fiscal year in which a sequestration occurs and 
        in all succeeding fiscal years.
          ``(5) If an automatic spending increase is 
        sequestered, the increase (in the applicable index) 
        that was disregarded as a result of that sequestration 
        shall not be taken into account in any subsequent 
        fiscal year.
          ``(6) Except as otherwise provided, sequestration in 
        accounts for which obligations are indefinite shall be 
        taken in a manner to ensure that obligations in the 
        fiscal year of a sequestration and succeeding fiscal 
        years are reduced, from the level that would actually 
        have occurred, by the applicable sequestration 
        percentage.''.
  (b) Conforming Amendment.--The table of contents set forth in 
250(a) of the Balanced Budget and Emergency Deficit Control Act 
of 1985 is amended by amending the item relating to section 256 
to read as follows:

``Sec. 256. Exceptions, limitations, and special rules.''.

SEC. 204. POINT OF ORDER.

  (a) Entitlement Point of Order.--Section 312 of the 
Congressional Budget Act of 1974 is amended by adding at the 
end the following new subsection:
  ``(g) Entitlement Point of Order.--It shall not be in order 
in the House of Representatives or the Senate to consider any 
bill, joint resolution, amendment, or conference report that--
          ``(1) increases aggregate level of direct spending 
        for any ensuing fiscal year or
          ``(2) includes any provision that has the effect of 
        modifying the application of section 252A of the 
        Balanced Budget and Emergency Deficit Control Act of 
        1985 to any entitlement program subject to 
        sequestration or exempt from sequestration under such 
        Act.''.

SEC. 205. TECHNICAL AND CONFORMING AMENDMENTS.

  The Balanced Budget and Emergency Deficit Control Act of 1985 
is amended as follows:
          (1) Section 251(a)(1) is amended by inserting ``, 
        section 252A,'' after ``section 252''.
          (2) Section 254(c)(4)(B) is amended by inserting ``or 
        section 252A'' after ``section 252''.
          (3) Section 254(c) is amended by redesignating 
        paragraph (5) as paragraph (6) and by inserting after 
        paragraph (4) the following new paragraph:
          ``(5) Direct spending control sequestration 
        reports.--The preview reports shall set forth, for the 
        current year and the budget year, estimates for each of 
        the following:
                  ``(A) The total level of direct spending for 
                all programs, projects, and activities 
                (excluding social security).
                  ``(B) The sequestration percentage or (if the 
                required sequestration percentage is greater 
                than the maximum allowable percentage for 
                medicare) percentages necessary to comply with 
                section 252A.''.
          (4) Section 254(f) is amended by redesignating 
        paragraphs (4) and (5) as paragraphs (5) and (6) and by 
        inserting after paragraph (3) the following new 
        paragraph:
          ``(4) Direct spending control sequestration 
        reports.--The final reports shall contain all the 
        information required in the direct spending control 
        sequestration preview reports. In addition, these 
        reports shall contain, for the budget year, for each 
        account to be sequestered, estimates of the baseline 
        level of sequesterable budgetary resources and 
        resulting outlays and the amount of budgetary resources 
        to be sequestered and resulting outlay reductions. The 
        reports shall also contain estimates of the effects on 
        outlays of the sequestration in each outyear for direct 
        spending programs.''.
          (5) Section 258C(a)(1) is amended by inserting ``, 
        252A,'' after ``section 252''.

               Subtitle B--Discretionary Spending Limits

SEC. 211. ENFORCING DISCRETIONARY SPENDING LIMITS.

  (a) Discretionary Spending Limits.--Sections 251(b) and (c) 
of the Balanced Budget and Emergency Deficit Control of Act of 
1985 are amended to read as follows:
  ``(b) Discretionary Spending Limit.--As used in this part, 
the term `discretionary spending limit' means with respect to 
fiscal year 2005: $818,736,000,000 in new budget authority and 
$901,816,000,000 in outlays.''.
  (b) Discretionary Spending Limit Point of Order.--Section 312 
of the Congressional Budget Act of 1974 (as amended by section 
204(a)) is further amended by adding at the end the following 
new subsection:
  ``(h) Discretionary Spending Limit Point of Order.--It shall 
not be in order in the House of Representatives or the Senate 
to consider any bill, joint resolution, amendment, or 
conference report that--
          ``(1) increases the discretionary spending limits for 
        any ensuing fiscal year after the budget year; or
          ``(2) would cause the discretionary spending limits 
        for the budget year to be breached.''.

SEC. 212. ANNUAL JOINT RESOLUTION ESTABLISHING DISCRETIONARY SPENDING 
                    LIMITS.

  (a) In General.--Title III of the Congressional Budget Act of 
1974 is amended by adding at the end the following new section:

  ``ANNUAL JOINT RESOLUTION ESTABLISHING DISCRETIONARY SPENDING LIMITS

  ``Sec. 317. (a) Introduction.--Before the close of the second 
legislative day of the House of Representatives after the date 
of House passage of a concurrent resolution on the budget, the 
chairman of the Committee on the Budget of the House shall 
introduce a joint resolution that amends section 251(b) of the 
Balanced Budget and Emergency Deficit Control of Act of 1985 to 
establish a discretionary spending limit for the fiscal year of 
the concurrent resolution.
  ``(b) Expedited Consideration.--For purposes of the 
consideration of a joint resolution introduced pursuant to 
subsection (a), the provisions of subsections (c) and (d) of 
section 1013 (other than subsection (c)(1)(A)) shall be applied 
by substituting `joint resolution' and `Committee on the 
Budget' for `bill' and `Committee on Appropriations', 
respectively.''.
  (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 316 the following new item:

``Sec. 317. Annual joint resolution establishing discretionary spending 
          limits.''.



              TITLE III--COMBATING WASTE, FRAUD, AND ABUSE.



 Subtitle A--Enhanced Rescissions of Budget Authority Identified by the 
                     President as Wasteful Spending



SEC. 301. ENHANCED CONSIDERATION OF CERTAIN PROPOSED RESCISSIONS.

  (a) In General.--Part B of title X of the Congressional 
Budget and Impoundment Control Act of 1974 (2 U.S.C. 681 et 
seq.) is amended by redesignating sections 1013 through 1017 as 
sections 1014 through 1018, respectively, and by inserting 
after section 1012 the following new section:

        ``ENHANCED CONSIDERATION OF CERTAIN PROPOSED RESCISSIONS

  ``Sec. 1013. (a) Proposed Rescission of Budget Authority 
Identified as Wasteful Spending.--The President may propose, at 
the time and in the manner provided in subsection (b), the 
rescission of any budget authority provided in an appropriation 
Act that he identifies as wasteful spending. If the President 
proposes a rescission of budget authority, he may also propose 
to reduce the appropriate discretionary spending limits for new 
budget authority and outlays flowing therefrom set forth in 
section 251(b) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 by an amount that does not exceed the 
amount of the proposed rescission. Funds made available for 
obligation under this procedure may not be proposed for 
rescission again under this section.
  ``(b) Transmittal of Special Message.--
          ``(1) The President may transmit to Congress a 
        special message proposing to rescind amounts of budget 
        authority and include with that special message a draft 
        bill that, if enacted, would only rescind that budget 
        authority unless the President also proposes a 
        reduction in the appropriate discretionary spending 
        limits set forth in section 251(b) of the Balanced 
        Budget and Emergency Deficit Control Act of 1985. That 
        bill shall clearly identify the amount of budget 
        authority that is proposed to be rescinded for each 
        program, project, or activity to which that budget 
        authority relates.
          ``(2) In the case of an appropriation Act that 
        includes accounts within the jurisdiction of more than 
        one subcommittee of the Committee on Appropriations, 
        the President in proposing to rescind budget authority 
        under this section shall send a separate special 
        message and accompanying draft bill for accounts within 
        the jurisdiction of each subcommittee.
          ``(3) Each special message shall specify, with 
        respect to the budget authority proposed to be 
        rescinded, the following:
                  ``(A) The amount of budget authority which he 
                proposes to be rescinded.
                  ``(B) Any account, department, or 
                establishment of the Government to which such 
                budget authority is available for obligation, 
                and the specific project or governmental 
                functions involved.
                  ``(C) The reasons why the budget authority 
                should be rescinded, including why he considers 
                it to be wasteful spending.
                  ``(D) To the maximum extent practicable, the 
                estimated fiscal, economic, and budgetary 
                effect (including the effect on outlays and 
                receipts in each fiscal year) of the proposed 
                rescission.
                  ``(E) All facts, circumstances, and 
                considerations relating to or bearing upon the 
                proposed rescission and the decision to effect 
                the proposed rescission, and to the maximum 
                extent practicable, the estimated effect of the 
                proposed rescission upon the objects, purposes, 
                and programs for which the budget authority is 
                provided.
                  ``(F) A reduction in the appropriate 
                discretionary spending limits set forth in 
                section 251(b) of the Balanced Budget and 
                Emergency Deficit Control Act of 1985, if 
                proposed by the President.
  ``(c) Procedures for Expedited Consideration.--
          ``(1)(A) Before the close of the second legislative 
        day of the House of Representatives after the date of 
        receipt of a special message transmitted to Congress 
        under subsection (b), the majority leader or minority 
        leader of the House of Representatives shall introduce 
        (by request) the draft bill accompanying that special 
        message. If the bill is not introduced as provided in 
        the preceding sentence, then, on the third legislative 
        day of the House of Representatives after the date of 
        receipt of that special message, any Member of that 
        House may introduce the bill.
          ``(B) The bill shall be referred to the Committee on 
        Appropriations. The bill shall be reported not later 
        than the seventh legislative day of that House after 
        the date of receipt of that special message. If that 
        committee fails to report the bill within that period, 
        that committee shall be automatically discharged from 
        consideration of the bill, and the bill shall be placed 
        on the appropriate calendar.
          ``(C) A vote on final passage of the bill shall be 
        taken in the House of Representatives on or before the 
        close of the 10th legislative day of that House after 
        the date of the introduction of the bill in that House. 
        If the bill is passed, the Clerk of the House of 
        Representatives shall cause the bill to be engrossed, 
        certified, and transmitted to the Senate within one 
        calendar day of the day on which the bill is passed.
          ``(2)(A) A motion in the House of Representatives to 
        proceed to the consideration of a bill under this 
        section shall be highly privileged and not debatable. 
        An amendment to the motion shall not be in order, nor 
        shall it be in order to move to reconsider the vote by 
        which the motion is agreed to or disagreed to.
          ``(B) Debate in the House of Representatives on a 
        bill under this section shall not exceed 4 hours, which 
        shall be divided equally between those favoring and 
        those opposing the bill. A motion to further limit 
        debate shall not be debatable. It shall not be in order 
        to move to recommit a bill under this section or to 
        move to reconsider the vote by which the bill is agreed 
        to or disagreed to.
          ``(C) Appeals from decisions of the Chair relating to 
        the application of the Rules of the House of 
        Representatives to the procedure relating to a bill 
        under this section shall be decided without debate.
          ``(D) Except to the extent specifically provided in 
        the preceding provisions of this subsection, 
        consideration of a bill under this section shall be 
        governed by the Rules of the House of Representatives. 
        It shall not be in order in the House of 
        Representatives to consider any rescission bill 
        introduced pursuant to the provisions of this section 
        under a suspension of the rules or under a special 
        rule.
          ``(3) A bill transmitted to the Senate pursuant to 
        paragraph (1)(D) shall be referred to its Committee on 
        Appropriations. That committee shall report the bill 
        without substantive revision and with or without 
        recommendation. The bill shall be reported not later 
        than the seventh legislative day of the Senate after it 
        receives the bill. A committee failing to report the 
        bill within such period shall be automatically 
        discharged from consideration of the bill, and the bill 
        shall be placed upon the appropriate calendar.
          ``(4)(A) A motion in the Senate to proceed to the 
        consideration of a bill under this section shall be 
        privileged and not debatable. An amendment to the 
        motion shall not be in order, nor shall it be in order 
        to move to reconsider the vote by which the motion is 
        agreed to or disagreed to.
          ``(B) Debate in the Senate on a bill under this 
        section, and all debatable motions and appeals in 
        connection therewith (including debate pursuant to 
        subparagraph (C)), shall not exceed 10 hours. The time 
        shall be equally divided between, and controlled by, 
        the majority leader and the minority leader or their 
        designees.
          ``(C) Debate in the Senate or any debatable motion or 
        appeal in connection with a bill under this section 
        shall be limited to not more than 1 hour, to be equally 
        divided between, and controlled by, the mover and the 
        manager of the bill, except that in the event the 
        manager of the bill is in favor of any such motion or 
        appeal, the time in opposition thereto, shall be 
        controlled by the minority leader or his designee. Such 
        leaders, or either of them, may, from time under their 
        control of the passage of a bill, allot additional time 
        to any Senator during the consideration of any 
        debatable motion or appeal.
          ``(D) A motion in the Senate to further limit debate 
        on a bill under this section is not debatable. A motion 
        to recommit a bill under this section is not in order.
  ``(d) Amendment and Divisions Prohibited.--No amendment to a 
bill considered under this section shall be in order in either 
the House of Representatives or the Senate. It shall not be in 
order to demand a division of the question in the House of 
Representatives (or in a Committee of the Whole) or in the 
Senate. No motion to suspend the application of this subsection 
shall be in order in either House, nor shall it be in order in 
either House to suspend the application of this subsection by 
unanimous consent.
  ``(e) Requirement To Make Available for Obligation.--Any 
amount of budget authority proposed to be rescinded in a 
special message transmitted to Congress under subsection (b) 
shall be made available for obligation on the day after the 
date on which either House rejects the bill transmitted with 
that special message.
  ``(f) Definitions.--For purposes of this section:
          ``(1) The term `appropriation Act' means any general 
        or special appropriation Act, and any Act or joint 
        resolution making supplemental, deficiency, or 
        continuing appropriations.
          ``(2) The term `legislative day' means, with respect 
        to either House of Congress, any day of session.
          ``(3) The term `rescind' means, with respect to an 
        appropriation Act, to reduce the amount of budget 
        authority appropriated in that Act, and reducing budget 
        authority shall include reducing obligation limitations 
        set forth in that Act.''.
  (b) Exercise of Rulemaking Powers.--Section 904 of the 
Congressional Budget Act of 1974 (2 U.S.C. 621 note) is 
amended--
          (1) in subsection (a), by striking ``and 1017'' and 
        inserting ``1012, and 1017''; and
          (2) in subsection (d), by striking ``section 1017'' 
        and inserting ``sections 1012 and 1017''.
  (c) Conforming Amendments.--
          (1) Section 1011 of the Congressional Budget Act of 
        1974 (2 U.S.C. 682(5)) is amended by repealing 
        paragraphs (3) and (5) and by redesignating paragraph 
        (4) as paragraph (3).
          (2) Section 1014 of such Act (2 U.S.C. 685) is 
        amended--
                  (A) in subsection (b)(1), by striking ``or 
                the reservation''; and
                  (B) in subsection (e)(1), by striking ``or a 
                reservation'' and by striking ``or each such 
                reservation''.
          (3) Section 1015(a) of such Act (2 U.S.C. 686) is 
        amended by striking ``is to establish a reserve or'', 
        by striking ``the establishment of such a reserve or'', 
        and by striking ``reserve or'' each other place it 
        appears.
          (4) Section 1017 of such Act (2 U.S.C. 687) is 
        amended--
                  (A) in subsection (a), by striking 
                ``rescission bill introduced with respect to a 
                special message or'';
                  (B) in subsection (b)(1), by striking 
                ``rescission bill or'', by striking ``bill or'' 
                the second place it appears, by striking 
                ``rescission bill with respect to the same 
                special message or'', and by striking ``, and 
                the case may be,'';
                  (C) in subsection (b)(2), by striking ``bill 
                or'' each place it appears;
                  (D) in subsection (c), by striking 
                ``rescission'' each place it appears and by 
                striking ``bill or'' each place it appears;
                  (E) in subsection (d)(1), by striking 
                ``rescission bill or'' and by striking ``, and 
                all amendments thereto (in the case of a 
                rescission bill)'';
                  (F) in subsection (d)(2)--
                          (i) by striking the first sentence;
                          (ii) by amending the second sentence 
                        to read as follows: ``Debate on any 
                        debatable motion or appeal in 
                        connection with an impoundment 
                        resolution shall be limited to 1 hour, 
                        to be equally divided between, and 
                        controlled by, the mover and the 
                        manager of the resolution, except that 
                        in the event that the manager of the 
                        resolution is in favor of any such 
                        motion or appeal, the time in 
                        opposition thereto shall be controlled 
                        by the minority leader or his 
                        designee.'';
                          (iii) by striking the third sentence; 
                        and
                          (iv) in the fourth sentence, by 
                        striking ``rescission bill or'' and by 
                        striking ``amendment, debatable 
                        motion,'' and by inserting `debatable 
                        motion';
                  (G) in paragraph (d)(3), by striking the 
                second and third sentences; and
                  (H) by striking paragraphs (4), (5), (6), and 
                (7) of paragraph (d).
  (d) Clerical Amendments.--The table of sections for subpart B 
of title X of the Congressional Budget and Impoundment Control 
Act of 1974 is amended by redesignating the item relating to 
sections 1014 through 1018 as items 1015 through 1019, 
respectively, and by inserting after the item relating to 
section 1012 the following new item:

