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108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-498

======================================================================



 
        CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2005

                                _______
                                

     May 19 (legislative day, May 18), 2004.--Ordered to be printed

                                _______
                                

 Mr. Nussle, from the committee of conference, submitted the following

                           CONFERENCE REPORT

                     [To accompany S. Con. Res. 95]

      The committee of conference on the disagreeing votes of 
the two Houses on the amendment of the House to the concurrent 
resolution (S. Con. Res. 95), setting forth the congressional 
budget for the United States Government for fiscal year 2005 
and including the appropriate budgetary levels for fiscal years 
2006 through 2009, having met, after full and free conference, 
have agreed to recommend and do recommend to their respective 
Houses as follows:
      That the Senate recede from its disagreement to the 
amendment of the House and agree to the same with an amendment 
as follows:
      In lieu of the matter proposed to be inserted by the 
House amendment, insert the following:

SECTION 1. CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2005.

    (a) Declaration.--Congress declares that this resolution is 
the concurrent resolution on the budget for fiscal year 2005 as 
authorized by section 301 of the Congressional Budget Act of 
1974 (2 U.S.C. 632).
    (b) Table of Contents.--The table of contents for this 
concurrent resolution is as follows:

Sec. 1. Concurrent resolution on the budget for fiscal year 2005.

                       TITLE I--LEVELS AND AMOUNTS

Sec. 101. Recommended levels and amounts for the budget year.
Sec. 102. Social security.
Sec. 103. Major functional categories.

                        TITLE II--RECONCILIATION

                           Subtitle A--Senate

Sec. 201. Reconciliation in the Senate.

                  Subtitle B--House of Representatives

Sec. 211. Reconciliation in the House of Representatives.

                TITLE III--RESERVE FUNDS AND ADJUSTMENTS

                        Subtitle A--Reserve Funds

Sec. 301. Deficit neutral reserve fund for health insurance for the 
          uninsured.
Sec. 302. Deficit neutral reserve fund for higher education.
Sec. 303. Deficit neutral reserve fund for Montgomery GI Bill benefits.
Sec. 304. Deficit neutral reserve fund for Postal Service reform.
Sec. 305. Deficit neutral reserve fund for the Family Opportunity Act.
Sec. 306. Deficit neutral reserve fund for eliminating survivor benefit 
          plan-social security offset.
Sec. 307. Reserve fund for pending legislation.

     Subtitle B--Adjustments With Respect to Discretionary Spending

Sec. 311. Adjustment for surface transportation.
Sec. 312. Adjustment for wildland fire suppression.
Sec. 313. Mechanism for adjusting appropriate discretionary levels.

                      TITLE IV--BUDGET ENFORCEMENT

                         Subtitle A--Enforcement

Sec. 401. Restrictions on advance appropriations.
Sec. 402. Emergency legislation.
Sec. 403. Exemption of overseas contingency operations.
Sec. 404. Discretionary spending limits in the Senate.
Sec. 405. Adjustments to reflect changes in concepts and definitions.
Sec. 406. Application and effect of changes in allocations and 
          aggregates.
Sec. 407. Pay-as-you-go point of order in the Senate.
Sec. 408. Compliance with section 13301 of the Budget Enforcement Act of 
          1990.

                     Subtitle B--Report Submissions

Sec. 411. Submission of report on defense savings.
Sec. 412. Submission of report on homeland security.

                Subtitle C--Exercise of Rulemaking Powers

Sec. 421. Exercise of rulemaking powers.

            TITLE V--REQUIRED LEVELS AND AMOUNTS FOR OUTYEARS

Sec. 501. Recommended levels and amounts.
Sec. 502. Social security.
Sec. 503. Major functional categories.

          TITLE VI--SENSE OF THE SENATE AND SENSE OF THE HOUSE

                     Subtitle A--Sense of the Senate

Sec. 601. Sense of the Senate on budget process reform.
Sec. 602. Sense of the Senate on budget process reform with regard to 
          the creation of bipartisan commissions to combat waste, fraud, 
          and abuse and to promote spending efficiency.
Sec. 603. Sense of the Senate on the relationship between annual deficit 
          spending and increases in debt service costs.
Sec. 604. Sense of the Senate regarding the costs of the medicare 
          prescription drug program.
Sec. 605. Sense of the Senate on returning stability to payments under 
          medicare physician fee schedule.
Sec. 606. Sense of the Senate supporting funding restoration for 
          agriculture research and extension.
Sec. 607. Sense of the Senate concerning a national animal 
          identification program.
Sec. 608. Sense of the Senate regarding contributions to the global fund 
          to fight aids, tuberculosis, and malaria.
Sec. 609. Sense of the Senate concerning child nutrition funding.
Sec. 610. Sense of the Senate regarding compensation for exposure to 
          toxic substances at the Department of Energy.
Sec. 611. Sense of the Senate regarding tax incentives for certain rural 
          communities.
Sec. 612. Sense of the Senate concerning summer food pilot projects.
Sec. 613. Sense of the Senate regarding closing the ``tax gap''.

                     Subtitle B--Sense of the House

Sec. 621. Sense of the House on entitlement reform.

                      Subtitle C--Sense of Congress

Sec. 631. Sense of Congress on spending accountability.

                      TITLE I--LEVELS AND AMOUNTS

SEC. 101. RECOMMENDED LEVELS AND AMOUNTS FOR THE BUDGET YEAR.

    The following budgetary levels are appropriate for fiscal 
year 2005:
            (1) Federal revenues.--For purposes of the 
        enforcement of this resolution--
                    (A) The recommended level of Federal 
                revenue for fiscal year 2005 is 
                $1,454,637,000,000.
                    (B) The amount by which the aggregate level 
                of Federal revenues should be changed for 
                fiscal year 2005 is -$28,194,000,000.
            (2) New budget authority.--For purposes of the 
        enforcement of this resolution, the appropriate level 
        of total new budget authority for fiscal year 2005 is 
        $2,005,068,000,000.
            (3) Budget outlays.--For purposes of the 
        enforcement of this resolution, the appropriate level 
        of total budget outlays for fiscal year 2005 is 
        $1,996,028,000,000.
            (4) Deficit.--For purposes of the enforcement of 
        this resolution, the amount of the deficit for fiscal 
        year 2005 is $541,391,000,000.
            (5) Debt subject to limit.--Pursuant to section 
        301(a)(5) of the Congressional Budget Act of 1974, the 
        appropriate level of the public debt for fiscal year 
        2005 is $8,073,946,000,000.
            (6) Debt held by the public.--The appropriate level 
        of the debt held by the public for fiscal year 2005 is 
        $4,762,355,000,000.

SEC. 102. SOCIAL SECURITY.

    (a) Social Security Revenues.--For purposes of Senate 
enforcement under sections 302 and 311 of the Congressional 
Budget Act of 1974, the amount of revenues of the Federal Old-
Age and Survivors Insurance Trust Fund and the Federal 
Disability Insurance Trust Fund for fiscal year 2005 is 
$572,309,000,000.
    (b) Social Security Outlays.--For purposes of Senate 
enforcement under sections 302 and 311 of the Congressional 
Budget Act of 1974, the amount of outlays of the Federal Old-
Age and Survivors Insurance Trust Fund and the Federal 
Disability Insurance Trust Fund for fiscal year 2005 is 
$396,157,000,000.
    (c) Social Security Administrative Expenses.--In the 
Senate, the amounts of new budget authority and budget outlays 
of the Federal Old-Age and Survivors Insurance Trust Fund and 
the Federal Disability Insurance Trust Fund for administrative 
expenses for fiscal year 2005 are $4,249,000,000 in new budget 
authority and $4,264,000,000 in outlays.

SEC. 103. MAJOR FUNCTIONAL CATEGORIES.

    Congress determines and declares that the appropriate 
levels of new budget authority and budget outlays for fiscal 
year 2005 for each major functional category are:
            (1) National Defense (050): $472,157,000,000 in new 
        budget authority and $474,298,000,000 in outlays.
            (2) International Affairs (150): $28,920,000,000 in 
        new budget authority and $32,795,000,000 in outlays.
            (3) General Science, Space, and Technology (250): 
        $23,928,000,000 in new budget authority and 
        $23,278,000,000 in outlays.
            (4) Energy (270): $3,027,000,000 in new budget 
        authority and $1,380,000,000 in outlays.
            (5) Natural Resources and Environment (300): 
        $32,128,000,000 in new budget authority and 
        $31,418,000,000 in outlays.
            (6) Agriculture (350): $21,797,000,000 in new 
        budget authority and $21,035,000,000 in outlays.
            (7) Commerce and Housing Credit (370): 
        $9,284,000,000 in new budget authority and 
        $3,258,000,000 in outlays.
            (8) Transportation (400): $71,789,000,000 in new 
        budget authority and $68,560,000,000 in outlays.
            (9) Community and Regional Development (450): 
        $13,612,000,000 in new budget authority and 
        $17,386,000,000 in outlays.
            (10) Education, Training, Employment, and Social 
        Services (500): $92,818,000,000 in new budget authority 
        and $90,716,000,000 in outlays.
            (11) Health (550): $252,426,000,000 in new budget 
        authority and $250,025,000,000 in outlays.
            (12) Medicare (570): $287,878,000,000 in new budget 
        authority and $288,987,000,000 in outlays.
            (13) Income Security (600): $339,157,000,000 in new 
        budget authority and $345,660,000,000 in outlays.
            (14) Social Security (650): $15,214,000,000 in new 
        budget authority and $15,214,000,000 in outlays.
            (15) Veterans Benefits and Services (700): 
        $70,832,000,000 in new budget authority and 
        $68,855,000,000 in outlays.
            (16) Administration of Justice (750): 
        $41,945,000,000 in new budget authority and 
        $41,773,000,000 in outlays.
            (17) General Government (800): $17,383,000,000 in 
        new budget authority and $17,975,000,000 in outlays.
            (18) Net Interest (900): $270,436,000,000 in new 
        budget authority and $270,436,000,000 in outlays.
            (19) Allowances (920): -$7,158,000,000 in new 
        budget authority and -$14,516,000,000 in outlays.
            (20) Undistributed Offsetting Receipts (950): 
        -$52,505,000,000 in new budget authority and 
        -$52,505,000,000 in outlays.

