H. R. 2920
IN THE HOUSE OF REPRESENTATIVES
June 17, 2009
Mr. Hoyer (for himself, Mr. George Miller of California, Mr. Hill, Mr. Welch, Mr. Spratt, Mr. Altmire, Mr. Andrews, Mr. Arcuri, Mr. Baca, Mr. Baird, Mr. Barrow, Ms. Bean, Mr. Berry, Mr. Bishop of Georgia, Mr. Bishop of New York, Mr. Blumenauer, Mr. Boccieri, Mr. Boren, Mr. Boswell, Mr. Boyd, Mr. Brady of Pennsylvania, Mr. Braley of Iowa, Mr. Bright, Mr. Butterfield, Mrs. Capps, Mr. Cardoza, Mr. Carnahan, Mr. Carney, Ms. Castor of Florida, Mr. Chandler, Mr. Childers, Mr. Clyburn, Mr. Connolly of Virginia, Mr. Cooper, Mr. Costa, Mr. Courtney, Mr. Crowley, Mr. Cuellar, Mrs. Dahlkemper, Mr. Davis of Alabama, Mr. Davis of Tennessee, Mrs. Davis of California, Ms. DeGette, Ms. DeLauro, Mr. Donnelly of Indiana, Mr. Driehaus, Mr. Edwards of Texas, Mr. Ellsworth, Ms. Eshoo, Mr. Etheridge, Mr. Fattah, Mr. Foster, Ms. Fudge, Ms. Giffords, Mr. Gonzalez, Mr. Gordon of Tennessee, Mr. Gene Green of Texas, Mr. Griffith, Mr. Gutierrez, Mrs. Halvorson, Mr. Hare, Ms. Harman, Mr. Hastings of Florida, Mr. Heinrich, Ms. Herseth Sandlin, Mr. Higgins, Mr. Himes, Mr. Hodes, Mr. Holden, Mr. Inslee, Mr. Johnson of Georgia, Mr. Kagen, Mr. Kanjorski, Ms. Kilroy, Mrs. Kirkpatrick of Arizona, Mr. Kissell, Mr. Klein of Florida, Ms. Kosmas, Mr. Kratovil, Mr. Langevin, Mr. Larsen of Washington, Mr. Larson of Connecticut, Mr. Lipinski, Mr. Loebsack, Mr. Luján, Mr. Lynch, Mr. Maffei, Mrs. Maloney, Ms. Markey of Colorado, Mr. Marshall, Mr. Massa, Mr. Matheson, Ms. Matsui, Ms. McCollum, Mr. McGovern, Mr. McIntyre, Mr. McMahon, Mr. McNerney, Mr. Melancon, Mr. Minnick, Mr. Moore of Kansas, Mr. Moran of Virginia, Mr. Patrick J. Murphy of Pennsylvania, Mr. Murphy of New York, Mr. Nye, Mr. Pascrell, Ms. Pelosi, Mr. Perlmutter, Mr. Perriello, Mr. Peters, Mr. Peterson, Mr. Pierluisi, Mr. Pomeroy, Mr. Price of North Carolina, Mr. Quigley, Mr. Reyes, Mr. Rodriguez, Mr. Ross, Mr. Ruppersberger, Mr. Ryan of Ohio, Mr. Sablan, Mr. Salazar, Ms. Linda T. Sánchez of California, Ms. Loretta Sanchez of California, Mr. Sarbanes, Mr. Schauer, Mr. Schiff, Mr. Schrader, Ms. Schwartz, Mr. Scott of Georgia, Mr. Scott of Virginia, Mr. Sestak, Ms. Shea-Porter, Mr. Sherman, Mr. Shuler, Mr. Sires, Mr. Skelton, Ms. Slaughter, Mr. Smith of Washington, Mr. Space, Ms. Speier, Mr. Stupak, Mr. Tanner, Mrs. Tauscher, Mr. Teague, Mr. Thompson of California, Ms. Titus, Ms. Tsongas, Mr. Van Hollen, Mr. Walz, Ms. Wasserman Schultz, Mr. Waxman, Mr. Wexler, Mr. Wilson of Ohio, Mr. Wu, Mr. Tonko, and Mr. Visclosky) introduced the following bill; which was referred to the Committee on the Budget
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.
