S 1040 IS
106th CONGRESS
1st Session
S. 1040
To promote freedom, fairness, and economic opportunity for families
by reducing the power and reach of the Federal establishment.
IN THE SENATE OF THE UNITED STATES
May 13, 1999
Mr. SHELBY (for himself and Mr. CRAIG) introduced the following bill; which
was read twice and referred to the Committee on Finance
A BILL
To promote freedom, fairness, and economic opportunity for families
by reducing the power and reach of the Federal establishment.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Freedom and Fairness
Restoration Act of 1997'.
Sec. 1. Short title; table of contents.
TITLE I--TAX REDUCTION AND SIMPLIFICATION; SUPERMAJORITY REQUIRED FOR TAX
CHANGES
Subtitle A--Tax Reduction and Simplification
Sec. 101. Individual income tax.
Sec. 102. Tax on business activities.
Sec. 103. Simplification of rules relating to qualified retirement
plans.
Sec. 104. Repeal of alternative minimum tax.
Sec. 105. Repeal of credits.
Sec. 106. Repeal of estate and gift taxes and obsolete income tax
provisions.
Sec. 107. Effective date.
Subtitle B--Supermajority Required for Tax Changes
Sec. 111. Supermajority required.
TITLE II--SPENDING RESTRAINT AND BUDGET PROCESS REFORM
Subtitle A--Balanced Budget by Fiscal Year 2002
Sec. 201. Maximum spending amounts.
Sec. 202. Enforcing maximum spending sequestration.
Sec. 203. Total spending point of order.
Subtitle B--Zero Based Budgeting and Decennial Sunsetting
Sec. 211. Reauthorization of discretionary programs and unearned
entitlements.
Sec. 212. Point of order.
Sec. 213. Decennial sunsetting.
TITLE I--TAX REDUCTION AND SIMPLIFICATION; SUPERMAJORITY REQUIRED FOR
TAX CHANGES
Subtitle A--Tax Reduction and Simplification
Sec. 101. INDIVIDUAL INCOME TAX.
(a) IN GENERAL- Section 1 of the Internal Revenue Code of 1986 is amended
to read as follows:
`SECTION 1. TAX IMPOSED.
`There is hereby imposed on the taxable income of every individual a tax
equal to 20 percent (17 percent in the case of taxable years beginning after
December 31, 1998) of the taxable income of such individual for such taxable
year.'
(b) TAXABLE INCOME- Section 63 of such Code is amended to read as
follows:
`SEC. 63. TAXABLE INCOME.
`(a) IN GENERAL- For purposes of this subtitle, the term `taxable income'
means the excess of--
`(A) wages (as defined in section 3121(a) without regard to paragraph
(1) thereof) which are paid in cash and which are received during the
taxable year for services performed in the United States,
`(B) retirement distributions which are includable in gross income for
such taxable year, plus
`(C) amounts received under any law of the United States or of any
State which is in the nature of unemployment compensation, over
`(2) the standard deduction.
`(1) IN GENERAL- For purposes of this subtitle, the term `standard
deduction' means the sum of--
`(A) the basic standard deduction, plus
`(B) the additional standard deduction.
`(2) BASIC STANDARD DEDUCTION- For purposes of paragraph (1), the basic
standard deduction is--
`(A) $22,000 in the case of--
`(ii) a surviving spouse (as defined in section 2(a)),
`(B) $14,000 in the case of a head of household (as defined in section
2(b)), and
`(C) $11,000 in the case of an individual--
`(i) who is not married and who is not a surviving spouse or head of
household, or
`(ii) who is a married individual filing a separate
return.
`(3) ADDITIONAL STANDARD DEDUCTION- For purposes of paragraph (1), the
additional standard deduction is $15,000 for each dependent (as defined in
section 152) who is described in section 151(c)(1) for the taxable year and
who is not required to file a return for such taxable year.
