The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Dec 10, 1985.
(Conference report filed in House, H. Rept. 99-433) Increases the public debt limit to $1,847,800,000,000 or $2,078,700,000,000 on and after October 1, 1985. Directs the Senate Committee on Finance, by July 1, 1986, to report legislation providing for payment of an alternative minimum tax by corporations on the broadest feasible definition of income to assure that all of those with economic income pay their fair share of taxes. Applies the revenue raised toward the Federal deficit. Requires the House Ways and Means Committee to report the same type of legislation before October 1, 1986. Expresses the sense of the Senate that the United States: (1) demands that no country provide safe harbor or safe passage to the hijackers of the Achille Lauro; (2) expects the full cooperation of all countries in the apprehension, prosecution, and punishment of the hijackers; (3) cannot condone the release of terrorists or the making of concessions to terrorists; (4) should identify the hijackers and the countries and groups that aid terrorist activities; and (5) should take the strongest measures to ensure that those responsible for the murder of an American citizen, Leon Klinghoffer, aboard the Achille Lauro are brought to justice. Title II: Deficit Reduction Procedures - Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act) - Part A: Congressional Budget Process - Amends the Congressional Budget and Impoundment Control Act of 1974 to prescribe maximum Federal budget deficits for each of fiscal years 1986 through 1991 providing for the incremental reduction of the deficit to zero by FY 1991. Requires Old Age, Survivors and Disability Insurance (OASDI) revenues and expenditures to be included in the calculation of deficits. Requires the receipts, revenues, disbursements, budget authority, and outlays of each off-budget Federal entity for a fiscal year to be included in total budget authority, total budget outlays, and total revenues and the amounts of budget authority and outlays set forth for each major functional category of the budget for such fiscal year. Requires amounts paid by the Federal Financing Bank to purchase loans made or guaranteed by a Government entity to be treated as outlays of such entity. Amends the Congressional Budget Act of 1974 to revise the timetable with respect to the congressional budget process. Eliminates the second concurrent resolution on the budget. Requires the Congress to complete action on an annual concurrent resolution on the budget on or before April 15 of each year. Requires such budget resolution to set forth appropriate budgetary levels for each fiscal year beginning on October 1 of such year and planning levels for each of the two ensuing fiscal years. Provides that such resolution may also set forth: (1) reconciliation directives; and (2) the calendar year in which the Congress believes the unemployment goals of the Employment Act of 1946 should be achieved. Requires that any budget resolution reported by the Committee on the Budget of the House which changes any rule of the House of Representatives be referred to the Committee on Rules. Authorizes the Committee on Rules to report the resolution with an amendment to strike or change the provision affecting the rule. Requires the committees of the House and Senate having legislative jurisdiction to report their budget views and estimates to the Committee on the Budget of the House or the Senate, respectively, by February 25 of each year. Requires the report of the Budget Committees accompanying a budget resolution to contain congressional committee allocations of total budget authority, entitlement authority, and credit authority under the resolution. Requires the joint explanatory statement accompanying a conference report on a budget resolution to set forth the common economic assumptions upon which such statement, report, or any amendment under technical disagreement is based. Requires the Committee on the Budget of the House to consult with the standing committees of the House during the preparation, consideration, and enforcement of the budget resolution with respect to all matters which relate to the jurisdiction or functions of such committees. Establishes a point of order against either House of Congress considering any budget resolution, amendment thereto, conference report thereon, or later revision thereof providing for budget outlays exceeding revenues by more than the maximum deficit amount prescribed for the fiscal year. Allows the House of Representative to waive such point of order by a three-fifths vote under certain circumstances. Requires the joint explanatory statement accompanying a conference report on a budget resolution to include committee allocations of new budget authority. Requires, for the House of Representatives, that each allocation divide new budget authority and resulting budget outlays, entitlement authority, and credit authority between mandatory or uncontrollable amounts and discretionary or controllable amounts. Establishes a point of order against either House considering any bill, resolution, or amendment thereto which provides new budget, spending, or credit authority