``Sec. 1013. Enhanced consideration of certain proposed rescissions.''.



       Subtitle B--Commission to Eliminate Waste, Fraud, and Abuse



SEC. 311. ESTABLISHMENT OF COMMISSION.

  (a) Establishment.--There is established the Commission to 
Eliminate Waste, Fraud, and Abuse (hereafter in this subtitle 
referred to as the ``Commission'').
  (b) Membership.--
          (1) In general.--The Commission shall consist of 12 
        members, all of whom shall be appointed by the 
        President not later than 90 days after the date of 
        enactment of this Act.
          (2) Chairperson and vice chairperson.--The President 
        shall designate a chairperson and vice chairperson from 
        among the members of the Commission.
  (c) Period of Appointment; Vacancies.--Members shall be 
appointed for the life of the Commission. Any vacancy in the 
Commission shall not affect its powers, but shall be filled in 
the same manner as the original appointment.
  (d) Meetings.--
          (1) Initial meeting.--Not later than 30 days after 
        the date on which all members of the Commission have 
        been appointed, the Commission shall hold its first 
        meeting.
          (2) Subsequent meetings.--The Commission shall meet 
        at the call of the chairperson.
  (e) Quorum.--A majority of the members of the Commission 
shall constitute a quorum, but a lesser number of members may 
hold hearings.

SEC. 312. DUTIES OF THE COMMISSION.

  (a) Definitions.--In this section, the following definitions 
shall apply:
          (1) Agency.--The term ``agency'' has the meaning 
        given the term ``Executive agency'' under section 105 
        of title 5, United States Code.
          (2) Program.--The term ``program'' means any activity 
        or function of an agency.
  (b) In General.--The Commission shall--
          (1) evaluate all agencies and programs within those 
        agencies, using the criteria under subsection (c); and
          (2) submit to Congress a plan with recommendations of 
        the agencies and programs that should be realigned or 
        eliminated.
  (c) Criteria.--
          (1) Duplicative.--If 2 or more agencies or programs 
        are performing the same essential function and the 
        function can be consolidated or streamlined into a 
        single agency or program, the Commission shall 
        recommend that the agency or program be realigned.
          (2) Wasteful or inefficient.--The Commission shall 
        recommend the realignment or elimination of any agency 
        or program that has wasted Federal funds by--
                  (A) egregious spending;
                  (B) mismanagement of resources and personnel; 
                or
                  (C) use of such funds for personal benefit or 
                the benefit of a special interest group.
          (3) Outdated, irrelevant, or failed.--The Commission 
        shall recommend the elimination of any agency or 
        program that--
                  (A) has completed its intended purpose;
                  (B) has become irrelevant; or
                  (C) has failed to meet its objectives.
  (d) Systematic Assessment of Programs.--
          (1) In general.--Not later than 1 year after the date 
        of enactment of this Act, the President shall--
                  (A) establish a systematic method for 
                assessing the effectiveness and accountability 
                of agency programs; and
                  (B) submit, to the Commission, assessments of 
                not less than \1/2\ of all programs covered 
                under subsection (b)(1) that use the method 
                established under subparagraph (A).
          (2) Method objectives.--The method established under 
        paragraph (1) shall--
                  (A) recognize different types of federal 
                programs;
                  (B) assess programs based primarily on the 
                achievement of performance goals (as defined 
                under section 1115(f)(4) of title 31, United 
                States Code); and
                  (C) assess programs based in part on the 
                adequacy of the program's performance measures, 
                financial management, and other factors 
                determined by the President.
          (3) Development.--The method established under 
        paragraph (1) shall not be implemented until it has 
        been reviewed and accepted by the Commission.
          (4) Consideration of assessments.--The Commission 
        shall consider assessments submitted under this 
        subsection when evaluating programs under subsection 
        (b)(1).
  (e) Common Performance Measures.--Not later than 1 year after 
the date of enactment of this Act, the President shall identify 
common performance measures for programs covered in subsection 
(b)(1) that have similar functions and, to the extent feasible, 
provide the Commission with data on such performance measures.
  (f) Report.--Not later than 2 years after the date of 
enactment of this Act, the Commission shall submit to the 
President and Congress a report that includes the plan 
described under subsection (b)(2), with supporting 
documentation for all recommendations.

SEC. 313. POWERS OF THE COMMISSION.

  (a) Hearings.--The Commission or, at its direction, any 
subcommittee or member of the Commission, may, for the purpose 
of carrying out this subtitle--
          (1) hold such hearings, sit and act at such times and 
        places, take such testimony, receive such evidence, and 
        administer such oaths as any member of the Commission 
        considers advisable;
          (2) require, by subpoena or otherwise, the attendance 
        and testimony of such witnesses as any member of the 
        Commission considers advisable; and
          (3) require, by subpoena or otherwise, the production 
        of such books, records, correspondence, memoranda, 
        papers, documents, tapes, and other evidentiary 
        materials relating to any matter under investigation by 
        the Commission.
  (b) Subpoenas.--
          (1) Issuance.--Subpoenas issued under subsection (a) 
        shall bear the signature of the chairperson of the 
        Commission and shall be served by any person or class 
        of persons designated by the chairperson for that 
        purpose.
          (2) Enforcement.--In the case of contumacy or failure 
        to obey a subpoena issued under subsection (a), the 
        United States district court for the judicial district 
        in which the subpoenaed person resides, is served, or 
        may be found, may issue an order requiring such person 
        to appear at any designated place to testify or to 
        produce documentary or other evidence. Any failure to 
        obey the order of the court may be punished by the 
        court as a contempt of that court.
  (c) Information From Federal Agencies.--The Commission may 
secure directly from any Federal department or agency such 
information as the Commission considers necessary to carry out 
this Act. Upon request of the chairperson of the Commission, 
the head of such department or agency shall furnish such 
information to the Commission.
  (d) Postal Services.--The Commission may use the United 
States mails in the same manner and under the same conditions 
as other departments and agencies of the Government.
  (e) Gifts.--The Commission may accept, use, and dispose of 
gifts or donations of services or property.

SEC. 314. COMMISSION PERSONNEL MATTERS.

  (a) Compensation of Members.--
          (1) Non-federal members.--Except as provided under 
        subsection (b), each member of the Commission who is 
        not an officer or employee of the Government shall not 
        be compensated.
          (2) Federal officers or employees.--All members of 
        the Commission who are officers or employees of the 
        United States shall serve without compensation in 
        addition to that received for their services as 
        officers or employees of the United States.
  (b) Travel Expenses.--The members of the Commission shall be 
allowed travel expenses, including per diem in lieu of 
subsistence, at rates authorized for employees of agencies 
under subchapter I of chapter 57 of title 5, United States 
Code, while away from their homes or regular places of business 
in the performance of services for the Commission.
  (c) Staff.--
          (1) In general.--The chairperson of the Commission 
        may, without regard to the civil service laws and 
        regulations, appoint and terminate an executive 
        director and such other additional personnel as may be 
        necessary to enable the Commission to perform its 
        duties. The employment of an executive director shall 
        be subject to confirmation by the Commission.
          (2) Compensation.--Upon the approval of the 
        chairperson, the executive director may fix the 
        compensation of the executive director and other 
        personnel without regard to chapter 51 and subchapter 
        III of chapter 53 of title 5, United States Code, 
        relating to classification of positions and General 
        Schedule pay rates, except that the rate of pay for the 
        executive director and other personnel may not exceed 
        the maximum rate payable for a position at GS-15 of the 
        General Schedule under section 5332 of such title.
          (3) Personnel as federal employees.--
                  (A) In general.--The executive director and 
                any personnel of the Commission who are 
                employees shall be employees under section 2105 
                of title 5, United States Code, for purposes of 
                chapters 63, 81, 83, 84, 85, 87, 89, and 90 of 
                that title.
                  (B) Members of commission.--Subparagraph (A) 
                shall not be construed to apply to members of 
                the Commission.
  (d) Detail of Government Employees.--Any Government employee 
may be detailed to the Commission without reimbursement, and 
such detail shall be without interruption or loss of civil 
service status or privilege.
  (e) Procurement of Temporary and Intermittent Services.--The 
chairperson of the Commission may procure temporary and 
intermittent services under section 3109(b) of title 5, United 
States Code, at rates for individuals which do not exceed the 
daily equivalent of the annual rate of basic pay prescribed for 
level V of the Executive Schedule under section 5316 of such 
title.

