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111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    111-217

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

 
PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 2920) TO REINSTITUTE AND 
 UPDATE THE PAY-AS-YOU-GO REQUIREMENT OF BUDGET NEUTRALITY ON NEW TAX 
 AND MANDATORY SPENDING LEGISLATION, ENFORCED BY THE THREAT OF ANNUAL, 
                        AUTOMATIC SEQUESTRATION

                                _______
                                

   July 21, 2009.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

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

                              R E P O R T

                       [To accompany H. Res. 665]

    The Committee on Rules, having had under consideration 
House Resolution 665, by a nonrecord vote, 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. 2920, the 
``Statutory Pay-As-You-Go Act of 2009,'' under a structured 
rule. The resolution provides one hour of debate equally 
divided and controlled by the chair and ranking minority member 
of the Committee on the Budget.
    The resolution waives all points of order against 
consideration of the bill except those arising under clause 9 
or 10 of rule XXI. It provides that the amendment in the nature 
of a substitute printed in part A of this report, modified by 
the amendment printed in part B of this report, shall be 
considered as adopted and the bill, as amended, shall be 
considered as read. The resolution waives all points of order 
against the bill, as amended.
    The resolution makes in order the amendment in the nature 
of a substitute printed in part C of this report if offered by 
Rep. Paul Ryan of Wisconsin or his designee. The amendment in 
the nature of a substitute shall be considered as read and 
shall be separately debatable for one hour equally divided and 
controlled by the proponent and an opponent. The resolution 
waives all points of order against the amendment in the nature 
of a substitute printed in part C of this report except those 
arising under clause 9 or 10 of rule XXI.
    The resolution provides one motion to recommit the bill 
with or without instructions. Finally, the rule provides that 
for purposes of the concurrent resolution on the budget, the 
amounts specified in section 421(a)(2)(A) and section 
421(a)(2)(C) shall be considered to be those reflected in 
section 314 and section 316 of the House companion measure.

                         EXPLANATION OF WAIVERS

    Although the rule waives all points of order against 
consideration of the bill (except those arising under clause 9 
or 10 of rule XXI), the Committee is not aware of any points of 
order against the bill's consideration. Although the rule 
waives all points of order against provisions in the bill, the 
Committee is not aware of any points of order against the bill. 
The waivers are prophylactic.

  SUMMARY OF AMENDMENT IN THE NATURE OF A SUBSTITUTE IN PART A TO BE 
                         CONSIDERED AS ADOPTED

    The amendment in the nature of a substitute limits the 
current policy adjustment, as it applies to the 2001 and 2003 
tax cuts, to tax cuts for the middle class and does not provide 
for a current policy adjustment for upper income taxpayers. It 
provides for the use of CBO cost estimates when such estimates 
are available prior to final congressional action on 
legislation, printed in the Congressional Record, and 
incorporated into legislation upon enrollment. When such 
estimates are not available prior to final congressional 
action, provides that OMB estimates shall be used. It requires 
deficit neutrality over both five and ten year periods, 
mirroring House rules. It conforms emergency designation 
procedures for the purposes of statutory PAYGO with emergency 
designation procedures in the House rules, and does not require 
a separate presidential emergency designation. Finally, it 
incorporates the judicial review section from the Balanced 
Budget and Emergency Deficit Control Act of 1985.

  SUMMARY OF AMENDMENT IN PART B TO THE AMENDMENT IN THE NATURE OF A 
            SUBSTITUTE IN PART A TO BE CONSIDERED AS ADOPTED

    The amendment eliminates duplicative language in the 
definition of the term ``budgetary effects'' (provisions 
elsewhere in the amendment in the nature of a substitute 
already require that estimates be made publicly available). It 
clarifies that the estimate to be included in a PAYGO Act is 
the estimate submitted for printing in the Congressional 
Record, before the vote on such legislation, by the chair of 
the House or Senate Budget Committee. It clarifies that the 
manner in which estimates should be made available 
electronically by the House and Senate Budget Committees is for 
such committees to post estimates on their websites. It moves 
to a different section the language regarding incorporation of 
estimates into legislation, and language relating to CBO's 
responsibilities and to scorekeeping. Finally, it makes various 
technical and conforming changes.

SUMMARY OF AMENDMENT IN THE NATURE OF A SUBSTITUTE IN PART C TO BE MADE 
                                IN ORDER

    Ryan, Paul (WI): The amendment in the nature of a 
substitute would establish caps on discretionary spending from 
FY2010 through FY2014 and a cap on total spending as a 
percentage of gross domestic product. It would also put in 
place maximum limits on deficits through 2019, again as a 
percentage of gross domestic product.

     PART A: TEXT OF AMENDMENT IN THE NATURE OF A SUBSTITUTE TO BE 
                         CONSIDERED AS ADOPTED

  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 ``Statutory 
Pay-As-You-Go Act of 2009''.
  (b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Purpose.
Sec. 3. Definitions.
Sec. 4. PAYGO estimates and PAYGO scorecards.
Sec. 5. Annual report and sequestration order.
Sec. 6. Calculating a sequestration.
Sec. 7. Current policy adjustment to the CBO estimates.
Sec. 8. Application of BBEDCA.
Sec. 9. Technical corrections.
Sec. 10. Conforming amendments.
Sec. 11. Exempt programs and activities.

SEC. 2. PURPOSE.

  The purpose of this Act is to reestablish a statutory 
procedure to enforce a rule of budget neutrality on new revenue 
and direct spending legislation.

SEC. 3. DEFINITIONS.

  As used in this Act--
          (1) The term ``BBEDCA'' means the Balanced Budget and 
        Emergency Deficit Control Act of 1985.
          (2) The definitions set forth in section 3 of the 
        Congressional Budget and Impoundment Control Act of 
        1974 and in section 250 of BBEDCA shall apply to this 
        Act, except to the extent that they are specifically 
        modified as follows:
                  (A) The term ``outyear'' means a fiscal year 
                that occurs one or more years after the budget 
                year.
                  (B) In section 250(c)(8)(C), the reference to 
                the food stamp program shall be deemed to be a 
                reference to the Supplemental Nutrition 
                Assistance Program.
          (3) The term ``AMT'' means the Alternative Minimum 
        Tax for individuals under sections 55-59 of the 
        Internal Revenue Code of 1986, the term ``EGTRRA'' 
        means the Economic Growth and Tax Relief Reconciliation 
        Act of 2001 (Public Law 107-16), and the term 
        ``JGTRRA'' means the Jobs and Growth Tax Relief and 
        Reconciliation Act of 2003 (Public Law 108-27).
          (4)(A) The term ``budgetary effects'' means the 
        amounts by which PAYGO legislation changes direct 
        spending or revenues relative to the baseline and shall 
        be determined on the basis of estimates included by 
        reference in the PAYGO Act or prepared under section 
        4(d)(3), as applicable. Such estimates shall be made 
        publicly available by the chairs of the Committees on 
        the Budget of the House of Representatives and the 
        Senate before final passage of such legislation or 
        under section 4(d)(3) if such estimates are not made 
        available before the final passage of such legislation. 
        Budgetary effects that increase direct spending or 
        decrease revenues are termed ``costs'' and budgetary 
        effects that increase revenues or decrease direct 
        spending are termed ``savings''.
          (B) For purposes of these definitions, off-budget 
        effects shall be counted as budgetary effects unless 
        such changes flow directly from amendments to title II 
        of the Social Security Act and related provisions of 
        the Internal Revenue Code of 1986 and debt service 
        effects shall not be counted as budgetary effects.
          (C) Solely for purposes of recording entries on a 
        PAYGO scorecard, provisions in appropriations Acts are 
        also considered to be budgetary effects for purposes of 
        this Act if such provisions make outyear modifications 
        to substantive law, except that provisions for which 
        the outlay effects net to zero over a period consisting 
        of the current year, the budget year, and the 4 
        subsequent years shall not be considered budgetary 
        effects. For purposes of this paragraph, the term, 
        ``modifications to substantive law'' refers to changes 
        to or restrictions on entitlement law or other 
        mandatory spending contained in appropriations Acts, 
        notwithstanding section 250(c)(8) of BBEDCA. Provisions 
        in appropriations Acts that are neither outyear 
        modifications to substantive law nor changes in 
        revenues have no budgetary effects for purposes of this 
        Act.
          (D) If a provision is designated as an emergency 
        requirement under this Act and is also designated as an 
        emergency requirement for purposes of the applicable 
        rules of the House of Representatives, CBO shall not 
        include the cost of such a provision in its estimate of 
        the legislation's budgetary effects.
          (5) The term ``debit'' refers to the net total 
        amount, when positive, by which costs recorded on the 
        PAYGO scorecards for a fiscal year exceed savings 
        recorded on those scorecards for that year.
          (6) The term ``entitlement law'' refers to a section 
        of law which provides entitlement authority.
          (7) The term ``PAYGO legislation'' or a ``PAYGO Act'' 
        refers to a bill or joint resolution that affects 
        direct spending or revenue relative to the baseline. 
        The budgetary effects of changes in revenues and 
        outyear modifications to substantive law included in 
        appropriation Acts as defined in paragraph (4) shall be 
        treated as if they were contained in PAYGO legislation.
          (8) The term ``timing shift'' refers to a delay of 
        the date on which direct spending would otherwise occur 
        from the ninth outyear to the tenth outyear or an 
        acceleration of the date on which revenues would 
        otherwise occur from the tenth outyear to the ninth 
        outyear.