for a fiscal year: (1) within the jurisdiction of any committee until such committee makes any required allocations and subdivisions pursuant to the budget resolution for that year; or (2) in excess of the appropriate committee allocation. Provides that the point of order against either House considering legislation providing new budget authority or increases or decreases in revenues or the public debt for a fiscal year until the concurrent resolution for that fiscal year has been adopted shall: (1) also apply to legislation providing new entitlement or credit authority; and (2) not apply in the House of Representatives after May 15 of a calendar year to any general appropriations bill providing new budget authority for the fiscal year beginning in that calendar year. Sets forth revised House and Senate procedures for the consideration of budget resolutions. Requires the House Committee on Appropriations to report all regular appropriations bills for the upcoming fiscal year by June 10. Requires any House or Senate committee report and each conference report on legislation providing new budget authority (other than continuing appropriations), new spending or credit authority, or an increase or decrease in revenues or tax expenditures for a fiscal year to include: (1) a statement comparing the levels in such measure to the appropriate committee allocations for such year; (2) a statement identifying and justifying the new spending authority; (3) a Congressional Budget Office (CBO) projection of how such legislation will affect the levels of such budget authority, budget outlays, spending authority, revenues, tax expenditures, direct loan obligations, or primary loan guarantee commitments for such fiscal year and the four succeeding years; and (4) CBO's estimate of the level of new budget authority for State and local assistance provided by such legislation. Requires CBO's tabulations of congressional budget action to report information on all such legislation to all House and Senate committees at least monthly. Directs each Budget Committee to make monthly summary budget scorekeeping reports including such tabulations to the members of its House. Requires CBO's five-year projection report to include information on entitlement authority and credit authority for each fiscal year. Establishes a point of order in the House of Representatives against considering any resolution providing for an adjournment period of more than three days in July until the House has approved all regular appropriations bills and any required reconciliation legislation for the upcoming fiscal year. Revises the reconciliation process to require that any reconciliation directives by which budget authority, entitlement authority, credit authority, revenues, or the public debt limit need to be changed to effectuate the provisions of a budget resolution be included in such resolution. Allows specified variance in the composition of changes required for a committee through reconciliation, provided that the total amount of changes recommended is not less that the total amount required. Provides that no amendment that would increase specific budget outlays or reduce specific revenues set forth in a reconciliation bill or resolution shall be in order in either House, unless such amendment provides for offsetting adjustments in other outlays and revenues, with specified exceptions. Requires the Congress to complete action on any reconciliation bill or resolution by June 15 of each year. Makes it out of order for either House to consider any reconciliation bill or resolution containing recommendations concerning the OASDI program. Establishes a point of order in the Senate against the consideration of any legislation that would provide new budget or entitlement authority or reduce revenues for a fiscal year for which a budget resolution has been completed, if such legislation would result in a deficit exceeding the applicable maximum deficit amount. Allows consideration in the House of Representatives of legislation providing new budget or entitlement authority, if such legislation would not cause committee allocations to be exceeded. Establishes a point of order against either House considering any legislation which provides new credit authority, unless such new credit authority is to be effective for any fiscal year only to the extent and in such amounts as provided in appropriation Acts. Requires CBO's cost analyses of reported bills to include descriptions of any methods for establishing Federal financial commitments contained in such bills. Requires the General Accounting Office to: (1) study provisions of law providing spending authority and permanent appropriations; and (2) report to the Congress recommendations for the appropriate form of financing for activities or programs financed by such provisions. Requires budget and credit authority and estimates of outlays and receipts for activities of the Federal budget which are off-budget immediately prior to enactment of this provision, excluding activities of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, to be included in the budget transmitted by the President to the Congress and in the budget resolution. Directs the Speaker of