SEC. 315. TERMINATION OF THE COMMISSION.

  The Commission shall terminate 90 days after the date on 
which the Commission submits its report.

SEC. 316. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated such sums as may be 
necessary for carrying out this subtitle for each of the fiscal 
years 2006 through 2008.

                     TITLE IV--TRUTH IN ACCOUNTING

Subtitle A--Accrual Funding of Pensions and Retirement Pay for Federal 
               Employees and Uniformed Services Personnel

SEC. 401. CIVIL SERVICE RETIREMENT SYSTEM.

  (a) Civil Service Retirement and Disability Fund.--Chapter 83 
of title 5, United States Code, is amended--
          (1) in section 8331--
                  (A) in paragraph (17)--
                          (i) by striking ``normal cost'' and 
                        inserting ``normal cost percentage''; 
                        and
                          (ii) by inserting ``and standards 
                        (using dynamic assumptions)'' after 
                        ``practice'';
                  (B) by amending paragraph (18) to read as 
                follows:
          ``(18) `Fund balance' means the current net assets of 
        the Fund available for payment of benefits, as 
        determined by the Office in accordance with appropriate 
        accounting standards, but does not include any amount 
        attributable to--
                  ``(A) the Federal Employees' Retirement 
                System; or
                  ``(B) contributions made under the Federal 
                Employees' Retirement Contribution Temporary 
                Adjustment Act of 1983 by or on behalf of any 
                individual who became subject to the Federal 
                Employees' Retirement System;''
                  (C) by amending paragraph (19) to read as 
                follows:
          ``(19) `accrued liability' means the estimated excess 
        of the present value of all benefits payable from the 
        Fund to employees and Members, and former employees and 
        Members, subject to this subchapter, and their 
        survivors, over the present value of deductions to be 
        withheld from the future basic pay of employees and 
        Members currently subject to this subchapter and of 
        future agency contributions to be made in their 
        behalf;''
                  (D) in paragraph (27) by striking ``and'' at 
                the end;
                  (E) in paragraph (28) by striking the period 
                at the end and inserting a semicolon; and
                  (F) by adding at the end the following 
                paragraphs:
          ``(29) `dynamic assumptions' means economic 
        assumptions that are used in determining actuarial 
        costs and liabilities of a retirement system and in 
        anticipating the effects of long-term future--
                  ``(A) investment yields;
                  ``(B) increases in rates of basic pay; and
                  ``(C) rates of price inflation; and
          ``(30) `unfunded liability' means the estimated 
        excess of--
                  ``(A) the actuarial present value of all 
                future benefits payable from the Fund under 
                this subchapter based on the service of current 
                or former employees or Members, over
                  ``(B) the sum of--
                          ``(i) the actuarial present value of 
                        deductions to be withheld from the 
                        future basic pay of employees and 
                        Members currently subject to this 
                        chapter pursuant to section 8334;
                          ``(ii) the actuarial present value of 
                        the future contributions to be made 
                        pursuant to section 8334 with respect 
                        to employees and Members currently 
                        subject to this subchapter;
                          ``(iii) the Fund balance, as defined 
                        in paragraph (18), as of the date the 
                        unfunded liability is determined; and
                          ``(iv) any other appropriate amount, 
                        as determined by the Office of 
                        Personnel Management in accordance with 
                        generally accepted actuarial practices 
                        and principles.'';
          (2) in section 8334--
                  (A) in subsection (a)(1)--
                          (i) by striking the last two 
                        sentences;
                          (ii) by redesignating that 
                        subsection, as so amended, as 
                        (a)(1)(A); and
                          (iii) by adding at the end the 
                        following new subparagraphs:
  ``(B) Except as provided in subparagraph (E), each employing 
agency having any employees or Members subject to subparagraph 
(A) shall contribute from amounts available for salaries and 
expenses an amount equal to the sum of--
          ``(i) the product of--
                  ``(I) the normal cost percentage, as 
                determined for employees (other than employees 
                covered by clause (ii)), multiplied by
                  ``(II) the aggregate amount of basic pay 
                payable by the agency, for the period involved, 
                to employees (under subclause (I)) who are 
                within such agency; and
          ``(ii) the product of--
                  ``(I) the normal cost percentage, as 
                determined for Members, Congressional 
                employees, law enforcement officers, 
                firefighters, air traffic controllers, 
                bankruptcy judges, Court of Federal Claims 
                judges, United States magistrates, judges of 
                the United States Court of Appeals for the 
                Armed Forces, members of the Capitol Police, 
                nuclear materials couriers, and members of the 
                Supreme Court Police, multiplied by
                  ``(II) the aggregate amount of basic pay 
                payable by the agency for the period involved, 
                to employees and Members (under subclause (I)) 
                who are within such agency.
  ``(C) In determining the normal cost percentage to be applied 
under subparagraph (B), amounts provided for under subparagraph 
(A) shall be taken into account.
  ``(D) Contributions under this paragraph shall be paid--
          ``(i) in the case of law enforcement officers, 
        firefighters, air traffic controllers, bankruptcy 
        judges, Court of Federal Claims judges, United States 
        magistrates, judges of the United States Court of 
        Appeals for the Armed Forces, members of the Supreme 
        Court Police, nuclear materials couriers and other 
        employees, from the appropriations or fund used to pay 
        such law enforcement officers, firefighters, air 
        traffic controllers, bankruptcy judges, Court of 
        Federal Claims judges, United States magistrates, 
        judges of the United States Court of Appeals for the 
        Armed Forces, members of the Supreme Court Police, 
        nuclear materials couriers and other employees, 
        respectively;
          ``(ii) in the case of elected officials, from an 
        appropriation or fund available for payment of other 
        salaries of the same office or establishment; and
          ``(iii) in the case of employees of the legislative 
        branch paid by the Clerk of the House of 
        Representatives, from the contingent fund of the House.
  ``(E) In the case of the United States Postal Service, the 
Metropolitan Washington Airports Authority, and the government 
of the District of Columbia, an amount equal to that withheld 
under subparagraph (A) shall be contributed from the 
appropriation or fund used to pay the employee.''; and
                  (B) in subsection (k)--
                          (i) in paragraph (1)--
                                  (I) in subparagraph (A) by 
                                striking ``the first sentence 
                                of subsection (a)(1) of this 
                                section'' and inserting 
                                ``subsection (a)(1)(A)''; and
                                  (II) by amending subparagraph 
                                (B) to read as follows:
          ``(B) the amount of the contribution under subsection 
        (a)(1)(B) shall be the amount which would have been 
        contributed under such subsection if this subsection 
        had not been enacted.''; and
                          (ii) in paragraph (2)(C)(iii) by 
                        striking ``the first sentence of 
                        subsection (a)(1)'' and inserting 
                        ``subsection (a)(1)(A)''; and
          (3) in section 8348--
                  (A) by repealing subsection (f);
                  (B) by amending subsection (g) to read as 
                follows:
  ``(g)(1)(A) Not later than June 30, 2005, the Office of the 
Actuary shall determine the unfunded liability of the Fund, as 
of September 30, 2004, attributable to benefits payable under 
this chapter and make recommendations regarding its 
liquidation. After considering such recommendations, the Office 
shall establish an amortization schedule, including a series of 
annual installments commencing October 1, 2005, which provides 
for the liquidation of such liability by October 1, 2044.
  ``(B) The Office shall redetermine the unfunded liability of 
the Fund as of the close of the fiscal year, for each fiscal 
year beginning after September 30, 2004, through the fiscal 
year ending September 30, 2039, and shall establish a new 
amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
  ``(C) The Office shall redetermine the unfunded liability of 
the Fund as of the close of the fiscal year for each fiscal 
year beginning after September 30, 2039, and shall establish a 
new amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability over five years.
  ``(D) Amortization schedules established under this paragraph 
shall be set in accordance with generally accepted actuarial 
practices and principles, with interest computed at the rate 
used in the most recent valuation of the Civil Service 
Retirement System.
  ``(2) At the beginning of each fiscal year, beginning on 
October 1, 2005, the Office shall notify the Secretary of the 
Treasury of the amount of the first installment under the most 
recent amortization schedule established under paragraph (1). 
The Secretary shall credit that amount to the Fund, as a 
Government contribution, out of any money in the Treasury of 
the United States not otherwise appropriated.
  ``(3) For the purpose of carrying out paragraph (1) with 
respect to any fiscal year, the Office may--
          ``(A) require the Board of Actuaries of the Civil 
        Service Retirement System to make actuarial 
        determinations and valuations, make recommendations, 
        and maintain records in accordance with section 
        8347(f); and
          ``(B) use the latest actuarial determinations and 
        valuations made by such Board of Actuaries.'';
                  (C) in subsections (h), (i), and (m) by 
                striking ``unfunded'' and inserting ``accrued'' 
                each place it appears; and
                  (D) by adding at the end the following new 
                subsection:
  ``(n) Under regulations prescribed by the Office, the head of 
an agency may request reconsideration of any amount determined 
to be payable with respect to such agency under section 
8334(a)(1)(B)-(D). Any such request shall be referred to the 
Board of Actuaries of the Civil Service Retirement System. The 
Board of Actuaries shall review the computations of the Office 
and may make any adjustment with respect to any such amount 
which the Board determines appropriate. A determination by the 
Board of Actuaries under this subsection shall be final.''.
  (b) Government Contributions.--Section 8423 of title 5, 
United States Code, is amended--
          (1) in subsection (a)(2) by striking ``section 8422'' 
        and inserting ``section 8422(a)''; and
          (2) in subsection (b)(2) by striking ``equal annual 
        installments'' and inserting ``annual installments set 
        in accordance with generally accepted actuarial 
        practices and principles''.

SEC. 402. CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM.

  (a) Section 101 of the Central Intelligence Agency Retirement 
Act (50 U.S.C. 2001) is amended--
          (1) in paragraph (5), to read as follows:
          ``(5) Unfunded liability.--The term `unfunded 
        liability' means the estimated excess of--
                  ``(A) the actuarial present value of all 
                future benefits payable from the Fund under 
                title II of this Act based on the service of 
                current or former participants, over
                  ``(B) the sum of--
                          ``(i) the actuarial present value of 
                        deductions to be withheld from the 
                        future basic pay of participants 
                        currently subject to title II of this 
                        Act pursuant to section 211;
                          ``(ii) the actuarial present value of 
                        the future contributions to be made 
                        pursuant to section 211 with respect to 
                        participants currently subject to title 
                        II of this Act;
                          ``(iii) the Fund balance, as defined 
                        in paragraph (4), as of the date the 
                        unfunded liability is determined; and
                          ``(iv) any other appropriate amount, 
                        as determined by the Director in 
                        accordance with generally accepted 
                        actuarial practices and principles.'';
          (2) in paragraph (6)--
                  (A) by striking `` `normal cost' '' and 
                inserting `` `normal cost percentage' ''; and
                  (B) by inserting ``and standards (using 
                dynamic assumptions)'' after ``practice''; and
          (3) by adding at the end the following paragraph:
          ``(10) Dynamic assumptions.--The term `dynamic 
        assumptions' means economic assumptions that are used 
        in determining actuarial costs and liabilities of a 
        retirement system and in anticipating the effects of 
        long-term future--
                  ``(A) investment yields;
                  ``(B) increases in rates of basic pay; and
                  ``(C) rates of price inflation.''.
  (b) Section 202 of such Act (50 U.S.C. 2012) is amended by 
adding at the end the following: ``The Fund is appropriated for 
the payment of benefits as provided by this title.''.
  (c) Section 211(a)(2) of such Act (50 U.S.C. 2021(a)(2)) is 
amended to read as follows:
          ``(2) Agency contributions.--The Agency shall 
        contribute to the Fund the amount computed in a manner 
        similar to that used under section 8334(a) of title 5, 
        United States Code, pursuant to determinations of the 
        normal cost percentage of the Central Intelligence 
        Agency Retirement and Disability System by the 
        Director. Contributions under this paragraph shall be 
        paid from amounts available for salaries and 
        expenses.''.
  (d) Section 261 of such Act (50 U.S.C. 2091) is amended--
          (1) by striking subsections (c), (d), and (e); and
          (2) by inserting after subsection (b) the following 
        new subsections:
  ``(c)(1) Not later than June 30, 2005, the Director shall 
cause to be made actuarial valuations of the Fund that 
determine the unfunded liability of the Fund, as of September 
30, 2004, attributable to benefits payable under this title and 
make recommendations regarding its liquidation. After 
considering such recommendations, the Director shall establish 
an amortization schedule, including a series of annual 
installments commencing October 1, 2005, which provides for the 
liquidation of such liability by October 1, 2044.
  ``(2) The Director shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year, for each fiscal 
year beginning after September 30, 2004, through the fiscal 
year ending September 30, 2039, and shall establish a new 
amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
  ``(3) The Director shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year for each fiscal 
year beginning after September 30, 2039, and shall establish a 
new amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability over five years.
  ``(4) Amortization schedules established under this 
subsection shall be set in accordance with generally accepted 
actuarial practices and principles, with interest computed at 
the rate used in the most recent valuation of the Civil Service 
Retirement and Disability System.
  ``(d) At the beginning of each fiscal year, beginning on 
October 1, 2005, the Director shall notify the Secretary of the 
Treasury of the amount of the first installment under the most 
recent amortization schedule established under subsection (c). 
The Secretary shall credit that amount to the Fund, as a 
Government contribution, out of any money in the Treasury of 
the United States not otherwise appropriated. For the purposes 
of Section 504 of the National Security Act of 1947, this 
amount shall be considered authorized.''.
  (e)(1) Title III of such Act (50 U.S.C. 2151 et seq.) is 
amended by adding at the end the following new section:

``SEC. 308. FULL FUNDING OF RETIREE COSTS FOR EMPLOYEES DESIGNATED 
                    UNDER SECTION 302.

