TABLE OF CONTENTS:
Title I: Family Tax Credit
Title II: Reducing the Cost of Capital by Reducing Capital
Gains Tax Rates and Indexing the Basis of Certain Assets
Title III: Neutral Cost Recovery
Title IV: Increasing National Savings Through
Individual Retirement Plus Accounts, Indexing for
Inflation the Income Thresholds for Taxing Social Security
Benefits, Etc.
Title V: Cap on Federal Spending and Establishment of
Commission to Reduce Federal Spending
Putting Jobs and the American Family First Act of 1993 - Title I: Family Tax Credit - Amends the Internal Revenue Code to allow individuals a tax credit of $500 multiplied by the number of qualifying children who have not attained age 18. Places limitations on such credit and adjusts it for inflation.
Title II: Reducing the Cost of Capital by Reducing Capital Gains Tax Rates and Indexing the Basis of Certain Assets - Reduces the individual and corporate capital gains rate from 34 percent to 15 percent. Reduces such tax to 7.5 percent for low- and middle-income taxpayers.
Provides for the phaseout of personal exemptions and the overall limitation on itemized deductions to take into account adjusted gross income which has been reduced by net capital gain.
Requires indexing, based on the gross national product deflator, of the adjusted basis of certain assets (corporate stock and tangible property that is a capital asset of property used in a trade or business) that have been held for more than one year at the time of sale or other transfer, solely for the purpose of determining gain or loss.
Provides for indexing the limitation on capital losses of noncorporate taxpayers.
Title III: Neutral Cost Recoverry - Allows the depreciation deduction to be computed based on a neutral recovery basis for property placed in service after December 31, 1993.
Repeals the special depreciation rules applicable under the adjusted current earnings provisions of the minimum tax.
Title IV: Increasing National Savings Through Individual Retirement Plus Accounts, Indexing for Inflation the Income Thresholds for Taxing Social Security Benefits, etc. - Allows individuals to establish individual retirement plus accounts with tax treatment similar to that for individual retirement plans. Makes contributions to such account nondeductible.
Provides for qualified distributions from such accounts. other than for general retirement purposes, including special purpose distributions made for the purchase of a first home and for medical or educational purposes. Prohibits special purpose distributions from being made during the first five years of the account.
Provides an inflation adjustment after 1996 for income thresholds in determining the taxation of social security benefits. Excludes income from individual retirement plans when determining modified adjusted gross income.
Provides an inflation adjustment after 1996 for the maximum amount allowable as a deduction for retirement savings.
Title V: Cap on Federal Spending and Establishment of Commission to Reduce Federal Spending - Establishes the Commission on Reduction of Federal Spending to: (1) recommend specific reductions in Federal activities to assure that spending does not grow at a rate in excess of two percent per year through FY 1998; and (2) report a bill to the Congress with changes necessary to achieve such reductions.
Establishes an advisory council to assist the Commission.
Amends the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollidngs Act) to set forth sequestration procedures when the increase in annual Federal spending exceeds the amount resulting from an annual rate of inflation of two percent.
[Congressional Bills 103th Congress]
[From the U.S. Government Printing Office]
[H.R. 2434 Introduced in House (IH)]
103d CONGRESS
1st Session
H. R. 2434
To provide a tax credit for families, to provide certain tax incentives
to encourage investment and increase savings, and to place limitations
on the growth of domestic spending.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 16, 1993
Mr. Grams (for himself, Mr. Hutchinson, Mr. Istook, Mr. Knollenberg,
Mr. Hoekstra, Mr. Talent, Mr. Crapo, Mr. Manzullo, Mr. Levy, Mr. Kim,
Mr. Hoke, Mr. Pombo, Ms. Dunn, Ms. Pryce of Ohio, Mr. Torkildsen, Mr.
Bachus of Alabama, Mr. McKeon, Mr. Bartlett of Maryland, Mr. Linder,
Mr. Blute, Mr. Baker of California, Mr. Collins of Georgia, Mr.
McInnis, Mr. Inglis of South Carolina, Mr. Dickey, Mr. Smith of
Michigan, Mrs. Fowler, Mr. Gingrich, Mr. Armey, Mr. Hyde, Mr. DeLay,
Mr. Solomon, Mr. Doolittle, Mr. Barton of Texas, Mr. Burton of Indiana,
Mr. Ramstad, Mr. Boehner, Mr. Cox, Mr. Smith of Oregon, Mr. Packard,
Mr. Dornan, Mr. Santorum, Mr. Herger, Mr. Ewing, and Mr. Hefley)
introduced the following bill; which was referred jointly to the
Committees on Ways and Means, Government Operations, and Rules
_______________________________________________________________________
A BILL
To provide a tax credit for families, to provide certain tax incentives
to encourage investment and increase savings, and to place limitations
on the growth of domestic spending.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) Short Title.--This Act may be cited as the ``Putting Jobs and
the American Family First Act of 1993''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
TITLE I--FAMILY TAX CREDIT
SEC. 101. FAMILY TAX CREDIT.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
is amended by redesignating section 35 as section 36 and by inserting
after section 34 the following new section:
``SEC. 35. FAMILY TAX CREDIT.
``(a) General Rule.--In the case of an eligible individual, there
shall be allowed as a credit against the tax imposed by this subtitle
for the taxable year an amount equal to $500 multiplied by the number
of qualifying children of the taxpayer who have not attained the age of
18 as of the close of the calendar year in which the taxable year of
the taxpayer begins.
``(b) Limitation Based on Amount of Tax.--The credit allowed by
subsection (a) for a taxable year shall not exceed the excess (if any)
of--
``(1) the sum of--
``(A) the tax imposed by this subtitle for the
taxable year (reduced by the credits allowable against
such tax other than the credits allowable under this
subpart), and
``(B) the taxes imposed by sections 3101 and 3111
on wages received by the taxpayer during such taxable
year, over
``(2) the credit allowable for the taxable year under
section 32.
``(c) Inflation Adjustments.--
``(1) In general.--In the case of a taxable year beginning
in a calendar year after 1993, the $500 amount contained in
subsection (a) shall be increased by an amount equal to--
``(A) $500, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, by substituting `calendar year
1992' for `calendar year 1989' in subparagraph (B)
thereof.
``(2) Rounding.--If any increase determined under paragraph
(1) is not a multiple of $5, such increase shall be rounded to
the next higher multiple of $5.
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Eligible individual.--The term `eligible individual'
has the meaning given to such term by section 32(c)(1)
(determined without regard to subparagraph (B) thereof).