SEC. 4. PAYGO ESTIMATES AND PAYGO SCORECARDS.

  (a) CBO Paygo Estimates.--(1) A PAYGO Act shall include by 
reference an estimate of its budgetary effects as determined 
under section 308(a)(3) of the Congressional Budget Act of 
1974, if timely submitted. Budgetary effects that are not so 
included shall be determined under section 4(d)(3).
  (2)(A) Section 308(a) of the Congressional Budget Act of 1974 
is amended by adding at the end the following new paragraph:
          ``(3) CBO paygo estimates.--Before a vote in either 
        House on a PAYGO Act that, if determined in the 
        affirmative, would clear such Act for enrollment, the 
        chairs of the Committees on the Budget of the House and 
        Senate shall request from the Director of the 
        Congressional Budget Office an estimate of the 
        budgetary effects of such Act under the Pay-As-You-Go 
        Act of 2009. If such an estimate is timely provided, 
        the chairs of the Committees on the Budget of the House 
        of Representative and the Senate shall cause it to be 
        printed in the Congressional Record under the heading 
        `PAYGO ESTIMATE'. As provided in section 4(a) of the 
        Statutory Pay-As-You-Go Act of 2009, the Clerk of the 
        House of Representatives or the Secretary of the 
        Senate, as applicable, shall incorporate an estimate 
        printed in the relevant portion of the Congressional 
        Record under this subsection into the enrollment of the 
        Pay-As-You-Go Act of 2009. The Director of the 
        Congressional Budget Office shall provide estimates 
        under this section in accordance with the scorekeeping 
        guidelines determined under section 252(d)(5) of the 
        Balanced Budget and Emergency Deficit Control Act of 
        1985. Upon agreement, the chairs of the Committees on 
        the Budget of the House of Representatives and the 
        Senate shall submit updates to such guidelines for 
        printing in the Congressional Record. For purposes of 
        this section, the Director of the Congressional Budget 
        Office shall not count timing shifts in his estimates 
        of the budgetary effects of PAYGO legislation (as 
        defined in section 3 of the Pay-As-You-Go Act of 
        2009).''.
  (B) The side heading of section 308(a) of the Congressional 
Budget Act of 1974 is amended by striking ``Reports on''.
  (b) Publication of Estimates.--The chairs of the Committees 
of Budget of the House of Representatives and the Senate shall 
make publicly available electronically and in printed form the 
estimates made under section 308(d) of the Congressional Budget 
Act of 1974. The chairs shall also submit such estimates to be 
printed in the Congressional Record before the vote on final 
passage of any measure and that measure shall include by 
reference an estimate of its budgetary effects.
  (c) Current Policy Adjustments for Certain Legislation.--For 
purposes of calculating budgetary effects under this Act, CBO 
shall adjust its estimates as described below for any provision 
of legislation designated as meeting the criteria in subsection 
(b), (c), or (d) of section 7 and which the chairman of the 
Committee on the Budget of the House of Representatives or the 
Senate, as applicable, designates as meeting those criteria. A 
single piece of legislation may contain provisions designated 
as meeting criteria in more than one of the subsections listed 
above. For appropriately designated provisions, CBO shall 
exclude from its estimates for purposes of this Act any costs 
of a provision to the extent that those costs, when combined 
with all other excluded costs of any other previously 
designated provisions of enacted legislation under the same 
subsection of section 7, do not exceed the maximum applicable 
current policy adjustment defined under the applicable 
subsection of section 7 for the applicable 10-year period, 
using the most recent baseline estimates supplied by the 
Congressional Budget Office consistent with section 257 of the 
Balanced Budget and Emergency Deficit Control Act of 1985 used 
in considering a concurrent resolution on the budget; or, after 
the beginning of a new calendar year and before consideration 
of a concurrent resolution on the budget, using the most recent 
baseline estimates supplied by the Congressional Budget Office 
consistent with section 257 of the Balanced Budget and 
Emergency Deficit Control Act of 1985. CBO estimates of 
legislation containing a current policy designation under this 
subsection shall include a separate presentation of costs 
excluded from the calculation of budgetary effects for the 
legislation, as well as an updated total of all excluded cost 
of provisions within the same subsection of section 7.
  (d) OMB Paygo Scorecards.--
          (1) In general.--OMB shall maintain and make publicly 
        available a continuously updated document containing 
        two PAYGO scorecards displaying the budgetary effects 
        of PAYGO legislation as determined under subsection 
        (b), applying the look-back requirement in subsection 
        (e) and the averaging requirement in subsection (f), 
        and a separate addendum displaying the estimates of the 
        costs of provisions designated in statute as emergency 
        requirements.
          (2) Estimates in legislation.--Except as provided in 
        paragraph (3), in making the calculations for the PAYGO 
        scorecards, OMB shall use the budgetary effects 
        included by reference in the applicable legislation.
          (3) OMB estimates.--If legislation does not contain 
        the estimate of budgetary effects under paragraph (2), 
        then OMB shall score the budgetary effects of that 
        legislation upon its enactment, based on the approaches 
        to scorekeeping set forth in this Act.
          (4) 5-year scorecard.--The first scorecard shall 
        display the budgetary effects of PAYGO legislation in 
        each year over the 5-year period beginning in the 
        budget year.
          (5) 10-year scorecard.--The second scorecard shall 
        display the budgetary effects of PAYGO legislation in 
        each year over the 10-year period beginning in the 
        budget year.
  (e) Look-Back to Capture Current-Year Effects.--For purposes 
of this section, OMB shall treat the budgetary effects of PAYGO 
legislation enacted during a session of Congress that occur 
during the current year as though they occurred in the budget 
year.
  (f) Averaging Used to Measure Compliance Over 5-Year and 10-
Year Periods.--OMB shall cumulate the budgetary effects of a 
PAYGO Act over the budget year (which includes any look-back 
effects under subsection (e)) and--
          (1) for purposes of the 5-year scorecard referred to 
        in subsection (d)(4), the four subsequent outyears, 
        divide that cumulative total by five, and enter the 
        quotient in the budget-year column and in each 
        subsequent column of the 5-year PAYGO scorecard; and
          (2) for purposes of the 10-year scorecard referred to 
        in subsection (d)(5), the nine subsequent outyears, 
        divide that cumulative total by ten, and enter the 
        quotient in the budget-year column and in each 
        subsequent column of the 10-year PAYGO scorecard.

SEC. 5. ANNUAL REPORT AND SEQUESTRATION ORDER.

  (a) Annual Report.--Not later than 14 days (excluding 
weekends and holidays) after Congress adjourns to end a 
session, OMB shall make publicly available and cause to be 
printed in the Federal Register an annual PAYGO report. The 
report shall include an up-to-date document containing the 
PAYGO scorecards, a description of any current policy 
adjustments made under section 4(c), information about 
emergency legislation (if any) required by section 3(4)(D), 
information about any sequestration if required by subsection 
(b), and other data and explanations that enhance public 
understanding of this Act and actions taken under it.
  (b) Sequestration Order.--If the annual report issued at the 
end of a session of Congress under subsection (a) shows a debit 
on either PAYGO scorecard for the budget year, OMB shall 
prepare and the President shall issue and include in that 
report a sequestration order that, upon issuance, shall reduce 
budgetary resources of direct spending programs by enough to 
offset that debit as prescribed in section 6. If there is a 
debit on both scorecards, the order shall fully offset the 
larger of the two debits. OMB shall include that order in the 
annual report and transmit it to the House of Representatives 
and the Senate. If the President issues a sequestration order, 
the annual report shall contain, for each budget account to be 
sequestered, estimates of the baseline level of budgetary 
resources subject to sequestration, the amount of budgetary 
resources to be sequestered, and the outlay reductions that 
will occur in the budget year and the subsequent fiscal year 
because of that sequestration.