Short title; table of contents
This Act may be cited
Statutory Pay-As-You-Go Act of
Table of contents
The table of contents is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Purpose and expiration.
Sec. 3. Definitions.
Sec. 4. PAYGO estimates and PAYGO ledger.
Sec. 5. Annual report and sequestration order.
Sec. 6. Calculating a sequestration.
Sec. 7. Special, temporary rule to reflect current policy.
Sec. 8. Application of BBEDCA.
Sec. 9. Amendments to the baseline.
Sec. 10. Technical corrections.
Sec. 11. Conforming amendments.
Sec. 12. Exempt programs and activities.
Purpose and expiration
The purpose of this Act is to reestablish a statutory procedure to enforce a rule of budget neutrality on new tax and mandatory spending legislation enacted through the end of calendar year 2013, by creating an automatic statutory penalty that Congress and the President will seek to avoid.
Sections 1 through 8 of this Act shall expire on the later of December 31, 2013, or the issuance and implementation of a sequestration order for fiscal year 2014 if one is required by this Act.
As used in this Act—
BBEDCA means the Balanced Budget and Emergency Deficit Control
Act of 1985.
budget authority, and
outlays have the meanings given to them in section 3 of the
Congressional Budget and Impoundment Control Act of 1974.
have the meanings given to them in section 250 of BBEDCA.
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
budgetary effects means the amounts by which PAYGO legislation
changes mandatory outlays or revenues relative to the baseline. Budgetary
effects that increase mandatory outlays or decrease revenues are termed
costs and budgetary effects that increase revenues or decrease
mandatory outlays are termed
savings. For purposes of these
definitions, off-budget effects and debt service effects are not counted as
debit refers to the net total amount, when positive, by which
costs recorded on the PAYGO ledger for a fiscal year exceed savings recorded on
that ledger for that year.
discretionary programs refers to programs funded though
appropriation Acts other than mandatory programs.
entitlement law means the statutory mandate or requirement of
the United States to incur a financial obligation unless that obligation is
explicitly conditioned on the appropriation in subsequent legislation of
sufficient funds for that purpose.
mandatory outlays refers to outlays flowing from—
budget authority provided by laws other than appropriation Acts;
entitlement laws; or
Nutrition Assistance Program, and the term
refers to programs that produce mandatory outlays.
outyear means a fiscal year that occurs one or more years after
the budget year.
PAYGO ledger refers to a table maintained by OMB (A) containing
a column for each fiscal year 2010 through 2014 and recording in the applicable
column or columns the average of the budgetary effects of each PAYGO Act
enacted after the enactment of this Act and before January 1, 2014, and (B)
displaying the net sum for each of those fiscal years of the average budgetary
effects of all such Acts.
PAYGO legislation or a
PAYGO Act refer to
legislation that is scored as increasing or decreasing governmental receipts or
mandatory outlays relative to the baseline, except that when those budgetary
effects are caused by substantive legislative provisions in appropriation Acts,
the current-year and budget-year effects of those provisions are not considered
timing shift refers to a delay of the date on which mandatory
outlays would otherwise occur from the ninth outyear to the tenth outyear or an
acceleration of the date on which revenues or offsetting receipts or
collections would otherwise occur from the tenth outyear to the ninth
PAYGO estimates and PAYGO ledger
As soon as practicable after Congress completes action on any PAYGO legislation, CBO shall provide an estimate of its budgetary effects to OMB.
OMB shall maintain and make publicly available a document containing a PAYGO ledger and, not later than 7 days (excluding weekends and legal holidays) after the enactment of any PAYGO legislation, OMB shall record on that ledger its estimate of the legislation’s budgetary effects in each fiscal year, applying the look-back requirement of subsection (e) and the averaging requirement of subsection (h). The document shall also explain any major differences between the OMB and CBO estimates of the budgetary effects of PAYGO legislation.