  ``(a) In addition to other government contributions required 
by law, the Agency shall contribute to the Civil Service 
Retirement and Disability fund (hereinafter in this section 
referred to as the `Fund') amounts calculated in accordance 
with section 8423 of title 5, United States Code, based on the 
projected number of employees to be designated pursuant to 
section 302 of this Act. In addition, the Agency, in a manner 
similar to that established for employee contributions to the 
Fund by section 8422 of title 5, United States Code, will 
contribute an amount equal to the difference between that which 
would be contributed by the number of employees projected to be 
designated under section 302 and the amounts that are actually 
being deducted and contributed from the basic pay of an equal 
number of employees pursuant to section 8422. The amounts of 
the Agency's contributions under this subsection shall be 
determined by the Director of the Office of Personnel 
Management, in consultation with the Director, and shall be 
paid by the Agency from funds available for salaries and 
expenses. Agency employees designated pursuant to section 302 
of this Act shall, commencing with such designation, have 
deducted from their basic pay the full amount required by 
section 8422 of title 5, United States Code, and such 
deductions shall be contributed to the Fund.
  ``(b)(1) The Director of the Office of Personnel Management, 
in consultation with the Director, shall determine the total 
amount of unpaid contributions (government and employee 
contributions) and interest attributable to the number of 
individuals employed with the Agency on September 30, 2005, who 
are projected to be designated under section 302 of this Act, 
but are not yet designated under that section as of that date. 
The amount shall be referred to as the section 302 unfunded 
liability.
  ``(2) Not later than June 30, 2006, the Director of the 
Office of Personnel Management, in consultation with the 
Director, shall establish an amortization schedule, setting 
forth a series of annual installments commencing September 30, 
2006, which provides for the liquidation of the section 302 
unfunded liability by September 30, 2013.
  ``(3) At the end of each fiscal year, beginning on September 
30, 2006, the Director shall notify the Secretary of the 
Treasury of the amount of the annual installment under the 
amortization schedule established under paragraph (2) of this 
subsection. Before closing the accounts for that fiscal year, 
the Secretary shall credit that amount to the Fund, out of any 
money in the Treasury of the United States not otherwise 
appropriated.
  ``(c) Amounts paid by the Agency pursuant to this section are 
deemed to be specifically authorized by the Congress for the 
purposes of section 504 of the National Security Act of 
1947.''.
  (2) The table of contents of such Act is amended by inserting 
after the item relating to section 307 the following new item:

``Sec. 308. Full funding of retiree costs for employees designated under 
          section 302.''.

SEC. 403. FOREIGN SERVICE RETIREMENT AND DISABILITY SYSTEM.

  Chapter 8 of title I of the Foreign Service Act of 1980, 
Public Law 96-465 (22 U.S.C. 4041 et seq.) 94 Stat. 2071, as 
amended, is further amended--
          (1) in section 804 (22 U.S.C. 4044)--
                  (A) by amending paragraph (5) to read as 
                follows:
          ``(5) `normal cost percentage' means the entry-age 
        normal cost computed in accordance with generally 
        accepted actuarial practice and standards (using 
        dynamic assumptions) and expressed as a level 
        percentage of aggregate basic pay;'';
                  (B) by amending paragraph (14) to read as 
                follows:
          ``(14) `unfunded liability' means the estimated 
        excess of--
                  ``(A) the actuarial present value of all 
                future benefits payable from the Fund under 
                this part based on the service of current or 
                former participants, over
                  ``(B) the sum of--
                          ``(i) the actuarial present value of 
                        deductions to be withheld from the 
                        future basic pay of participants 
                        currently subject to this part pursuant 
                        to section 805;
                          ``(ii) the actuarial present value of 
                        the future contributions to be made 
                        pursuant to section 805 with respect to 
                        participants currently subject to this 
                        part;
                          ``(iii) the Fund balance, as defined 
                        in paragraph (7), as of the date the 
                        unfunded liability is determined, 
                        excluding any amount attributable to 
                        the Foreign Service Pension System, or 
                        contributions made under the Federal 
                        Employees' Retirement Contribution 
                        Temporary Adjustment Act of 1983 by or 
                        on behalf of any individual who became 
                        subject to the Foreign Service Pension 
                        System; and
                          ``(iv) any other appropriate amount, 
                        as determined by the Secretary of the 
                        Treasury in accordance with generally 
                        accepted actuarial practices and 
                        principles.''; and
                  (C)(i) by striking the period at the end of 
                paragraph (15) and inserting ``; and''; and
                  (ii) by adding at the end the following new 
                paragraph:
          ``(16) `dynamic assumptions' means economic 
        assumptions that are used in determining actuarial 
        costs and liabilities of a retirement system and in 
        anticipating the effects of long-term future--
                  ``(A) investment yields;
                  ``(B) increases in rates of basic pay; and
                  ``(C) rates of price inflation.'';
          (2) in section 852 (22 U.S.C. 4071a)--
                  (A) in paragraph (4)--
                          (i) by striking ``normal cost'' and 
                        inserting ``normal cost percentage''; 
                        and
                          (ii) by striking ``by the Secretary 
                        of State'';
                  (B) in paragraph (7)--
                          (i) by striking ``supplemental'' and 
                        inserting ``unfunded'';
                          (ii) in subparagraph (B)(i) by 
                        striking ``(I)'' and ``and (II) 
                        contributions for past civilian and 
                        military service''; and
                          (iii) in subparagraph (B)(ii) by 
                        inserting before the semicolon ``with 
                        respect to participants currently 
                        subject to this part''; and
                  (C)(i) at the end of paragraph (8) by 
                striking ``and'';
                  (ii) at the end of paragraph (9) by striking 
                the period and inserting ``; and''; and
                  (iii) by adding at the end the following new 
                paragraph:
          ``(10) `dynamic assumptions' means economic 
        assumptions that are used in determining actuarial 
        costs and liabilities of a retirement system and in 
        anticipating the effects of long-term future--
                  ``(A) investment yields;
                  ``(B) increases in rates of basic pay; and
                  ``(C) rates of price inflation.'';
          (3) in section 805(a)(1) (22 U.S.C. 4045(a)(i))--
                  (A) by striking the second sentence;
                  (B) by redesignating that subsection, as so 
                amended, as (a)(1)(A);
                  (C) by redesignating the last sentence of 
                that subsection, as so amended as (a)(1)(C);
                  (D) by inserting after subparagraph (A) the 
                following new subparagraph:
                  ``(B) Each employing agency having 
                participants shall contribute to the Fund the 
                amount computed in a manner similar to that 
                used under section 8334(a) of title 5, United 
                States Code, pursuant to determinations of the 
                normal cost percentage of the Foreign Service 
                Retirement and Disability System. Contributions 
                under this subparagraph shall be paid from the 
                appropriations or fund used for payment of the 
                salary of the participant.'';
                  (E) in subsection (a)(2)(A) by striking ``An 
                equal amount shall be contributed by the 
                Department'' and inserting in its place ``Each 
                employing agency having participants shall 
                contribute to the Fund the amount computed in a 
                manner similar to that used under section 
                8334(a) of title 5, United States Code, 
                pursuant to determinations of the normal cost 
                percentage of the Foreign Service Retirement 
                and Disability System''; and
                  (F) in subsection (a)(2)(B) by striking ``An 
                equal amount shall be contributed by the 
                Department'' and inserting in its place ``Each 
                employing agency having participants shall 
                contribute to the Fund from amounts available 
                for salaries and expenses the amount computed 
                in a manner similar to that used under section 
                8334(a) of title 5, United States Code, 
                pursuant to determinations of the normal cost 
                percentage of the Foreign Service Retirement 
                and Disability System'';
          (4) by repealing sections 821 and 822 (22 U.S.C. 4061 
        and 4062) and by adding the following new section:
  ``Sec. 821. Unfunded Liability.--(a)(1) Not later than June 
30, 2005, the Secretary of State shall cause to be made 
actuarial valuations of the Fund that determine the unfunded 
liability of the Fund, as of September 30, 2004, attributable 
to benefits payable under this subchapter and make 
recommendations regarding its liquidation. After considering 
such recommendations, the Secretary of State shall establish an 
amortization schedule, including a series of annual 
installments commencing October 1, 2004, which provides for the 
liquidation of such liability by October 1, 2044.
  ``(2) The Secretary of State shall redetermine the unfunded 
liability of the Fund as of the close of the fiscal year, for 
each fiscal year beginning after September 30, 2004, through 
the fiscal year ending September 30, 2039, and shall establish 
a new amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
  ``(3) The Secretary of State shall redetermine the unfunded 
liability of the Fund as of the close of the fiscal year for 
each fiscal year beginning after September 30, 2039, and shall 
establish a new amortization schedule, including a series of 
annual installments commencing on October 1 of the second 
subsequent fiscal year, which provides for the liquidation of 
such liability over five years.
  ``(4) Amortization schedules established under this 
subsection shall be set in accordance with generally accepted 
actuarial practices and principles, with interest computed at 
the rate used in the most recent valuation of the Foreign 
Service Retirement and Disability System.
  ``(b) At the beginning of each fiscal year, beginning on 
October 1, 2005, the Secretary of State shall notify the 
Secretary of the Treasury of the amount of the first 
installment under the most recent amortization schedule 
established under paragraph (1). The Secretary of the Treasury 
shall credit that amount to the Fund, as a Government 
contribution, out of any money in the Treasury of the United 
States not otherwise appropriated.'';
          (5) in section 857(b)(1) (22 U.S.C. 4071f(b)(1)) by 
        striking ``equal annual installments'' and inserting 
        ``annual installments set in accordance with generally 
        accepted actuarial practices and principles'';
          (6) in section 859 (22 U.S.C. 4071h) by adding 
        ``percentage'' after ``normal cost'';
          (7) in section 802 (22 U.S.C. 4042) by adding at the 
        end the following: ``The Fund is appropriated for the 
        payment of benefits as provided by this subchapter.''; 
        and
          (8) in section 818 (22 U.S.C. 4058) by striking 
        ``System'' and inserting ``Systems under this 
        subchapter''.

SEC. 404. PUBLIC HEALTH SERVICE COMMISSIONED CORPS RETIREMENT SYSTEM.

  (a) In General.--Title II of the Public Health Service Act 
(42 U.S.C. 202 et seq.) is amended by adding at the end the 
following new part:

  ``PART C--PUBLIC HEALTH SERVICE COMMISSIONED CORPS RETIREMENT SYSTEM

                  ``ESTABLISHMENT AND PURPOSE OF FUND

  ``Sec. 251. There is established on the books of the Treasury 
a fund to be known as the Public Health Service Commissioned 
Corps Retirement Fund (hereinafter in this part referred to as 
the `Fund'), which shall be administered by the Secretary. The 
Fund shall be used for the accumulation of funds in order to 
finance on an actuarially sound basis liabilities of the 
Department of Health and Human Services for benefits payable on 
account of retirement, disability, or death to commissioned 
officers of the Public Health Service and to their survivors 
pursuant to part A of this title.

                          ``ASSETS OF THE FUND

  ``Sec. 252. There shall be deposited into the Fund the 
following, which shall constitute the assets of the Fund:
          ``(1) Amounts paid into the Fund under section 255.
          ``(2) Any return on investment of the assets of the 
        Fund.
          ``(3) Amounts transferred into the Fund pursuant to 
        section 404(c) of the Deficit Control Act of 2004.