`(c) RETIREMENT DISTRIBUTIONS- For purposes of subsection (a), the term
`retirement distribution' means any distribution from--
`(1) a plan described in section 401(a) which includes a trust exempt
from tax under section 501(a),
`(2) an annuity plan described in section 403(a),
`(3) an annuity contract described in section 403(b),
`(4) an individual retirement account described in section 408(a),
`(5) an individual retirement annuity described in section 408(b),
`(6) an eligible deferred compensation plan (as defined in section
457),
`(7) a governmental plan (as defined in section 414(d)), or
`(8) a trust described in section 501(c)(18).
Such term includes any plan, contract, account, annuity, or trust which,
at any time, has been determined by the Secretary to be such a plan, contract,
account, annuity, or trust.
`(d) INCOME OF CERTAIN CHILDREN- For purposes of this subtitle--
`(1) an individual's taxable income shall include the taxable income of
each dependent child of such individual who has not attained age 14 as of
the close of such taxable year, and
`(2) such dependent child shall have no liability for tax imposed by
section 1 with respect to such income and shall not be required to file a
return for such taxable year.
`(e) INFLATION ADJUSTMENT-
`(1) IN GENERAL- In the case of any taxable year beginning in a calendar
year after 1997, each dollar amount contained in subsection (b) shall be
increased by an amount determined by the Secretary to be equal to--
`(A) such dollar amount, multiplied by
`(B) the cost-of-living adjustment for such calendar year.
`(2) COST-OF-LIVING ADJUSTMENT- For purposes of paragraph (1), the
cost-of-living adjustment for any calendar year is the percentage (if any)
by which--
`(A) the CPI for the preceding calendar year, exceeds
`(B) the CPI for the calendar year 1996.
`(3) CPI FOR ANY CALENDAR YEAR- For purposes of paragraph (2), the CPI
for any calendar year is the average of the Consumer Price Index as of the
close of the 12-month period ending on August 31 of such calendar
year.
`(4) CONSUMER PRICE INDEX- For purposes of paragraph (3), the term
`Consumer Price Index' means the last Consumer Price Index for all-urban
consumers published by the Department of Labor. For purposes of the
preceding sentence, the revision of the Consumer Price Index which is most
consistent with the Consumer Price Index for calendar year 1986 shall be
used.
`(5) ROUNDING- If any increase determined under paragraph (1) is not a
multiple of $10, such increase shall be rounded to the next highest multiple
of $10.
`(f) MARITAL STATUS- For purposes of this section, marital status shall be
determined under section 7703.'
SEC. 102. TAX ON BUSINESS ACTIVITIES.
(a) IN GENERAL- Section 11 of the Internal Revenue Code of 1986 (relating
to tax imposed on corporations) is amended to read as follows:
`SEC. 11. TAX IMPOSED ON BUSINESS ACTIVITIES.
`(a) TAX IMPOSED- There is hereby imposed on every person engaged in a
business activity a tax equal to 20 percent (17 percent in the case of taxable
years beginning after December 31, 1998) of the business taxable income of
such person.
`(b) LIABILITY FOR TAX- The tax imposed by this section shall be paid by
the person engaged in the business activity, whether such person is an
individual, partnership, corporation, or otherwise.
`(c) BUSINESS TAXABLE INCOME- For purposes of this section--
`(1) IN GENERAL- The term `business taxable income' means gross active
income reduced by the deductions specified in subsection (d).
`(2) GROSS ACTIVE INCOME-
`(A) IN GENERAL- For purposes of paragraph (1), the term `gross active
income' means gross receipts from--
`(i) the sale or exchange of property or services in the United
States by any person in connection with a business activity,
and
`(ii) the export of property or services from the United States in
connection with a business activity.
`(B) EXCHANGES- For purposes of this section, the amount treated as
gross receipts from the exchange of property or services is the fair
market value of the property or services received, plus any money
received.
`(C) COORDINATION WITH SPECIAL RULES FOR FINANCIAL SERVICES, ETC-
Except as provided in subsection (e)--
`(i) the term `property' does not include money or any financial
instrument, and
`(ii) the term `services' does not include financial
services.