SEC. 6. CALCULATING A SEQUESTRATION.

  (a) Reducing Nonexempt Budgetary Resources by a Uniform 
Percentage.--OMB shall calculate the uniform percentage by 
which the budgetary resources of nonexempt direct spending 
programs are to be sequestered such that the outlay savings 
resulting from that sequestration, as calculated under 
subsection (b), shall offset the budget-year debit, if any on 
the applicable PAYGO scorecard. If the uniform percentage 
calculated under the prior sentence exceeds 4 percent, the 
Medicare programs described in section 256(d) of BBEDCA shall 
be reduced by 4 percent and the uniform percentage by which the 
budgetary resources of all other nonexempt direct spending 
programs are to be sequestered shall be increased, as 
necessary, so that the sequestration of Medicare and of all 
other nonexempt direct spending programs together produce the 
required outlay savings.
  (b) Outlay Savings.--In determining the amount by which a 
sequestration offsets a budget-year debit, OMB shall count--
          (1) the amount by which the sequestration in a crop 
        year of crop support payments, pursuant to section 
        256(j) of BBEDCA, reduces outlays in the budget year 
        and the subsequent fiscal year;
          (2) the amount by which the sequestration of Medicare 
        payments in the 12-month period following the 
        sequestration order, pursuant to section 256(d) of 
        BBEDCA, reduces outlays in the budget year and the 
        subsequent fiscal year; and
          (3) the amount by which the sequestration in the 
        budget year of the budgetary resources of other 
        nonexempt mandatory programs reduces outlays in the 
        budget year and in the subsequent fiscal year.

SEC. 7. CURRENT POLICY ADJUSTMENT TO THE CBO ESTIMATES.

  (a) Purpose.--The purpose of this section is to provide for 
adjustments of estimates of PAYGO effects for legislation 
affecting four areas of the budget--
          (1) payments made under section 1848 of the Social 
        Security Act (titled Payment for Physicians' Services);
          (2) the Estate and Gift Tax under subtitle B of the 
        Internal Revenue Code of 1986;
          (3) the AMT; and
          (4) provisions of EGTRRA or JGTRRA that amended the 
        Internal Revenue Code of 1986 (or provisions in later 
        statutes further amending the amendments made by EGTRRA 
        or JGTRRA), other than--
                  (A) the provisions of those two Acts that 
                were made permanent by the Pension Protection 
                Act of 2006 (Public Law 109-280);
                  (B) amendments to the estate and gift tax 
                referred to in paragraph (2);
                  (C) the AMT referred to in paragraph (3);
                  (D) the 35 percent bracket and that portion 
                of the 33 percent bracket that applies to 
                taxable income greater than $200,000 for an 
                individual and $250,000 for a couple; and
                  (E) provisions in those two Acts relating to 
                taxes rates on capital gains and dividends.
  (b) Medicare Payments to Physicians.--
          (1) Criteria.--Legislation that includes provisions 
        amending or superseding the system of payments under 
        section 1848 of the Social Security Act shall trigger 
        the current policy adjustment required by this Act.
          (2) Adjustment.--The amount of the maximum current 
        policy adjustment shall be the difference between--
                  (A) estimated net outlays attributable to the 
                payments made to physicians under that section 
                of the Social Security Act (as scheduled on 
                July 15, 2009, to be in effect); and
                  (B) what those net outlays would have been if 
                the nominal payment rates and related 
                parameters in effect for 2009 had been in 
                effect thereafter without change.
  (c) Estate and Gift Tax.--
          (1) Criteria.--Legislation that includes provisions 
        amending the Estate and Gift Tax under subtitle B of 
        the Internal Revenue Code of 1986 shall trigger the 
        current policy adjustment required by this Act.
          (2) Adjustment.--The amount of the maximum current 
        policy adjustment shall be the difference between--
                  (A) total revenues projected to be collected 
                under the Internal Revenue Code of 1986 (as 
                scheduled on July 15, 2009, to be in effect); 
                and
                  (B) what those revenue collections would have 
                been if, on the date of enactment of the 
                legislation meeting the criteria in paragraph 
                (1), estate and gift tax law had instead been 
                amended so that the tax rates, nominal 
                exemption amounts, and related parameters in 
                effect for tax year 2009 had remained in effect 
                thereafter without change.
  (d) Permanent Extension of Middle-Class Tax Cuts and AMT 
Relief.--
          (1) Criteria.--Legislation that includes provisions 
        extending middle-class tax cuts or AMT relief shall 
        trigger the current policy adjustment required by this 
        Act if those provisions extend one or more of the 
        following provisions--
                  (A) AMT relief for calendar year 2010 and 
                subsequent years in such a manner that the 
                number of AMT taxpayers is not estimated to 
                exceed the number of AMT taxpayers in tax year 
                2008 in any year through the tenth year after 
                enactment;
                  (B) the 10 percent bracket as in effect for 
                tax year 2010, as provided for under section 
                101(a) of the Economic Growth and Tax Relief 
                Reconciliation Act of 2001 and any later 
                amendments through July 15, 2009;
                  (C) the child tax credit as in effect for tax 
                year 2010, as provided for under section 201 of 
                the Economic Growth and Tax Relief 
                Reconciliation Act and any later amendments 
                through July 15, 2009;
                  (D) tax benefits for married couples as in 
                effect for tax year 2010, as provided for under 
                title III of the Economic Growth and Tax Relief 
                Reconciliation Act and any later amendments 
                through July 15, 2009;
                  (E) the adoption credit as in effect in tax 
                year 2010, as provided for under section 202 of 
                the Economic Growth and Tax Relief 
                Reconciliation Act of 2001 and any later 
                amendments through July 15, 2009;
                  (F) the dependent care credit as in effect in 
                tax year 2010, as provided for under section 
                204 of the Economic Growth and Tax Relief 
                Reconciliation Act of 2001 and any later 
                amendments through July 15, 2009;
                  (G) the employer-provided child care credit 
                as in effect in tax year 2010, as provided for 
                under section 205 of the Economic Growth and 
                Tax Relief Reconciliation Act of 2001 and any 
                later amendments through July 15, 2009;
                  (H) the education tax benefits as in effect 
                in tax year 2010, as provided for under title 
                IV of the Economic Growth and Tax Relief 
                Reconciliation Act of 2001 and any later 
                amendments through July 15, 2009;
                  (I) the 25 and 28 percent brackets as in 
                effect for tax year 2010, as provided for under 
                section 101(a) of the Economic Growth and Tax 
                Relief Reconciliation Act of 2001 and any later 
                amendments through July 15, 2009; and
                  (J) the 33 percent brackets as in effect for 
                tax year 2010, as provided for under section 
                101(a) of the Economic Growth and Tax Relief 
                Reconciliation Act of 2001 and any later 
                amendment affecting taxpayers with taxable 
                income of $200,000 or less for individuals and 
                $250,000 or less for couples in calendar year 
                2010 and increased in each subsequent year by 
                an amount equal to the cost of living 
                adjustment determined under section 1(f)(3) of 
                the Internal Revenue Code of 1986 for the 
                calendar year in which the taxable year begins, 
                determined by substituting ``calendar year 
                2008'' for ``calendar year 1992'' in 
                subparagraph (B) thereof.
          (2) Adjustment.--The amount of the maximum current 
        policy adjustment shall be the difference between what 
        total revenues would have been under the Internal 
        Revenue Code of 1986 (as scheduled on July 15, 2009, to 
        be in effect) and what revenues would be if 
        legislation--
                  (A) permanently extending the AMT exemption 
                and brackets in effect in tax year 2009 but 
                increased in tax year 2010 and each subsequent 
                tax year as indicated under subsection 
                (d)(2)(B), along with any additional amount 
                necessary to prevent the number of taxpayers 
                who must pay AMT from increasing; and
                  (B) permanently extending the provisions 
                identified in section 7(a)(4),
        were enacted on the same day as the legislation 
        referred to in paragraph (1).

SEC. 8. APPLICATION OF BBEDCA.