                        TITLE II--RECONCILIATION

                           Subtitle A--Senate

SEC. 201. RECONCILIATION IN THE SENATE.

    (a) Tax Relief.--The Committee on Finance of the Senate 
shall report a reconciliation bill not later than September 30, 
2004, that consists of changes in laws within its jurisdiction 
sufficient to reduce revenues by not more than $22,900,000,000 
and to increase outlays by not more than $4,600,000,000 for the 
period of fiscal years 2005 through 2009.
    (b) Increase in Statutory Debt Limit.--The Committee on 
Finance of the Senate shall report a reconciliation bill not 
later than September 10, 2004, that consists solely of changes 
in laws within its jurisdiction to increase the statutory debt 
limit by $689,946,000,000.

                  Subtitle B--House of Representatives

SEC. 211. RECONCILIATION IN THE HOUSE OF REPRESENTATIVES.

    (a) Tax Relief.--The Committee on Ways and Means of the 
House shall report a reconciliation bill not later than 
September 30, 2004, that consists of changes in laws within its 
jurisdiction sufficient to reduce revenues by not more than 
$22,900,000,000 and to increase outlays by not more than 
$4,600,000,000 for the period of fiscal years 2005 through 
2009.
    (b) Conforming Adjustment.--Upon the reporting of a 
recommendation pursuant to section 211(a), or an amendment 
thereto, that shall be deemed to have complied with the 
directions under section 211 of this resolution by virtue of 
section 310(c) of the Congressional Budget Act of 1974, the 
chairman of the Committee on the Budget of the House may file 
with the House appropriately revised allocations, functional 
levels, and aggregates to carry out this subsection.

                TITLE III--RESERVE FUNDS AND ADJUSTMENTS

                       Subtitle A--Reserve Funds

SEC. 301. DEFICIT NEUTRAL RESERVE FUND FOR HEALTH INSURANCE FOR THE 
                    UNINSURED.

    (a) Senate.--If the Committee on Finance or the Committee 
on Health, Education, Labor, and Pensions of the Senate reports 
a bill or joint resolution, or an amendment thereto is offered 
or a conference report thereon is submitted, that provides 
health insurance or expands access to care for the uninsured 
(including a measure providing for tax deductions for the 
purchase of health insurance or other measures and including 
legislation to reallocate and maintain expiring SCHIP funds 
rather than allowing such funds to revert to the Treasury), 
increases access to health insurance through lowering costs, 
and does not increase the costs of current health insurance 
coverage, the chairman of the Committee on the Budget of the 
Senate may revise allocations of new budget authority and 
outlays, the revenue aggregates, and other appropriate 
aggregates to reflect such legislation, to the extent that such 
legislation would not increase the deficit for fiscal year 2005 
and for the period of fiscal years 2005 through 2009.
    (b) House.--In the House, if legislation is reported, or if 
an amendment thereto is offered or a conference report thereon 
is submitted, that provides health insurance for the uninsured, 
the chairman of the Committee on the Budget may revise the 
allocations for that committee and appropriate aggregates to 
take into account the budgetary effects of such measure for 
that purpose, to the extent the measure would not increase the 
deficit for fiscal year 2005 and for the period of fiscal years 
2005 through 2009.

SEC. 302. DEFICIT NEUTRAL RESERVE FUND FOR HIGHER EDUCATION.

    (a) In General.--If the Committee on Health, Education, 
Labor, and Pensions of the Senate or the Committee on Education 
and Workforce in the House reports a bill or joint resolution, 
or if an amendment thereto is offered or a conference report 
thereon is submitted, that reauthorizes the Higher Education 
Act of 1965, the appropriate chairman of the Committee on the 
Budget may revise the allocations for that committee and 
appropriate aggregates to take into account the budgetary 
effects of such measure for that purpose, to the extent the 
measure would not increase the deficit for fiscal year 2005 and 
for the period of fiscal years 2005 through 2009.
    (b) Sense of Senate.--It is the sense of the Senate that 
this resolution contemplates that--
            (1) the provisions necessary to achieve the deficit 
        neutrality in subsection (a) may be offered as 
        amendments on the Senate floor;
            (2) the Committee on Health, Education, Labor, and 
        Pensions will not be limited to spending reductions 
        within its committee's jurisdiction to satisfy the 
        requirements in subsection (a) in such an amendment; 
        and
            (3) the committee may report a bill with up to 
        $5,000,000,000 in new spending for higher education 
        programs provided that provisions necessary to achieve 
        deficit neutrality may be offered as amendments on the 
        Senate floor.

SEC. 303. DEFICIT NEUTRAL RESERVE FUND FOR MONTGOMERY GI BILL BENEFITS.

    If the Committee on Armed Services of the Senate or the 
appropriate committee of the House reports a bill or joint 
resolution, or an amendment thereto is offered or a conference 
report thereon is submitted, that increases benefit levels 
under the Montgomery GI Bill for members of the Selected 
Reserves, the appropriate chairman of the Committee on the 
Budget may revise the allocations for that committee and 
appropriate aggregates to take into account the budgetary 
effects of such measure for that purpose, to the extent the 
measure would not increase the deficit for fiscal year 2005 and 
for the period of fiscal years 2005 through 2009.

SEC. 304. DEFICIT NEUTRAL RESERVE FUND FOR POSTAL SERVICE REFORM.

    If the Committee on Governmental Affairs of the Senate or 
the Committee on Government Reform of the House reports a bill 
or joint resolution, or an amendment thereto is offered or a 
conference report thereon is submitted, that reforms the United 
States Postal Service to improve its long-term economic 
viability and provides for increased financial transparency, 
the appropriate chairman of the Committee on the Budget may 
revise the allocations for that committee and appropriate 
aggregates to take into account the budgetary effects of such 
measure for that purpose, to the extent the measure would not 
increase the deficit for fiscal year 2005 and for the period of 
fiscal years 2005 through 2009.

SEC. 305. DEFICIT NEUTRAL RESERVE FUND FOR THE FAMILY OPPORTUNITY ACT.

    If the Committee on Energy and Commerce of the House or the 
Committee on Finance of the Senate reports legislation, or if 
an amendment thereto is offered or a conference report thereon 
is submitted, that provides medicaid coverage for children with 
special needs (the Family Opportunity Act), the appropriate 
chairman of the Committee on the Budget may revise the 
allocations for that committee and appropriate aggregates to 
take into account the budgetary effects of such measure for 
that purpose, to the extent the measure would not increase the 
deficit for fiscal year 2005 and for the period of fiscal years 
2005 through 2009.

SEC. 306. DEFICIT NEUTRAL RESERVE FUND FOR ELIMINATING SURVIVOR BENEFIT 
                    PLAN-SOCIAL SECURITY OFFSET.

    If the Committee on Armed Services of the House or Senate 
reports a bill or joint resolution, or an amendment thereto is 
offered or a conference report thereon is submitted, that 
increases the minimum Survivor Benefit Plan basic annuity for 
surviving spouses age 62 and older, the appropriate chairman of 
the Committee on the Budget may revise the allocations for that 
committee and appropriate aggregates to take into account the 
budgetary effects of such measure for that purpose, to the 
extent the measure would not increase the deficit for fiscal 
year 2005 and for the period of fiscal years 2005 through 2009.

SEC. 307. RESERVE FUND FOR PENDING LEGISLATION.

    In the House, for any bill that provides for the safe 
importation of FDA-approved prescription drugs or places limits 
on medical malpractice litigation, that has passed the House in 
the first session of the 108th Congress and, after the date of 
adoption of this concurrent resolution, is enacted into law, 
the chairman of the Committee on the Budget may make the 
appropriate adjustments in the allocations and aggregates to 
reflect any resulting savings from any such measure.

     Subtitle B--Adjustments With Respect to Discretionary Spending

SEC. 311. ADJUSTMENT FOR SURFACE TRANSPORTATION.