                        ``PAYMENT FROM THE FUND

  ``Sec. 253. There shall be paid from the Fund benefits 
payable on account of retirement, disability, or death to 
commissioned officers of the Public Health Service and to their 
survivors pursuant to part A of this title.

              ``DETERMINATION OF CONTRIBUTIONS TO THE FUND

  ``Sec. 254. (a)(1) Not later than June 30, 2005, the 
Secretary shall determine the unfunded liability of the Fund 
attributable to service performed as of September 30, 2004, 
which is `active service' for the purpose of section 212. The 
Secretary shall establish an amortization schedule, including a 
series of annual installments commencing October 1, 2005, which 
provides for the liquidation of such liability by October 1, 
2044.
  ``(2) The Secretary shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year, for each fiscal 
year beginning after September 30, 2004, through the fiscal 
year ending September 30, 2039, and shall establish a new 
amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
  ``(3) The Secretary shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year for each fiscal 
year beginning after September 30, 2039, and shall establish a 
new amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability over 5 years.
  ``(b) The Secretary shall determine each fiscal year, in 
sufficient time for inclusion in the budget request for the 
following fiscal year, the total amount of Department of Health 
and Human Services contributions to be made to the Fund during 
the fiscal year under section 255(a). That amount shall be the 
sum of--
          ``(1) the product of--
                  ``(A) the current estimate of the value of 
                the single level percentage of basic pay to be 
                determined under subsection (c)(1) at the time 
                of the most recent actuarial valuation under 
                subsection (c); and
                  ``(B) the total amount of basic pay expected 
                to be paid during that fiscal year to 
                commissioned officers of the Public Health 
                Service on active duty (other than active duty 
                for training); and
          ``(2) the product of--
                  ``(A) the current estimate of the value of 
                the single level percentage of basic pay and of 
                compensation (paid pursuant to section 206 of 
                title 37, United States Code) to be determined 
                under subsection (c)(2) at the time of the most 
                recent actuarial valuation under subsection 
                (c); and
                  ``(B) the total amount of basic pay and of 
                compensation (paid pursuant to section 206 of 
                title 37, United States Code) expected to be 
                paid during the fiscal year to commissioned 
                officers of the Reserve Corps of the Public 
                Health Service (other than officers on full-
                time duty other than for training) who are not 
                otherwise described in subparagraph (A).
  ``(c) Not less often than every four years thereafter (or by 
the fiscal year end prior to the effective date of any 
statutory change affecting benefits payable on account of 
retirement, disability, or death to commissioned officers or 
their survivors), the Secretary shall carry out an actuarial 
valuation of benefits payable on account of retirement, 
disability, or death to commissioned officers of the Public 
Health Service and to their survivors pursuant to part A of 
this title. Each such actuarial valuation shall be signed by an 
enrolled Actuary and shall include--
          ``(1) a determination (using the aggregate entry-age 
        normal cost method) of a single level percentage of 
        basic pay for commissioned officers of the Public 
        Health Service on active duty (other than active duty 
        for training); and
          ``(2) a determination (using the aggregate entry-age 
        normal cost method) of a single level percentage of 
        basic pay and of compensation (paid pursuant to section 
        206 of title 37, United States Code) of commissioned 
        officers of the Reserve Corps of the Public Health 
        Service (other than officers on full time duty other 
        than for training) who are not otherwise described in 
        paragraph (1).
  ``(d) All determinations under this section shall be in 
accordance with generally accepted actuarial principles and 
practices and, where appropriate, shall follow the general 
pattern of methods and assumptions approved by the Department 
of Defense Retirement Board of Actuaries.
  ``(e) The Secretary shall provide for the keeping of such 
records as are necessary for determining the actuarial status 
of the Fund.

                        ``PAYMENTS INTO THE FUND

  ``Sec. 255. (a) From amounts available to the Department of 
Health and Human Services for salaries and expenses, the 
Secretary shall pay into the Fund at the end of each month the 
amount that is the sum of--
          ``(1) the product of--
                  ``(A) the level percentage of basic pay 
                determined using all the methods and 
                assumptions approved for the most recent (as of 
                the first day of the current fiscal year) 
                actuarial valuation under sections 254(c)(1) 
                (except that any statutory change affecting 
                benefits payable on account of retirement, 
                disability, or death to commissioned officers 
                or their survivors that is effective after the 
                date of that valuation and on or before the 
                first day of the current fiscal year shall be 
                used in such determination); and
                  ``(B) the total amount of basic pay accrued 
                for that month by commissioned officers of the 
                Public Health Service on active duty (other 
                than active duty for training); and
          ``(2) the product of--
                  ``(A) the level percentage of basic pay and 
                of compensation (paid pursuant to section 206 
                of title 37, United States Code) determined 
                using all the methods and assumptions approved 
                for the most recent (as of the first day of the 
                current fiscal year) actuarial valuation under 
                section 254(c)(2) (except that any statutory 
                change affecting benefits payable on account of 
                retirement, disability, or death to 
                commissioned officers or their survivors that 
                is effective after the date of that valuation 
                and on or before the first day of the current 
                fiscal year shall be used in such 
                determinations); and
                  ``(B) the total amount of basic pay and of 
                compensation (paid pursuant to section 206 of 
                title 37, United States Code) accrued for that 
                month by commissioned officers of the Reserve 
                Corps of the Public Health Service (other than 
                officers on full-time duty other than for 
                training).
  ``(b) At the beginning of each fiscal year, beginning on 
October 1, 2005, the Secretary shall certify to the Secretary 
of the Treasury the amount of the first installment under the 
most recent amortization schedule established under section 
254(a). The Secretary of the Treasury shall pay into the Fund 
from the General Fund of the Treasury the amount so certified. 
Such payment shall be the contribution to the Fund for that 
fiscal year.

                    ``INVESTMENTS OF ASSETS OF FUND

  ``Sec. 256. The Secretary may request the Secretary of the 
Treasury to invest such portion of the Fund as is not, in the 
judgment of the Secretary, required to meet the current needs 
of the Fund. Such investments shall be made by the Secretary of 
the Treasury in public debt securities with maturities suitable 
to the needs of the Fund, as determined by the Secretary, and 
bearing interest at rates determined by the Secretary of the 
Treasury, taking into consideration current market yields on 
outstanding marketable obligations of the United States of 
comparable maturities. The income on such investments shall be 
credited to and form a part of the Fund.

                    ``IMPLEMENTATION YEAR EXCEPTIONS

  ``Sec. 257. (a) To avoid funding shortfalls in the first year 
should formal actuarial determinations not be available in time 
for budget preparation, the amounts used in the first year in 
sections 255(a)(1)(A) and 255(a)(2)(A) shall be set equal to 
those estimates in sections 254(b)(1)(A) and 254(b)(2)(A) if 
final determinations are not available. The original unfunded 
liability as defined in section 254(a) shall include an 
adjustment to correct for this difference between the formal 
actuarial determinations and the estimates in sections 
254(b)(1)(A) and 254(b)(2)(A).''.
  (b) Conforming Amendments.--
          (1) Condition of detail.--Section 214 of the Public 
        Health Service Act (42 U.S.C. 215) is amended by adding 
        at the end the following new subsection:
  ``(e) The Secretary shall condition any detail under 
subsection (a), (b), or (c) upon the agreement of the executive 
department, State, subdivision, Committee of the Congress, or 
institution concerned to pay to the Department of Health and 
Human Services, in advance or by way of reimbursement, for the 
full cost of the detail including that portion of the 
contributions under section 255(a) that is attributable to the 
detailed personnel.''.
          (2) Exemption from sequestration.--Section 255(g)(1) 
        of the Balanced Budget and Emergency Deficit Control 
        Act of 1985 (2 U.S.C. 905(g)(1)) is amended--
                  (A) in subparagraph (A), by inserting after 
                the item relating to ``payment to the foreign 
                service retirement and disability fund'' the 
                following item: ``Payment to the Public Health 
                Service Commissioned Corps Retirement Fund (75-
                0380-0-1-551);''; and
                  (B) in subparagraph (B), by inserting after 
                the item relating to the ``Pensions for former 
                Presidents'' the following item: ``Public 
                Health Service Commissioned Corps Retirement 
                Fund (75-8274-0-7-602);''.
  (c) Transfer of Appropriations.--There shall be transferred 
on October 1, 2006, into the fund established under section 251 
of the Public Health Service Act, as added by subsection (a), 
any obligated or unobligated balances of appropriations made to 
the Department of Health and Human Services that are currently 
available for benefits payable on account of retirement, 
disability, or death to commissioned officers of the Public 
Health Service and to their survivors pursuant to part A of 
title II of the Public Health Service Act, and amounts so 
transferred shall be part of the assets of the Fund.

SEC. 405. NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION COMMISSIONED 
                    OFFICER CORPS RETIREMENT SYSTEM.