Basis of OMB estimates
When estimating and recording the budgetary effects of a PAYGO Act, OMB shall employ economic and technical assumptions consistent with those in the President’s most recent Budget submitted under section 1105 of title 31, United States Code, and shall use probabilistic methods where appropriate. Once it enters budgetary effects on the ledger, OMB shall not change the entries other than to correct errors. OMB’s assumptions, data, determinations, estimates, and methodology under this Act are not subject to review in any judicial or administrative proceeding.
Current policy exceptions for certain legislation
Notwithstanding the definitions in paragraphs (5), (11), and (12) of section 3, OMB estimates of provisions of legislation within the four areas of the budget identified in section 7 shall be entered on the PAYGO scorecard as specified in that section, and the estimates so entered shall be treated as the budgetary effects of PAYGO legislation for purposes of this section.
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.
For purposes of this section, OMB and CBO shall not count timing shifts in their estimates of the budgetary effects of PAYGO legislation.
If a provision of PAYGO legislation is enacted that the President designates as an emergency requirement and that the Congress so designates in statute, OMB shall display the budgetary effects of that provision as an addendum in the document containing the PAYGO ledger but shall not record the budgetary effects in the ledger itself.
Averaging used To measure compliance over ten years
OMB shall cumulate the budgetary effects of a PAYGO Act over the budget year (which includes any look-back effects under subsection (e)) and the nine subsequent outyears, divide that cumulative total by ten, and enter the quotient in the budget-year column of the PAYGO ledger and in each subsequent column, if any, through the column for 2014.
OMB and CBO shall prepare estimates under this paragraph in conformance with scorekeeping guidelines determined after consultation among the House and Senate Committees on the Budget, CBO, and OMB.
Treatment of program conversions
For purposes of this section, and notwithstanding other provisions of this Act—
if legislation converts an identifiable element of a mandatory program into a discretionary program (with that program element or a substantially similar one continuing to be authorized), OMB and CBO shall not score the conversion of that element as reducing mandatory outlays; and
if legislation converts an identifiable element of a discretionary program into a mandatory program, OMB and CBO shall estimate the legislation’s budgetary effects in each year by subtracting the discretionary baseline levels of that element from the amount by which that legislation increases mandatory outlays in that year.
Annual report and sequestration order
No later than 14 days (excluding weekends and holidays) after Congress adjourns to end a session, OMB shall make publicly available an annual PAYGO report and publish in the Federal Register a notice of the report and information on how it can be obtained. The report shall include an up-to-date document containing a PAYGO ledger and information about estimating differences as required by section 4(b), a description of and justification for any current policy exceptions made under section 4(d), information about emergency legislation (if any) required by section 4(g), 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. If Congress does not adjourn to end a session, then for the purposes of this Act it shall be deemed to have done so on December 31 of that session.
If the annual report issued at the end of a session of Congress under subsection (a) shows a debit on the PAYGO ledger for the budget year, OMB shall prepare and the President shall issue an order sequestering budgetary resources from mandatory programs by enough to fully offset that debit, as prescribed in section 6. 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.
Calculating a sequestration
For purposes of this section, OMB shall assume that mandatory programs are at the levels in the baseline before the implementation of the sequestration order.
Reducing nonexempt budgetary resources by a uniform percentage
OMB shall calculate the uniform percentage by which the budgetary resources of nonexempt mandatory programs are to be sequestered such that the outlay savings resulting from that sequestration, as calculated under subsection (c), shall fully offset the budget-year debit on the PAYGO ledger, if any. 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 mandatory programs are to be sequestered shall be increased, as necessary, so that the sequestration of Medicare and of all other nonexempt mandatory programs together produces the required outlay savings.
In determining the amount by which a sequestration offsets a budget-year debit, OMB shall count—
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;
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
the amount by which the sequestration in the budget year of the budgetary resources of other nonexempt mandatory programs reduces mandatory outlays in the budget year and in the subsequent fiscal year.