`(3) EXEMPTION FROM TAX FOR ACTIVITIES OF GOVERNMENTAL ENTITIES AND
TAX-EXEMPT ORGANIZATIONS- For purposes of this section, the term `business
activity' does not include any activity of a governmental entity or of any
other organization which is exempt from tax under this chapter.
`(1) IN GENERAL- The deductions specified in this subsection are--
`(A) the cost of business inputs for the business activity,
`(B) wages (as defined in section 3121(a) without regard to paragraph
(1) thereof) which are paid in cash for services performed in the United
States as an employee, and
`(C) retirement contributions to or under any plan or arrangement
which makes retirement distributions (as defined in section 63(c)) for the
benefit of such employees to the extent such contributions are allowed as
a deduction under section 404.
`(A) IN GENERAL- For purposes of paragraph (1), the term `cost of
business inputs' means--
`(i) the amount paid for property sold or used in connection with a
business activity,
`(ii) the amount paid for services (other than for the services of
employees, including fringe benefits paid by reason of such services) in
connection with a business activity, and
`(iii) any excise tax, sales tax, customs duty, or other separately
stated levy imposed by a Federal, State, or local government on the
purchase of property or services which are for use in connection with a
business activity.
Such term shall not include any tax imposed by chapter 2 or
21.
`(B) EXCEPTIONS- Such term shall not include--
`(i) items described in subparagraphs (B) and (C) of paragraph (1),
and
`(ii) items for personal use not in connection with any business
activity.
`(C) EXCHANGES- For purposes of this section, the amount treated as
paid in connection with the exchange of property or services is the fair
market value of the property or services exchanged, plus any money
paid.
`(e) SPECIAL RULES FOR FINANCIAL INTERMEDIATION SERVICE ACTIVITIES- In the
case of the business activity of providing financial intermediation services,
the taxable income from such activity shall be equal to the value of the
intermediation services provided in such activity.
`(f) EXCEPTION FOR SERVICES PERFORMED AS EMPLOYEE- For purposes of this
section, the term `business activity' does not include the performance of
services by an employee for the employee's employer.
`(g) Carryover of Credit-Equivalent of Excess Deductions-
`(1) IN GENERAL- If the aggregate deductions for any taxable year exceed
the gross active income for such taxable year, the credit-equivalent of such
excess shall be allowed as a credit against the tax imposed by this section
for the following taxable year.
`(2) CREDIT-EQUIVALENT OF EXCESS DEDUCTIONS- For purposes of paragraph
(1), the credit-equivalent of the excess described in paragraph (1) for any
taxable year is an amount equal to--
`(ii) the product of such excess and the 3-month Treasury rate for
the last month of such taxable year, multiplied by
`(B) the rate of the tax imposed by subsection (a) for such taxable
year.
`(3) CARRYOVER OF UNUSED CREDIT- If the credit allowable for any taxable
year by reason of this subsection exceeds the tax imposed by this
section for such year, then (in lieu of treating such excess as an
overpayment) the sum of--
`(B) the product of such excess and the 3-month Treasury rate for the
last month of such taxable year,
shall be allowed as a credit against the tax imposed by this section for
the following taxable year.
`(4) 3-MONTH TREASURY RATE- For purposes of this subsection, the 3-month
Treasury rate is the rate determined by the Secretary based on the average
market yield (during any 1-month period selected by the Secretary and ending
in the calendar month in which the determination is made) on outstanding
marketable obligations of the United States with remaining periods to
maturity of 3 months or less.'
`(b) TAX ON TAX-EXEMPT ENTITIES PROVIDING NONCASH COMPENSATION TO
EMPLOYEES- Section 4977 of such Code is amended to read as follows:
`SEC. 4977. TAX ON NONCASH COMPENSATION PROVIDED TO EMPLOYEES NOT ENGAGED IN
BUSINESS ACTIVITY.
`(a) IMPOSITION OF TAX- There is hereby imposed a tax equal to 20 percent
(17 percent in the case of calender years beginning after December 31, 1998)
of the value of excludable compensation provided during the calendar year by
an employer for the benefit of employees to whom this section applies.
`(b) LIABILITY FOR TAX- The tax imposed by this section shall be paid by
the employer.