  For purposes of this Act--
          (1) notwithstanding section 275 of BBEDCA, the 
        provisions of sections 255, 256, 257, and 274 of 
        BBEDCA, as amended by this Act, shall apply to the 
        provisions of this Act;
          (2) references in sections 255, 256, 257, and 274 to 
        ``this part'' or ``this title'' shall be interpreted as 
        applying to this Act;
          (3) references in sections 255, 256, 257, and 274 of 
        BBEDCA to ``section 254'' shall be interpreted as 
        referencing section 5 of this Act;
          (4) the reference in section 256(b) of BBEDCA to 
        ``section 252 or 253'' shall be interpreted as 
        referencing section 5 of this Act;
          (5) the reference in section 256(d)(1) of BBEDCA to 
        ``section 252 or 253'' shall be interpreted as 
        referencing section 6 of this Act;
          (6) the reference in section 256(d)(4) of BBEDCA to 
        ``section 252 or 253'' shall be interpreted as 
        referencing section 5 of this Act;
          (7) section 256(k) of BBEDCA shall apply to a 
        sequestration, if any, under this Act; and
          (8) references in section 257(e) of BBEDCA to 
        ``section 251, 252, or 253'' shall be interpreted as 
        referencing section 4 of this Act.

SEC. 9. TECHNICAL CORRECTIONS.

  (a) Section 250(c)(18) of BBEDCA is amended by striking ``the 
expenses the Federal deposit insurance agencies'' and inserting 
``the expenses of the Federal deposit insurance agencies''.
  (b) Section 256(k)(1) of BBEDCA is amended by striking ``in 
paragraph (5)'' and inserting ``in paragraph (6)''.

SEC. 10. CONFORMING AMENDMENTS.

  (a) Section 256(a) of BBEDCA is repealed.
  (b) Section 256(b) of BBEDCA is amended by striking 
``origination fees under sections 438(c)(2) and 455(c) of that 
Act shall each be increased by 0.50 percentage point.'' and 
inserting in lieu thereof ``origination fees under sections 
438(c)(2) and (6) and 455(c) and loan processing and issuance 
fees under section 428(f)(1)(A)(ii) of that Act shall each be 
increased by the uniform percentage specified in that 
sequestration order, and, for student loans originated during 
the period of the sequestration, special allowance payments 
under section 438(b) of that Act accruing during the period of 
the sequestration shall be reduced by the uniform percentage 
specified in that sequestration order.''.
  (c) Section 256(c) of BBEDCA is repealed.
  (d) Section 256(d) of BBEDCA is amended--
          (1) by redesignating paragraphs (2), (3), and (4) as 
        paragraphs (3), (5), and (6);
          (2) by amending paragraph (1) to read as follows:
          ``(1) Calculation of reduction in payment amounts.--
        To achieve the total percentage reduction in those 
        programs required by section 252 or 253, subject to 
        paragraph (2), and notwithstanding section 710 of the 
        Social Security Act, OMB shall determine, and the 
        applicable Presidential order under section 254 shall 
        implement, the percentage reduction that shall apply, 
        with respect to the health insurance programs under 
        title XVIII of the Social Security Act--
                  ``(A) in the case of parts A and B of such 
                title, to individual payments for services 
                furnished during the one-year period beginning 
                on the first day of the first month beginning 
                after the date the order is issued (or, if 
                later, the date specified in paragraph (4)); 
                and
                  ``(B) in the case of parts C and D, to 
                monthly payments under contracts under such 
                parts for the same one-year period;
        such that the reduction made in payments under that 
        order shall achieve the required total percentage 
        reduction in those payments for that period.'';
          (3) by inserting after paragraph (1) the following:
          ``(2) Uniform reduction rate; maximum permissible 
        reduction.--Reductions in payments for programs and 
        activities under such title XVIII pursuant to a 
        sequestration order under section 254 shall be at a 
        uniform rate, which shall not exceed 4 percent, across 
        all such programs and activities subject to such 
        order.'';
          (4) by inserting after paragraph (3), as 
        redesignated, the following:
          ``(4) Timing of subsequent sequestration order.--A 
        sequestration order required by section 252 or 253 with 
        respect to programs under such title XVIII shall not 
        take effect until the first month beginning after the 
        end of the effective period of any prior sequestration 
        order with respect to such programs, as determined in 
        accordance with paragraph (1).'';
          (5) in paragraph (6), as redesignated, to read as 
        follows:
          ``(6) Sequestration disregarded in computing payment 
        amounts.--The Secretary of Health and Human Services 
        shall not take into account any reductions in payment 
        amounts which have been or may be effected under this 
        part, for purposes of computing any adjustments to 
        payment rates under such title XVIII, specifically 
        including--
                  ``(A) the part C growth percentage under 
                section 1853(c)(6);
                  ``(B) the part D annual growth rate under 
                section 1860D-2(b)(6); and
                  ``(C) application of risk corridors to part D 
                payment rates under section 1860D-15(e).''; and
          (6) by adding after paragraph (6), as redesignated, 
        the following:
          ``(7) Exemptions from sequestration.--In addition to 
        the programs and activities specified in section 255, 
        the following shall be exempt from sequestration under 
        this part:
                  ``(A) Part d low-income subsidies.--Premium 
                and cost-sharing subsidies under section 1860D-
                14 of the Social Security Act.
                  ``(B) Part d catastrophic subsidy.--Payments 
                under section 1860D-15(b) and (e)(2)(B) of the 
                Social Security Act.
                  ``(C) Qualified individual (qi) premiums.--
                Payments to States for coverage of Medicare 
                cost-sharing for certain low-income Medicare 
                beneficiaries under section 1933 of the Social 
                Security Act.''.

SEC. 11. EXEMPT PROGRAMS AND ACTIVITIES.