``(2) Qualifying child.--The term `qualifying child' has
the meaning given to such term by section 32(c)(3) (determined
without regard to subparagraphs (C) and (E) thereof).
``(3) Certain other rules apply.--Subsections (d) and (e)
of section 32 shall apply.''
(b) Denial of Double Benefit.--Subparagraph (A) of section 21(b)(1)
(defining qualifying individual) is amended by inserting ``(other than
an individual described in section 30A(a))'' after ``taxpayer''.
(c) Conforming Amendment.--The table of sections for such subpart B
is amended by adding at the end thereof the following new item:
``Sec. 30A. Family tax credit.''
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1992.
TITLE II--REDUCING THE COST OF CAPITAL BY REDUCING CAPITAL GAINS TAX
RATES AND INDEXING THE BASIS OF CERTAIN ASSETS
SEC. 201. REDUCTION IN INDIVIDUAL CAPITAL GAINS RATE.
(a) General Rule.--Subsection (h) of section 1 (relating to maximum
capital gains rate) is amended to read as follows:
``(h) Maximum Capital Gains Rate.--
``(1) In general.--If a taxpayer has a net capital gain for
any taxable year, then the tax imposed by this section shall
not exceed the sum of--
``(A) a tax computed at the rates and in the same
manner as if this subsection had not been enacted on
the taxable income reduced by the net capital gain,
plus
``(B) a tax equal to the sum of--
``(i) 7.5 percent of so much of the net
capital gain as does not exceed--
``(I) the maximum amount of taxable
income to which the 15-percent rate
applies under the table applicable to
the taxpayer, reduced by
``(II) the taxable income to which
subparagraph (A) applies, plus
``(ii) 15 percent of the net capital gain
in excess of the net capital gain to which
clause (i) applies.
``(2) Transitional rule.--In the case of a taxable year
which includes January 1, 1993, the amount of the net capital
gain for purposes of paragraph (1) shall not exceed the net
capital gain determined by only taking into account gains and
losses properly taken into account for the portion of the
taxable year on or after such date.''
(b) Phase-out of Personal Exemptions and Limitation on Deduction of
Itemized Deductions Not to Result From Net Capital Gain.--
(1)(A) Subparagraphs (A) and (B) of section 151(d)(3)
(relating to phaseout of exemption amount) are each amended by
inserting ``modified'' before ``adjusted gross income''.
(B) Paragraph (3) of section 151(d) is amended by
redesignating subparagraphs (D) and (E) as subparagraphs (E)
and (F), respectively, and by inserting after subparagraph (C)
the following new subparagraph:
``(D) Modified adjusted gross income.--For purposes
of this paragraph, the term `modified adjusted gross
income' means adjusted gross income reduced by net
capital gain. In the case of a taxable year which
includes January 1, 1993, the amount of the net capital
gain for purposes of preceding sentence shall not
exceed the net capital gain determined by only taking
into account gains and losses properly taken into
account for the portion of the taxable year on or after
such date.''
(2) Subsection (a) of section 68 (relating to overall
limitation on itemized deductions) is amended by inserting
``(reduced by net capital gain (determined in accordance with
the last sentence of section 151(d)(3)(D)))'' after ``adjusted
gross income''.
(c) Technical Amendments.--
(1) Paragraph (1) of section 170(e) is amended by striking
``the amount of gain'' in the material following subparagraph
(B)(ii) and inserting ``16/31 (19/34 in the case of a
corporation) of the amount of gain''.
(2)(A) The second sentence of section 7518(g)(6)(A) is
amended by striking ``28 percent (34 percent in the case of a
corporation)'' and inserting ``15 percent''.
(B) The second sentence of section 607(h)(6)(A) of the
Merchant Marine Act, 1936, is amended by striking ``28 percent
(34 percent in the case of a corporation)'' and inserting ``15
percent''.
SEC. 202. REDUCTION IN CORPORATE CAPITAL GAINS RATE.
(a) General Rule.--Section 1201 (relating to alternative tax for
corporations) is amended by redesignating subsection (b) as subsection
(c), and by striking subsection (a) and inserting the following:
``(a) General Rule.--If for any taxable year a corporation has a
net capital gain, then, in lieu of the tax imposed by section 11, 511,
or 831(a) (whichever applies), there is hereby imposed a tax (if such
tax is less than the tax imposed by such section) which shall consist
of the sum of--
``(1) a tax computed on the taxable income reduced by the
net capital gain, at the same rates and in the same manner as
if this subsection had not been enacted, plus
``(2) a tax of 15 percent of the net capital gain.
``(b) Transitional Rule.--In the case of a taxable year which
includes January 1, 1993, the amount of the net capital gain for
purposes of subsection (a) shall not exceed the net capital gain
determined by only taking into account gains and losses properly taken
into account for the portion of the taxable year on or after such
date.''
(b) Technical Amendments.--
(1) Clause (iii) of section 852(b)(3)(D) is amended by
striking ``66 percent'' and inserting ``85 percent''.
(2) Paragraphs (1) and (2) of section 1445(e) are each
amended by striking ``34 percent'' and inserting ``15
percent''.
SEC. 203. REDUCTION OF MINIMUM TAX RATE ON CAPITAL GAINS.
Subparagraph (A) of section 55(b)(1) (relating to tentative minimum
tax) is amended to read as follows:
``(A) the sum of--
``(i) 15 percent of the lesser of--
``(I) the net capital gain
(determined with the adjustments
provided in this part and (to the
extent applicable) the limitations of
sections 1(h)(2) and 1201(b)), or
``(II) so much of the alternative
minimum taxable income for the taxable
year as exceeds the exemption amount,
plus
``(ii) 20 percent (24 percent in the case
of a taxpayer other than a corporation) of the
amount (if any) by which the excess referred to
in clause (i)(II) exceeds the net capital gain
(as so determined), reduced by''.
SEC. 204. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF DETERMINING GAIN
OR LOSS.
(a) In General.--Part II of subchapter O of chapter 1 (relating to
basis rules of general application) is amended by inserting after
section 1021 the following new section:
``SEC. 1022. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF DETERMINING
GAIN OR LOSS.
``(a) General Rule.--
``(1) Indexed basis substituted for adjusted basis.--Except
as provided in paragraph (2), if an indexed asset which has
been held for more than 1 year is sold or otherwise disposed
of, for purposes of this title the indexed basis of the asset
shall be substituted for its adjusted basis.