  (a) In General.--The National Oceanic and Atmospheric 
Administration Commissioned Officer Corps Act of 2002 (title II 
of Public Law 107-372) is amended by inserting after section 
246 (33 U.S.C. 3046) the following new section:
  ``Sec. 246A. (a) Establishment and Purpose of NOAA 
Commissioned Officer Corps Retirement Fund.--(1) There is 
established on the books of the Treasury a fund to be known as 
the National Oceanic and Atmospheric Administration 
Commissioned Officer Corps Retirement Fund (hereinafter in this 
section referred to as the `Fund'), which shall be administered 
by the Secretary. The Fund shall be used for the accumulation 
of funds in order to finance on an actuarially sound basis 
liabilities of the Department of Commerce under military 
retirement and survivor benefit programs for the commissioned 
officers corps.
  ``(2) The term `military retirement and survivor benefit 
program' means--
          ``(A) the provisions of this title and title 10, 
        United States Code, creating entitlement to, or 
        determining, the amount of retired pay;
          ``(B) the programs under the jurisdiction of the 
        Department of Defense providing annuities for survivors 
        and members and former members of the Armed Forces, 
        including chapter 73 of title 10, section 4 of Public 
        Law 92-425, and section 5 of Public Law 96-202, as made 
        applicable to the commissioned officer corps by section 
        261.
  ``(b) Assets of the Fund.--There shall be deposited into the 
Fund the following, which shall constitute the assets of the 
Fund:
          ``(1) Amounts paid into the Fund under subsection 
        (e).
          ``(2) Any return on investment of the assets of the 
        Fund.
          ``(3) Amounts transferred into the Fund pursuant to 
        section 405(c) of the Deficit Control Act of 2004.
  ``(c) Payments From the Fund.--There shall be paid from the 
Fund benefits payable on account of military retirement and 
survivor benefit programs to commissioned officers of the 
commissioned officer corps and their survivors.
  ``(d) Determination of Contributions to the Fund.--(1)(A) Not 
later than June 30, 2004, the Secretary shall determine the 
unfunded liability of the Fund attributable to service 
performed as of September 30, 2004, which is `active service' 
for the purpose of this title. The Secretary shall establish an 
amortization schedule, including a series of annual 
installments commencing October 1, 2005, which provides for the 
liquidation of such liability by October 1, 2044.
  ``(B) The Secretary shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year, for each fiscal 
year beginning after September 30, 2004, through the fiscal 
year ending September 30, 2039, and shall establish a new 
amortization schedule, including a series of annual 
installments commencing on September 30 of the subsequent 
fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
  ``(C) The Secretary shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year for each fiscal 
year beginning after September 30, 2039, and shall establish a 
new authorization schedule, including series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability over 5 years.
  ``(2) The Secretary shall determine each fiscal year, in 
sufficient time for inclusion in the budget request for the 
following fiscal year, the total amount of Department of 
Commerce contributions to be made to the Fund during that 
fiscal year under (e). The amount shall be the product of--
          ``(A) the current estimate of the value of the single 
        level percentage of basic pay to be determined under 
        subsection (e) at the time of the most recent actuarial 
        valuation under paragraph (3); and
          ``(B) the total amount of basic pay expected to be 
        paid during that fiscal year to commissioned officers 
        of NOAA on active duty.
  ``(3) Not less often then every four years (or by the fiscal 
year end before the effective date of any statutory change 
affecting benefits payable on account of retirement, 
disability, or death to commissioned officers or their 
survivors), the Secretary shall carry out an actuarial 
valuation of benefits payable on account of military retirement 
and survivor benefit programs to commissioned officers of the 
Administration and to their survivors. Each such actuarial 
valuation shall be signed by an enrolled Actuary and shall 
include a determination (using the aggregate entry-age normal 
cost method) of a single level percentage of basic pay for 
commissioned officers on active duty.
  ``(4) All determinations under this section shall be in 
accordance with generally accepted actuarial principles and 
practices, and, where appropriate, shall follow the general 
pattern of methods and assumptions approved by the Department 
of Defense Retirement Board of Actuaries.
  ``(5) The Secretary shall provide for the keeping of such 
records as are necessary for determining the actuarial status 
of the Fund.
  ``(e) Payments Into the Fund.--(1) From amounts appropriated 
to the National Oceanic Atmospheric Administration for salaries 
and expenses, the Secretary shall pay into the Fund at the end 
of each month the amount that is the product of--
          ``(A) the level percentage of basic pay determined 
        using all the methods and assumptions approved for the 
        most recent (as of the first day of the current fiscal 
        year) actuarial valuation under subsection (d) (except 
        that any statutory change affecting benefits payable on 
        account of military retirement and survivor benefit 
        programs to commissioned officers of the Administration 
        and to their survivors that is effective date after the 
        date of that valuation and on or before the first day 
        of the current fiscal year shall be used in such 
        determination); and
          ``(B) the total amount of basic pay accrued for that 
        month by commissioned officers on active duty.
  ``(2)(A) At the beginning of each fiscal year, the Secretary 
shall determine the sum of--
          ``(i) the amount of the payment for that year under 
        the amortization of the original unfunded liability of 
        the Fund;
          ``(ii) the amount (including any negative amount) for 
        that year under the most recent amortization schedule 
        determined by the Secretary for the amortization of any 
        cumulative actuarial gain or loss to the Fund, 
        resulting from changes in benefits; and
          ``(iii) the amount (including any negative amount) 
        for that year under the most recent amortization 
        schedule determined by the Secretary for the 
        amortization or any cumulative actuarial gain or loss 
        to the Fund resulting from changes in actuarial 
        assumptions and from experience different from the 
        assumed since the last valuation.
The Secretary shall promptly certify the amount of the sum to 
the Secretary of the Treasury.
  ``(B) Upon receiving the certification pursuant to paragraph 
(1), the Secretary of the Treasury shall promptly pay into the 
Fund from the General Fund of the Treasury the amount so 
certified. Such payment shall be the contribution to the Fund 
for that fiscal year.
  ``(f) Investment of Assets of the Fund.--The Secretary may 
request the Secretary of the Treasury to invest such portion of 
the Fund as is not, in the judgment of the Secretary, required 
to meet the current needs of the Fund. Such investments shall 
be made by the Secretary of the Treasury in public debt 
securities with maturities suitable to the needs of the Fund, 
as determined by the Secretary, and bearing interest at rates 
determined by the Secretary of the Treasury, taking into 
consideration current market yields on outstanding marketable 
obligations of the United States of comparable maturities. The 
income of such investments shall be credited to and form a part 
of the Fund.
  ``(g) Implementation Year Exceptions.--(1) To avoid funding 
shortfalls in the first year should formal actuarial 
determinations not be available in time for budget preparation, 
the amounts used in the first year in subsection (e)(1)(A) 
shall be set equal to the estimate in subsection (d)(2)(A) if 
final determinations are not available. The original unfunded 
liability as determined in subsection (d)(1) shall include an 
adjustment to correct for this difference between the formal 
actuarial determinations and the estimates in subsection 
(d)(2)(A).''.
  (b) Exemption From Sequestration.--Section 255(g)(1)(B) of 
the Balanced Budget and Emergency Deficit Control Act of 1985 
(2 U.S.C. 905(g)(1)(B)) is amended by striking ``National 
Oceanic and Atmospheric Administration retirement (13-1450-0-1-
306);'' and inserting ``National Oceanic and Atmospheric 
Administration Commissioned Officer Corps Retirement Fund;''.
  (c) Transfer of Appropriations.--There shall be transferred 
on October 1, 2006, into the fund established under section 
246A(a) of the National Oceanic and Atmospheric Administration 
Commissioned Officer Corps Act of 2002 (title II of Public Law 
107-372, as added by subsection (a)), any obligated and 
unobligated balance of appropriations made to the Department of 
Commerce that are available as of the date of the enactment of 
this Act for benefits payable on account of military retirement 
and survivor benefit programs to commissioned officers of the 
NOAA Commissioned Officer Corps and to their survivors, and 
amounts so transferred shall be part of the assets of the Fund, 
effective October 1, 2006.
  (d) Effective Date.--Subsection (c) (relating to payments 
from the Fund) and (e) (relating to payments into the Fund) of 
section 246A of the National Oceanic and Atmospheric 
Administration Commissioned Officer Corps Act of 2002 (title II 
of Public Law 107-372, as added by subsection (a)), shall take 
effect on October 1, 2006.

SEC. 406. COAST GUARD MILITARY RETIREMENT SYSTEM.

  (a) Accrual Funding for Coast Guard Retirement.--
          (1) In general.--Chapter 11 of title 14, United 
        States Code, is amended by adding at the end the 
        following new subchapter:

          ``SUBCHAPTER V--COAST GUARD MILITARY RETIREMENT FUND


``Sec. 441. Establishment and purpose of Fund; definitions

  ``(a) Establishment of Fund; Purpose.--There is established 
on the books of the Treasury a fund to be known as the Coast 
Guard Military Retirement Fund (hereinafter in this subchapter 
referred to as the `Fund'), which shall be administered by the 
Secretary. The Fund shall be used for the accumulations of 
funds in order to finance on an actuarially sound basis 
liabilities of the Coast Guard under military retirement and 
survivor benefit programs.
  ``(b) Military Retirement and Survivor Benefit Programs 
Defined.--In this subchapter, the term `military retirement and 
survivor benefit programs' means--
          ``(1) the provisions of this title and title 10 
        creating entitlement to, or determining the amount of, 
        retired pay;
          ``(2) the programs providing annuities for survivors 
        of members and former members of the armed forces, 
        including chapter 73 of title 10, section 4 of Public 
        Law 92-425, and section 5 of Public Law 96-402; and
          ``(3) the authority provided in section 1048(h) of 
        title 10.
  ``(c) Secretary Defined.--In this subchapter, the term 
`Secretary' means the Secretary of Homeland Security when the 
Coast Guard is not operating as a service in the Navy and the 
Secretary of Defense when the Coast Guard is operating as a 
service in the Navy.

``Sec. 442. Assets of the Fund

  ``There shall be deposited into the Fund the following, which 
shall constitute the assets of the Fund:
          ``(1) Amounts paid into the Fund under section 445 of 
        this title.
          ``(2) Any return on investment of the assets of the 
        Fund.
          ``(3) Amounts transferred into the Fund pursuant to 
        section 406(d) of the Deficit Control Act of 2004.

``Sec. 443. Payments from the Fund

  ``(a) In General.--There shall be paid from the Fund the 
following:
          ``(1) Retired pay payable to persons on the retired 
        list of the Coast Guard.
          ``(2) Retired pay payable under chapter 1223 of title 
        10 to former members of the Coast Guard and the former 
        United States Lighthouse Service.
          ``(3) Benefits payable under programs that provide 
        annuities for survivors of members and former members 
        of the armed forces, including chapter 73 of title 10, 
        section 4 of Public Law 92-425, and section 5 of Public 
        Law 96-402.
          ``(4) Amounts payable under section 1048(h) of title 
        10.
  ``(b) Availability of Assets of the Fund.--The assets of the 
Fund are hereby made available for payments under subsection 
(a).

``Sec. 444. Determination of contributions to the Fund

  ``(a) Initial Unfunded Liability.--(1) Not later than June 
30, 2005, the Secretary shall determine the unfunded liability 
of the Fund attributable to service performed as of September 
30, 2004, which is `active service' for the purposes of section 
212. The Secretary shall establish an amortization schedule, 
including a series of annual installments commencing October 1, 
2005, which provides for the liquidation of such liability by 
October 1, 2044.
  ``(2) The Secretary shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year, for each 
beginning after September 30, 2004, through the fiscal year 
ending September 30, 2039, and shall establish a new 
amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability by October 1, 2044.
  ``(3) The Secretary shall redetermine the unfunded liability 
of the Fund as of the close of the fiscal year for each fiscal 
year beginning after September 30, 2039, and shall establish a 
new amortization schedule, including a series of annual 
installments commencing on October 1 of the second subsequent 
fiscal year, which provides for the liquidation of such 
liability over five years.
  ``(b) Annual Contributions for Current Services.--(1) The 
Secretary shall determine each fiscal year, in sufficient time 
for inclusion in the budget request for the following fiscal 
year, the total amount of Department of Homeland Security, or 
Department of Defense, contributions to be made to the Fund 
during that fiscal year under section 445(a) of this title. 
That amount shall be the sum of the following:
          ``(A) The product of--
                  ``(i) the current estimate of the value of 
                the single level percentage of basic pay to be 
                determined under subsection (c)(1)(A) at the 
                time of the most recent actuarial valuation 
                under subsection (c); and
                  ``(ii) the total amount of basic pay expected 
                to be paid during that fiscal year to members 
                of the Coast Guard on active duty (other than 
                active duty for training).
          ``(B) The product of--
                  ``(i) the current estimate of the value of 
                the single level percentage of basic pay and of 
                compensation (paid pursuant to section 206 of 
                title 37) to be determined under subsection 
                (c)(1)(B) at the time of the most recent 
                actuarial valuation under subsection (c); and
                  ``(ii) the total amount of basic pay and 
                compensation (paid pursuant to section 206 of 
                title 37) expected to be paid during that 
                fiscal year to members of the Coast Guard Ready 
                Reserve (other than members on full-time 
                Reserve duty other than for training) who are 
                not otherwise described in subparagraph 
                (A)(ii).
  ``(2) The amount determined under paragraph (1) for any 
fiscal year is the amount needed to be appropriated to the 
Department of Homeland Security for that fiscal year for 
payments to be made to the Fund during that year under section 
445(a) of this title. The President shall include not less than 
the full amount so determined in the budget transmitted to 
Congress for that fiscal year under section 1105 of title 31. 
The President may comment and make recommendations concerning 
any such amount.
  ``(c) Periodic Actuarial Valuations.--(1) Not less often than 
every four years (or before the effective date of any statutory 
change affecting benefits payable on account of retirement, 
disability, or death to members of the Coast Guard or their 
survivors), the Secretary shall carry out an actuarial 
valuation of the Coast Guard military retirement and survivor 
benefit programs. Each actuarial valuation of such programs 
shall be signed by an enrolled actuary and shall include--
          ``(A) a determination (using the aggregate entry-age 
        normal cost method) of a single level percentage of 
        basic pay for members of the Coast Guard on active duty 
        (other than active duty for training); and
          ``(B) a determination (using the aggregate entry-age 
        normal cost method) of single level percentage of basic 
        pay and of compensation (paid pursuant to section 206 
        of title 37) for members of the Ready Reserve of the 
        Coast Guard (other than members on full-time Reserve 
        duty other than for training) who are not otherwise 
        described in subparagraph (A).
  ``(2) Such single level percentages shall be used for the 
purposes of subsection (b) and section 445(a) of this title.
  ``(d) Use of Generally Accepted Actuarial Principles and 
Practices.--All determinations under this section shall be in 
accordance with generally accepted actuarial principles and 
practices and, where appropriate, shall follow the general 
pattern of methods and assumptions approved by the Department 
of Defense Retirement Board of Actuaries.
  ``(e) Records.--The Secretary shall provide for the keeping 
of such records as are necessary for determining the actuarial 
status of the Fund.

``Sec. 445. Payments into the Fund

  ``(a) Monthly Accrual Charge for Current Services.--From 
amounts appropriated to the Coast Guard for salaries and 
expenses, the Secretary shall pay into the Fund at the end of 
each month as the Department of Homeland Security, or 
Department of Defense, contribution to the Fund for that month 
the amount that is the sum of the following:
          ``(1) The product of--
                  ``(A) the level percentage of basic pay 
                determined using all the methods and 
                assumptions approved for the most recent (as of 
                the first day of the current fiscal year) 
                actuarial valuation under section 444(c)(1)(A) 
                of this title (except that any statutory change 
                in the military retirement and survivor benefit 
                systems that is effective after the date of 
                that valuation and on or before the first day 
                of the current fiscal year shall be used in 
                such determination); and
                  ``(B) the total amount of basic pay accrued 
                for that month by members of the Coast Guard on 
                active duty (other than active duty for 
                training).
          ``(2) The product of--
                  ``(A) the level percentage of basic pay and 
                compensation (accrued pursuant to section 206 
                of title 37) determined using all the methods 
                and assumptions approved for the most recent 
                (as of the first day of the current fiscal 
                year) actuarial valuation under section 
                444(c)(1)(B) of this title (except that any 
                statutory change in the military retirement and 
                survivor benefit systems that is effective 
                after the date of that valuation and on or 
                before the first day of the current fiscal year 
                shall be used in such determination); and
                  ``(B) the total amount of basic pay and of 
                compensation (paid pursuant to section 206 of 
                title 37) accrued for that month by members of 
                the Ready Reserve (other than members of full-
                time Reserve duty other than for training) who 
                are not otherwise described in paragraph 
                (1)(B).
  ``(b) Annual Payment for Unfunded Liabilities.--(1) At the 
beginning of each fiscal year, beginning on October 1, 2005, 
the Secretary shall certify to the Secretary of the Treasury 
the amount of the first installment under the most recent 
amortization schedule established under section 254(a). The 
Secretary of the Treasury shall promptly pay into the Fund from 
the General Fund of the Treasury the amount so certified. Such 
payment shall be the contribution to the Fund for that fiscal 
year.