  (a) Designations.--Section 255 of BBEDCA is amended by 
redesignating subsection (i) as (j) and striking ``1998'' and 
inserting in lieu thereof ``2010''.
  (b) Social Security, Veterans Programs, Net Interest, and Tax 
Credits.--Subsections (a) through (d) of section 255 of BBEDCA 
are amended to read as follows
  ``(a) Social Security Benefits and Tier I Railroad Retirement 
Benefits.--Benefits payable under the old-age, survivors, and 
disability insurance program established under title II of the 
Social Security Act (title 42, United States Code, section 401 
et seq.), and benefits payable under section 231b(a), 
231b(f)(2), 231c(a), and 231c(f) of title 45 United States 
Code, shall be exempt from reduction under any order issued 
under this part.
  ``(b) Veterans Programs.--The following program shall be 
exempt from reduction under any order issued under this part--
          ``All programs administered by the Department of 
        Veterans Affairs.
          ``Special Benefits for Certain World War II Veterans 
        (28-0401-0-1-701).
  ``(c) Net Interest.--No reduction of payments for net 
interest (all of major functional category 900) shall be made 
under any order issued under this part.
  ``(d) Refundable Income Tax Credits.--Payments to individuals 
made pursuant to provisions of the Internal Revenue Code of 
1986 establishing refundable tax credits shall be exempt from 
reduction under any order issued under this part.''.
  (c) Other Programs and Activities, Low-Income Programs, and 
Economic Recovery Programs.--Subsections (g) and (h) of section 
255 of BBEDCA are amended to read as follows:
  ``(g) Other Programs and Activities.--
          ``(1)(A) The following budget accounts and activities 
        shall be exempt from reduction under any order issued 
        under this part:
                  ``Activities resulting from private 
                donations, bequests, or voluntary contributions 
                to the Government.
                  ``Activities financed by voluntary payments 
                to the Government for goods or services to be 
                provided for such payments.
                  ``Administration of Territories, Northern 
                Mariana Islands Covenant grants (14-0412-0-1-
                808).
                  ``Advances to the Unemployment Trust Fund and 
                Other Funds (16-0327-0-1-600).
                  ``Black Lung Disability Trust Fund 
                Refinancing (16-0329-0-1-601).
                  ``Bonneville Power Administration Fund and 
                borrowing authority established pursuant to 
                section 13 of Public Law 93-454 (1974), as 
                amended (89-4045-0-3-271).
                  ``Claims, Judgments, and Relief Acts (20-
                1895-0-1-808).
                  ``Compact of Free Association (14-0415-0-1-
                808).
                  ``Compensation of the President (11-0209-01-
                1-802).
                  ``Comptroller of the Currency, Assessment 
                Funds (20-8413-0-8-373).
                  ``Continuing Fund, Southeastern Power 
                Administration (89-5653-0-2-271).
                  ``Continuing Fund, Southwestern Power 
                Administration (89-5649-0-2-271).
                  ``Dual Benefits Payments Account (60-0111-0-
                1-601).
                  ``Emergency Fund, Western Area Power 
                Administration (89-5069-0-2-271).
                  ``Exchange Stabilization Fund (20-4444-0-3-
                155).
                  ``Federal Deposit Insurance Corporation, 
                Deposit Insurance Fund (51-4596-4-4-373).
                  ``Federal Deposit Insurance Corporation, 
                FSLIC Resolution Fund (51-4065-0-3-373).
                  ``Federal Deposit Insurance Corporation, 
                Noninterest Bearing Transaction Account 
                Guarantee (51-4458-0-3-373).
                  ``Federal Deposit Insurance Corporation, 
                Senior Unsecured Debt Guarantee (51-4457-0-3-
                373).
                  ``Federal Housing Finance Agency, 
                Administrative Expenses (95-5532-0-2-371).
                  ``Federal Payment to the District of Columbia 
                Judicial Retirement and Survivors Annuity Fund 
                (20-1713-0-1-752).
                  ``Federal Payment to the District of Columbia 
                Pension Fund (20-1714-0-1-601).
                  ``Federal Payments to the Railroad Retirement 
                Accounts (60-0113-0-1-601).
                  ``Federal Reserve Bank Reimbursement Fund 
                (20-1884-0-1-803).
                  ``Financial Agent Services (20-1802-0-1-803).
                  ``Foreign Military Sales Trust Fund (11-8242-
                0-7-155).
                  ``Hazardous Waste Management, Conservation 
                Reserve Program (12-4336-0-3-999).
                  ``Host Nation Support Fund for Relocation 
                (97-8337-0-7-051).
                  ``Internal Revenue Collections for Puerto 
                Rico (20-5737-0-2-806).
                  ``Intragovernmental funds, including those 
                from which the outlays are derived primarily 
                from resources paid in from other government 
                accounts, except to the extent such funds are 
                augmented by direct appropriations for the 
                fiscal year during which an order is in effect.
                  ``Medical Facilities Guarantee and Loan Fund 
                (75-9931-0-3-551).
                  ``National Credit Union Administration, 
                Central Liquidity Facility (25-4470-0-3-373).
                  ``National Credit Union Administration, 
                Corporate Credit Union Share Guarantee Program 
                (25-4476-0-3-376).
                  ``National Credit Union Administration, 
                Credit Union Homeowners Affordability Relief 
                Program (25-4473-0-3-371).
                  ``National Credit Union Administration, 
                Credit Union Share Insurance Fund (25-4468-0-3-
                373).
                  ``National Credit Union Administration, 
                Credit Union System Investment Program (25-
                4474-0-3-376).
                  ``National Credit Union Administration, 
                Operating fund (25-4056-0-3-373).
                  ``National Credit Union Administration, Share 
                Insurance Fund Corporate Debt Guarantee Program 
                (25-4469-0-3-376).
                  ``National Credit Union Administration, U.S. 
                Central Federal Credit Union Capital Program 
                (25-4475-0-3-376).
                  ``Office of Thrift Supervision (20-4108-0-3-
                373).
                  ``Panama Canal Commission Compensation Fund 
                (16-5155-0-2-602).
                  ``Payment of Vietnam and USS Pueblo prisoner-
                of-war claims within the Salaries and Expenses, 
                Foreign Claims Settlement account (15-0100-0-1-
                153).
                  ``Payment to Civil Service Retirement and 
                Disability Fund (24-0200-0-1-805).
                  ``Payment to Department of Defense Medicare-
                Eligible Retiree Health Care Fund (97-0850-0-1-
                054).
                  ``Payment to Judiciary Trust Funds (10-0941-
                0-1-752).
                  ``Payment to Military Retirement Fund (97-
                0040-0-1-054).
                  ``Payment to the Foreign Service Retirement 
                and Disability Fund (19-0540-0-1-153).
                  ``Payments to Copyright Owners (03-5175-0-2-
                376).
                  ``Payments to Health Care Trust Funds (75-
                0580-0-1-571).
                  ``Payment to Radiation Exposure Compensation 
                Trust Fund (15-0333-0-1-054).
                  ``Payments to Social Security Trust Funds 
                (28-0404-0-1-651).
                  ``Payments to the United States Territories, 
                Fiscal Assistance (14-0418-0-1-806).
                  ``Payments to trust funds from excise taxes 
                or other receipts properly creditable to such 
                trust funds.
                  ``Payments to widows and heirs of deceased 
                Members of Congress (00-0215-0-1-801).
                  ``Postal Service Fund (18-4020-0-3-372).
                  ``Radiation Exposure Compensation Trust Fund 
                (15-8116-0-1-054).
                  ``Reimbursement to Federal Reserve Banks (20-
                0562-0-1-803).
                  ``Salaries of Article III judges.
                  ``Soldiers and Airmen's Home, payment of 
                claims (84-8930-0-7-705).
                  ``Tennessee Valley Authority Fund, except 
                nonpower programs and activities (64-4110-0-3-
                999).
                  ``Tribal and Indian trust accounts within the 
                Department of the Interior which fund prior 
                legal obligations of the Government or which 
                are established pursuant to Acts of Congress 
                regarding Federal management of tribal real 
                property or other fiduciary responsibilities, 
                including but not limited to Tribal Special 
                Fund (14-5265-0-2-452), Tribal Trust Fund (14-
                8030-0-7-452), White Earth Settlement (14-2204-
                0-1-452), and Indian Water Rights and Habitat 
                Acquisition (14-5505-0-2-303).
                  ``United Mine Workers of America 1992 Benefit 
                Plan (95-8260-0-7-551).
                  ``United Mine Workers of America 1993 Benefit 
                Plan (95-8535-0-7-551).
                  ``United Mine Workers of America Combined 
                Benefit Fund (95-8295-0-7-551).
                  ``United States Enrichment Corporation Fund 
                (95-4054-0-3-271).
                  ``Universal Service Fund (27-5183-0-2-376).
                  ``Vaccine Injury Compensation (75-0320-0-1-
                551).
                  ``Vaccine Injury Compensation Program Trust 
                Fund (20-8175-0-7-551).
          ``(B) The following Federal retirement and disability 
        accounts and activities shall be exempt from reduction 
        under any order issued under this part:
                  ``Black Lung Disability Trust Fund (20-8144-
                0-7-601).
                  ``Central Intelligence Agency Retirement and 
                Disability System Fund (56-3400-0-1-054).
                  ``Civil Service Retirement and Disability 
                Fund (24-8135-0-7-602).
                  ``Comptrollers general retirement system (05-
                0107-0-1-801).
                  ``Contributions to U.S. Park Police annuity 
                benefits, Other Permanent Appropriations (14-
                9924-0-2-303).
                  ``Court of Appeals for Veterans Claims 
                Retirement Fund (95-8290-0-7-705).
                  ``Department of Defense Medicare-Eligible 
                Retiree Health Care Fund (97-5472-0-2-551).
                  ``District of Columbia Federal Pension Fund 
                (20-5511-0-2-601).
                  ``District of Columbia Judicial Retirement 
                and Survivors Annuity Fund (20-8212-0-7-602).
                  ``Energy Employees Occupational Illness 
                Compensation Fund (16-1523-0-1-053).
                  ``Foreign National Employees Separation Pay 
                (97-8165-0-7-051).
                  ``Foreign Service National Defined 
                Contributions Retirement Fund (19-5497-0-2-
                602).
                  ``Foreign Service National Separation 
                Liability Trust Fund (19-8340-0-7-602).
                  ``Foreign Service Retirement and Disability 
                Fund (19-8186-0-7-602).
                  ``Government Payment for Annuitants, 
                Employees Health Benefits (24-0206-0-1-551).
                  ``Government Payment for Annuitants, Employee 
                Life Insurance (24-0500-0-1-602).
                  ``Judicial Officers' Retirement Fund (10-
                8122-0-7-602).
                  ``Judicial Survivors' Annuities Fund (10-
                8110-0-7-602).
                  ``Military Retirement Fund (97-8097-0-7-602).
                  ``National Railroad Retirement Investment 
                Trust (60-8118-0-7-601).
                  ``National Oceanic and Atmospheric 
                Administration retirement (13-1450-0-1-306).
                  ``Pensions for former Presidents (47-0105-0-
                1-802).
                  ``Postal Service Retiree Health Benefits Fund 
                (24-5391-0-2-551).
                  ``Public Safety Officer Benefits (15-0403-0-
                1-754).
                  ``Rail 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).
                  ``Special Benefits for Disabled Coal Miners 
                (16-0169-0-1-601).
                  ``Special Benefits, Federal Employees' 
                Compensation Act (16-1521-0-1-600).
                  ``Special Workers Compensation Expenses (16-
                9971-0-7-601.)
                  ``Tax Court Judges Survivors Annuity Fund 
                (23-8115-0-7-602).
                  ``United States Court of Federal Claims 
                Judges' Retirement Fund (10-8124-0-7-602).
                  ``United States Secret Service, DC Annuity 
                (70-0400-0-1-751).
                  ``Voluntary Separation Incentive Fund (97-
                8335-0-7-051).
          ``(2) Prior legal obligations of the Government in 
        the following budget accounts and activities shall be 
        exempt from any order issued under this part:
                  ``Biomass Energy Development (20-0114-0-1-
                271).
                  ``Check Forgery Insurance Fund (20-4109-0-3-
                803).
                  ``Credit liquidating accounts.
                  ``Credit reestimates.
                  ``Employees Life Insurance Fund (24-8424-0-8-
                602).
                  ``Federal Aviation Insurance Revolving Fund 
                (69-4120-0-3-402).
                  ``Federal Crop Insurance Corporation Fund 
                (12-4085-0-3-351).
                  ``Federal Emergency Management Agency, 
                National Flood Insurance Fund (58-4236-0-3-
                453).
                  ``Federal Home Loan Mortgage Corporation 
                (Freddie Mac).
                  ``Federal National Mortgage Corporation 
                (Fannie Mae).
                  ``Geothermal resources development fund (89-
                0206-0-1-271).
                  ``Low-Rent Public Housing--Loans and Other 
                Expenses (86-4098-0-3-604).
                  ``Maritime Administration, War Risk Insurance 
                Revolving Fund (69-4302-0-3-403).
                  ``Natural Resource Damage Assessment Fund 
                (14-1618-0-1-302).
                  ``Overseas Private Investment Corporation, 
                Noncredit Account (71-4184-0-3-151).
                  ``Pension Benefit Guaranty Corporation Fund 
                (16-4204-0-3-601).
                  ``San Joaquin Restoration Fund (14-5537-0-2-
                301).
                  ``Servicemembers' Group Life Insurance Fund 
                (36-4009-0-3-701).
                  ``Terrorism Insurance Program (20-0123-0-1-
                376).
  ``(h) Low-Income Programs.--The following programs shall be 
exempt from reduction under any order issued under this part:
          ``Academic Competitiveness/Smart Grant Program (91-
        0205-0-1-502).
          ``Child Care Entitlement to States (75-1550-0-1-609).
          ``Child Enrollment Contingency Fund (75-5551-0-2-
        551).
          ``Child Nutrition Programs (with the exception of 
        special milk programs) (12-3539-0-1-605).
          ``Children's Health Insurance Fund (75-0515-0-1-551).
          ``Commodity Supplemental Food Program (12-3507-0-1-
        605).
          ``Contingency Fund (75-1522-0-1-609).
          ``Family Support Programs (75-1501-0-1-609).
          ``Federal Pell Grants under section 401 Title IV of 
        the Higher Education Act.
          ``Grants to States for Medicaid (75-0512-0-1-551).
          ``Payments for Foster Care and Permanency (75-1545-0-
        1-609).
          ``Supplemental Nutrition Assistance Program (12-3505-
        0-1-605).
          ``Supplemental Security Income Program (28-0406-0-1-
        609).
          ``Temporary Assistance for Needy Families (75-1552-0-
        1-609).''.
  (d) Economic Recovery Programs.--Section 255 of BBEDCA is 
amended by adding the following after subsection (h):
  ``(i) Economic Recovery Programs.--The following programs 
shall be exempt from reduction under any order issued under 
this part:
          ``All programs enacted in, or increases in programs 
        provided by, the American Recovery and Reinvestment Act 
        of 2009.
          ``Exchange Stabilization Fund-Money Market Mutual 
        Fund Guaranty Facility (20-4274-0-3-376).
          ``Financial Stabilization Reserve (20-0131-4-1-376).
          ``GSE Mortgage-Backed Securities Purchase Program 
        Account (20-0126-0-1-371).
          ``GSE Preferred Stock Purchase Agreements (20-0125-0-
        1-371).
          ``Office of Financial Stability (20-0128-0-1-376).
          ``Special Inspector General for the Troubled Asset 
        Relief Program (20-0133-0-1-376).
          ``Troubled Asset Relief Program Account (20-0132-0-1-
        376).
          ``Troubled Asset Relief Program Equity Purchase 
        Program (20-0134-0-1-376).
          ``Troubled Asset Relief Program, Home Affordable 
        Modification Program (20-0136-0-1-604).''.
                              ----------                              