``(2) Exception for depreciation, etc.--The deduction for
depreciation, depletion, and amortization shall be determined
without regard to the application of paragraph (1) to the
taxpayer or any other person.
``(b) Indexed Asset.--
``(1) In general.--For purposes of this section, the term
`indexed asset' means--
``(A) stock in a corporation, and
``(B) tangible property (or any interest therein),
which is a capital asset of property used in the trade
or business (as defined in section 1231(b)).
``(2) Certain property excluded.--For purposes of this
section, the term `indexed asset' does not include--
``(A) Creditor's interest.--Any interest in
property which is in the nature of a creditor's
interest.
``(B) Options.--Any option or other right to
acquire an interest in property.
``(C) Net lease property.--In the case of a lessor,
net lease property (within the meaning of subsection
(h)(1)).
``(D) Certain preferred stock.--Stock which is
fixed and preferred as to dividends and does not
participate in corporate growth to any significant
extent.
``(E) Stock in certain corporations.--Stock in--
``(i) an S corporation (within the meaning
of section 1361),
``(ii) a personal holding company (as
defined in section 542), and
``(iii) a foreign corporation.
``(3) Exception for stock in foreign corporation which is
regularly traded on national or regional exchange.--Clause
(iii) of paragraph (2)(E) shall not apply to stock in a foreign
corporation the stock of which is listed on the New York Stock
Exchange, the American Stock Exchange, or any domestic regional
exchange for which quotations are published on a regular basis
other than--
``(A) stock of a foreign investment company (within
the meaning of section 1246(b)), and
``(B) stock in a foreign corporation held by a
United States person who meets the requirements of
section 1248(a)(2).
``(c) Indexed Basis.--For purposes of this section--
``(1) Indexed basis.--The indexed basis for any asset is--
``(A) the adjusted basis of the asset, multiplied
by
``(B) the applicable inflation ratio.
``(2) Applicable inflation ratio.--The applicable inflation
ratio for any asset is the percentage arrived at by dividing--
``(A) the gross national product deflator for the
calendar quarter in which the disposition takes place,
by
``(B) the gross national product deflator for the
calendar quarter in which the asset was acquired by the
taxpayer (or, if later, the calendar quarter ending
December 31, 1992).
The applicable inflation ratio shall not be taken into account
unless it is greater than 1. The applicable inflation ratio for
any asset shall be rounded to the nearest one-tenth of 1
percent.
``(3) Gross national product deflator.--The gross national
product deflator for any calendar quarter is the implicit price
deflator for the gross national product for such quarter (as
shown in the first revision thereof).
``(4) Secretary to publish tables.--The Secretary shall
publish tables specifying the applicable inflation ratios for
each calendar quarter.
``(d) Special Rules.--For purposes of this section--
``(1) Treatment as separate asset.--In the case of any
asset, the following shall be treated as a separate asset:
``(A) a substantial improvement to property,
``(B) in the case of stock of a corporation, a
substantial contribution to capital, and
``(C) any other portion of an asset to the extent
that separate treatment of such portion is appropriate
to carry out the purposes of this section.
``(2) Assets which are not indexed assets throughout
holding period.--
``(A) In general.--The applicable inflation ratio
shall be appropriately reduced for calendar months at
any time during which the asset was not an indexed
asset.
``(B) Certain short sales.--For purposes of
applying subparagraph (A), an asset shall be treated as
not an indexed asset for any short sale period during
which the taxpayer or the taxpayer's spouse sells short
property substantially identical to the asset. For
purposes of the preceding sentence, the short sale
period begins on the day after the substantially
identical property is sold and ends on the closing date
for the sale.
``(3) Treatment of certain distributions.--A distribution
with respect to stock in a corporation which is not a dividend
shall be treated as a disposition.
``(4) Section cannot increase ordinary loss.--To the extent
that (but for this paragraph) this section would create or
increase a net ordinary loss to which section 1231(a)(2)
applies or an ordinary loss to which any other provision of
this title applies, such provision shall not apply. The
taxpayer shall be treated as having a long-term capital loss in
an amount equal to the amount of the ordinary loss to which the
preceding sentence applies.
``(5) Acquisition date where there has been prior
application of subsection (a)(1) with respect to the
taxpayer.--If there has been a prior application of subsection
(a)(1) to an asset while such asset was held by the taxpayer,
the date of acquisition of such asset by the taxpayer shall be
treated as not earlier than the date of the most recent such
prior application.
``(6) Collapsible corporations.--The application of section
341(a) (relating to collapsible corporations) shall be
determined without regard to this section.
``(e) Certain Conduit Entities.--
``(1) Regulated investment companies; real estate
investment trusts; common trust funds.--
``(A) In general.--Stock in a qualified investment
entity shall be an indexed asset for any calendar month
in the same ratio as the fair market value of the
assets held by such entity at the close of such month
which are indexed assets bears to the fair market value
of all assets of such entity at the close of such
month.
``(B) Ratio of 90 percent or more.--If the ratio
for any calendar month determined under subparagraph
(A) would (but for this subparagraph) be 90 percent or
more, such ratio for such month shall be 100 percent.
``(C) Ratio of 10 percent or less.--If the ratio
for any calendar month determined under subparagraph
(A) would (but for this subparagraph) be 10 percent or
less, such ratio for such month shall be zero.
``(D) Valuation of assets in case of real estate
investment trusts.--Nothing in this paragraph shall
require a real estate investment trust to value its
assets more frequently than once each 36 months (except
where such trust ceases to exist). The ratio under
subparagraph (A) for any calendar month for which there
is no valuation shall be the trustee's good faith
judgment as to such valuation.
``(E) Qualified investment entity.--For purposes of
this paragraph, the term `qualified investment entity'
means--
``(i) a regulated investment company
(within the meaning of section 851),
``(ii) a real estate investment trust
(within the meaning of section 856), and
``(iii) a common trust fund (within the
meaning of section 584).
``(2) Partnerships.--In the case of a partnership, the
adjustment made under subsection (a) at the partnership level
shall be passed through to the partners.
``(3) Subchapter s corporations.--In the case of an
electing small business corporation, the adjustment under
subsection (a) at the corporate level shall be passed through
to the shareholders.
``(f) Dispositions Between Related Persons.--
``(1) In general.--This section shall not apply to any sale
or other disposition of property between related persons except
to the extent that the basis of such property in the hands of
the transferee is a substituted basis.