`(c) EXCLUDABLE COMPENSATION- For purposes of subsection (a), the term
`excludable compensation' means any remuneration for services performed as an
employee other than--
`(1) wages (as defined in section 3121(a) without regard to paragraph
(1) thereof) which are paid in cash,
`(2) remuneration for services performed outside the United States,
and
`(3) retirement contributions to or under any plan or arrangement which
makes retirement distributions (as defined in section 63(c)).
`(d) EMPLOYEES TO WHOM SECTION APPLIES- This section shall apply to an
employee who is employed in any activity by--
`(1) any organization which is exempt from taxation under this chapter,
or
`(2) any agency or instrumentality of the United States, or any State or
political subdivision of a State, or the District of Columbia.'
SEC. 103. SIMPLIFICATION OF RULES RELATING TO QUALIFIED RETIREMENT
PLANS.
(a) IN GENERAL- The following provisions of the Internal Revenue Code of
1986 are hereby repealed:
(1) Nondiscrimination rules-
(A) Paragraphs (4) and (5) of section 401(a) (relating to
nondiscrimination requirements).
(B) Sections 401(a)(10)(B) and 416 (relating to top heavy
plans).
(C) Section 401(a)(17) (relating to compensation limit).
(D) Sections 401(a)(26) and 410(b) (relating to minimum participation
and coverage requirements).
(E) Paragraphs (3), (8), (11) and (12) of sections 401(k), and section
4979 (relating to actual deferral percentage).
(F) Section 401(l) (relating to permitted disparity in plan
contributions or benefits).
(G) Section 401(m) (relating to nondiscrimination test for matching
contributions and employee contributions).
(H) Paragraphs (1)(D) and (12) of section 403(b) (relating to
nondiscrimination requirements).
(I) Paragraph (3) of section 408(k) and paragraph (6) (other than
subparagraph (A)(i)) of such section (relating to simplified employee
pensions).
(A) Sections 401(a)(16), 403(b) (2) and (3), and 415 (relating to
limitations on benefits and contributions under qualified plans).
(B) Sections 401(a)(30) and 402(g) (relating to limitation on
exclusion for elective deferrals).
(C) Paragraphs (3) and (7) of section 404(a) (relating to percentage
of compensation limits).
(D) Section 404(l) (relating to limit on includable
compensation).
(3) RESTRICTION ON DISTRIBUTIONS-
(A) Section 72(t) (relating to 10-percent additional tax on early
distributions from qualified retirement plans).
(B) Sections 401(a)(9), 403(b)(10), and 4974 (relating to minimum
distribution rules).
(C) Section 402(e)(4) (relating to net unrealized
appreciation).
(D) Section 4980A (relating to tax on excess distributions from
qualified retirement plans).
(4) SPECIAL REQUIREMENTS FOR PLAN BENEFITING SELF-EMPLOYED INDIVIDUALS-
Subsections (a)(10)(A) and (d) of section 401.
(5) PROHIBITION OF TAX-EXEMPT ORGANIZATIONS AND GOVERNMENTS FROM HAVING
QUALIFIED CASH OR DEFERRED ARRANGEMENTS- Section 401(k)(4)(B).
(b) EMPLOYER REVERSIONS OF EXCESS PENSION ASSETS PERMITTED SUBJECT ONLY TO
INCOME INCLUSION-
(1) REPEAL OF TAX ON EMPLOYER REVERSIONS- Section 4980 of such Code is
hereby repealed.
(2) EMPLOYER REVERSIONS PERMITTED WITHOUT PLAN TERMINATION- Section 420
of such Code is amended to read as follows:
`SEC. 420. TRANSFERS OF EXCESS PENSION ASSETS.
`(a) IN GENERAL- If there is a qualified transfer of any excess pension
assets of a defined benefit plan (other than a multiemployer plan) to an
employer--
`(1) a trust which is part of such plan shall not be treated as failing
to meet the requirements of section 401(a) or any other provision of law
solely by reason of such transfer (or any other action authorized under this
section), and
`(2) such transfer shall not be treated as a prohibited transaction for
purposes of section 4975.