    (a) In General.--If the Committee on Transportation and 
Infrastructure of the House or the Committee on Environment and 
Public Works, the Committee on Banking, Housing, and Urban 
Affairs, or the Committee on Commerce, Science, and 
Transportation of the Senate reports a bill or joint 
resolution, or if an amendment thereto is offered or a 
conference report thereon is submitted, that provides new 
budget authority for the budget accounts or portions thereof in 
the highway and transit categories as defined in subparagraphs 
(B) and (C) of section 250(c)(4) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 in excess of--
            (1) for fiscal year 2005: $42,657,000,000;
            (2) for fiscal year 2006: $43,635,000,000;
            (3) for fiscal year 2007: $45,709,000,000;
            (4) for fiscal year 2008: $46,945,000,000; or
            (5) for fiscal year 2009: $47,732,000,000;
the appropriate chairman of the Committee on the Budget may 
revise the appropriate budget aggregates and increase the 
allocation of new budget authority to such committee for fiscal 
year 2005 and for the period of fiscal years 2005 through 2009 
to the extent such excess is offset by a reduction in mandatory 
outlays from the Highway Trust Fund or an increase in receipts 
appropriated to such fund (for the applicable fiscal year) 
caused by such legislation or any previously enacted 
legislation. In the Senate, any increase in receipts shall be 
reported from the Committee on Finance.
    (b) Adjustment for Outlays.--For fiscal year 2005, in the 
House and the Senate, if a bill or joint resolution is 
reported, or if an amendment thereto is offered or a conference 
report thereon is submitted, that changes obligation 
limitations such that the total limitations are in excess of 
$41,204,000,000 for fiscal year 2005 for programs, projects, 
and activities within the highway and transit categories as 
defined in subparagraphs (B) and (C) of sections 250(c)(4) of 
the Balanced Budget and Emergency Deficit Control Act of 1985, 
and if legislation has been enacted that satisfies the 
conditions set forth in subsection (a) for such fiscal year, 
the appropriate chairman of the Committee on the Budget may 
increase the allocation of outlays and appropriate aggregates 
for such fiscal year for the committee reporting such measure 
by the amount of outlays that corresponds to such excess 
obligation limitations, but not to exceed the amount of such 
excess that was offset pursuant to subsection (a).

SEC. 312. ADJUSTMENT FOR WILDLAND FIRE SUPPRESSION.

    (a) Findings.--Congress makes the following findings:
            (1) Due to the expansion of the wildland urban 
        interface, severe drought conditions in many regions of 
        the country, and the poor health of the Nation's 
        forests and rangelands, the Forest Service and the 
        Department of the Interior regularly spend more than 
        the amount appropriated for fire suppression, and then 
        borrow from other accounts to pay for fire suppression.
            (2) This borrowing has a negative effect on many 
        Forest Service and Department of the Interior programs.
            (3) This resolution provides an amount equal to the 
        10-year average for fire suppression in fiscal year 
        2005.
            (4) The Forest Service and the Department of the 
        Interior should address cost containment within the 
        fire suppression account, and report to Congress 
        regarding how funds appropriated pursuant to this 
        section are used.
    (b) Sense of Congress.--It is the sense of Congress that 
the adjustment authorized by this section shall only be made 
if--
            (1) the wildland fire suppression accounts in the 
        Interior Appropriations bill are funded at the 10-year 
        average;
            (2) there are insufficient funds in such accounts; 
        and
            (3) the current fire season is of sufficient 
        severity to require appropriations in excess of the 
        base amount.
    (c) Cap Adjustment.--
            (1) Definition.--For this subsection, the term 
        ``base amount'' refers to the average of the 
        obligations of the 10 fiscal years preceding the 
        current year for wildfire suppression in the Forest 
        Service and in the Department of the Interior, 
        calculated by the Director of the Congressional Budget 
        Office in consultation with the chairmen of the 
        Committees on the Budget and Appropriations. The 
        Director of the Congressional Budget Office shall 
        provide such information for fiscal year 2005 in a 
        letter to the chairmen of such committees.
            (2) Adjustments for fiscal year 2005.--If any bill, 
        joint resolution, amendment, or conference report 
        provides new budget authority for wildland fire 
        suppression in fiscal year 2005 that would cause the 
        level of total new budget authority for wildland fire 
        suppression to exceed the base amount for such fiscal 
        year, then the chairman of the Committee on the Budget 
        may adjust the appropriate allocations and other 
        budgetary levels by the amount of excess new budget 
        authority provided by that measure for that purpose 
        (and the outlays flowing therefrom), but the adjustment 
        for new budget authority may not exceed--
                    (A) for the Forest Service for fiscal year 
                2005, $400,000,000; and
                    (B) for the Department of the Interior for 
                fiscal year 2005, $100,000,000.
            (3) Fiscal year 2004.--
                    (A) Senate.--In the Senate, if any bill, 
                joint resolution, amendment, or conference 
                report provides new budget authority for 
                wildland fire suppression in fiscal year 2004, 
                then the chairman of the Committee on the 
                Budget may determine that such amount of new 
                budget authority (and outlays flowing 
                therefrom) shall not be counted for the 
                purposes of the Congressional Budget Act of 
                1974 and this resolution, if such amounts for 
                that fiscal year do not exceed the following 
                levels of new budget authority--
                            (i) for the Forest Service, 
                        $400,000,000; and
                            (ii) for the Department of the 
                        Interior, $100,000,000.
                    (B) House.--In the House, if any bill, 
                joint resolution, amendment, or conference 
                report provides new budget authority for 
                wildland fire suppression in fiscal year 2004, 
                then the chairman of the Committee on the 
                Budget may adjust the appropriate allocations 
                and other budgetary levels by the amount of new 
                budget authority provided by that measure for 
                that purpose (and the outlays flowing 
                therefrom), but the adjustment for new budget 
                authority may not exceed--
                            (i) for the Forest Service, 
                        $400,000,000; and
                            (ii) for the Department of the 
                        Interior, $100,000,000.

SEC. 313. MECHANISM FOR ADJUSTING APPROPRIATE DISCRETIONARY LEVELS.

    (a) Section 504 Compliance.--In the House and the Senate, 
whenever the Committee on Appropriations reports the first bill 
or joint resolution making regular appropriations for fiscal 
year 2005, the appropriate chairman of the Committee on the 
Budget may revise the committee's allocation in this resolution 
by $4,630,000,000 in new budget authority and $14,240,000,000 
in outlays and make conforming adjustments to other levels in 
this resolution.
    (b) Funding for Project Bioshield.--In the House and the 
Senate, on the same day that the Committee on Appropriations 
reports as provided in subsection (a), the appropriate chairman 
of the Committee on the Budget may also revise the allocations 
to the Committee on Appropriations, discretionary spending 
limits, and other appropriate levels and limits in this 
resolution by $2,528,000,000 in new budget authority and 
$276,000,000 in outlays for Project Bioshield for fiscal year 
2005.

                      TITLE IV--BUDGET ENFORCEMENT

                        Subtitle A--Enforcement

SEC. 401. RESTRICTIONS ON ADVANCE APPROPRIATIONS.

    (a) Senate.--
            (1) Point of order.--Except as provided in 
        paragraph (2), it shall not be in order in the Senate 
        to consider any bill, joint resolution, motion, 
        amendment, or conference report that would provide an 
        advance appropriation.
            (2) Exception.--An advance appropriation may be 
        provided for fiscal year 2006 for programs, projects, 
        activities, or accounts identified in the joint 
        explanatory statement of managers accompanying this 
        resolution under the heading ``Accounts Identified for 
        Advance Appropriations'' in an aggregate amount not to 
        exceed $23,158,000,000 in new budget authority.
            (3) Waiver and appeals.--
                    (A) Waiver.--In the Senate, paragraph (1) 
                may be waived or suspended only by an 
                affirmative vote of three-fifths of the 
                Members, duly chosen and sworn. An affirmative 
                vote of three-fifths of the Members of the 
                Senate, duly chosen and sworn, shall be 
                required to sustain an appeal of the ruling of 
                the Chair on a point of order raised under 
                paragraph (1).
                    (B) Procedure.--A point of order under 
                paragraph (1) may be raised by a Senator as 
                provided in section 313(e) of the Congressional 
                Budget Act of 1974.
                    (C) Conference report.--If a point of order 
                is sustained under paragraph (1) against a 
                conference report in the Senate, the report 
                shall be disposed of as provided in section 
                313(d) of the Congressional Budget Act of 1974.
            (4) Advance appropriation.--In this subsection, the 
        term ``advance appropriation'' means any discretionary 
        new budget authority in a bill or joint resolution 
        making general appropriations or continuing 
        appropriations for fiscal year 2005 that first becomes 
        available for any fiscal year after 2005.
            (5) Repeal.--Section 501 of H. Con. Res. 95 (108th 
        Congress) is repealed.
    (b) House.--
            (1) In general.--(A) In the House, except as 
        provided in paragraph (2), an advance appropriation may 
        not be reported in a bill or joint resolution making a 
        general appropriation or continuing appropriation, and 
        may not be in order as an amendment thereto.
            (B) Managers on the part of the House may not agree 
        to a Senate amendment that would violate subparagraph 
        (A) unless specific authority to agree to the amendment 
        first is given by the House by a separate vote with 
        respect thereto.
            (2) Limitation.--In the House, an advance 
        appropriation may be provided for fiscal year 2006 for 
        programs, projects, activities or accounts identified 
        in the joint explanatory statement of managers 
        accompanying this resolution under the heading 
        ``Accounts Identified for Advance Appropriations, Part 
        A'' in an aggregate amount not to exceed 
        $23,158,000,000 in new budget authority, and an advance 
        appropriation may be provided for fiscal year 2007 for 
        any program identified in such statement under the 
        heading ``Accounts Identified for Advance 
        Appropriations, Part B''.
            (3) Definition.--In this subsection, the term 
        ``advance appropriation'' means any discretionary new 
        budget authority in a bill or joint resolution making 
        general appropriations or continuing appropriations for 
        fiscal year 2005 that first becomes available for any 
        fiscal year after 2005.

SEC. 402. EMERGENCY LEGISLATION.