``(2) Related persons defined.--For purposes of this
section, the term `related persons' means--
``(A) persons bearing a relationship set forth in
section 267(b), and
``(B) persons treated as single employer under
subsection (b) or (c) of section 414.
``(g) Transfers To Increase Indexing Adjustment or Depreciation
Allowance.--If any person transfers cash, debt, or any other property
to another person and the principal purpose of such transfer is--
``(1) to secure or increase an adjustment under subsection
(a), or
``(2) to increase (by reason of an adjustment under
subsection (a)) a deduction for depreciation, depletion, or
amortization,
the Secretary may disallow part or all of such adjustment or increase.
``(h) Definitions.--For purposes of this section--
``(1) Net lease property defined.--The term `net lease
property' means leased real property where--
``(A) the term of the lease (taking into account
options to renew) was 50 percent or more of the useful
life of the property, and
``(B) for the period of the lease, the sum of the
deductions with respect to such property which are
allowable to the lessor solely by reason of section 162
(other than rents and reimbursed amounts with respect
to such property) is 15 percent or less of the rental
income produced by such property.
``(2) Stock includes interest in common trust fund.--The
term `stock in a corporation' includes any interest in a common
trust fund (as defined in section 584(a)).
``(i) Regulations.--The Secretary shall prescribe such regulations
as may be necessary or appropriate to carry out the purposes of this
section.''
(b) Clerical Amendment.--The table of sections for part II of
subchapter O of such chapter 1 is amended by inserting after the item
relating to section 1021 the following new item:
``Sec. 1022. Indexing of certain assets
for purposes of determining
gain or loss.''
(c) Adjustment To Apply for Purposes of Determining Earnings and
Profits.--Subsection (f) of section 312 (relating to effect on earnings
and profits of gain or loss and of receipt of tax-free distributions)
is amended by adding at the end thereof the following new paragraph:
``(3) Effect on earnings and profits of indexed basis.--
For substitution of indexed basis for
adjusted basis in the case of the disposition of certain assets after
December 31, 1992, see section 1022(a)(1).''
SEC. 205. INDEXING OF LIMITATION ON CAPITAL LOSSES OF INDIVIDUALS.
Section 1211 (relating to limitation on capital losses) is amended
by adding at the end thereof the following new subsection:
``(c) Indexation of Limitation on Noncorporate Taxpayers.--
``(1) In general.--In the case of any taxable year
beginning in a calendar year after 1992, the $3,000 and $1,500
amounts under subsection (b)(1) shall be increased by an amount
equal to--
``(A) such dollar amount, multiplied by
``(B) the applicable inflation adjustment for the
calendar year in which the taxable year begins.
``(2) Applicable inflation adjustment.--For purposes of
paragraph (1), the applicable inflation adjustment for any
calendar year is the percentage (if any) by which--
``(A) the gross national product deflator for the
last calendar quarter of the preceding calendar year,
exceeds
``(B) the gross national product deflator for the
last calendar quarter of 1991.
For purposes of this paragraph, the term `gross national
product deflator' has the meaning given such term by section
1022(c)(3).''
SEC. 206. EFFECTIVE DATES.
(a) In General.--Except as provided in subsection (b), the
amendments made by this title shall apply to sales or exchanges
occurring after December 31, 1992, in taxable years ending after such
date.
(b) Indexing of Loss Limitation.--The amendments made by section
205 shall apply to taxable years beginning after December 31, 1992.
TITLE III--NEUTRAL COST RECOVERY
SEC. 301. DEPRECIATION ADJUSTMENT FOR CERTAIN PROPERTY PLACED IN
SERVICE IN TAXABLE YEARS BEGINNING AFTER DECEMBER 31,
1993.
(a) In General.--Section 168 (relating to accelerated cost recovery
system) is amended by adding at the end thereof the following new
subsection:
``(j) Deduction Adjustment To Allow Equivalent of Expensing For
Certain Property Placed in Service in Taxable Years Beginning After
December 31, 1993.--
``(1) In general.--In the case of tangible property placed
in service in a taxable year beginning after December 31, 1993,
the deduction allowable under this section with respect to such
property for any taxable year (after the taxable year during
which the property is placed in service) shall be--
``(A) the amount so allowable for such taxable year
without regard to this subsection, multiplied by
``(B) the applicable neutral cost recovery ratio
for such taxable year.
For purposes of subparagraph (A), paragraphs (1) and (2) of
section 168(b) shall be applied by substituting `150 percent'
for `200 percent'.
``(2) Applicable neutral cost recovery ratio.--For purposes
of paragraph (1), the applicable neutral cost recovery ratio
for any taxable year is the number determined by--
``(A) dividing--
``(i) the gross national product deflator
for the calendar quarter ending in such taxable
year which corresponds to the calendar quarter
during which the property was placed in service
by the taxpayer, by
``(ii) the gross national product deflator
for the calendar quarter during which the
property was placed in service by the taxpayer,
and
``(B) then multiplying the number determined under
subparagraph (A) by the number equal to 1.035 to the
nth power where `n' is the number of full years in the
period beginning on the 1st day of the calendar quarter
during which the property was placed in service by the
taxpayer and ending on the day before the beginning of
the corresponding calendar quarter ending during such
taxable year.
The applicable neutral cost recovery ratio shall not be taken
into account unless it is greater than 1. The applicable
neutral cost recovery ratio shall be rounded to the nearest
one-tenth of 1 percent.
``(3) Gross national product deflator.--For purposes of
paragraph (2), the gross national product deflator for any
calendar quarter is the implicit price deflator for the gross
national product for such quarter (as shown in the first
revision thereof).
``(4) Election not to have subsection apply.--This
subsection shall not apply to any property if the taxpayer
elects not to have this subsection apply to such property. Such
an election, once made, shall be irrevocable.''
(b) Minimum Tax Treatment.--Paragraph (1) of section 56(a) is
amended by adding at the end thereof the following new subparagraph:
``(E) Use of neutral cost recovery ratio.--In the
case of tangible property placed in service in a
taxable year beginning after December 31, 1993, the
deduction allowable under this paragraph with respect
to such property for any taxable year (after the
taxable year during which the property is placed in
service) shall be--
``(i) the amount so allowable for such
taxable year without regard to this
subparagraph, multiplied by
``(ii) the applicable neutral cost recovery
ratio for such taxable year (as determined
under section 168(j)).
This subparagraph shall not apply to any property with
respect to which there is an election in effect not to
have section 168(j) apply.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1993.