The gross income of the employer shall include the amount of any qualified
transfer made during the taxable year.
`(b) QUALIFIED TRANSFER- For purposes of this section--
`(1) IN GENERAL- The term `qualified transfer' means a transfer--
`(A) of excess pension assets of a defined benefit plan to the
employer, and
`(B) with respect to which the vesting requirements of subsection (c)
are met in connection with the plan.
`(2) ONLY 1 TRANSFER PER YEAR- No more than 1 transfer with respect to
any plan during a taxable year may be treated as a qualified transfer for
purposes of this section.
`(c) VESTING REQUIREMENTS OF PLANS TRANSFERRING ASSETS- The vesting
requirements of this subsection are met if the plan provides that the accrued
pension benefits of any participant or beneficiary under the plan become
nonforfeitable in the same manner which would be required if the plan had
terminated immediately before the qualified transfer (or in the case of a
participant who separated during the 1-year period ending on the date of the
transfer, immediately before such separation).
`(d) DEFINITION AND SPECIAL RULE- For purposes of this section--
`(1) EXCESS PENSION ASSETS- The term `excess pension assets' means the
excess (if any) of--
`(A) the amount determined under section 412(c)(7)(A)(ii),
over
`(i) the amount determined under section 412(c)(7)(A)(i),
or
`(ii) 125 percent of current liability (as defined in section
412(c)(7)(B)).
The determination under this paragraph shall be made as of the most
recent valuation date of the plan preceding the qualified transfer.
`(2) COORDINATION WITH SECTION 412- In the case of a qualified
transfer--
`(A) any asset transferred in a plan year on or before the valuation
date for such year (and any income allocable thereto) shall, for purposes
of section 412, be treated as assets in the plan as of the valuation date
for such year, and
`(B) the plan shall be treated as having a net experience loss under
section 412(b)(2)(B)(iv) in an amount equal to the amount of such transfer
and for which amortization charges begin for the first plan year after the
plan year in which such transfer occurs, except that such section shall be
applied to such amount by substituting `10 plan years' for `5 plan
years'.'
`SEC. 104. REPEAL OF ALTERNATIVE MINIMUM TAX.
Part VI of subchapter A of chapter 1 of the Internal Revenue Code of 1986
is hereby repealed.
SEC. 105. REPEAL OF CREDITS.
Part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986
is hereby repealed.
SEC. 106. REPEAL OF ESTATE AND GIFT TAXES AND OBSOLETE INCOME TAX
PROVISIONS.
(a) Repeal of Estate and Gift Taxes-
(1) IN GENERAL- Subtitle B of the Internal Revenue Code of 1986 is
hereby repealed.
(2) EFFECTIVE DATE- The repeal made by paragraph (1) shall apply to the
estates of decedents dying, and gifts and generation-skipping transfers
made, after December 31, 1996.
(b) Repeal of Obsolete Income Tax Provisions-
(1) IN GENERAL- Except as provided in paragraph (2), chapter 1 of the
Internal Revenue Code of 1986 is hereby repealed.
(2) EXCEPTIONS- Paragraph (1) shall not apply to--
(A) sections 1, 11, and 63 of such Code, as amended by this
Act,
(B) those provisions of chapter 1 of such Code which are necessary for
determining whether or not--
(i) retirement distributions are includible in the gross income of
employees, or
(ii) an organization is exempt from tax under such chapter,
and
(C) subchapter D of such chapter 1 (relating to deferred
compensation).
SEC. 107. EFFECTIVE DATE.
Except as otherwise provided in this subtitle, the amendments made by this
subtitle shall apply to taxable years beginning after December 31, 1996.
Subtitle B--Supermajority Required for Tax Changes
SEC. 111. SUPERMAJORITY REQUIRED.
(a) IN GENERAL- It shall not be in order in the House of Representatives
or the Senate to consider any bill, joint resolution, amendment thereto, or
conference report thereon that includes any provision that--
(1) increases any Federal income tax rate,
(2) creates any additional Federal income tax rate,
(3) reduces the standard deduction, or
(4) provides any exclusion, deduction, credit or other benefit which
results in a reduction in Federal revenues.