    (a) Exemption of Emergency Provisions.--
            (1) In general.--In the House and Senate, if a 
        bill, joint resolution, amendment, or conference report 
        designates a provision as an emergency requirement 
        pursuant to this section, then the new budget 
        authority, new entitlement authority, outlays, and 
        receipts resulting therefrom shall not count for 
        purposes of sections 302, 303, 311, and 401 of the 
        Congressional Budget Act of 1974 or any concurrent 
        resolution on the budget and, in the Senate only, shall 
        not count for the purpose of sections 404 (relating to 
        discretionary spending limits in the Senate) and 407 
        (relating to the pay-go requirement) of this 
        resolution.
            (2) Designations.--
                    (A) Guidance.--If a provision of 
                legislation is designated as an emergency 
                requirement under paragraph (1), the committee 
                report and any joint explanatory statement of 
                managers accompanying that legislation shall 
                include an explanation of the manner in which 
                the provision meets the criteria in 
                subparagraph (B). If such legislation is to be 
                considered by the House without being reported, 
                then the committee shall cause the explanation 
                to be published in the Congressional Record in 
                advance of floor consideration.
                    (B) Criteria.--
                            (i) In general.--Any such provision 
                        is an emergency requirement if the 
                        underlying situation poses a threat to 
                        life, property, or national security 
                        and is--
                                    (I) sudden, quickly coming 
                                into being, and not building up 
                                over time;
                                    (II) an urgent, pressing, 
                                and compelling need requiring 
                                immediate action;
                                    (III) subject to clause 
                                (ii), unforeseen, 
                                unpredictable, and 
                                unanticipated; and
                                    (IV) not permanent, 
                                temporary in nature.
                            (ii) Unforeseen.--An emergency that 
                        is part of an aggregate level of 
                        anticipated emergencies, particularly 
                        when normally estimated in advance, is 
                        not unforeseen.
    (b) Point of Order in the Senate.--
            (1) Definitions.--In this subsection, the terms 
        ``direct spending'', ``receipts'', and ``appropriations 
        for discretionary accounts'' means any provision of a 
        bill, joint resolution, amendment, motion, or 
        conference report that affects direct spending, 
        receipts, or appropriations as those terms have been 
        defined and interpreted for purposes of the Balanced 
        Budget and Emergency Deficit Control Act of 1985.
            (2) Point of order.--When the Senate is considering 
        a bill, resolution, amendment, motion, or conference 
        report, if a point of order is made by a Senator 
        against an emergency designation in that measure, that 
        provision making such a designation shall be stricken 
        from the measure and may not be offered as an amendment 
        from the floor.
            (3) Waiver and appeal.--Paragraph (2) may be waived 
        or suspended in the Senate only by an affirmative vote 
        of three-fifths of the Members, duly chosen and sworn. 
        An affirmative vote of three-fifths of the Members of 
        the Senate, duly chosen and sworn, shall be required to 
        sustain an appeal of the ruling of the Chair on a point 
        of order raised under this section.
            (4) Definition of an emergency designation.--For 
        purposes of paragraph (2), a provision shall be 
        considered an emergency designation if it designates 
        any item as an emergency requirement pursuant to this 
        section.
            (5) Form of the point of order.--A point of order 
        under paragraph (2) may be raised by a Senator as 
        provided in section 313(e) of the Congressional Budget 
        Act of 1974.
            (6) Conference reports.--If a point of order is 
        sustained under paragraph (2) against a conference 
        report, the report shall be disposed of as provided in 
        section 313(d) of the Congressional Budget Act of 1974.
            (7) Exception for defense spending.--Paragraph (2) 
        shall not apply against an emergency designation for a 
        provision making discretionary appropriations in the 
        defense category.
    (c) Repeal.--Section 502 of H. Con. Res. 95 (108th 
Congress) is repealed.

SEC. 403. EXEMPTION OF OVERSEAS CONTINGENCY OPERATIONS.

    In the House and Senate, if a bill, joint resolution, 
amendment, or a conference report makes supplemental 
appropriations for fiscal year 2005 for overseas contingency 
operations related to the global war on terrorism, then the new 
budget authority, new entitlement authority, and outlays 
resulting from the provisions of such measure that are 
designated pursuant to this section as making appropriations 
for such contingency operations shall not count for purposes of 
sections 302, 303, and 401 of the Congressional Budget Act of 
1974 and, in the Senate only, shall not count for the purpose 
of section 404 (relating to discretionary spending limits in 
the Senate and 407 (relating to the pay-go requirement) of this 
resolution, except that the amounts that are not counted for 
purposes of this section shall not exceed $50,000,000,000 in 
new budget authority.

SEC. 404. DISCRETIONARY SPENDING LIMITS IN THE SENATE.

    (a) Discretionary Spending Limits.--In the Senate and as 
used in this section, the term ``discretionary spending limit'' 
means for fiscal year 2005--
            (1) $812,773,000,000 in new budget authority and 
        $818,285,000,000 in outlays for the discretionary 
        category;
            (2) for the highway category, $33,393,000,000 in 
        outlays; and
            (3) for the mass transit category, $1,488,000,000 
        in new budget authority, and $6,726,000,000 in outlays.
    (b) Discretionary Spending Point of Order in the Senate.--
            (1) In general.--Except as otherwise provided in 
        this subsection, it shall not be in order in the Senate 
        to consider any bill or joint resolution or amendment, 
        motion, or conference report thereon that would exceed 
        any of the discretionary spending limits in this 
        section.
            (2) Waiver.--This subsection may be waived or 
        suspended in the Senate only by the affirmative vote of 
        three-fifths of the Members, duly chosen and sworn.
            (3) Appeals.--Appeals in the Senate from the 
        decisions of the Chair relating to any provision of 
        this subsection shall be limited to 1 hour, to be 
        equally divided between, and controlled by, the 
        appellant and the manager of the bill or joint 
        resolution, as the case may be. An affirmative vote of 
        three-fifths of the Members of the Senate, duly chosen 
        and sworn, shall be required to sustain an appeal of 
        the ruling of the Chair on a point of order raised 
        under this subsection.
    (c) Adjustments.--
            (1) In general.--
                    (A) Chairman.--After the reporting of a 
                bill or joint resolution, or the offering of an 
                amendment thereto or the submission of a 
                conference report thereon, the chairman of the 
                Committee on the Budget may make the 
                adjustments set forth in subparagraph (B) for 
                the amount of new budget authority in that 
                measure (if that measure meets the requirements 
                set forth in paragraph (2)) and the outlays 
                flowing from that budget authority.
                    (B) Matters to be adjusted.--The 
                adjustments referred to in subparagraph (A) are 
                to be made to--
                            (i) the discretionary spending 
                        limits, if any, set forth in the 
                        appropriate concurrent resolution on 
                        the budget;
                            (ii) the allocations made pursuant 
                        to the appropriate concurrent 
                        resolution on the budget pursuant to 
                        section 302(a) of the Congressional 
                        Budget Act of 1974; and
                            (iii) the budgetary aggregates as 
                        set forth in the appropriate concurrent 
                        resolution on the budget.
            (2) Amounts of adjustments.--The adjustment 
        referred to in paragraph (1) shall be--
                    (A) an amount provided for transportation 
                under section 311;
                    (B) an amount provided for fire suppression 
                pursuant to section 312; and
                    (C) the amounts provided in section 313.
            (3) Reporting revised suballocations.--Following 
        any adjustment made under paragraph (1), the Committee 
        on Appropriations of the Senate shall report 
        appropriately revised suballocations under section 
        302(b) to carry out this subsection.
    (d) Repeal.--Section 504 of H. Con. Res. 95 (108th 
Congress) is repealed.

SEC. 405. ADJUSTMENTS TO REFLECT CHANGES IN CONCEPTS AND DEFINITIONS.

    (a) Changes in Concepts and Definitions.--In the House and 
Senate, upon the enactment of a bill or joint resolution 
providing for a change in concepts or definitions, the chairman 
of the Committee on the Budget shall make adjustments to the 
levels and allocations in this resolution in accordance with 
section 251(b) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 (as in effect prior to September 30, 2002).
    (b) Miscellaneous Adjustments.--
            (1) Senate.--In the Senate, for fiscal year 2005, 
        if a bill is reported, or an amendment thereto is 
        offered or a conference report thereon is submitted, 
        that changes offsetting receipts collected from the 
        Power Marketing Administration into offsetting 
        collections credited against the allocation of the 
        Committee on Appropriations, the chairman of the 
        Committee on the Budget may adjust the appropriate 
        allocations and levels by the amount of new budget 
        authority provided by that measure (and outlays flowing 
        therefrom) for the Army Corps of Engineers and the 
        Pick-Sloan Missouri Basin Project within the Bureau of 
        Reclamation, but not to exceed the amount of forgone 
        offsetting receipts.
            (2) House.--In the House, the chairman of the 
        Committee on the Budget may reduce the revenue 
        aggregates and increase the allocations to the 
        Committee on Ways and Means and other appropriate 
        spending aggregates for legislation that extends the 
        child tax credit, other than measures considered 
        pursuant to section 211, to the extent such adjustments 
        are deficit neutral for fiscal year 2005 and for the 
        period covered by this resolution.

SEC. 406. APPLICATION AND EFFECT OF CHANGES IN ALLOCATIONS AND 
                    AGGREGATES.