         PART B: TEXT OF AMENDMENT TO BE CONSIDERED AS ADOPTED

  Page 3, lines 1 through 7, strike ``Such estimates'' and all 
that follows through ``such legislation.''.
  Page 4, lines 13 and 14, strike ``for purposes of'' and 
insert ``under''.
  Page 4, line 16, insert ``PAYGO'' before ``legislation's''.
  Page 5, line 14, strike ``CBO''.
  Page 5, line 17, insert ``for printing in the Congressional 
Record by the chairs of the Committees on the Budget of the 
House of Representatives and the Senate, as applicable, before 
the vote on the PAYGO legislation'' before the period.
  Page 5, line 17, after the period insert the following: ``The 
Clerk of the House or the Secretary of the Senate, as 
applicable, shall also incorporate by reference such estimate 
printed in the relevant portion of the Congressional Record 
under section 308(a)(3) of the Congressional Budget Act of 1974 
into the enrollment of a PAYGO Act.''.
  Page 6, line 2, insert ``, as applicable,'' after ``Senate''.
  Page 6, line 5, insert ``Statutory'' before ``Pay''.
  Page 6, line 8, insert ``post such estimate on their 
respective committee websites and'' after ``shall''.
  Page 6, line 10, strike ``As provided'' and all that follows 
thereafter through ``Record.'' on line 25.
  Page 7, line 4, insert ``Statutory'' before ``Pay''.
  Page 7, strike lines 8 through 16 and insert the following 
new subsection:
  (b) Section 308 of the Congressional Budget Act of 1974 is 
amended by adding at the end the following new subsection:
  ``(d) Scorekeeping Guidelines.--The Director of the 
Congressional Budget Office shall provide estimates under this 
section in accordance with the scorekeeping guidelines 
determined under section 252(d)(5) of the Balanced Budget and 
Emergency Deficit Control Act of 1985. Upon agreement, the 
chairs of the Committees on the Budget of the House of 
Representatives and the Senate shall submit updates to such 
guidelines for printing in the Congressional Record.''.
  Page 8, line 24, strike ``cost'' and insert ``costs''.
  Page 9, line 6, strike ``subsection (b)'' and insert 
``section 308 of the Congressional Budget Act of 1974''.
  Page 11, lines 12 and 13, strike ``required by'' and insert 
``designated under''.
  Page 13, line 22, strike ``PAYGO effects'' and insert 
``budgetary effects of PAYGO legislation''.
  Page 19, line 20, strike ``section 7(a)(4)'' and insert 
``paragraph (1)''.
                              ----------                              


 PART C: TEXT OF AMENDMENT IN THE NATURE OF A SUBSTITUTE TO BE MADE IN 
                                 ORDER

  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 ``Budget 
Control Act of 2009''.
  (b) Table of Contents.--

Sec. 1. Short title; table of contents.

                 TITLE I--DISCRETIONARY SPENDING LIMITS

Sec. 101. Discretionary spending limits.
Sec. 102. Adjustments to discretionary spending limits.
Sec. 103. Conforming amendments.

                     TITLE II--TOTAL SPENDING LIMITS

Sec. 201. Total spending limits.
Sec. 202. Effective date.

                        TITLE III--DEFICIT LIMITS

Sec. 301. Deficit limits.
Sec. 302. Effective date.

