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The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Aug 9, 2022.
Nickel Plan Act
This bill modifies the federal budget process to establish and enforce new spending caps.
The bill establishes an outlay cap (less net interest payments) for FY2022 of $4.298 trillion, less 5%. For each year from FY2023-FY2026, the bill reduces the outlay cap by 5% of the previous year's outlay cap.
For FY2027 and subsequent years, total outlays may not exceed 18% of the gross domestic product (GDP) for that year as estimated by the Office of Management and Budget (OMB). Beginning in FY2028, total projected outlays for any year may not be less than the total projected outlays for the preceding year.
The OMB must enforce the spending caps using a sequester to eliminate any excess spending through automatic cuts. The bill eliminates the existing exemptions from sequestration.
If the OMB projects a sequester, the congressional budget committees may report a resolution directing congressional committees to change existing law to achieve the spending reductions necessary to meet the outlay limits.
The bill also establishes procedures for Congress to enforce the outlay caps established by this bill.