    (a) Application.--Any adjustments of allocations and 
aggregates made pursuant to this resolution shall--
            (1) apply while that measure is under 
        consideration;
            (2) take effect upon the enactment of that measure; 
        and
            (3) be published in the Congressional Record as 
        soon as practicable.
    (b) Effect of Changed Allocations and Aggregates.--Revised 
allocations and aggregates resulting from these adjustments 
shall be considered for the purposes of the Congressional 
Budget Act of 1974 as allocations and aggregates contained in 
this resolution.
    (c) Budget Committee Determinations.--For purposes of this 
resolution--
            (1) the levels of new budget authority, outlays, 
        direct spending, new entitlement authority, revenues, 
        deficits, and surpluses for a fiscal year or period of 
        fiscal years shall be determined on the basis of 
        estimates made by the appropriate Committee on the 
        Budget; and
            (2) such chairman may make any other necessary 
        adjustments to such levels to carry out this 
        resolution.
    (d) Amendment in the House.--In the House, for purposes of 
titles II and III, the term ``amendment'' or ``amendment 
thereto'' means an amendment offered or an amendment made in 
order as original text, or considered as adopted by special 
order of the House.
    (e) Allocations.--The allocations set forth in the joint 
explanatory statement accompanying this resolution made under 
section 302(a)(1) of the Congressional Budget Act of 1974 shall 
be for fiscal year 2005 and (except in the case of the 
Committee on Appropriations) for the period of fiscal years 
covered by this resolution.

SEC. 407. PAY-AS-YOU-GO POINT OF ORDER IN THE SENATE.

    (a) Point of Order.--
            (1) In general.--It shall not be in order in the 
        Senate to consider any direct spending or revenue 
        legislation that would increase the on-budget deficit 
        or cause an on-budget deficit for any one of the three 
        applicable time periods as measured in paragraphs (5) 
        and (6).
            (2) Applicable time periods.--For purposes of this 
        subsection, the term ``applicable time period'' means 
        any 1 of the 3 following periods:
                    (A) The first year covered by the most 
                recently adopted concurrent resolution on the 
                budget.
                    (B) The period of the first 5 fiscal years 
                covered by the most recently adopted concurrent 
                resolution on the budget.
                    (C) The period of the 5 fiscal years 
                following the first 5 fiscal years covered in 
                the most recently adopted concurrent resolution 
                on the budget.
            (3) Direct-spending legislation.--For purposes of 
        this subsection and except as provided in paragraph 
        (4), the term ``direct-spending legislation'' means any 
        bill, joint resolution, amendment, motion, or 
        conference report that affects direct spending as that 
        term is defined by, and interpreted for purposes of, 
        the Balanced Budget and Emergency Deficit Control Act 
        of 1985.
            (4) Exclusion.--For purposes of this subsection, 
        the terms ``direct-spending legislation'' and ``revenue 
        legislation'' do not include--
                    (A) any concurrent resolution on the 
                budget;
                    (B) any provision of legislation that 
                affects the full funding of, and continuation 
                of, the deposit insurance guarantee commitment 
                in effect on the date of enactment of the 
                Budget Enforcement Act of 1990; or
                    (C) any legislation considered pursuant to 
                title II of this resolution.
            (5) Baseline.--Estimates prepared pursuant to this 
        section shall--
                    (A) use the baseline surplus or deficit 
                used for the most recently adopted concurrent 
                resolution on the budget; and
                    (B) be calculated under the requirements of 
                subsections (b) through (d) of section 257 of 
                the Balanced Budget and Emergency Deficit 
                Control Act of 1985 for fiscal years beyond 
                those covered by that concurrent resolution on 
                the budget.
            (6) Prior surplus.--If direct spending or revenue 
        legislation increases the on-budget deficit or causes 
        an on-budget deficit when taken individually, it must 
        also increase the on-budget deficit or cause an on-
        budget deficit when taken together with all direct 
        spending and revenue legislation enacted since the 
        beginning of the calendar year not accounted for in the 
        baseline under paragraph (5)(A), except that direct 
        spending or revenue effects resulting in net deficit 
        reduction enacted pursuant to reconciliation 
        instructions since the beginning of that same calendar 
        year shall not be available.
    (b) Waiver.--This section may be waived or suspended in the 
Senate only by the affirmative vote of three-fifths of the 
Members, duly chosen and sworn.
    (c) Appeals.--Appeals in the Senate from the decisions of 
the Chair relating to any provision of this section shall be 
limited to 1 hour, to be equally divided between, and 
controlled by, the appellant and the manager of the bill or 
joint resolution, as the case may be. An affirmative vote of 
three-fifths of the Members of the Senate, duly chosen and 
sworn, shall be required to sustain an appeal of the ruling of 
the Chair on a point of order raised under this section.
    (d) Determination of Budget Levels.--For purposes of this 
section, the levels of new budget authority, outlays, and 
revenues for a fiscal year shall be determined on the basis of 
estimates made by the Committee on the Budget of the Senate.
    (e) Repeal.--Section 505 of H. Con. Res. 95 (108th 
Congress) is repealed.
    (f) Sunset.--This section shall expire on April 15, 2005.

SEC. 408. COMPLIANCE WITH SECTION 13301 OF THE BUDGET ENFORCEMENT ACT 
                    OF 1990.

    (a) In General.--In the House, notwithstanding section 
302(a)(1) of the Congressional Budget Act of 1974 and section 
13301 of the Budget Enforcement Act of 1990, the joint 
explanatory statement accompanying the conference report on any 
concurrent resolution on the budget shall include in its 
allocation under section 302(a) of the Congressional Budget Act 
of 1974 to the Committee on Appropriations amounts for the 
discretionary administrative expenses of the Social Security 
Administration.
    (b) Special Rule.--In the House, for purposes of applying 
section 302(f) of the Congressional Budget Act of 1974, 
estimates of the level of total new budget authority and total 
outlays provided by a measure shall include any discretionary 
amounts provided for the Social Security Administration.

                     Subtitle B--Report Submissions

SEC. 411. SUBMISSION OF REPORT ON DEFENSE SAVINGS.

    Not later than June 25, 2004, the Committees on Armed 
Services of the House and the Senate shall submit to the 
relevant Committee on the Budget (and publish in the 
Congressional Record) its findings that identify $2,000,000,000 
in savings from (1) activities that are determined to be of a 
low priority to the successful execution of current military 
operations; and (2) activities that are determined to be 
wasteful or unnecessary to national defense. Funds identified 
should be reallocated to programs and activities that directly 
contribute to enhancing the combat capabilities of the U.S. 
military forces with an emphasis on force protection, munitions 
and surveillance capabilities.

SEC. 412. SUBMISSION OF REPORT ON HOMELAND SECURITY.

    In the House and Senate, not later than June 25, 2004, the 
Select Committee on Homeland Security and the Committee on 
Governmental Affairs respectively, shall submit to the 
corresponding Committees on the Budget (and publish in the 
Congressional Record) a report identifying no less than 
$150,000,000 in savings from--
            (1) activities that are determined to be of low 
        priority to the successful execution of current 
        domestic homeland security operations; and
            (2) activities that are determined to be wasteful 
        or unnecessary to homeland security.
Funds identified should be accompanied by recommendations on 
reallocation to programs and activities that are considered top 
priority activities or directly contribute to enhancing the 
defense of our homeland.

               Subtitle C--Exercise of Rulemaking Powers

SEC. 421. EXERCISE OF RULEMAKING POWERS.

    Congress adopts the provisions of this title--
            (1) as an exercise of the rulemaking power of the 
        Senate and the House, respectively, and as such they 
        shall be considered as part of the rules of each House, 
        or of that House to which they specifically apply, and 
        such rules shall supersede other rules only to the 
        extent that they are inconsistent therewith; and
            (2) with full recognition of the constitutional 
        right of either House to change those rules (so far as 
        they relate to that House) at any time, in the same 
        manner, and to the same extent as in the case of any 
        other rule of that House.

           TITLE V--REQUIRED LEVELS AND AMOUNTS FOR OUTYEARS

SEC. 501. RECOMMENDED LEVELS AND AMOUNTS.

    In accordance with section 301(a) of the Congressional 
Budget Act of 1974 (requiring levels for at least 4 years 
following the budget year), the following budgetary levels are 
appropriate for the fiscal years 2006 through 2009:
    (1) Federal revenues.--For purposes of the enforcement of 
this resolution--
            (A) The recommended levels of Federal revenues are 
        as follows:
                    Fiscal year 2006: $1,634,152,000,000.
                    Fiscal year 2007: $1,753,744,000,000.
                    Fiscal year 2008: $1,844,828,000,000.
                    Fiscal year 2009: $1,950,926,000,000.
            (B) The amounts by which the aggregate levels of 
        Federal revenues should be changed are as follows:
                    Fiscal year 2006: -$21,416,000,000.
                    Fiscal year 2007: $0.
                    Fiscal year 2008: $0.
                    Fiscal year 2009: $0.
    (2) New budget authority.--For purposes of the enforcement 
of this resolution, the appropriate levels of total new budget 
authority are as follows:
                    Fiscal year 2006: $2,068,452,000,000.
                    Fiscal year 2007: $2,178,188,000,000.
                    Fiscal year 2008: $2,287,795,000,000.
                    Fiscal year 2009: $2,398,895,000,000.
    (3) Budget outlays.--For purposes of the enforcement of 
this resolution, the appropriate levels of total budget outlays 
are as follows:
                    Fiscal year 2006: $2,082,187,000,000.
                    Fiscal year 2007: $2,155,801,000,000.
                    Fiscal year 2008: $2,254,981,000,000.
                    Fiscal year 2009: $2,363,019,000,000.
    (4) Deficits.--For purposes of the enforcement of this 
resolution, the amounts of the deficits are as follows:
                    Fiscal year 2006: $448,035,000,000.
                    Fiscal year 2007: $402,057,000,000.
                    Fiscal year 2008: $410,153,000,000.
                    Fiscal year 2009: $412,093,000,000.
    (5) Debt subject to limit.--Pursuant to section 301(a)(5) 
of the Congressional Budget Act of 1974, the appropriate levels 
of the public debt are as follows:
                    Fiscal year 2006: $8,645,824,000,000.
                    Fiscal year 2007: $9,168,812,000,000.
                    Fiscal year 2008: $9,699,909,000,000.
                    Fiscal year 2009: $10,235,831,000,000.
    (6) Debt held by the public.--The appropriate levels of the 
debt held by the public are as follows:
                    Fiscal year 2006: $5,030,718,000,000.
                    Fiscal year 2007: $5,237,335,000,000.
                    Fiscal year 2008: $5,436,448,000,000.
                    Fiscal year 2009: $5,623,726,000,000.