SEC. 302. REPEAL OF SPECIAL DEPRECIATION RULES APPLICABLE UNDER THE
ADJUSTED CURRENT EARNINGS PROVISIONS OF THE MINIMUM TAX.
(a) In General.--Subparagraph (A) of section 56(g)(4) (relating to
adjustments) is amended to read as follows:
``(A) Depreciation.--
``(i) In general.--The depreciation
deduction with respect to any property for any
taxable year beginning after December 31, 1993,
shall be the same as the depreciation deduction
allowable in computing alternative minimum
taxable income for such taxable year.
``(ii) Basis rules.--Notwithstanding
subparagraph (I), the adjusted basis of any
depreciable property held by the taxpayer as of
the beginning of the taxpayer's first taxable
year beginning after December 31, 1993, shall
be determined as if the provisions of clause
(i) had also applied to taxable years beginning
in 1990, 1991, 1992, or 1993.
``(iii) Lost basis recovered over 5
years.--The amount determined under clause (iv)
shall be allowed as a deduction ratably over
the 60-month period beginning with the first
month of the taxpayer's first taxable year
beginning after December 31, 1993.
``(iv) Amount of lost basis.--The amount
determined under this clause is the excess of--
``(I) the aggregate adjusted bases
of depreciable property held by the
taxpayer as of the beginning of the
taxpayer's first taxable year beginning
after December 31, 1993, which would
have been determined (as of such time)
under subparagraph (I) without regard
to clause (ii), over
``(II) the aggregate adjusted bases
of such property (as of such time) as
determined under the rules of clause
(ii).''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 1993.
TITLE IV--INCREASING NATIONAL SAVINGS THROUGH INDIVIDUAL RETIREMENT
PLUS ACCOUNTS, INDEXING FOR INFLATION THE INCOME THRESHOLDS FOR TAXING
SOCIAL SECURITY BENEFITS, ETC.
SEC. 401. ESTABLISHMENT OF INDIVIDUAL RETIREMENT PLUS ACCOUNTS.
(a) In General.--Subpart A of part I of subchapter D of chapter 1
(relating to pension, profit-sharing, stock bonus plans, etc.) is
amended by inserting after section 408 the following new section:
``SEC. 408A. INDIVIDUAL RETIREMENT PLUS ACCOUNTS.
``(a) General Rule.--Except as provided in this section, an
individual retirement plus account shall be treated for purposes of
this title in the same manner as an individual retirement plan.
``(b) Individual Retirement Plus Account.--For purposes of this
title, the term `individual retirement plus account' means an
individual retirement plan which is designated at the time of the
establishment of the plan as an individual retirement plus account.
Such designation shall be made in such manner as the Secretary may
prescribe.
``(c) Contribution Rules.--
``(1) No deduction allowed.--No deduction shall be allowed
under section 219 for a contribution to an individual
retirement plus account.
``(2) Contribution limit.--
``(A) In general.--Except in the case of rollover
contributions, the aggregate amount which may be
accepted as contributions to an individual retirement
plus account shall not be greater than the excess (if
any) of--
``(i) the nondeductible limit with respect
to the individual for the taxable year under
section 408(o) (after application of
subparagraph (B)(ii) thereof), over
``(ii) the designated nondeductible
contributions made by the individual for such
taxable year to 1 or more individual retirement
plans.
``(B) $1,000 increase after 1994.--
``(i) In general.--In the case of any
taxable year beginning after December 31, 1994,
the amount determined under subparagraph (A)(i)
(without regard to this subparagraph) shall be
increased by $1,000.
``(ii) Adjustment for inflation.--In the
case of any taxable year beginning in a
calendar year after 1996, the $1,000 amount in
clause (i) shall be increased by an amount
equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment under section 1(f)(3) for
the calendar year in which the taxable
year begins, determined by substituting
`calendar year 1995' for `calendar year
1989' in subparagraph (B) thereof.
``(iii) Rounding.--If any amount as
adjusted under clause (ii) is not a multiple of
$50, such amount shall be rounded to the
nearest multiple of $50 (or, if such amount is
a multiple of $25, such amount shall be rounded
to the next highest multiple of $50).
``(C) Special rule for married individuals.--The
nondeductible limits under subparagraph (A) for an
individual and for such individual's spouse shall be an
amount equal to the excess (if any) of--
``(i) $2,000, over
``(ii) the sum of the amount allowed as a
deduction under section 219 for contributions
on behalf of such individual or such spouse,
plus the amount determined under subparagraph
(A)(ii) with respect to each.
In no event shall the sum of such limits exceed an
amount equal to the sum of the compensation includible
in the individual's and spouse's gross income for the
taxable year, reduced by the sum of the amounts
determined under clause (ii).
``(3) Contributions after age 70\1/2\.--Contributions may
be made by an individual to an individual retirement plus
account after such individual has attained the age of 70\1/2\.
``(4) Limitations on rollover contributions.--No rollover
contributions may be made to an individual retirement plus
account unless such rollover contribution is a contribution of
a distribution or payment out of--
``(A) another individual retirement plus account,
or
``(B) an individual retirement plan which is not
allocable to any amount transferred to such plan which
represented any portion of the balance to the credit of
an employee in a qualified trust (or any income
allocable to such portion).
``(d) Distribution Rules.--For purposes of this title--
``(1) In general.--Except in the case of a qualified
distribution, the rules of paragraphs (1) and (2) of section
408(d) shall apply to any distribution from an individual
retirement plus account.
``(2) Treatment of qualified distribution.--In the case of
a qualified distribution from an individual retirement plus
account--
``(A) the amount of such distribution shall not be
includible in gross income; and
``(B) section 72(t) shall not apply.
``(3) Qualified distribution.--For purposes of this
subsection--
``(A) In general.--The term `qualified
distribution' means any distribution--
``(i) made on or after the date on which
the individual attains age 59\1/2\,
``(ii) made to a beneficiary (or to the
estate of an individual) on or after the death
of the individual,
``(iii) attributable to the employee's
being disabled (within the meaning of section
72(m)(7)), or
``(iv) which is a qualified special purpose
distribution (within the meaning of subsection
(e)).
``(B) Distributions within 5 years.--No
distribution shall be treated as a qualified
distribution if--
``(i) it is made within the 5-taxable year
period beginning with the 1st taxable year in
which the individual made a contribution to an
individual retirement plus account, or
``(ii) in the case of a distribution
properly allocable to a rollover contribution
(or income allocable thereto), it is made
within 5 years of the date on which such
rollover contribution was made.