Special, temporary rule to reflect current policy
The purpose of this section is to establish a temporary rule addressing the scoring of legislation affecting four areas of the budget and superseding the scoring rules otherwise provided by this Act to the extent they are inconsistent. The four areas covered by this section are—
payments made under section 1848 of the Social Security Act (titled Payment for Physicians’ Services);
the Estate and Gift Tax under subtitle B of the Internal Revenue Code of 1986;
the AMT; and
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—
the provisions of those two Acts that were made permanent by the Pension Protection Act of 2006 (Public Law 109–280);
amendments to the estate and gift tax referred to in paragraph (2); and
the AMT referred to in paragraph (3).
This section shall remain in effect through December 31, 2010, for each of the four areas specified in subsection (a), except that if the President determines that legislation sufficiently consistent with current policy as described in subsection (c)(2) has not been enacted in one or more of those four areas by that date, the provisions of this section will remain in effect with respect to that area or those areas until such legislation has been enacted or until December 31, 2011, whichever occurs sooner.
Current policy projection and initial current law projections
For purposes of this section, the budgetary effects of legislation of the type referred to in subsection (a) shall be estimated relative to the baseline under section 257 of BBEDCA but the budgetary effects of that legislation shall be entered on the PAYGO ledger only to the extent that they fall outside a range bounded by the current policy projection under paragraph (2) and the initial current law projection under paragraph (3), as specified under subsections (d), (e), or (f), as applicable. Each of those two boundary projections shall be estimated using the policy assumptions stated in paragraph (2) or (3) as applicable, regardless of the enactment of subsequent legislation, but the estimates of the dollar levels of those two boundary projections shall change—
when economic and technical assumptions change with the issuance of a new budget under section 1105 of title 31 United States Code;
with changes in the assumed effective date of the legislation that is measured against those two projections; and
to the extent the policy assumptions under either of those two projections interact with other aspects of law, when legislation affecting those other aspects of law is enacted.
During the period specified in subsection (b), there shall exist a current policy projection in addition to the baseline specified in section 257 of BBEDCA. This projection shall—
with respect to payments made under section 1848 of the Social Security Act, assume that the applicable payment rates and payment policies in effect for 2009 remain in effect thereafter without change;
with respect to the estate and gift tax, assume that the tax rates, nominal exemption amounts, and related parameters in effect for tax year 2009 remain in effect thereafter without change;
with respect to
the AMT, assume that the exemption amounts and related parameters in effect for
tax year 2009 are 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; and
with respect to the income tax provisions referred to in subsection (a)(4), assume that each such separate provision scheduled on June 8, 2009, to be in effect for tax year 2010 remains in effect thereafter without change, other than applicable indexing.
Initial current law projection
During the period specified in subsection (b), there shall exist an initial current law projection in addition to the baseline specified in section 257 of BBEDCA. This projection shall—
with respect to payments made under section 1848 of the Social Security Act, assume that the applicable payment rates and payment policies scheduled on June 8, 2009, to be in effect for each subsequent fiscal year shall be in effect as scheduled;
with respect to the estate and gift tax, assume that the tax rates, nominal exemption amounts, and related parameters scheduled on June 8, 2009, to be in effect for each subsequent tax year shall be in effect as scheduled;
with respect to the AMT, assume that the exemption amounts and related parameters scheduled on June 8, 2009, to be in effect for each subsequent tax year shall be in effect as scheduled; and
with respect to provisions of the income tax referred to in subsection (a)(4), assume that each such provision scheduled on June 8, 2009, to be in effect for each subsequent tax year shall be in effect as scheduled.
Budgetary effects of certain medicare legislation
Notwithstanding the definitions in paragraphs (5), (11), and (12) of section 3, OMB shall enter on the PAYGO ledger the budgetary effects of any provision of PAYGO legislation that amends or supersedes the system of payments under section 1848 of the Social Security Act—
only to the extent that the level of net Medicare outlays are estimated to be higher in a fiscal year than if that provision of PAYGO legislation had instead enacted (or maintained) the current policy projection; or
only to the extent that the level of net Medicare outlays are estimated to be lower in a fiscal year than if that provision of PAYGO legislation had instead enacted (or maintained) the initial current law projection.