the House to appoint a Member User Group to review and advise the Speaker on the effect and impact of budgetary scorekeeping rules and practices. Requires CBO to: (1) submit its annual fiscal policy reports to the Budget Committees by February 15; (2) report to the Congress by January 15 each year a listing of all programs and activities lacking authorizations of appropriations in the current and upcoming fiscal years; and (4) conduct continuing studies to enhance comparisons of budget outlays, credit authority, and tax expenditures. Requires the President to submit the current services budget to the Congress by the first Monday after January 3 of each year. Requires the Joint Economic Committee to submit its economic evaluation of such budget to the Budget Committees before March 1. Requires that congressional committees receive prompt notification of all changes in budget functional categories. Amends the rules of the House of Representatives to: (1) make it the function of the Rules Committee to conduct a continuing study of, and report to the House on, the congressional budget process; (2) require the election of House committees within seven calendar days after a new Congress convenes; and (3) permit consideration of rescissions of appropriations and transfers of unexpended balances within the agency for which they were originally appropriated when such rescissions or transfers are included in a general appropriation bill. Makes technical and conforming amendments to the Congressional Budget and Impoundment Control Act of 1974 and the rules of the House of Representatives. Part B: Budget Submitted by the President - Requires submission of the President's budget to the Congress by the first Monday after January 3 of each year. Requires the annual budget submitted by the President to be prepared on the basis of the best estimates available so as to ensure that the deficit set forth for a fiscal year shall not exceed the applicable maximum deficit amount. Repeals a requirement that the President submit budget changes by April 11 of each year. Part C: Emergency Powers to Eliminate Deficits in Excess of Maximum Deficit Amount - Requires the Director of the Office of Management and Budget (OMB) and the Director of CBO: (1) by August 15 of each year (January 10, 1986, for FY 1986), to estimate the budget base levels of total revenues and budget outlays for the upcoming fiscal year; (2) to determine whether the projected deficit for such fiscal year will exceed the applicable maximum deficit amount and whether such excess will be greater than $10,000,000,000 (zero in 1986 and 1991); (3) to estimate the rate of real economic growth for such fiscal year, each quarter of such year, and the last two quarters of the preceding fiscal year; and (4) by August 20 of each year (January 15, 1986, for FY 1986), to report such information to the Comptroller General together with the amounts and percentages by which each non-defense program account and each program, project, and activity within each defense account must be reduced in any fiscal year for which the projected deficit exceeds the maximum deficit amount by over $10,000,000,000 (zero in 1986 and 1991) in order to eliminate such excess. Sets forth procedures for determining such reductions for a fiscal year. Requires that reductions necessary to eliminate one half of the deficit excess for a fiscal year (such excess shall not exceed $11,700,000,000 for FY 1986) be made in outlays under defense program accounts and that reductions necessary to eliminate the other half be made in outlays under non-defense program accounts. Requires automatic spending increases for specified Federal retirement programs to be reduced by a uniform percentage up to 100 percent as necessary to reduce one-half of the deficit excess, also to be divided between defense and non-defense programs. Requires the Directors to determine which accounts are in the defense and non-defense categories. Requires the Directors' report to the Comptroller General to also specify: (1) the amount and percentage reduction in automatic spending increases by program and the resulting reduction in the deficit excess; (2) the savings to be achieved in the application of each special rule, exception, and limitation to such reduction process prescribed in this Act and the amount of the percentage reduction in Federal payments to States under the Federal-State Extended Unemployment Compensation Act of 1970; and (3) a budgetary breakdown of the reductions for defense and non-defense by account, together with estimates of resulting reductions in outlays. Sets forth the economic and technical assumptions to be used by the Directors in determining the budget base to be used in making the estimates, determinations, specifications, and reduction calculations under this Act. Requires the Directors to average differences to produce a single, consistent set of data. Requires the Comptroller General, by August 25 of each year (January 20, 1986, for FY 1986), to submit to the Congress and the President a report based on the OMB-CBO report, providing the same items of information, and explaining any differences in such reports. Requires the Directors, by October 5 of each fiscal