                      TITLE IV--GENERAL PROVISIONS

Sec. 401. Spending reduction orders for total spending limits and 
          deficit limits.
Sec. 402. Enforcement procedures under the Congressional Budget Act.
Sec. 403. Definitions.
Sec. 404. Amendments to section 257 of the Balanced Budget and Emergency 
          Deficit Control Act of 1985.

                 TITLE I--DISCRETIONARY SPENDING LIMITS

SEC. 101. DISCRETIONARY SPENDING LIMITS.

  Section 251(c) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended by striking paragraphs (1) 
through (13) and inserting the following new paragraphs:
          ``(1) For fiscal year 2010--
                  ``(A) for the general purpose category, 
                $1,048,000,000,000 in new budget authority and 
                $1,302,000,000,000 in outlays;
                  ``(B) for the overseas contingency operations 
                category, $130,000,000,000 in new budget 
                authority and $67,000,000,000 in outlays;
          ``(2) For fiscal year 2011--
                  ``(A) for the general purpose category, 
                $1,058,000,000,000 in new budget authority and 
                $1,233,000,000,000 in outlays;
                  ``(B) for the overseas contingency operations 
                category, $50,000,000,000 in new budget 
                authority and $70,000,000,000 in outlays;
          ``(3) For fiscal year 2012--
                  ``(A) for the general purpose category, 
                $1,069,000,000,000 in new budget authority and 
                $1,171,000,000,000 in outlays;
                  ``(B) for the overseas contingency operations 
                category, $50,000,000,000 in new budget 
                authority and $54,000,000,000 in outlays;
          ``(4) For fiscal year 2013--
                  ``(A) for the general purpose category, 
                $1,079,000,000,000 in new budget authority and 
                $1,161,000,000,000 in outlays;
                  ``(B) for the overseas contingency operations 
                category, $50,000,000,000 in new budget 
                authority and $50,000,000,000 in outlays;
          ``(5) For fiscal year 2014--
                  ``(A) for the general purpose category, 
                $1,094,000,000,000 in new budget authority and 
                $1,161,000,000,000 in outlays;
                  ``(B) for the overseas contingency operations 
                category, $50,000,000,000 in new budget 
                authority and $50,000,000,000 in outlays;''.

SEC. 102. ADJUSTMENTS TO DISCRETIONARY SPENDING LIMITS.

  Section 251(b) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended to read as follows:
  ``(b) Adjustments to Discretionary Spending Limits.--
          ``(1) Concepts and definitions.--When the President 
        submits the budget under section 1105 of title 31, 
        United States Code, OMB shall calculate and the budget 
        shall include adjustments to discretionary spending 
        limits (and those limits as cumulatively adjusted) for 
        the budget year and each outyear to reflect changes in 
        concepts and definitions. Such changes shall equal the 
        baseline levels of new budget authority and outlays 
        using up-to-date concepts and definitions minus those 
        levels using the concepts and definitions in effect 
        before such changes. Such changes may only be made 
        after consultation with the Committees on 
        Appropriations and the Budget of the House of 
        Representatives and the Senate and that consultation 
        shall include written communication to such committees 
        that affords such committees the opportunity to comment 
        before official action is taken for such changes.
          ``(2) Adjustments.--
                  ``(A) Emergency designation.--If 
                appropriations for discretionary accounts are 
                enacted that the President designates as 
                emergency requirements and that the Congress so 
                designates in statute, the adjustment shall be 
                the total of such appropriations in 
                discretionary accounts designated as emergency 
                requirements and the outlays flowing in all 
                fiscal years from such appropriations.
                  ``(B) Overseas contingency operations 
                designation.--If appropriations for 
                discretionary accounts are enacted that the 
                President designates as overseas contingency 
                operations related to the global war on 
                terrorism that the Congress so designates in 
                statute, the adjustment shall be the total of 
                such appropriations in discretionary accounts 
                designated as overseas contingency operations 
                and the outlays flowing in all fiscal years 
                from such appropriations.
          ``(3) Special outlay allowance.--If, in any fiscal 
        year, outlays for a category exceed the discretionary 
        spending limit for that category but new budget 
        authority does not exceed its limit for that category 
        (after application of the first step of a spending 
        reduction described in subsection (a)(2), if 
        necessary), the adjustment in outlays for a fiscal year 
        is the amount of the excess but not to exceed 0.5 
        percent of the sum of the adjusted discretionary 
        spending limits on outlays for that fiscal year.''.

SEC. 103. CONFORMING AMENDMENTS.

          (1) Section 275(b) of the Balanced Budget and 
        Emergency Deficit Control Act of 1985 is amended by 
        striking ``2002'' and inserting ``2019'' and by 
        striking ``2006'' and inserting ``2019'';
          (2) Sections 254(c)(2)(A) and (f) of the Balanced 
        Budget and Emergency Deficit Control Act of 1985 are 
        amended by striking ``2002'' and inserting ``2014''.

                    TITLE II--TOTAL SPENDING LIMITS

SEC. 201. TOTAL SPENDING LIMITS.

  Total Spending Limits.--After section 253 of the Balanced 
Budget and Emergency Deficit Control Act of 1985, add the 
following new section:

``SEC. 253A. ENFORCING TOTAL SPENDING LIMITS.

  ``(a) Projections.--
          ``(1) Long-term projections.--For each of at least 10 
        fiscal years within the guideline period:
                  ``(A) OMB shall prepare a report of the 
                projected spending amount and the guideline 
                spending amount (as defined in section 250(c)) 
                and include such report in the budget as 
                submitted by the President annually under 
                section 1105(a) of title 31, United States 
                Code.
                  ``(B) CBO shall prepare a report of the 
                projected spending amount and the guideline 
                spending amount (as defined in section 250(c)) 
                and include such report in the CBO annual 
                baseline and reestimate of the President's 
                budget.
          ``(2) Inclusion in spending reduction orders.--
        Reports prepared pursuant to subsection (a) shall be 
        included in the spending reduction report set forth in 
        subsection (b).
  ``(b) Spending Reduction Report.--Within 15 calendar days 
after Congress adjourns to end a session and on the same day as 
a spending reduction order (if any) under sections 251 and 
253A, but after any spending reduction required by section 251, 
OMB shall issue a spending reduction report to reduce an excess 
spending amount (if any).
  ``(c) Spending Reduction Order.--A spending reduction ordered 
pursuant to subsection (b) shall be implemented using the 
procedures set forth in section 256A.
  ``(d) Guideline Period.--The guideline period shall be as 
follows:
          ``(1) Fiscal year 2010: 24.6 percent.
          ``(2) Fiscal year 2011: 23.2 percent.
          ``(3) Fiscal year 2012: 21.7 percent.
          ``(4) Fiscal year 2013: 21.7 percent.
          ``(5) Fiscal year 2014: 21.8 percent.
          ``(6) Fiscal year 2015: 21.8 percent.
          ``(7) Fiscal year 2016: 21.7 percent.
          ``(8) Fiscal year 2017: 21.7 percent.
          ``(9) Fiscal year 2018: 21.7 percent.
          ``(10) Fiscal year 2019: 21.7 percent.
          ``(11) Fiscal year 2020 and each subsequent fiscal 
        year: 21.7 percent.''.

SEC. 202. EFFECTIVE DATE.

  This title shall apply to fiscal year 2010 and subsequent 
fiscal years.

                       TITLE III--DEFICIT LIMITS

SEC. 301. DEFICIT LIMITS.

  Amend section 253 of the Balanced Budget and Emergency 
Deficit Control Act of 1985 to read as follows:

``SEC. 253. ENFORCING DEFICIT LIMITS.

  ``(a) Enforcing Deficit Limits.-- In this section, the term 
`deficit limit' means an amount, as estimated by OMB, that 
equals--
          ``(1) 8 percent of GDP for 2010;
          ``(2) 6 percent of GDP for 2011;
          ``(3) 4 percent of GDP for 2012;
          ``(4) 3 percent of GDP for 2013;
          ``(5) 3 percent of GDP for 2014;
          ``(6) 3 percent of GDP for 2015;
          ``(7) 3 percent of GDP for 2016;
          ``(8) 3 percent of GDP for 2017;
          ``(9) 3 percent of GDP for 2018; and
          ``(10) 3 percent of GDP for 2019.
  ``(b) Spending Reduction Report.--Within 15 calendar days 
after Congress adjourns to end a session and on the same day as 
a spending reduction order (if any) under sections 251 and 
253A, but after any spending reduction required by section 251 
and 253A, OMB shall issue a spending reduction report to reduce 
an excess spending amount (if any).
  ``(c) Spending Reduction Order.--A spending reduction ordered 
pursuant to subsection (b) shall be implemented using the 
procedures set forth in section 256A.''