(b) WAIVER OR SUSPENSION- This section may be waived or suspended in the
House of Representatives or the Senate only by the affirmative vote of
three-fifths of the Members, duly chosen and sworn.
TITLE II--SPENDING RESTRAINT AND BUDGET PROCESS REFORM
Subtitle A--Balanced Budget by Fiscal Year 2002
SEC. 201. MAXIMUM SPENDING AMOUNTS.
Section 601(a)(1) of the Congressional Budget Act of 1974 is amended to
read as follows:
`(1) MAXIMUM SPENDING AMOUNT- The term `maximum spending amount'
means--
`(A) with respect to fiscal year 1998, $1,653,000,000,000 in
outlays;
`(B) with respect to fiscal year 1999, $1,687,000,000,000 in
outlays;
`(C) with respect to fiscal year 2000, $1,748,000,000,000 in
outlays;
`(D) with respect to fiscal year 2001, $1,799,000,000,000 in outlays;
and
`(E) with respect to fiscal year 2002, $1,851,000,000,000 in
outlays.'.
SEC. 202. ENFORCING MAXIMUM SPENDING SEQUESTRATION.
(a) SEQUESTRATION- Section 253(a) of the Balanced Budget and Emergency
Deficit Control Act of 1985 is amended to read as follows:
`(a) SEQUESTRATION- Within 15 days after Congress adjourns to end a
session (other than the One Hundred Third Congress), and on the same day as
sequestration (if any) under sections 251 and 252, but after any sequestration
required by those sections, there shall be a sequestration (if necessary) to
reduce total Federal spending to the maximum permissible level as set forth in
section 601(a)(1) of the Congressional Budget Act of 1974.'.
(b) CONFORMING AMENDMENT TO HEADING- The section heading of section 253 of
the Balanced Budget and Emergency Deficit Control Act of 1985 is amended to
read as follows:
`SEC. 253. ENFORCING MAXIMUM SPENDING LIMITS.'.
(c) ADDITIONAL CONFORMING AMENDMENTS- Section 253 of the Balanced Budget
and Emergency Deficit Control Act of 1985 is amended--
(1) by repealing subsections (b), (g), and (h), and by redesignating
subsections (c), (d), (e), and (f), as subsections (b), (c), (d), and (e),
respectively;
(2) in subsection (b) (as redesignated), by amending the first sentence
to read as follows: `To reduce total Federal spending to the maximum
permissible level for a budget year, 20 percent of the required outlay
reductions shall be obtained from non-exempt defense accounts (accounts
designated as function 050 in the President's fiscal year 1998 budget
submission) and 80 percent from non-exempt, non-defense accounts (all other
non-exempt accounts).';
(3) in subsection (c) (as redesignated), by striking `subsection (c)'
and inserting `subsection (b)'; and
(4) in subsection (e) (as redesignated), by striking `(b), (c), (d), and
(e)' and inserting `(b), (c), and (d)' and by striking `(d) or (e)' and
inserting `(c) or `(d)'.
(d) LOOK-BACK SEQUESTER- Section 253 of the Balanced Budget and Emergency
Deficit Control Act of 1985 is amended by adding at the end the following new
subsection:
`(f) Look-Back Sequester-
`(1) IN GENERAL- On July 1 of each fiscal year, the Director of OMB
shall determine if laws effective during the current fiscal year will cause
spending to exceed the maximum spending amount for such fiscal year. If the
limit is exceeded, there
shall be a preliminary sequester on July 1 to eliminate the excess.
`(2) PERMANENT SEQUESTER- Budget authority sequestered on July 1
pursuant to paragraph (1) shall be permanently canceled on July 15.
`(3) NO MARGIN- The margin for determining a sequester under this
subsection shall be zero.
`(4) SEQUESTRATION PROCEDURES- The provision of subsections (b), (c),
and (d) of this section shall apply to a sequester under this
subsection.'.