year, to submit to the Comptroller General a revised report identifying: (1) any change in the deficit excess for such year as a result of laws enacted and regulations promulgated after the submission of their initial report; and (2) any necessary adjustments in the estimates, determinations, specifications, and reductions contained in the initial report. Requires the Comptroller General, by October 10, to submit a revised version of his report as necessary in light of the revised OMB-CBO report. Sets forth defense program sequestration procedures providing for: (1) the determination of a uniform reduction percentage; (2) the sequestration of new budget authority and unobligated balances; and (3) sequestration from national defense accounts through the termination or modification of existing contracts. Directs the President, on September 1 (February 1, 1986, for FY 1986) preceding each fiscal year for which the Comptroller General's report identifies a deficit excess over $10,000,000,000 (zero for FY 1986 and 1991), to issue an initital order eliminating such deficit excess in accordance with such report by modifying or suspending the operation of each provision of Federal law requiring an automatic spending increase and by sequestering new budget authority, unobligated balances, new loan guarantee commitments, new direct loan obligations, and spending authority. Requires such order to provide for reductions as specified in the report (except as provided for defense programs for FY 1986). Requires that any amounts sequestered and any portions of automatic spending increases reduced by such order be withheld or suspended, respectively, pending issuance of the President's final order and permanently cancelled in accordance with such final order when issued. Requires the President's initial order to take effect on October 1 of each fiscal year (March 1, 1986, for FY 1986). Sets forth special rules for FY 1986, including special sequestration procedures for national defense. Allows the President to differentiate reduction percentages among programs, projects, and activities within accounts and to exempt from reductions any military personnel account, provided that the total amount required to be sequestered for national defense is achieved. Prohibits the President's order for FY 1986 from resulting in a military base closure or realignment. Requires the President to issue a final order on October 15 of each year (the initial order shall be the final order for FY 1986) providing for any adjustments required pursuant to the Comptroller General's revised report. Prohibits the elimination of any Federal program, project, or activity or the denial of benefits to any eligible person as a result of such a presidential order. Directs the Comptroller General to report to the Congress and the President by November 15 of each year (April 1, 1986, for FY 1986) on the extent to which the President's final order complies with requirements of this Act. Requires the CBO director to notify the Congress at any time if: (1) CBO or OMB has determined that real economic growth is projected or estimated to be less than zero for each of two consecutive quarters out of the past two and upcoming four quarters; or (2) the Department of Commerce preliminary reports of actual real economic growth indicate that the rate of real economic growth for each of the most recent reported quarter and the immediately preceding quarter is less than one percent. Requires the Majority Leader of each House, upon receiving such notification, to introduce a joint resolution suspending provisions of this title for the remainder of the current fiscal year or for the following fiscal year or both. Sets forth House and Senate procedure for consideration of such resolution. Authorizes each standing committee of the Senate, within two days after submission of the Comptroller General's revised report under this title, to submit to the Senate Budget Committee alternatives to the order envisioned by such report as such order would affect laws within such standing committee's jurisdiction. Permits the Senate Budget Committee, within two days after issuance of a final order by the President under this title, to report a resolution affirming all or parts of such order and containing reconciliation instructions to certain committees sufficient to achieve at least the total level of deficit reduction contained in those parts not affirmed. Directs such committees, within ten days, to submit their responses to the Senate Budget Committee, which shall report a reconciliation bill or resolution carrying out such committees' recommendations. Establishes a point of order against Senate consideration of any such reconciliation legislation which, if enacted, would result in a deficit for a fiscal year exceeding the applicable maximum deficit amount. Lists programs and activities which are exempt from any reduction measures under this Act, including: (1) OASDI benefits and certain railroad retirement benefits; (2) veterans' compensation and pensions; (3) interest on the national debt; (4) earned income tax credit payments; (5) offsetting receipts and collections; (6) payments to Federal retirement funds and certain Federal