SEC. 502. SOCIAL SECURITY.

    (a) Social Security Revenues.--For purposes of Senate 
enforcement under sections 302 and 311 of the Congressional 
Budget Act of 1974, the amounts of revenues of the Federal Old-
Age and Survivors Insurance Trust Fund and the Federal 
Disability Insurance Trust Fund are as follows:
                    Fiscal year 2006: $600,872,000,000.
                    Fiscal year 2007: $629,263,000,000.
                    Fiscal year 2008: $658,631,000,000.
                    Fiscal year 2009: $689,510,000,000.
    (b) Social Security Outlays.--For purposes of Senate 
enforcement under sections 302 and 311 of the Congressional 
Budget Act of 1974, the amounts of outlays of the Federal Old-
Age and Survivors Insurance Trust Fund and the Federal 
Disability Insurance Trust Fund are as follows:
                    Fiscal year 2006: $406,380,000,000.
                    Fiscal year 2007: $419,538,000,000.
                    Fiscal year 2008: $433,728,000,000.
                    Fiscal year 2009: $450,526,000,000.
    (c) Social Security Administrative Expenses.--In the 
Senate, the amounts of new budget authority and budget outlays 
of the Federal Old-Age and Survivors Insurance Trust Fund and 
the Federal Disability Insurance Trust Fund for administrative 
expenses are as follows:
            Fiscal year 2006:
                    (A) New budget authority, $4,334,000,000.
                    (B) Outlays, $4,273,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $4,429,000,000.
                    (B) Outlays, $4,361,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $4,526,000,000.
                    (B) Outlays, $4,455,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $4,626,000,000.
                    (B) Outlays, $4,552,000,000.

SEC. 503. MAJOR FUNCTIONAL CATEGORIES.

    Congress determines and declares that the appropriate 
levels of new budget authority and budget outlays for fiscal 
years 2006 through 2009 for each major functional category are:
    (1) National Defense (050):
            Fiscal year 2006:
                    (A) New budget authority, $432,366,000,000.
                    (B) Outlays, $452,218,00,000.
            Fiscal year 2007:
                    (A) New budget authority, $442,103,000,000.
                    (B) Outlays, $434,750,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $452,073,000,000.
                    (B) Outlays, $438,532,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $462,069,000,000.
                    (B) Outlays, $447,384,000,000.
    (2) International Affairs (150):
            Fiscal year 2006:
                    (A) New budget authority, $30,619,000,000.
                    (B) Outlays, $32,248,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $31,291,000,000.
                    (B) Outlays, $29,599,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $31,977,000,000.
                    (B) Outlays, $28,793,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $32,677,000,000.
                    (B) Outlays, $29,123,000,000.
    (3) General Science, Space, and Technology (250):
            Fiscal year 2006:
                    (A) New budget authority, $24,406,000,000.
                    (B) Outlays, $23,864,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $24,943,000,000.
                    (B) Outlays, $24,316,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $25,491,000,000.
                    (B) Outlays, $24,755,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $26,052,000,000.
                    (B) Outlays, $25,287,000,000.
    (4) Energy (270):
            Fiscal year 2006:
                    (A) New budget authority, $3,122,000,000.
                    (B) Outlays, $1,866,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $3,253,000,000.
                    (B) Outlays, $1,619,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $3,090,000,000.
                    (B) Outlays, $1,113,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $2,730,000,000.
                    (B) Outlays, $1,318,000,000.
    (5) Natural Resources and Environment (300):
            Fiscal year 2006:
                    (A) New budget authority, $32,942,000,000.
                    (B) Outlays, $32,931,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $33,755,000,000.
                    (B) Outlays, $33,655,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $34,443,000,000.
                    (B) Outlays, $34,118,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $35,923,000,000.
                    (B) Outlays, $35,413,000,000.
    (6) Agriculture (350):
            Fiscal year 2006:
                    (A) New budget authority, $23,914,000,000.
                    (B) Outlays, $22,748,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $24,920,000,000.
                    (B) Outlays, $23,758,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $24,865,000,000.
                    (B) Outlays, $23,735,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $25,928,000,000.
                    (B) Outlays, $24,917,000,000.
    (7) Commerce and Housing Credit (370):
            Fiscal year 2006:
                    (A) New budget authority, $8,720,000,000.
                    (B) Outlays, $4,292,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $8,191,000,000.
                    (B) Outlays, $2,744,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $8,154,000,000.
                    (B) Outlays, $1,485,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $8,014,000,000.
                    (B) Outlays, $1,202,000,000.
    (8) Transportation (400):
            Fiscal year 2006:
                    (A) New budget authority, $73,253,000,000.
                    (B) Outlays, $71,302,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $75,911,000,000.
                    (B) Outlays, $73,633,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $77,709,000,000.
                    (B) Outlays, $75,611,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $79,072,000,000.
                    (B) Outlays, $77,027,000,000.
    (9) Community and Regional Development (450):
            Fiscal year 2006:
                    (A) New budget authority, $13,607,000,000.
                    (B) Outlays, $14,457,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $13,905,000,000.
                    (B) Outlays, $14,231,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $14,127,000,000.
                    (B) Outlays, $14,032,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $14,439,000,000.
                    (B) Outlays, $14,318,000,000.
    (10) Education, Training, Employment, and Social Services 
(500):
            Fiscal year 2006:
                    (A) New budget authority, $95,108,000,000.
                    (B) Outlays, $93,772,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $97,167,000,000.
                    (B) Outlays, $95,389,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $99,113,000,000.
                    (B) Outlays, $97,331,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $101,229,000,000.
                    (B) Outlays, $99,469,000,000.
    (11) Health (550):
            Fiscal year 2006:
                    (A) New budget authority, $257,888,000,000.
                    (B) Outlays, $257,875,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $272,290,000,000.
                    (B) Outlays, $271,481,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $292,081,000,000.
                    (B) Outlays, $291,298,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $314,270,000,000.
                    (B) Outlays, $311,345,000,000.
    (12) Medicare (570):
            Fiscal year 2006:
                    (A) New budget authority, $322,742,000,000.
                    (B) Outlays, $322,339,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $362,593,000,000.
                    (B) Outlays, $362,827,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $387,739,000,000.
                    (B) Outlays, $387,718,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $414,248,000,000.
                    (B) Outlays, $413,776,000,000.
    (13) Income Security (600):
            Fiscal year 2006:
                    (A) New budget authority, $342,290,000,000.
                    (B) Outlays, $345,570,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $343,329,000,000.
                    (B) Outlays, $345,588,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $356,872,000,000.
                    (B) Outlays, $358,513,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $366,779,000,000.
                    (B) Outlays, $367,788,000,000.
    (14) Social Security (650):
            Fiscal year 2006:
                    (A) New budget authority, $16,779,000,000.
                    (B) Outlays, $16,779,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $18,269,000,000.
                    (B) Outlays, $18,269,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $20,218,000,000.
                    (B) Outlays, $20,218,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $22,229,000,000.
                    (B) Outlays, $22,229,000,000.
    (15) Veterans Benefits and Services (700):
            Fiscal year 2006:
                    (A) New budget authority, $69,263,000,000.
                    (B) Outlays, $68,135,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $67,925,000,000.
                    (B) Outlays, $66,976,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $71,702,000,000.
                    (B) Outlays, $70,938,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $72,937,000,000.
                    (B) Outlays, $72,132,000,000.
    (16) Administration of Justice (750):
            Fiscal year 2006:
                    (A) New budget authority, $40,338,000,000.
                    (B) Outlays, $40,851,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $41,111,000,000.
                    (B) Outlays, $41,209,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $41,990,000,000.
                    (B) Outlays, $41,682,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $42,889,000,000.
                    (B) Outlays, $42,492,000,000.
    (17) General Government (800):
            Fiscal year 2006:
                    (A) New budget authority, $17,840,000,000.
                    (B) Outlays, $17,685,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $18,267,000,000.
                    (B) Outlays, $17,917,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $18,204,000,000.
                    (B) Outlays, $17,849,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $18,645,000,000.
                    (B) Outlays, $18,096,000,000.
    (18) Net Interest (900):
            Fiscal year 2006:
                    (A) New budget authority, $318,053,000,000.
                    (B) Outlays, $318,053,000,000.
            Fiscal year 2007:
                    (A) New budget authority, $362,002,000,000.
                    (B) Outlays, $362,002,000,000.
            Fiscal year 2008:
                    (A) New budget authority, $393,729,000,000.
                    (B) Outlays, $393,729,000,000.
            Fiscal year 2009:
                    (A) New budget authority, $419,915,000,000.
                    (B) Outlays, $419,915,000,000.
    (19) Allowances (920):
            Fiscal year 2006:
                    (A) New budget authority, $0.
                    (B) Outlays, $0.
            Fiscal year 2007:
                    (A) New budget authority, $0.
                    (B) Outlays, $0.
            Fiscal year 2008:
                    (A) New budget authority, $0.
                    (B) Outlays, $0.
            Fiscal year 2009:
                    (A) New budget authority, $0.
                    (B) Outlays, $0.
    (20) Undistributed Offsetting Receipts (950):
            Fiscal year 2006:
                    (A) New budget authority, -$54,798,000,000.
                    (B) Outlays, -$54,798,000,000.
            Fiscal year 2007:
                    (A) New budget authority, -$63,037,000,000.
                    (B) Outlays, -$64,162,000,000.
            Fiscal year 2008:
                    (A) New budget authority, -$65,782,000,000.
                    (B) Outlays, -$66,469,000,000.
            Fiscal year 2009:
                    (A) New budget authority, -$61,150,000,000.
                    (B) Outlays, -$60,212,000,000.