``Sec. 446. Investment of assets of the Fund

  ``The Secretary may request the Secretary of the Treasury to 
invest such portion of the Fund as is not, in the judgment of 
the Secretary, required to meet the current needs of the Fund. 
Such investments shall be made by the Secretary of the Treasury 
in public debt securities with maturities suitable to the needs 
of the Fund, as determined by the Secretary, and bearing 
interest at rates determined by the Secretary of the Treasury, 
taking into consideration current market yields on outstanding 
marketable obligations of the United States of comparable 
maturities. The income on such investments shall be credited to 
and form a part of the Fund.''.
          (2) Technical amendments.--Such chapter is further 
        amended--
                  (A) by amending the center heading after the 
                table of sections to read as follows:

                      ``SUBCHAPTER I--OFFICERS'';

                  (B) by amending the center heading after 
                section 336 to read as follows:

                  ``SUBCHAPTER II--ENLISTED MEMBERS'';

                  (C) by amending the center heading after 
                section 373 to read as follows:

                ``SUBCHAPTER III--GENERAL PROVISIONS'';

          and
                  (D) by amending the center heading after 
                section 425 to read as follows:

                 ``SUBCHAPTER IV--SPECIAL PROVISIONS''.

          (3) Clerical amendments.--The table of sections at 
        the beginning of such chapter is amended--
                  (A) by striking ``officers'' at the beginning 
                of the table and inserting ``subchapter i--
                officers'';
                  (B) by striking ``enlisted members'' after 
                the item relating to section 336 and inserting 
                ``subchapter ii--enlisted members'';
                  (C) by striking ``general provisions'' after 
                the item relating to section 373 and inserting 
                ``subchapter iii--general provisions'';
                  (D) by striking ``special provisions'' after 
                the item relating to section 425 and inserting 
                ``subchapter iv--special provisions''; and
                  (E) by adding at the end the following:

          ``SUBCHAPTER V--COAST GUARD MILITARY RETIREMENT FUND

``441. Establishment and purpose of Fund; definitions.
``442. Assets of the Fund.
``443. Payments from the Fund.
``444. Determination of contributions to the Fund.
``445. Payments into the Fund.
``446. Investment of assets of the Fund.''.

  (b) Implementation Year Exceptions.--To avoid funding 
shortfalls in the first year of implementation of subchapter V 
of chapter 11 of title 14, United States Code, as added by 
subsection (a), if formal actuarial determinations are not 
available in time for budget preparation, the amounts used in 
the first year under sections 445(a)(1)(A) and 445(a)(2)(A) of 
such title shall be set equal to those estimates in sections 
444(b)(1)(A)(i) and 444(b)(1)(B)(i), respectively, of such 
title if final determinations are not available. The original 
unfunded liability, as defined in section 444(a) of such title, 
shall include an adjustment to correct for this difference 
between the formal actuarial determinations and the estimates 
in sections 444(b)(1)(A)(i) and 444(b)(1)(B)(i) of such title.
  (c) Conforming Amendment.--Subparagraph (B) of section 
255(g)(1) of the Balanced Budget and Emergency Deficit Control 
Act of 1985 (2 U.S.C. 905(g)(1)) is amended by striking 
``Retired Pay, Coast Guard (69-0241-0-1-403)'' and inserting 
``Coast Guard Military Retirement Fund (69-0241-01-403)''.
  (d) Transfer of Existing Balances.--
          (1) Transfer.--There shall be transferred into the 
        Fund on October 1, 2005, any obligated and unobligated 
        balances of appropriations made to the Department of 
        Homeland Security that are currently available for 
        retired pay, and amounts so transferred shall be part 
        of the assets of the Fund.
          (2) Fund defined.--For purposes of paragraph (1), the 
        term ``Fund'' means the Coast Guard Military Retirement 
        Fund established under section 441 of title 14, United 
        States Code, as added by subsection (a).
  (e) Effective Date.--Sections 443 (relating to payments from 
the Fund) and 445 (relating to payments into the Fund) of title 
14, United States Code, as added by subsection (a), shall take 
effect on October 1, 2005.

 Subtitle B--Accrual Funding of Post-Retirement Health Benefits Costs 
                         for Federal Employees

SEC. 411. FEDERAL EMPLOYEES HEALTH BENEFITS FUND.

  (a) Section 8906 of title 5, United States Code, is amended--
          (1) by redesignating subsection (c) as subsection 
        (c)(1) and by adding at the end the following new 
        paragraphs:
  ``(2) In addition to Government contributions required by 
subsection (b) and paragraph (1), each employing agency shall 
contribute amounts as determined by the Office to be necessary 
to prefund the accruing actuarial cost of post-retirement 
health benefits for each of the agency's current employees who 
are eligible for Government contributions under this section. 
Amounts under this paragraph shall be paid by the employing 
agency separate from other contributions under this section, 
from the appropriations or fund used for payment of the salary 
of the employee, on a schedule to be determined by the Office.
  ``(3) Paragraph (2) shall not apply to the United States 
Postal Service or the government of the District of 
Columbia.''; and
          (2) by amending subsection (g)(1) to read as follows:
  ``(g)(1) Except as provided in paragraphs (2) and (3), all 
Government contributions authorized by this section for health 
benefits for an annuitant shall be paid from the Employees 
Health Benefits Fund to the extent that funds are available in 
accordance with section 8909(h)(6) and, if necessary, from 
annual appropriations which are authorized to be made for that 
purpose and which may be made available until expended.''.
  (b) Section 8909 of title 5, United States Code, is amended 
by adding at the end the following new subsection:
  ``(h)(1) Not later than June 30, 2006, the Office shall 
determine the existing liability of the Fund for post-
retirement health benefits, excluding the liability of the 
United States Postal Service for service under section 
8906(g)(2), under this chapter as of September 30, 2006. The 
Office shall establish an amortization schedule, including a 
series of annual installments commencing September 30, 2006, 
which provides for the liquidation of such liability by 
September 30, 2043.
  ``(2) At the close of each fiscal year, for fiscal years 
beginning after September 30, 2005, the Office shall determine 
the supplemental liability of the Fund for post-retirement 
health benefits, excluding the liability attributable to the 
United States Postal Service for service subject to section 
8906(g)(2), and shall establish an amortization schedule, 
including a series of annual installments commencing on 
September 30 of the subsequent fiscal year, which provides for 
liquidation of such supplemental liability over 30 years.
  ``(3) Amortization schedules established under this paragraph 
shall be set in accordance with generally accepted actuarial 
practices and principles.
  ``(4) At the end of each fiscal year on and after September 
30, 2006, the Office shall notify the Secretary of the Treasury 
of the amounts of the next installments under the most recent 
amortization schedules established under paragraphs (1) and 
(2). Before closing the accounts for the fiscal year, the 
Secretary shall credit the sum of these amounts (including in 
that sum any negative amount for the amortization of the 
supplemental liability) to the Fund, as a Government 
contribution, out of any money in the Treasury of the United 
States not otherwise appropriated.
  ``(5) For the purpose of carrying out paragraphs (1) and (2), 
the Office shall perform or arrange for actuarial 
determinations and valuations and shall prescribe retention of 
such records as it considers necessary for making periodic 
actuarial valuations of the Fund.
  ``(6) Notwithstanding subsection (b), the amounts deposited 
into the Fund pursuant to this subsection and section 
8906(c)(2) to prefund post-retirement health benefits costs 
shall be segregated within the Fund so that such amounts, as 
well as earnings and proceeds under subsection (c) attributable 
to them, may be used exclusively for the purpose of paying 
Government contributions for post-retirement health benefits 
costs. When such amounts are used in combination with amounts 
withheld from annuitants to pay for health benefits, a portion 
of the contributions shall then be set aside in the Fund as 
described in subsection (b).
  ``(7) Under this subsection, `supplemental liability' means--
          ``(A) the actuarial present value for future post-
        retirement health benefits that are the liability of 
        the Fund, less
          ``(B) the sum of--
                  ``(i) the actuarial present value of all 
                future contributions by agencies and annuitants 
                to the Fund toward those benefits pursuant to 
                section 8906;
                  ``(ii) the present value of all scheduled 
                amortization payments to the Fund pursuant to 
                paragraphs (1) and (2);
                  ``(iii) the Fund balance as of the date the 
                supplemental liability is determined, to the 
                extent that such balance is attributable to 
                post-retirement benefits; and
                  ``(iv) any other appropriate amount, as 
                determined by the Office in accordance with 
                generally accepted actuarial practices and 
                principles.''.

SEC. 412. FUNDING UNIFORMED SERVICES HEALTH BENEFITS FOR ALL RETIREES.

  Title 10, United States Code, is amended--
          (1) in the title of chapter 56, by striking 
        ``DEPARTMENT OF DEFENSE MEDICARE-ELIGIBLE'' and 
        inserting ``UNIFORMED SERVICES'';
          (2) in section 1111--
                  (A) in subsection (a)--
                          (i) by striking ``Department of 
                        Defense Medicare-Eligible'' and 
                        inserting ``Uniformed Services'';
                          (ii) by striking ``Department of 
                        Defense under''; and
                          (iii) by striking ``for medicare-
                        eligible beneficiaries'';
                  (B) in subsection (c)--
                          (i) by striking ``The Secretary of 
                        Defense may'' and inserting ``The 
                        Secretary of Defense shall'';
                          (ii) by striking ``with any other'' 
                        and inserting ``with each'';
                          (iii) by striking ``Any such 
                        agreement'' and inserting ``Such 
                        agreements''; and
                          (iv) by striking ``administering 
                        Secretary may'' and inserting 
                        ``administrative Secretary shall'';
          (3) in section 1113--
                  (A) in subsection (a)--
                          (i) by striking ``and are medicare 
                        eligible'';
                          (ii) by striking ``who are medicare 
                        eligible''; and
                          (iii) by adding at the end the 
                        following new sentence: ``For the 
                        fiscal year starting October 1, 2004, 
                        only, the payments will be solely for 
                        the costs of members or former members 
                        of a uniformed service who are entitled 
                        to retired or retainer pay and are 
                        medicare-eligible, and eligible 
                        dependents or survivors who are 
                        medicare-eligible.'';
                  (B) in subsection (c)(1), by striking ``who 
                are medicare-eligible'';
                  (C) in subsection (d), by striking ``who are 
                medicare-eligible''; and
                  (D) in subsection (f), by striking ``If'' and 
                inserting ``When'';
          (4) in section 1114, in subsection (a)(1), by 
        striking ``Department of Defense Medicare-Eligible'' 
        and inserting ``Uniformed Services'';
          (5) in section 1115--
                  (A) in subsection (b)(2), by striking ``The 
                amount determined under paragraph (1) for any 
                fiscal year is the amount needed to be 
                appropriated to the Department of Defense (or 
                to the other executive department having 
                jurisdiction over the participating uniformed 
                service)'' and inserting ``The amount 
                determined under paragraph (1), or the amount 
                determined under section 1111(c) for a 
                participating uniformed service, for any fiscal 
                year, is the amount needed to be appropriated 
                to the Department of Defense (or to any other 
                executive department having jurisdiction over a 
                participating uniformed service)'';
                  (B) in subsection (c)(2), by striking ``for 
                medicare eligible beneficiaries''; and
                  (C) by adding at the end the following new 
                subsection:
  ``(f) For the fiscal year starting October 1, 2004, only, the 
amounts in this section shall be based solely on the costs of 
medicare-eligible benefits of beneficiaries and the costs for 
their eligible dependents or survivors who are medicare-
eligible, and shall be recalculated thereafter to reflect the 
cost of beneficiaries defined in section 1111.''; and
          (6) in section 1116--
                  (A) in subsection (a)(1)(A), by striking 
                ``for medicare-eligible beneficiaries'';
                  (B) in subsection (a)(2)(A), by striking 
                ``for medicare-eligible beneficiaries''; and
                  (C) in subsection (c), by striking 
                ``subsection (a) shall be paid from funds 
                available for the health care programs'' and 
                inserting ``subsection (a) and section 1111(c) 
                shall be paid from funds available for the pay 
                of members of the participating uniformed 
                services under the jurisdiction of the 
                respective administering secretaries''.

SEC. 413. EFFECTIVE DATE.