Budgetary effects of estate and gift tax legislation
Notwithstanding the definitions in paragraphs (5), (11), and (12) of section 3, OMB shall enter on the PAYGO ledger the budgetary effects of any provision of PAYGO legislation that amends the estate and gift tax—
only to the extent that total revenues in a fiscal year are estimated to be changed because tax liability under the estate and gift tax is estimated to be higher in tax year 2010 than if that provision of PAYGO legislation had instead enacted (or maintained) the current policy projection;
only to the extent that total revenues in a fiscal year are estimated to be changed because tax liability under the estate and gift tax is estimated to be lower in tax year 2010 than if that provision of PAYGO legislation had instead enacted (or maintained) the initial current law projection;
only to the extent that total revenues in a fiscal year are estimated to be changed because tax liability under the estate and gift tax is estimated to be lower in a tax year after 2010 than if that provision of PAYGO legislation had instead enacted (or maintained) the current policy projection; or
only to the extent that total revenues in a fiscal year are estimated to be changed because tax liability under the estate and gift tax is estimated to be higher in a tax year after 2010 than if that provision of PAYGO legislation had instead enacted (or maintained) the initial current law projection.
Budgetary effects of AMT and certain income tax legislation taken separately; stacking order and interactive effects
Notwithstanding the definitions in paragraphs (5), (11), and (12) of section 3, OMB shall enter on the PAYGO ledger the budgetary effects of any PAYGO legislation that amends the AMT or amends one of the income tax provisions referred to in subsection (a)(4)—
only to the extent that the level of income tax revenues is estimated to be lower and the level of outlays for refundable tax credits is estimated to be higher in a fiscal year than if that PAYGO legislation had instead enacted (or maintained) the current policy projection with respect to that provision of the income tax; or
only to the extent that the level of income tax revenues is estimated to be higher and the level of outlays for refundable tax credits is estimated to be lower in a fiscal year than if that PAYGO legislation had instead enacted (or maintained) the initial current law projection with respect to that provision of the income tax.
Application of BBEDCA
For purposes of this Act—
notwithstanding section 275 of BBEDCA, the provisions of sections 255, 256, and 257 of BBEDCA, as amended by this Act, shall apply to the provisions of this Act;
sections 255, 256, and 257 to
this part shall be interpreted as
applying to this Act;
sections 255, 256, and 257 of BBEDCA to
section 254 shall be
interpreted as referencing section 5 of this Act;
the reference in
section 256(b) of BBEDCA to
section 252 or 253 shall be
interpreted as referencing section 5 of this Act;
the reference in
section 256(d)(1) of BBEDCA to
section 252 or 253 shall be
interpreted as referencing section 6 of this Act;
the reference in
section 256(d)(4) of BBEDCA to
section 252 or 253 shall be
interpreted as referencing section 5 of this Act;
section 256(k) of the BBEDCA shall apply to a sequestration, if any, under this Act;
section 257(e) to
section 251, 252, or 253 shall be interpreted
as referencing section 4 of this Act; and
direct spending in section 257 of BBEDCA shall be interpreted as
applying to mandatory programs or the funding for mandatory programs, as
Amendments to the baseline
In section 257 of BBEDCA—
entitlement authority and insert in lieu thereof
amend subsection (b)(2)(A) to read—
If any law expires before the budget year or before any outyear, then any program with estimated current-year outlays of more than $50,000,000 operating under that law is assumed to continue to operate under that law as in effect immediately before its expiration. For purposes of the preceding sentence, the Food, Conservation, and Energy Act of 2008 or a similar successor Act is treated as a program assumed to be continued after its scheduled expiration.
amend subsection (b)(2)(D) to read—
Payments of social insurance, deposit insurance, pension insurance, and any similar statutory financial insurance guarantees are assumed to be made in full regardless of the sufficiency of the funds supporting those programs, and funding for flood insurance and any similar contractual insurance programs is assumed to be sufficient to fulfill existing contracts.