``(4) Special rules relating to rollovers from regular
individual retirement accounts.--
``(A) In general.--Except as provided in this
paragraph, any amount paid or distributed out of an
individual retirement plan on or before the earlier
of--
``(i) the date on which the individual
attains age 55, or
``(ii) January 1, 1994,
shall not be included in gross income (and section
72(t) shall not apply to such amount) if the individual
receiving such amount transfers, within 60 days of
receipt, the entire amount received to an individual
retirement plus account.
``(B) Treatment of tax-favored amounts.--
``(i) In general.--Notwithstanding
subparagraph (A), there shall be included in
gross income (but section 72(t) shall not apply
to) the portion of any amount transferred which
bears the same ratio to such amount as--
``(I) the aggregate amount of
contributions to individual retirement
plans with respect to which a deduction
was allowable under section 219, bears
to
``(II) the aggregate balance of
such plans.
``(ii) Time for inclusion.--Any amount
described in clause (i) shall be included in
gross income ratably over the 4-taxable year
period beginning with the taxable year in which
the amount was paid or distributed out of the
individual retirement plan.
``(e) Qualified Special Purpose Distribution.--For purposes of this
section--
``(1) In general.--The term `qualified special purpose
distribution' means--
``(A) a qualified first-time homebuyer
distribution, or
``(B) an applicable medical or educational
distribution.
``(2) 25 percent account limit.--A distribution shall not
be treated as a qualified special purpose distribution to the
extent it exceeds the amount (if any) by which--
``(A) 25 percent of the sum of--
``(i) the aggregate balance of individual
retirement plus accounts established on behalf
of an individual, plus
``(ii) the aggregate amounts previously
treated as qualified special purpose
distributions, exceeds
``(B) the amount determined under subparagraph
(A)(ii).
``(3) Distributions used to purchase a home by first-time
homebuyer.--For purposes of paragraph (1)--
``(A) In general.--The term `qualified first-time
homebuyer distribution' means any payment or
distribution received by a first-time homebuyer from an
individual retirement plan to the extent such payment
or distribution is used by the individual before the
close of the 60th day after the day on which such
payment or distribution is received to pay qualified
acquisition costs with respect to a principal residence
for such individual.
``(B) Basis reduction.--The basis of any principal
residence described in subparagraph (A) shall be
reduced by any amount excluded from the gross income of
such first-time homebuyer by reason of this section.
``(C) Recognition of gain as ordinary income.--
``(i) In general.--Notwithstanding any
other provision of this subtitle, except as
provided in clause (ii)--
``(I) gain (if any) on the sale or
exchange of a principal residence to
which subparagraph (A) applies shall,
to the extent of the amount excluded
from gross income under this section,
be treated as ordinary income by such
individual, and
``(II) section 72(t) shall apply to
such amount.
``(ii) Exception.--Clause (i) shall not
apply to any taxable year to the extent of any
amount which, before the due date (without
extensions) for filing the return for such
year, the taxpayer contributes to an individual
retirement plus account. Such amount shall not
be taken into account for purposes of any
provision of this title relating to excess
contributions.
``(iii) Coordination with other
provisions.--In the event all or part of the
gain referred to in clause (i) is treated as
ordinary income under any other provision of
this subtitle, such provision shall be applied
before clause (i).
``(D) Special rule where delay in acquisition.--
If--
``(i) any amount is paid or distributed
from an individual retirement plus account to
an individual for purposes of being used as
provided in subparagraph (A), and
``(ii) by reason of a delay in the
acquisition of the residence, such amount
cannot be so used,
the amount so paid or distributed may be paid into an
individual retirement plus account as provided in
section 408(d)(3)(A)(i) without regard to section
408(d)(3)(B), and, if so paid into such other plan,
such amount shall not be taken into account in
determining whether section 408(d)(3)(A)(i) applies to
any other amount.
``(E) Definitions.--For purposes of this
paragraph--
``(i) Qualified acquisition costs.--The
term `qualified acquisition costs' means the
costs of acquiring, constructing, or
reconstructing a residence. Such term includes
any usual or reasonable settlement, financing,
or other closing costs.
``(ii) First-time homebuyer.--The term
`first-time homebuyer' means any individual if
such individual (and if married, such
individual's spouse) had no present ownership
interest in a principal residence during the 3-
year period ending on the date of acquisition
of the principal residence to which this
paragraph applies.
``(iii) Principal residence.--The term
`principal residence' has the same meaning as
when used in section 1034.
``(iv) Date of acquisition.--The term `date
of acquisition' means the date--
``(I) on which a binding contract
to acquire the principal residence to
which subparagraph (A) applies is
entered into, or
``(II) on which construction or
reconstruction of such a principal
residence is commenced.
``(4) Applicable medical distributions.--For purposes of
paragraph (1), the term `applicable medical distributions'
means any distributions made to an individual (not otherwise
taken into account under this subsection) to the extent such
distributions do not exceed the amount allowable as a deduction
under section 213 for amounts paid during the taxable year for
medical care (without regard to whether the individual itemized
deductions for the taxable year).
``(5) Distributions from individual retirement plus
accounts for educational expenses.--
``(A) In general.--For purposes of paragraph (1),
the term `applicable educational distributions' means
distributions to an individual to the extent that the
amount of such distributions (not otherwise treated as
qualified special purpose distributions, determined
after application of paragraph (4)) does not exceed the
qualified higher education expenses of the individual
for the taxable year.
``(B) Qualified higher education expenses.--For
purposes of subparagraph (A)--
``(i) In general.--The term `qualified
higher education expenses' means tuition, fees,
books, supplies, and equipment required for the
enrollment or attendance of--
``(I) the taxpayer,
``(II) the taxpayer's spouse, or
``(III) the taxpayer's child (as
defined in section 151(c)(3)) or
grandchild,
at an eligible educational institution (as
defined in section 135(c)(3)).
``(ii) Coordination with savings bond
provisions.--The amount of qualified higher
education expenses for any taxable year shall
be reduced by any amount excludable from gross
income under section 135.
``(f) Rollover Contributions.--For purposes of this section, the
term `rollover contributions' means contributions described in sections
402(a)(5), 402(a)(7), 403(a)(4), 403(b)(8), and 408(d)(3).
``(g) Determinations.--For purposes of this section, any
determinations with respect to aggregate contributions to, or the
balance of, individual retirement plus accounts shall be made as of the
close of the calendar year preceding the calendar year in which the
taxable year begins.''