          TITLE VI--SENSE OF THE SENATE AND SENSE OF THE HOUSE

                    Subtitle A--Sense of the Senate

SEC. 601. SENSE OF THE SENATE ON BUDGET PROCESS REFORM.

    It is the sense of the Senate that Congress and the 
President should work together to enact budget process reform 
legislation that would include mechanisms to restrain 
Government spending. Such legislation may include--
            (1) deficit targets that, when exceeded, would 
        result in across-the-board reductions in Federal 
        spending except Social Security, Medicare, and 
        Veterans' benefits;
            (2) revision of the content of budget resolutions 
        to increase their focus on aggregate levels, and to 
        include easily understood enforcement tools such as--
                    (A) discretionary spending limits;
                    (B) pay-as-you-go; and
                    (C) explicit committee allocations;
            (3) emergency spending procedures which budget for 
        emergency needs;
            (4) pay-as-you-go limitations which apply to non-
        budget expenditures;
            (5) limitations on unauthorized appropriations; and
            (6) enhanced rescission or constitutional line-item 
        veto authority for the President.

SEC. 602. SENSE OF THE SENATE ON BUDGET PROCESS REFORM WITH REGARD TO 
                    THE CREATION OF BIPARTISAN COMMISSIONS TO COMBAT 
                    WASTE, FRAUD, AND ABUSE AND TO PROMOTE SPENDING 
                    EFFICIENCY.

    (a) Waste, Fraud, and Abuse.--It is the sense of the Senate 
that legislation should be enacted that would create a 
bipartisan commission for the purpose of--
            (1) submitting recommendations on ways to eliminate 
        waste, fraud, and abuse; and
            (2) to provide recommendations on ways in which to 
        achieve cost savings through enhancing program 
        efficiencies in all discretionary and entitlement 
        programs.
The findings of the commission should be made on an annual 
basis, and should be presented in conjunction with the 
submission of the President's budget request to Congress.
    (b) Efficiency.--It is the sense of the Senate that a 
bipartisan commission should be established to--
            (1) audit Federal domestic agencies, and programs 
        within such agencies, with the express purpose of 
        providing Congress with recommendations, and 
        legislation;
            (2) implement those recommendations; and
            (3) realign or eliminate government agencies and 
        programs that are duplicative, inefficient, outdated, 
        irrelevant, or have failed to accomplish their intended 
        purpose.
The findings of the commission should be made on an annual 
basis, and should be presented in conjunction with the 
submission of the President's budget request to Congress.

SEC. 603. SENSE OF THE SENATE ON THE RELATIONSHIP BETWEEN ANNUAL 
                    DEFICIT SPENDING AND INCREASES IN DEBT SERVICE 
                    COSTS.

    It is the sense of the Senate that the Congressional Budget 
Office shall consult with the Committee on the Budget of the 
Senate in order to prepare a report containing a discussion 
of--
            (1) the relationship between annual deficit 
        spending and increases in debt service costs;
            (2) the relationship between incremental increases 
        in discretionary spending and debt service costs; and
            (3) the feasibility of providing estimates of debt 
        service costs in the cost estimates prepared pursuant 
        to section 308 of the Congressional Budget Act of 1974.

SEC. 604. SENSE OF THE SENATE REGARDING THE COSTS OF THE MEDICARE 
                    PRESCRIPTION DRUG PROGRAM.

    It is the sense of the Senate that the Committee on Finance 
of the Senate should report a bill that consists of changes in 
laws within its jurisdiction sufficient to ensure that spending 
within part D of the Medicare Prescription Drug Benefit program 
in fiscal years 2005 through 2013 does not exceed the total of 
$409,000,000,000 as estimated by the Congressional Budget 
Office.

SEC. 605. SENSE OF THE SENATE ON RETURNING STABILITY TO PAYMENTS UNDER 
                    MEDICARE PHYSICIAN FEE SCHEDULE.

    It is the sense of the Senate that, while recent actions by 
Congress have helped address the immediate reductions in 
reimbursement, further action by Congress is urgently needed to 
put in place a new formula or mechanism for updating Medicare 
physician fees in 2006 and thereafter, in order to ensure--
            (1) the long-term stability of the Medicare payment 
        system for physicians and other health care 
        professionals, such that payment rates keep pace with 
        practice cost increases; and
            (2) future access to physicians' services for 
        Medicare beneficiaries.

SEC. 606. SENSE OF THE SENATE SUPPORTING FUNDING RESTORATION FOR 
                    AGRICULTURE RESEARCH AND EXTENSION.

    It is the sense of the Senate that in making appropriations 
and revenue decisions, the Senate supports--
            (1) the restoration of the 33 accounts of the 
        Cooperative State Research, Education, and Extension 
        Service;
            (2) the fiscal year 2005 funding of the National 
        Research Initiative; and
            (3) the fiscal year 2005 funding of competitive 
        research programs of the Cooperative State Research, 
        Education, and Extension Service in an amount that is 
        adequate to--
                    (A) fight obesity and stave off chronic 
                diseases;
                    (B) combat insects and animal and plant 
                diseases;
                    (C) establish new crops, improved 
                livestock, and economic opportunities for 
                producers; and
                    (D) keep pathogens and other dangers out of 
                the air, water, soil, plants, and animals.

SEC. 607. SENSE OF THE SENATE CONCERNING A NATIONAL ANIMAL 
                    IDENTIFICATION PROGRAM.

    It is the sense of the Senate that in making appropriations 
and revenue decisions, the Senate supports--
            (1) the development and implementation of a 
        national animal identification program recognizing the 
        need for resources to carry out the implementation of 
        the plan;
            (2) the provision by the Secretary of Agriculture 
        of a time-line for the development and implementation 
        of the program as soon as practicable after the date of 
        approval of this concurrent resolution;
            (3) the provision by the Secretary of Agriculture 
        to ensure the Animal and Plant Health Inspection 
        Service, State animal health agencies, and agricultural 
        producers are provided funds necessary to implement a 
        national animal identification program; and
            (4) the establishment of a program that is not 
        overly burdensome to agricultural producers and ensures 
        the privacy of information of agricultural producers.

SEC. 608. SENSE OF THE SENATE REGARDING CONTRIBUTIONS TO THE GLOBAL 
                    FUND TO FIGHT AIDS, TUBERCULOSIS, AND MALARIA.

    It is the sense of the Senate that appropriations Acts 
should provide sufficient funds to continue matching 
contributions from other sources to The Global Fund to Fight 
AIDS, Tuberculosis, and Malaria on a 1 to 2 basis.

SEC. 609. SENSE OF THE SENATE CONCERNING CHILD NUTRITION FUNDING.

    It is the sense of the Senate that the levels in this 
concurrent resolution assume additional funds for the 
reauthorization of Federal child nutrition programs.

SEC. 610. SENSE OF THE SENATE REGARDING COMPENSATION FOR EXPOSURE TO 
                    TOXIC SUBSTANCES AT THE DEPARTMENT OF ENERGY.

    It is the sense of the Senate that--
            (1) claims for occupational illness, which are 
        determined to be caused by exposure to toxic substances 
        at Department of Energy facilities under subtitle D of 
        the EEOICPA, should be promptly, equitably, and 
        efficiently compensated;
            (2) administrative and technical changes should be 
        made to the EEOICPA to--
                    (A) improve claims processing and review by 
                physicians panels to ensure cost-effective and 
                efficient consideration and determination of 
                workers' claims;
                    (B) provide for membership in additional 
                special exposure cohorts; and
                    (C) address eligibility issues at 
                facilities with residual radiation; and
            (3) the President and Congress should work together 
        at the earliest opportunity to develop a plan that 
        effectively resolves the issue of a lack of a willing 
        payor for many claims that are determined under 
        subtitle D of the EEOICPA to be related to exposure to 
        a toxic substance at Department of Energy facilities.

SEC. 611. SENSE OF THE SENATE REGARDING TAX INCENTIVES FOR CERTAIN 
                    RURAL COMMUNITIES.

    It is the sense of the Senate that if tax relief measures 
are enacted in accordance with the assumptions in the budget 
resolution in this session of Congress, such legislation should 
include incentives to help rural communities attract 
individuals to live and work and start and grow a business in 
those communities.

SEC. 612. SENSE OF THE SENATE CONCERNING SUMMER FOOD PILOT PROJECTS.