SEC. 302. EFFECTIVE DATE.

  This title shall apply to fiscal year 2010 and subsequent 
fiscal years through fiscal year 2019.

                      TITLE IV--GENERAL PROVISIONS

SEC. 401. SPENDING REDUCTION ORDERS FOR TOTAL SPENDING LIMITS AND 
                    DEFICIT LIMITS.

  The Balanced Budget and Emergency Deficit Control Act of 1985 
is amended by adding after section 256 the following:

``SEC. 256A. SPENDING REDUCTION ORDERS FOR TOTAL SPENDING LIMITS AND 
                    DEFICIT LIMITS.

  ``(a) Application.--A spending reduction order issued 
pursuant to this part shall apply to eliminate breaches of the 
limits set forth in sections 253 (deficit limits) and 253A 
(total spending limits) of the Balanced Budget and Emergency 
Deficit Control Act of 1985.
  ``(b) Spending Reduction Orders.--
          ``(1) Eliminating a spending excess.--OMB shall 
        include in its spending reduction order a requirement 
        that each spending account shall be reduced by an 
        amount of budget authority calculated by multiplying 
        the baseline level of budgetary resources in that 
        account at that time by the uniform percentage 
        necessary to reduce outlays sufficient to eliminate an 
        excess spending amount.
          ``(2) Exemptions.--The following shall be exempt from 
        reduction under any order issued under this part:
                  ``(A) Net interest.--Payments for net 
                interest (set forth in function 900).
                  ``(B) Social security.--Benefits payable 
                under the old-age, survivors, and disability 
                insurance program established under title II of 
                the Social Security Act.
                  ``(C) Veterans programs.--Benefits payable by 
                the Department of Veterans affairs and other 
                programs providing benefits to veterans.
                  ``(D) Obligated balances.--Obligated balances 
                of budget authority carried over from prior 
                fiscal years shall be exempt from reduction 
                under any order issued under this part.
                  ``(E) Constitutional obligations.--Any 
                obligations of the Federal Government required 
                to be paid under the U.S. Constitution or 
                contractual obligations as determined by OMB 
                shall be exempt from reduction under any order 
                issued under this part.
                  ``(F) Unemployment insurance.--Benefits 
                payable under unemployment insurance payments.
                  ``(G) Emergency legislation.--Provisions of 
                spending legislation the President designates 
                as an emergency requirement and the Congress so 
                designates in statute.
                  ``(H) Overseas contingency operations 
                designation.--Provisions of spending 
                legislation the President designates as 
                overseas contingency operations related to the 
                global war on terrorism and the Congress so 
                designates in statute.
                  ``(I) Discretionary spending.--Discretionary 
                spending if the discretionary spending limits 
                set forth in section 251(c) are not exceeded.
          ``(3) Application to fast growing programs.--Any 
        program whose growth in the budget year is less than 
        the rate of inflation as determined by OMB shall be 
        exempt from a spending reduction issued under this 
        title.
          ``(4) Limitation on spending reductions.--No program 
        shall be subject to a spending reduction of more than 1 
        percent of its budgetary resources.
          ``(5) Uniform percentage.--The percentage required to 
        produce a spending reduction, as ordered by a spending 
        reduction order, shall be calculated by OMB by adding 
        all budgetary resources of the Government, and reducing 
        that amount by an amount sufficient to reduce the total 
        amount of outlays of the Government to equal, or lower, 
        a level of outlays than the amount set forth in the 
        guideline period.
          ``(6) Effect of a spending reduction order.--Upon the 
        issue of a spending reduction order, a spending 
        reduction shall be ordered for all nonexempt spending 
        accounts. The spending reduction shall be effective as 
        follows:
                  ``(A) Budgetary resources subject to a 
                spending reduction to any discretionary account 
                shall be permanently cancelled.
                  ``(B) The same percentage spending reduction 
                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).
                  ``(C) Administrative regulations implementing 
                a spending reduction shall be made within 120 
                days of the issue of a spending reduction 
                order.
                  ``(D) Budgetary resources subject to a 
                spending reduction in revolving, trust, and 
                special fund accounts and offsetting 
                collections subject to a spending reduction in 
                appropriation accounts shall not be available 
                for obligation during the fiscal year in which 
                the spending reduction is issued, and shall be 
                available in subsequent years only to the 
                extent as provided by law.
          ``(7) Inapplicability of sections 255 and 256.--
        Sections 255 and 256 shall not apply to spending 
        reduction orders under this section.''.

SEC. 402. ENFORCEMENT PROCEDURES UNDER THE CONGRESSIONAL BUDGET ACT.

  (a) Enforcement.--Title III of the Congressional Budget Act 
of 1974 is amended by adding after section 315 the following 
new section:

``SEC. 316. ENFORCEMENT PROCEDURES.

  ``(a) Discretionary Spending Limits.--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 would cause the discretionary 
spending limits as set forth in section 251(c) of the Balanced 
Budget and Emergency Deficit Control Act of 1985 to be 
exceeded.
  ``(b) Total Spending Limits.--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 would cause the total spending limits set 
forth in section 253A of the Balanced Budget and Emergency 
Deficit Control Act of 1985 to be exceeded.
  ``(c) Deficit Limits.--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 would cause the total deficit limits set forth 
in section 253 of the Balanced Budget and Emergency Deficit 
Control Act of 1985 to be exceeded.
  ``(d) Waiver or Suspension.--
          ``(1) In the senate.--The provisions of this section 
        may be waived or suspended in the Senate only by the 
        affirmative vote of two-thirds of the Members, duly 
        chosen and sworn.
          ``(2) In the house.--The provisions of this section 
        may be waived or suspended in the House of 
        Representatives only by a rule or order proposing only 
        to waive such provisions by an affirmative vote of two-
        thirds of the Members, duly chosen and sworn.
  ``(e) Point of Order Protection.--In the House, it shall not 
be in order to consider a rule or order that waives the 
application of paragraph (2) of subsection (c).
  ``(f) Motion to Suspend.--It shall not be in order for the 
Speaker to entertain a motion to suspend the application of 
this section under clause 1 of rule XV.''.
  (b) 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 inserting after the item 
relating to section 315 the following new item:

``Sec. 316. Enforcement procedures.''.

SEC. 403. DEFINITIONS.

  Section 250(c)(4) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended by striking paragraph 
(4), redesignating the succeeding paragraphs accordingly, and 
adding the following paragraphs:
          ``(19) The term `spending reduction' refers to the 
        cancellation of budgetary resources provided by 
        discretionary appropriations or mandatory spending.
          ``(20) The term `GDP', for any fiscal year, means the 
        gross domestic product during such fiscal year 
        consistent with Department of Commerce definitions.
          ``(21) The term `total spending' means the total 
        aggregate outlays of the Federal Government.
          ``(22) The term `guideline period' means the period 
        of fiscal years set forth in section 253A(d).
          ``(23) The term `projected spending amount' means the 
        amount of total outlays of the Federal Government for a 
        fiscal year within the guideline period.
          ``(24) The term `guideline spending amount' means the 
        amount of total outlays of the Federal Government for a 
        fiscal year as a percentage of GDP for such fiscal year 
        within the guideline period.
          ``(25) The term `excess spending amount' means the 
        amount by which a projected spending amount exceeds the 
        guideline spending amount for a fiscal year within the 
        guideline period.
          ``(26) The term `spending reduction order' means a 
        spending reduction order as defined in section 253A(c).
          ``(27) The term `advance appropriation' means 
        appropriations that first become available one fiscal 
        year or more beyond the fiscal year for which an 
        appropriation Act making such funds available is 
        enacted.
          ``(28)(A) The term `emergency requirement' means any 
        provision that provides new budget authority and 
        resulting outlays for a situation that poses a threat 
        to life, property, or national security and is--
                  ``(i) sudden, quickly coming into being, and 
                not building up over time;
                  ``(ii) an urgent, pressing, and compelling 
                need requiring immediate action;
                  ``(iii) unforeseen, unpredictable, and 
                unanticipated; and
                  ``(iv) not permanent, temporary in nature.
          ``(B) An emergency that is part of an aggregate level 
        of anticipated emergencies, particularly when normally 
        estimated in advance, is not unforeseen.''.