(b) Conforming Amendment.--The table of sections for subpart A of
part I of subchapter D of chapter 1 is amended by inserting after the
item relating to section 408 the following new item:
``Sec. 408A. Individual retirement plus
accounts.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1992.
SEC. 402. INFLATION ADJUSTMENT OF INCOME THRESHOLDS FOR TAXATION OF
SOCIAL SECURITY BENEFITS; INCOME FROM INDIVIDUAL
RETIREMENT PLANS EXCLUDED.
(a) Adjustment of Income Thresholds for Inflation.--Section 86
(relating to social security and tier 1 railroad retirement benefits)
is amended by adding at the end thereof the following new subsection:
``(g) Adjustment of Income Thresholds for Inflation.--
``(1) In general.--In the case of any taxable year
beginning in a calendar year after 1996, the $25,000 and
$32,000 amounts contained in subsection (c) shall be increased
by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment under section
1(f)(3) for the calendar year in which the taxable year
begins, determined by substituting `calendar year 1995'
for `calendar year 1989' in subparagraph (B) thereof.
``(2) Rounding.--If any amount as adjusted under paragraph
(1) is not a multiple of $50, such amount shall be rounded to
the nearest multiple of $50 (or, if such amount is a multiple
of $25, such amount shall be rounded to the next highest
multiple of $50).''
(b) Income From Individual Retirement Plans Excluded.--Paragraph
(2) of section 86(b) is amended by striking ``and'' at the end of
subparagraph (A), by striking the period at the end of subparagraph (B)
and inserting ``, and'', and by adding at the end thereof the following
new subparagraph:
``(C) decreased by the portion of such income which
is attributable to a distribution or payment from an
individual retirement plan.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1996.
SEC. 403. INFLATION ADJUSTMENT OF MAXIMUM AMOUNT OF IRA DEDUCTION.
(a) In General.--Section 219 (relating to retirement savings) is
amended by redesignating subsection (h) as subsection (i) and by
inserting after subsection (g) the following new subsection:
``(h) Adjustment of Maximum Deduction for Inflation.--
``(1) In general.--In the case of any taxable year
beginning in a calendar year after 1996, each applicable dollar
amount shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment under section
1(f)(3) for the calendar year in which the taxable year
begins, determined by substituting `calendar year 1995'
for `calendar year 1989' in subparagraph (B) thereof.
``(2) Applicable dollar amount.--For purposes of paragraph
(1), the term `applicable dollar amount' means--
``(A) the $2,000 amount in subsections (b)(1)(A)
and (c)(2) of this section, in subsections (a)(1), (b),
and (j) of section 408, and in section 408A(c)(2)(C),
and
``(B) the $2,250 amount in subsection (c)(2) of
this section and in section 408(d)(5).
``(3) Rounding.--If any amount as adjusted under paragraph
(1) is not a multiple of $50, such amount shall be rounded to
the nearest multiple of $50 (or, if such amount is a multiple
of $25, such amount shall be rounded to the next highest
multiple of $50).''
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1996.
TITLE V--CAP ON FEDERAL SPENDING AND ESTABLISHMENT OF COMMISSION TO
REDUCE FEDERAL SPENDING
SEC. 501. ESTABLISHMENT.
There is established a commission to be known as the ``Commission
on Reduction of Federal Spending'' (hereinafter referred to as the
``Commission'').
SEC. 502. DUTIES OF COMMISSION.
The Commission is authorized and directed to--
(1) review all Federal spending, including entitlement
programs, in order to identify and recommend specific
reductions in any Federal project, program, or activity to
assure that aggregate Federal spending does not grow at a rate
in excess of 2 percent per annum through fiscal year 1998; and
(2)(A) not later than 6 months after the adoption of this
resolution, report to the House of Representatives and to the
Senate, by bill, any changes in law necessary to carry out
paragraph (1); and
(B) if either House of Congress rejects the bill referred
to in paragraph (2), report to the House of Representatives and
the Senate within 10 legislative days of that rejection another
bill containing any changes in law necessary to carry out
paragraph (1).
SEC. 503. MEMBERSHIP.
(a) Number and Appointment.--The Commission shall be composed of 20
Members of the House of Representatives appointed by the Speaker, of
whom 10 shall be members of the minority party appointed after
consultation with the minority leader of the House and 20 Senators
appointed by the President pro tempore of the Senate, of whom 10 shall
be members of the minority party, appointed after consultation with the
minority leader of the Senate. The appointments shall be made within 30
days after the adoption of this resolution and shall be for the
duration of the One Hundred Third Congress.
(b) Quorum.--Twenty-one members of the Commission shall constitute
a quorum but a lesser number may hold hearings.
(c) Chairperson; Vice Chairperson.--The Chairperson and Vice
Chairperson of the Commission shall be elected by the members.
(d) Meetings.--The Commission shall meet at the call of the
Chairperson or a majority of its members.
SEC. 504. DIRECTOR AND STAFF OF COMMISSION.
(a) Director.--The Commission shall have a Director who shall be
appointed by the Chairperson. The Director shall be paid at the rate of
basic pay payable for level V of the Executive Schedule.
(b) Staff.--The Commission may appoint and fix the pay of
additional personnel as it considers appropriate.
SEC. 505. POWERS OF COMMISSION.
The Commission may, for the purpose of carrying out this
resolution, hold hearings, sit and act at times and places, take
testimony, and receive evidence as the Commission considers
appropriate.
SEC. 506. TERMINATION.
The Commission shall terminate at the close of the One Hundred
Fourth Congress.
SEC. 507. PAYMENT OF EXPENSES.
One-half of the expenses of the Commission shall be paid from the
contingent fund of the House of Representatives and one-half from the
contingent fund of the Senate.
SEC. 508. CONSIDERATION OF COMMISSION'S PROPOSAL.
(a) Upon the reporting of a bill by the Commission in either House
of Congress, the bill shall be placed on the appropriate calendar of
that House.
(b) A vote on final passage of the bill shall be taken in that
House on or before the close of the 7th legislative day of that House
after the date the bill is reported to that House. If the bill is
agreed to, the Clerk of the House of Representatives (in the case of a
bill agreed to in the House of Representatives) or the Secretary of the
Senate (in the case of a bill agreed to in the Senate) shall cause the
bill to be engrossed, certified, and transmitted to the other House of
Congress within one calendar day after the bill is agreed to.
(c)(1) A bill transmitted to the House of Representatives or the
Senate pursuant to subsection (b) shall be placed upon the appropriate
calendar.