trust funds; (7) specified Federal insurance trusts; and (8) the child nutrition, aid to families with dependent children, food stamp, Medicaid, Supplement Security Income, and women, infants, and children programs. Sets forth special rules for applying reductions required under this Act to the: (1) guaranteed student loan, child support enforcement, foster care and adoption assistance, and unemployment compensation programs; (2) the Commodity Credit Corporation; and (3) obligated balances. Limits maximum permissible reductions to one percent in FY 1986 and two percent in subsequent fiscal years for Medicare, community health centers, migrant health centers, Indian health facilities, Indian health services, and veterans' medical care. Prohibits a sequestration order under this Act from reducing a Federal employee's rate of pay under a statutory pay system or any element of military pay. Provides for the treatment of mine worker disability increases as automatic spending increases. Terminates the provisions at this part on September 30, 1991. Part D: Budgetary Treatment of Social Security Trust Funds - Provides that the receipts and disbursements of the Federal Old Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund (OASDI trust funds) and the taxes imposed on employers, employees, and the self-employed shall not be included in the totals of the Federal budget as submitted by the President or as stated in the congressional budget, and shall be exempt from any general budget limitation imposed by statute on Federal expenditures and net lending, for fiscal years 1986 through 1992. Prohibits payments between the Treasury and such funds, other than an appropriation to such funds already authorized under the Social Security Act as in effect on the date of enactment of this Act. Part E: Miscellaneous and Related Provisions - Requires a three-fifths vote in the Senate to waive specified provisions and points of order under the Congressional Budget Act of 1974. Directs the Secretary of the Treasury to issue to the OASDI trust funds, the Federal Hospital Insurance Trust Fund, the Federal Supplementary Medical Insurance Trust Fund, the Railroad Retirement Account, the Civil Service Retirement and Disability Fund, and other specified funds public debt obligations identical to the obligations which: (1) were redeemed between September 1, 1985, and September 29, 1985; and (2) would not have been redeemed had the public debt limit been increased on August 1, 1985. Directs the Secretary to pay to such funds the interest not earned because of redemptions, noninvestments, or disinvestments during such period that would not have occurred had the public debt ceiling been increased on August 1, 1985. Requires the Secretary to: (1) issue to the Department of Defense Military Retirement Fund obligations that would have been issued to such Fund on October 1, 1985, had the public debt ceiling been increased on August 1, 1985; (2) pay to such Fund the amount of interest not earned because such obligations were not issued; and (3) immediately invest such interest payment in special obligations designated by the Secretary of Defense. Requires the Secretary of the Treasury to pay to each fund listed in Table III of the Monthly Statement of the Public Debt of November 30, 1985, the amount of interest such fund was unable to earn from investments between December 7, 1985, and the date of enactment of this Act because of the expiration of the temporary debt limit. Directs the Secretary to pay to the OASDI trust funds an amount (not to exceed $550,000,000) sufficient to fully compensate such funds for interest losses arising from the premature redemption, between September 1, 1984, and October 31, 1984, of securities maturing in calendar years 1987 through 1991. Requires CBO to use revenue estimates provided by the Joint Committee on Taxation for purposes of revenue legislation. Authorizes any Member of Congress or any person adversely affected by any action under this title to bring a lawsuit concerning the constitutionality of this title. Provides that such an action shall be subject to expedited consideration and shall be reviewable by appeal directly to the U.S. Supreme Court from a three-judge panel of the U.S. District Court for the District of Columbia. Prohibits any court order granting declaratory of injunctive relief from the President's sequestration order from taking effect pending final disposition of any such appeal. Provides that if reductions pursuant to a sequestration order of the President under this title are prevented or avoided on constitutional grounds as determined by the Supreme Court, the entire order shall be null and void. Provides for the establishment of a Temporary Joint Committee on Deficit Reduction to which the OMB-CBO report shall be submitted if the reporting procedures set forth earlier in this title are invalidated. Directs the Committee to report to both Houses a joint resolution setting forth the contents of the OMB-CBO report. Requires such joint resolution, if enacted, to be considered to be the Comptroller General's report received by the President. Waives specified provisions of this title if a declaration of war by the Congress is in effect.