(c)(1) by striking
Budgetary resources and inserting in lieu
Except as provided in subsection (d), budgetary
resources and by striking
to offset pay absorption and for pay
annualization and inserting in lieu thereof
to adjust Pell grant
amend subsection (c)(2) to read—
Expiring housing contracts
New budget authority shall be added to the baseline in the budget year and the outyears to cover the costs of renewing expiring subsidized housing contracts that were funded in the current year under multiyear contracts whose budget authority was recorded in years prior to the current year. The amount added (before adjusting for inflation) shall be the amount needed to renew the expiring contracts through an uninterrupted series of 12-month contracts, assuming unchanged rental or equivalent prices.
amend subsection (c)(4) to read—
Notwithstanding paragraph (1), new budget authority for the Pell grant program shall be included in the baseline in an amount sufficient to cover the costs of the program at the maximum award level specified in the most recently enacted full-year appropriation Acts, the budget authority in the budget year shall be adjusted for any cumulative funding shortfall or surplus from prior academic years, and the adjustment for inflation under paragraph (5) shall not apply.
insert after subsection (c) the following (and redesignate the subsequent subsections accordingly):
Notwithstanding subsections (b) and (c), temporary mandatory funding and tax provisions related to major natural or man-made disasters shall be assumed to expire on schedule, and discretionary funding for major natural or man-made disaster shall not be projected. In lieu, the baseline shall include a disaster allowance that is not designated as mandatory or discretionary and is not allocated to any committee of Congress. The amount of budget authority assumed for this disaster allowance shall equal a probabilistic estimate of the amount of Federal exposure to the risk of major natural or man-made disasters occurring in the remainder of the current year, the budget year, and each outyear, and the amount of outlays shall equal the estimated expenditures of that budget authority. Major disasters shall include disaster costs other than those normally covered by routine firefighting funding and normal and ongoing costs of disaster agencies, programs, or activities.
of BBEDCA is amended by striking
the expenses the Federal deposit
insurance agencies and inserting
the expenses of the Federal
deposit insurance agencies.
of BBEDCA is amended by striking
in paragraph (5) and inserting
in paragraph (6).
Section 256(a) of BBEDCA is repealed.
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
Section 256(c) of BBEDCA is repealed.
Section 256(d) of BBEDCA is amended—
by redesignating paragraphs (2), (3), and (4) as paragraphs (3), (5), and (6);
by amending paragraph (1) to read as follows:
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—
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
in the case of parts C and D, to monthly payments under contracts under such parts for the same one-year period;
by inserting after paragraph (1) the following:
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.
by inserting after paragraph (3), as redesignated, the following:
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).
in paragraph (6), as redesignated, to read as follows:
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—
the part C growth percentage under section 1853(c)(6);
the part D annual growth rate under section 1860D–2(b)(6); and
application of risk corridors to part D payment rates under section 1860D–15(e).
by adding after paragraph (6), as redesignated, the following:
Exemptions from sequestration
In addition to the programs and activities specified in section 255, the following shall be exempt from sequestration under this part:
Part d low-income subsidies
Premium and cost-sharing subsidies under section 1860D–14 of the Social Security Act.
Part d catastrophic subsidy
Payments under section 1860D–15(b) and (e)(2)(B) of the Social Security Act.
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.
Exempt programs and activities
255 of BBEDCA is amended by redesignating paragraph (i) as (j) and striking
1998 and inserting in lieu thereof
Social security, veterans programs, net interest, and tax credits
Subsections (a) through (d) of section 255 of BBEDCA are amended to read as follows:
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.
The following programs shall be exempt from reduction under any order issued under this part—
- Canteen Service Revolving Fund (36–4014–0–3–705).
- National Service Life Insurance Fund (36–8132–0–7–701).
- Native American Veteran Housing Loan Program (36–1120–0–1–704).
- Service-Disabled Veterans Insurance Fund (36–4012–0–3–701).