(2) A vote on final passage of a bill transmitted to that House
shall be taken on or before the close of the 7th legislative day in
that House after the date on which the bill is transmitted. If the bill
is agreed to in that House, the Clerk of the House of Representatives
(in the case of a bill agreed to in the House of Representatives) or
the Secretary of the Senate (in the case of a bill agreed to in the
Senate) shall cause the engrossed bill to be returned to the House.
(d)(1) A motion in the House of Representatives to proceed to the
consideration of a bill under this section shall be highly privileged
and not debatable. An amendment to the motion shall not be in order,
nor shall it be in order to move to reconsider the vote by which the
motion is agreed to or disagreed to.
(2) Debate in the House of Representatives on a bill under this
section shall not exceed 4 hours, which shall be divided equally
between those favoring and those opposing the bill. A motion further to
limit debate shall not be debatable. It shall not be in order to move
to recommit a bill under this section or to move to reconsider the vote
by which the bill is agreed to or disagreed to.
(3) Appeals from decisions of the Chair relating to the application
of the Rules of the House of Representatives to the procedure relating
to a bill under this section shall be decided without debate.
(4) Except to the extent specifically provided in the preceding
provisions of this section, consideration of a bill under this section
shall be governed by the Rules of the House of Representatives.
(e)(1) A motion in the Senate to proceed to the consideration of a
bill under this section shall be privileged and not debatable. An
amendment to the motion shall not be in order, nor shall it be in order
to move to reconsider the vote by which the motion is agreed to or
disagreed to.
(2) Debate in the Senate on a bill under this section, and all
debatable motions and appeals in connection therewith, shall not exceed
10 hours. The time shall be equally divided between, and controlled by,
the majority leader and the minority leader or their designees.
(3) Debate in the Senate on any debatable motion or appeal in
connection with a bill under this section shall be limited to not more
than 1 hour, to be equally divided between, and controlled by, the
mover and the manager of the bill, except that in the event the manager
of the bill is in favor of any such motion or appeal, the time in
opposition thereto, shall be controlled by the minority leader or his
designee. Such leaders, or either of them, may, from time under their
control on the passage of a bill, allot additional time to any Senator
during the consideration of any debatable motion or appeal.
(4) A motion in the Senate to further limit debate on a bill under
this section is not debatable. A motion to recommit a bill under this
section is not in order.
(f) No amendment to a bill considered under this section shall be
in order in either the House of Representatives or the Senate. No
motion to suspend the application of this subsection shall be in order
in either House, nor shall it be in order in either House to suspend
the application of this subsection by unanimous consent.
(g) For purposes of this resolution, the term ``legislative day''
means, with respect to either House of Congress, any calendar day
during which that House is in session.
SEC. 509. ADVISORY COUNCIL.
(a) There is established an advisory council to assist the
Commission in carrying out its duties.
(b) The advisory council shall be composed of 150 private citizens
appointed as follows:
(1) Twenty individuals shall be selected randomly by the
Director of the Internal Revenue Service from among individual
taxpayers who are willing to serve.
(2) Thirty-four individuals shall be appointed by the
Speaker of the House of Representatives.
(3) Thirty-two individuals shall be appointed by the
minority party leader of the House of Representatives.
(4) Thirty-two individuals shall be appointed by the
majority party leader of the Senate.
(5) Thirty-two individuals shall be appointed by the
minority party leader of the Senate.
(c) Members of the advisory council shall receive travel expenses,
including per diem in lieu of subsistence, in accordance with sections
5702 and 5703 of title 5, United States Code.
(d) The advisory council shall terminate at the close of the One
Hundred Fourth Congress.
SEC. 510. AMENDMENTS TO THE BALANCED BUDGET AND EMERGENCY DEFICIT
CONTROL ACT OF 1985 TO LIMIT FEDERAL SPENDING.
The Balanced Budget and Emergency Deficit Control Act of 1985 is
amended by adding after section 252 the following new section:
``SEC. 252A. LIMITATIONS ON DIRECT SPENDING.
``(a) Enforcement.--The purpose of this section is to assure that
any increase in the annual amount of total Federal spending exceeding
the amount resulting from an annual rate of inflation of 2 percent will
trigger an offsetting sequestration.
``(b) Sequestration.--Within 15 calendar days after Congress
adjourns to end a session and on the same day as a sequestration (if
any) under sections 251 and 252, and prior to any sequestration under
section 253, there shall be a sequestration to offset the amount of any
excess Federal spending in that fiscal year. The amount of excess
Federal spending for a fiscal year shall be the amount by which OMB
projects total Federal spending for that year to exceed the direct
spending limit for that year set forth in the following table:
------------------------------------------------------------------------
Outlay limits (in
Fiscal Year billions of dollars)
------------------------------------------------------------------------
1994........................................... 1472.3
1995........................................... 1501.8
1996........................................... 1531.8
1997........................................... 1562.4
1998........................................... 1593.7
------------------------------------------------------------------------
``(c) Eliminating Excess Federal Spending.--The amount required to
be sequestered in a fiscal year under subsection (b) shall be obtained
from all non-exempt accounts. Each non-exempt account shall be reduced
by the uniform percentage necessary to make the required reduction in
Federal spending. The uniform reduction required shall be made without
application of the exemptions, limitations, and special rules set forth
in sections 255 and 256, except for the following: section 255(a) (with
respect to social security benefits), 255(c) and prior legal
obligations of the Government in sections 255(g)(1) and 255(g)(2),
256(g), 256(h), and 256(l).
``(d) Reports.--The requirements of section 254 for reports and
orders that are applicable to section 252 shall also apply to this
section except that such reports and orders for this section shall
refer to and apply the requirements, calculations and sequestrations of
this section.
``(e) Reconciliation Process to Avoid Sequestration.--Whenever an
update report for this section indicates that a sequester would be
necessary to eliminate excess Federal spending, the special
reconciliation process set forth in section 258C shall apply for
consideration of alternatives to the order envisioned by such report.
``(f) Trigger.--This section shall only be effective if the
recommendations of the Commission on Reduction of Federal Spending are
not enacted into law.''
<all>
HR 2434 IH----2
HR 2434 IH----3
HR 2434 IH----4
HR 2434 IH----5
Introduced in House
Introduced in House
Sponsor introductory remarks on measure. (CR H3598)
Referred to the House Committee on Government Operations.
Referred to the House Committee on Rules.
Referred to the House Committee on Ways and Means.
Referred to the Subcommittee on Legislation and National Security.
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