  Except as otherwise provided, this title shall take effect 
upon enactment with respect to fiscal years beginning after 
2005.

``Sec. 601. Short title.
``Sec. 602. Budgetary treatment.
``Sec. 603. Timetable for implementation of accrual budgeting for 
          Federal insurance programs.
``Sec. 604. Definitions.
``Sec. 605. Authorizations to enter into contracts; actuarial cost 
          account.
``Sec. 606. Effective date.''.



                  Subtitle C--Limit on the Public Debt



SEC. 421. LIMIT ON PUBLIC DEBT.

  Section 3101 of title 31, United States Code, is amended to 
read as follows:

``Sec. 3101. Public debt limit

  ``(a) In this section, the current redemption value of an 
obligation issued on a discount basis and redeemable before 
maturity at the option of its holder is deemed to be the face 
amount of the obligation.
  ``(b) The face amount of obligations issued under this 
chapter 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 
and intragovernmental holdings) may not be more than 
$4,393,000,000,000 outstanding at one time, subject to changes 
periodically made in that amount as provided by law.
  ``(c) For purposes of this section, the face amount, for any 
month, of any obligation issued on a discount basis that is not 
redeemable before maturity at the option of the holder of the 
obligation is an amount equal to the sum of--
          ``(1) the original issue price of the obligation, 
        plus
          ``(2) the portion of the discount on the obligation 
        attributable to periods before the beginning of such 
        month (as determined under the principles of section 
        1272(a) of the Internal Revenue Code of 1986 without 
        regard to any exceptions contained in paragraph (2) of 
        such section).
  ``(d) For purposes of this section, the term `intragovernment 
holding' is any obligation issued by the Secretary of the 
Treasury to any Federal trust fund or Government account, 
whether in respect of public money, money otherwise required to 
be deposited in the Treasury, or amounts appropriated.''.

                        TITLE V--PAYGO EXTENSION

SEC. 501. EXTENSION OF PAY-AS-YOU-GO REQUIREMENT.

  (a) Purpose.--Section 252(a) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 is amended to read as 
follows:
  ``(a) Purpose.--The purpose of this section is to assure that 
any legislation that is enacted before October 1, 2007, that 
causes a net increase in direct spending will trigger an 
offsetting sequestration.''.
  (b) Timing.--Section 252(b)(1) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 is amended by striking 
``any net deficit increase'' and all that follows through 
``2002,'' and by inserting ``any net increase in direct 
spending enacted before October 1, 2007,''.
  (c) Calculation of Direct Spending Increase.--Section 
252(b)(2) of the Balanced Budget and Emergency Deficit Control 
Act of 1985 is amended--
          (1) by striking ``deficit'' the first place it 
        appears and inserting ``direct spending'';
          (2) in subparagraph (A) by striking ``and receipts'';
          (3) in subparagraph (C) by striking ``and receipts''; 
        and
          (4) by amending the heading to read as follows: 
        ``Calculation of direct spending increase.--''.
  (d) Conforming Amendments.--(1) The heading of section 252(c) 
of the Balanced Budget and Emergency Deficit Control Act of 
1985 is amended to read as follows: ``Eliminating a Direct 
Spending Increase.--''.
  (2) Paragraphs (1), (2), and (4) of section 252(d) of the 
Balanced Budget and Emergency Deficit Control Act of 1985 are 
amended by striking ``or receipts'' each place it appears.
  (3) Section 252(e) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended by striking ``or 
receipts'' and by striking ``, outlays, and receipts'' and 
inserting ``and outlays''.
  (4) Section 254(c)(3) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended--
          (A) in subparagraph (A) by striking ``net deficit 
        increase or decrease'' and by inserting ``net increase 
        or decrease in direct spending'';
          (B) in subparagraph (B) by striking ``amount of 
        deficit increase or decrease'' and by inserting 
        ``increase or decrease in direct spending''; and
          (C) in subparagraph (C) by striking ``a deficit 
        increase'' and by inserting ``an increase in direct 
        spending''.
                              ----------                              


    18. An Amendment in the Nature of a Substitute To Be Offered by 
  Representative Young of Florida, or His Designee, Debatable for 30 
                                Minutes

  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Spending Control Act of 
2004''.

SEC. 2. EXTENSION OF DIRECT SPENDING CONTROLS.

  (a) Purpose.--Section 252(a) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 is amended to read as 
follows:
  ``(a) Purpose.--The purpose of this section is to assure that 
any legislation that causes a net increase in direct spending 
will trigger an offsetting sequestration.''.
  (b) Timing.--Section 252(b)(1) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 is amended by striking 
``any net deficit increase'' and all that follows through 
``2002,'' and by inserting ``any net increase in direct 
spending,''.
  (c) Calculation of Direct Spending Increase.--(1) Section 
252(b)(2) of the Balanced Budget and Emergency Deficit Control 
Act of 1985 is amended to read as follows:
          ``(2) Calculation of Direct Spending Increase.--OMB 
        shall calculate the amount of increase or decrease in 
        direct spending. If, in the President's budget 
        submission pursuant to section 1105(a) of title 31, 
        United States Code, baseline estimates for direct 
        spending for the current year exceed the direct 
        spending baseline estimates for the current year 
        assumed in the previous year's budget as a result of 
        legislation enacted since the previous budget, that 
        shall be treated as an increase in direct spending for 
        purposes of this section.
  (2) Conforming Amendment.--Section 1105(a) of title 31, 
United States Code, is amended by adding at the end the 
following new paragraph:
          ``(35) a separate statement identifying the changes 
        in direct spending baseline estimates for the current 
        year resulting from economic factors, technical 
        factors, or enacted legislation.''.
  (d) Conforming Amendments.--(1) The heading of section 252(c) 
of the Balanced Budget and Emergency Deficit Control Act of 
1985 is amended to read as follows: ``Eliminating a Direct 
Spending Increase.--''.
  (2) Paragraphs (1), (2), and (4) of section 252(d) of the 
Balanced Budget and Emergency Deficit Control Act of 1985 are 
amended by striking ``or receipts'' each place it appears.
  (3) Section 252(e) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended by striking ``or 
receipts'' and by striking ``, outlays, and receipts'' and 
inserting ``and outlays''.
  (4) Section 254(c)(3) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended--
          (A) in subparagraph (A) by striking ``net deficit 
        increase or decrease'' and by inserting ``net increase 
        or decrease in direct spending'';
          (B) in subparagraph (B) by striking ``amount of 
        deficit increase or decrease'' and by inserting 
        ``increase or decrease in direct spending''; and
          (C) in subparagraph (C) by striking ``a deficit 
        increase'' and by inserting ``an increase in direct 
        spending''.

SEC. 3. PROJECTIONS UNDER SECTION 257.

  Section 257(c) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended by inserting after paragraph (6) 
the following new paragraph:
          ``(7) Emergencies.--New budgetary resources 
        designated under section 251(b)(2)(A) or 251(b)(2)(I) 
        shall not be assumed beyond the fiscal year for which 
        they have been enacted.''.

SEC. 4. EXCEPTION FOR OUTLAY COMPONENTS OF EXPIRING RECEIPTS 
                    LEGISLATION.

  Section 252(d)(4) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended by striking ``and'' at 
the end of subparagraph (A), by striking the period and 
inserting ``; and'' at the end of subparagraph (B), and by 
adding at the end the following new subparagraph:
                  ``(C) extending provisions in the Economic 
                Growth and Tax Relief Reconciliation Act of 
                2001 or provisions in sections 101 through 104, 
                section 202, or sections 301 and 302 of the 
                Jobs and Growth Tax Relief Reconciliation Act 
                of 2003.''.

SEC. 5. TECHNICAL CORRECTIONS TO THE BALANCED BUDGET AND EMERGENCY 
                    DEFICIT CONTROL ACT OF 1985.

  Part C of the Balanced Budget and Emergency Deficit Control 
Act of 1985 is amended as follows:
          (1) In section 250(a), strike ``SEC. 256. GENERAL AND 
        SPECIAL SEQUESTRATION RULES'' and insert ``Sec. 256. 
        General and special sequestration rules'' in the item 
        relating to section 256.
          (2) In subparagraphs (F), (G), (H), (I), (J), and (K) 
        of section 250(c)(4), insert ``subparagraph'' after 
        ``described in'' each place it appears.
          (3) In section 250(c)(18), insert ``of'' after 
        ``expenses''.
          (4) In section 251(b)(1)(A), strike ``committees'' 
        the first place it appears and insert ``Committees''.
          (5) In section 251(b)(1)(C)(i), strike ``fiscal 
        years'' and insert ``fiscal year''.
          (6) In section 251(b)(1)(D)(ii), strike ``fiscal 
        years'' and insert ``fiscal year''.
          (7) In section 252(b)(2)(B), insert ``the'' before 
        ``budget year''.
          (8) In section 252(c)(1)(C)(i), strike ``paragraph 
        (1)'' and insert ``subsection (b)''.
          (9) In section 254(c)(3)(A), strike ``subsection'' 
        and insert ``section''.
          (10) In section 254(f)(4), strike ``subsection'' and 
        insert ``section'' and strike ``sequesterable'' and 
        insert ``sequestrable''.
          (11) In section 255(g)(1)(B), move the fourteenth 
        undesignated clause 2 ems to the right.
          (12) In section 255(g)(2), insert ``and'' after the 
        semicolon at the end of the next-to-last undesignated 
        clause.
          (13) In section 255(h)--
                  (A) strike ``and'' after the semicolon in the 
                ninth undesignated clause;
                  (B) insert ``and'' after the semicolon at the 
                end of the tenth undesignated clause; and
                  (C) strike the semicolon at the end and 
                insert a period.
          (14) In section 256(k)(1), strike ``paragraph (5)'' 
        and insert ``paragraph (6)''.
          (15) In section 257(b)(2)(A)(i), strike 
        ``differenes'' and insert ``differences''.

SEC. 6. CHANGE OF FISCAL YEAR.

  (a) Fiscal Year To Begin November 1.--Section 1102 of title 
31, United States Code, is amended by striking ``October 1'' 
and inserting ``November 1'' and by striking ``September 30'' 
and inserting ``October 31''.
  (b) Title of Appropriation Acts.--Section 105 of title 1, 
United States Code, is amended by striking ``September 30'' and 
inserting ``October 31''.
  (c) Transition to New Fiscal Year.--(1) As soon as 
practicable, the President shall prepare and submit to the 
Congress--
          (A) after consultation with the Committees on 
        Appropriations of the House of Representatives and the 
        Senate, budget estimates for the United States 
        Government for the period commencing October 1, 2005, 
        and ending October 31, 2005, in such form and detail as 
        he may determine; and
          (B) propose legislation he considers appropriate with 
        respect to changes in law necessary to provide 
        authorizations of appropriations for that period.
  (2) The Director of the Office of Management and Budget shall 
provide, by regulation or otherwise, for the orderly transition 
of all departments, agencies, and instrumentalities of the 
United States Government and the government of the District of 
Columbia from the use of the fiscal year in effect on the date 
of enactment of this Act to the use of the new fiscal year 
prescribed by section 1102 of title 31, United States Code, (as 
amended by subsection (a)). The Director shall prepare and 
submit to the Congress such additional proposed legislation as 
he considers necessary to accomplish this objective.
  (d) Effective Date.--This section and the amendments made by 
it (except for subsection (c)) apply to fiscal year 2006 and 
subsequent fiscal years.

SEC. 7. SUNSETTING OF DISCRETIONARY PROGRAMS AND UNEARNED ENTITLEMENTS.

  (a) Fiscal Year 2007.--Effective October 1, 2006, 
authorizations for all programs (except earned entitlements) 
shall terminate unless such programs are reauthorized after the 
date of enactment of this Act and before October 1, 2006.
  (b) Definitions.--For purposes of subsection (a), the term 
``earned entitlement'' means an entitlement earned by service 
or paid for in total or in part by assessments or contributions 
such as social security, veterans' benefits, retirement 
programs, and medicare.

SEC. 8. SPECIAL RULE FOR FISCAL YEAR 2005.

  For purposes of ensuring the full funding of the 
transportation guarantees in fiscal year 2005, the amounts 
provided for fiscal year 2005 for discretionary new budget 
authority and outlays allocated to the House Committee on 
Appropriations as though under section 302(a) of the 
Congressional Budget Act of 1974 shall be increased by not less 
than $2,057,000,000 in budget authority and $634,000,000 in 
outlays.
                              ----------                              


 19. An Amendment To Be Offered by Representative Young of Florida, or 
                 His Designee, Debatable for 10 Minutes

  Strike any provision that establishes, extends, or enforces 
discretionary spending limits whether by amending section 251 
of the Balanced Budget and Emergency Deficit Control Act of 
1985 or otherwise.