(e) REPORTS- Section 254 of the Balanced Budget and Emergency Deficit
Control Act of 1985 is amended--
(1) by striking subsection (c);
(2) in subsection (d)(1), by striking `deficit sequestration' and
inserting `total spending sequestration';
(3) in subsection (d) by repealing paragraph (4) and inserting the
following new paragraph:
`(4) TOTAL SPENDING SEQUESTRATION REPORTS- The preview reports shall set
forth for the budget year estimates for each of the following:
`(A) The amount of reductions required from defense accounts and the
reductions required from non-defense accounts.
`(B) The sequestration percentage necessary to achieve the required
reduction in defense accounts under section 253(c).
`(C) The reductions required under sections 253(d)(1) and
253(d)(2).
`(D) The sequestration percentage necessary to achieve the required
reduction in non-defense accounts under section 253(d)(3).'; and
(4) in subsection (g)(3), by striking `DEFICIT' and inserting `TOTAL
SPENDING' in the side heading and in the first sentence by striking
`deficit' and inserting `total spending'.
(f) CONFORMING AMENDMENT TO TABLE OF CONTENTS- The item relating to
section 253 is amended by striking `Enforcing deficit targets' and inserting
`Enforcing maximum spending limits'.
SEC. 203. TOTAL SPENDING POINT OF ORDER.
Section 605(b) of the Congressional Budget Act of 1974 is amended to read
as follows:
`(b) TOTAL SPENDING POINT OF ORDER-
`(1) IN GENERAL- It shall not be in order in the House of
Representatives or the Senate to consider any bill, joint resolution,
amendment thereto, or conference report thereon, that includes any provision
that would result in total spending for a fiscal year that exceeds the
maximum permissible total spending amount for such fiscal year as set forth
in section 601(a)(1).
`(2) WAIVER OF SUSPENSION- This subsection may be waived or suspended in
the House of Representatives or the Senate only by the affirmative vote of
three-fifths of its Members, duly chosen and sworn.'.
Subtitle B--Zero Based Budgeting and Decennial Sunsetting
SEC. 211. REAUTHORIZATION OF DISCRETIONARY PROGRAMS AND UNEARNED
ENTITLEMENTS.
(a) FISCAL YEAR 1998- Effective October 1, 1997, spending authority for
each unearned entitlement and high-cost discretionary spending program is
terminated unless such spending authority is reauthorized after the date of
enactment of this Act.
(b) FISCAL YEAR 1999- Effective October 1, 1998, spending authority for
each discretionary spending program (not including high-cost discretionary
spending programs) is terminated unless such spending authority is
reauthorized after the date of enactment of this Act.
(c) DEFINITIONS- For purposes of this subtitle--
(1) the term `unearned entitlement' means an entitlement not earned by
service or paid for in total or in part by assessments or contributions such
as Social Security, veterans' benefits, retirement programs, and medicare;
and
(2) the term `high-cost discretionary program' means the most expensive
one-third of discretionary program within each budget function
account.
SEC. 212. POINT OF ORDER.
(a) IN GENERAL- It shall not be in order in the House of Representatives
or the Senate to consider any bill, joint resolution, amendment, or conference
report that includes any provision that appropriates funds unless such
appropriation has been previously authorized by law.
(b) WAIVER OR SUSPENSION- This section may be waived or suspended in the
House of Representatives or the Senate only by the affirmative vote of
three-fifths of the Members, duly chosen and sworn.
SEC. 213. DECENNIAL SUNSETTING.
(a) FIRST DECENNIAL CENSUS YEAR- Effective on the first day of the fiscal
year beginning in the first decennial census year after the year 2001 and each
10 years thereafter, the spending authority described in section 211(a) is
terminated unless such spending authority is reauthorized after the last date
the spending authority was required to be reauthorized under this subtitle.
(b) SECOND DECENNIAL CENSUS YEAR- Effective on the first day of the fiscal
year beginning in the year after the first decennial census year after the
year 2001 and each 10 years thereafter, the spending authority described in
section 211(b) is terminated unless such spending authority is reauthorized
after the last date the spending authority was required to be reauthorized
under this subtitle.
END