- Veterans Insurance and Indemnities (36–0120–0–1–701).
- Veterans Reopened Insurance Fund (36–4010–0–3–701).
- Veterans Special Life Insurance Fund (36–8455–0–8–701).
- United States Government Life Insurance Fund (36–8150–0–7–701).
- Benefits under chapter 21 of title 38, United States Code, relating to specially adapted housing and mortgage-protection life insurance for certain veterans with service-connected disabilities (36–0120–01–701).
- Compensation and Pensions (36–0102–0–1–701) to include Burial Benefits under chapter 23 of title 38.
- Benefits under chapter 33 of title 38, United States Code, relating to educational assistance provided by the Post-9/11 Educational Assistance Act of 2008 (36–0137–0–1–702).
- Benefits under chapter 39 of title 38, United States Code, relating to automobiles and adaptive equipment for certain disabled veterans and members of the Armed Forces (36–0137–0–1–702).
- Benefits under chapter 35 of title 38, United States Code, related to educational assistance for survivors and dependents of certain veterans with service-connected disabilities (36–0137–0–1–702).
- Assistance and services under chapter 31 of title 38, United States Code, relating to training and rehabilitation for certain veterans with service-connected disabilities (36–0137–0–1–702).
- Benefits under subchapters I, II, and III of chapter 37 of title 38, United States Code, relating to housing loans for certain veterans and for the spouses and surviving spouses of certain veterans Housing Program Account (36–1119–0–1–704).
- Special Benefits for Certain World War II Veterans (28–0401–0–1–701).
No reduction of payments for net interest (all of major functional category 900) shall be made under any order issued under this part.
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.
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:
Other programs and activities
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).
- Appropriations for the District of Columbia (to the extent they are appropriations of locally raised funds).
- 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).
- Colorado River Basins Power Marketing Fund, Western Area Power Administration (89–4452–0–3–271).
- Compact of Free Association (14–0415–0–1–808).
- Compensation of the President (11–0209–0–1–802).
- Construction, Rehabilitation, Operation and Maintenance, Western Area Power Administration (89–5068–0–2–271).
- 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, Office of Inspector General (51–4595–0–4–373).
- 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).
- Health Education Assistance Loans Program Account (75–0340–0–1–552).
- 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).
- Operation and Maintenance, Alaska Power Administration (89–0302–0–1–271).
- Operation and Maintenance, Southeastern Power Administration (89–0302–0–1–271).
- Operation and Maintenance, Southwestern Power Administration (89–0303–0–1–271).
- 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).
- 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).
- 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), Indian Land and Water Claims Settlements (14–2303–0–1–452), 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).
- Western Area Power Administration, Borrowing Authority, Recovery Act (89–4404–0–3–271).
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).
- 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).
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).
- 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).
- Geothermal resources development fund (89–0206–0–1–271).
- Homeowners Assistance Fund (97–4090–0–3–051).
- International Trade Administration, Operations and administration (13–1250–0–1–376).
- 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).
- Rail service assistance within the Safety and Operations account (69–0700–0–1–401).
- 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).
Nonbudgetary accounts and activities, including the following, are exempt from sequestration under this part:
- Credit financing accounts.
- Deposit funds.
- Federal Reserve.
- Government Sponsored Enterprises, including the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
- Thrift Savings Fund.
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 (12–3512–0–1–605).
- Contingency Fund (75–1522–0–1–609).
- Family Support Programs (75–1501–0–1–551).
- Federal Pell Grants under section 401 title IV of the Higher Education Act.
- Grants to States for Low-Income House Projects in Lieu of Low-Income Housing Credit Allocations, Recovery Act (20–0139–0–1–604).
- Grants to States for Medicaid (75–0512–0–1–551).
- Payments for Foster Care and Permanency (75–1545–0–1–609).
- Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (12–3510–0–1–605).
- 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).
Economic recovery programs
Section 255 of BBEDCA is amended by adding the following after subsection (h):
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).
- Office of Financial Stability (20–0128–0–1–376).
- 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).