    It is the sense of the Senate that sufficient funds should 
be provided to the Food and Nutrition Service and other 
appropriate agencies within the Department of Agriculture to 
enable those agencies to expand the summer food pilot projects 
established under section 18(f) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1769(f)) to all States of 
the United States and to all service institutions (including 
service institutions described in section 13(a)(7) of that 
Act).

SEC. 613. SENSE OF THE SENATE REGARDING CLOSING THE ``TAX GAP''.

    It is the sense of the Senate that the Internal Revenue 
Service should be provided the resources necessary to increase 
enforcement activities that would be concentrated on efforts to 
reduce the tax gap substantially by the end of fiscal year 
2009.

                     Subtitle B--Sense of the House

SEC. 621. SENSE OF THE HOUSE ON ENTITLEMENT REFORM.

    (a) Findings.--The House finds that welfare was 
successfully reformed through the application of work 
requirements, education and training opportunity, and time 
limits on eligibility.
    (b) Sense of the House.--It is the sense of the House that 
authorizing committees should--
            (1) systematically review all means-tested 
        entitlement programs and track beneficiary 
        participation across programs and time;
            (2) enact legislation to develop common eligibility 
        requirements for means-tested entitlement programs;
            (3) enact legislation to accurately rename means-
        tested entitlement programs;
            (4) enact legislation to coordinate program 
        benefits in order to limit to a reasonable period of 
        time the Government dependency of means-tested 
        entitlement program participants;
            (5) evaluate the costs of, and justifications for, 
        nonmeans-tested, nonretirement-related entitlement 
        programs; and
            (6) identify and utilize resources that have 
        conducted cost-benefit analyses of participants in 
        multiple means- and nonmeans-tested entitlement 
        programs to understand their cumulative costs and 
        collective benefits.

                     Subtitle C--Sense of Congress

SEC. 631. SENSE OF CONGRESS ON SPENDING ACCOUNTABILITY.

    It is the sense of Congress that--
            (1) authorizing committees should actively engage 
        in oversight utilizing--
                    (A) the plans and goals submitted by 
                executive agencies pursuant to the Government 
                Performance and Results Act of 1993; and
                    (B) the performance evaluations submitted 
                by such agencies (that are based upon the 
                Program Assessment Rating Tool which is 
                designed to improve agency performance);
        in order to enact legislation to eliminate waste, 
        fraud, and abuse to ensure the efficient use of 
        taxpayer dollars;
            (2) all Federal programs should be periodically 
        reauthorized and funding for unauthorized programs 
        should be level-funded in fiscal year 2005 unless there 
        is a compelling justification;
            (3) committees should submit written justifications 
        for earmarks and should consider not funding those most 
        egregiously inconsistent with national policy;
            (4) the fiscal year 2005 budget resolution should 
        be vigorously enforced and legislation should be 
        enacted establishing statutory limits on appropriations 
        and a pay-as-you-go rule for new and expanded 
        entitlement programs; and
            (5) Congress should make every effort to offset 
        nonwar-related supplemental appropriations.
      And the House agree to the same.

                                   Jim Nussle,
                                   Rob Portman,
                                 Managers on the Part of the House.

                                   Don Nickles,
                                   Pete Domenici,
                                   Chuck Grassley,
                                   Judd Gregg,
                                Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

      The managers on the part of the House and the Senate at 
the conference on the disagreeing votes of the two Houses on 
the amendment of the House to the concurrent resolution (S. 
Con. Res. 95) setting forth the congressional budget for the 
United States Government for fiscal year 2005 and setting forth 
appropriate budgetary levels for fiscal years 2006 through 
2009, submit the following joint statement to the House and the 
Senate in explanation of the effect of the action agreed upon 
by the managers and recommended in the accompanying conference 
report:
      The House amendment struck all out of the Senate 
resolution after the resolving clause and inserted a substitute 
text.
      The Senate recedes from its disagreement to the amendment 
of the House with an amendment that is a substitute for the 
Senate resolution and the House amendment. The differences 
between the Senate resolution, the House amendment, and the 
substitute agreed to in conference are noted below, except for 
clerical corrections, conforming changes made necessary by 
agreements reached by the conferees, and minor drafting and 
clarifying changes.

                          DISPLAYS AND AMOUNTS

      The contents of concurrent budget resolutions are set 
forth in section 301(a) of the Congressional Budget Act of 
1974. The years in this document are fiscal years unless 
otherwise noted.
Senate Resolution
      The Senate resolution includes all of the items required 
as part of a concurrent budget resolution under section 301(a) 
of the Congressional Budget Act. The Senate resolution included 
the traditional function categories and set out levels for 
fiscal year 2005.
House Amendment
      The House amendment includes all of the items required as 
part of a concurrent budget resolution under section 301(a) of 
the Congressional Budget Act. It also included a new separate 
functional category, function 100, for Homeland Security. As 
permitted under section 301(b) of the Congressional Budget Act, 
Section 101(6) of the House amendment includes advisory levels 
on debt held by the public. The House Amendment revised the 
levels for the current year, fiscal year 2004.
Conference Agreement
      The conference agreement includes all of the items 
required as part of a concurrent budget resolution under 
section 301(a) of the Congressional Budget Act. As permitted 
under section 301(b) of the Congressional Budget Act, Section 
101(6) of the conference agreement includes advisory levels on 
debt held by the public. The conference agreement does not 
include a function 100.

                     AGGREGATE AND FUNCTION LEVELS

      The following tables are included in this section:

Conference Report on the Fiscal Year 2005 Budget Resolution: 
        Aggregate and Function Levels
Senate-Passed Fiscal Year 2005 Budget Resolution: Aggregate and 
        Function Levels
House-Passed Fiscal Year 2005 Amendment: Total Spending and 
        Revenues
House-Passed Fiscal Year 2005 Amendment: Discretionary Spending
House-Passed Fiscal Year 2005 Amendment: Mandatory Spending


                         FUNCTIONS AND REVENUES

      Pursuant to section 301(a)(4) of the Budget Act, the 
budget resolution must set appropriate levels for each major 
functional category based on the 302(a) allocations and the 
budgetary totals.
      The respective levels of the Senate resolution, the House 
amendment, and the conference agreement for each major budget 
function and revenue totals are discussed in the following 
section.
      Note: In the House amendment as passed, funding amounts 
for certain homeland security activities were moved out of 
their customary functions and into a separate category, 
Function 100--Homeland Security. Therefore, the House-passed 
totals in these functions do not precisely correspond with 
those in the Senate-passed resolution. The functions affected 
are Function 050 (non-military activities only), Function 150, 
Function 250, Function 270, Function 300, Function 350, 
Function 370, Function 400, Function 450, Function 500, 
Function 550, Function 570, Function 600, Function 700, 
Function 750, and Function 800. The customary correspondence 
was restored in the process of developing the conference 
agreement.
      The conference agreement provides aggregate discretionary 
spending in 2005 of $814.261 billion in budget authority and 
$890.812 billion in outlays including outlays flowing from 
prior-year emergencies. These two aggregate numbers are 
allocated to the Appropriations Committees to be suballocated 
to their 13 individual appropriations subcommittees as required 
by section 302 of the Budget Act.

                                REVENUES

      Federal revenues are taxes and other collections from the 
public that result from the government's sovereign or 
governmental powers. Revenues contained in the budget 
resolution reflect all of the Federal government's various tax 
receipts that are classified as ``on budget.'' This includes 
individual income taxes, corporate income taxes, excise taxes, 
estate and gift taxes, customs duties and miscellaneous 
receipts (which include deposits of earnings by the Federal 
Reserve System, fines, penalties, fees for regulatory services, 
and others). The component of social insurance taxes that is 
collected for the Social Security system--the Old Age and 
Survivors and Disability Insurance [OASDI] payroll tax--is 
``off budget.'' The remaining social insurance taxes (the 
Hospital Insurance [HI] payroll tax portion of Medicare, the 
Federal Unemployment Tax Act [FUTA] payroll tax, railroad 
retirement and other retirement systems) are all on budget. 
Pursuant to the Congressional Budget Act of 1974 and the Budget 
Enforcement Act of 1990, Social Security payroll taxes, which 
constitute slightly more than a quarter of all Federal 
receipts, are not included in the budget resolution.
      Under current law, federal tax collections are projected 
to total $11.8 trillion over the next five years. For 2004, 
total revenues are projected to be 15.9 percent of gross 
domestic product [GDP], far below the post-World War II average 
of 17.9 percent. Over the period covered by the budget 
resolution, 2005-2009, total baseline revenues are projected to 
average 17.8 percent of GDP (nearly back to the long-term 
historical average). Even though this conference agreement 
assumes policies producing a net reduction in tax revenues, 
total federal taxes are still projected to rise from 16.8 
percent of GDP in 2005 to 18.2 percent of GDP in 2009--above 
the historical average. The increase in Federal taxes relative 
to GDP occurs because of provisions in the tax code that are 
not indexed fully for inflation and real, inflation-adjusted, 
income growth. The tendency for taxes to increase relative to 
the size of the economy due to inflation and a growing economy 
highlights the need to regularly adjust tax policies to avoid 
an ever-increasing tax burden on our economy.
Senate Resolution
      The Senate resolution assumes total revenues of $11.7 
trillion over the next five years, $0.1 trillion less than 
baseline, climbing from 15.9 percent of GDP this year to 18.0 
percent of GDP by 2009.
      The Senate resolution assumes that the accelerated tax 
relief provisions in the 2003 Jobs and Growth Tax Relief 
Reconciliation Act [JGTRRA] that expire at the end of 2004 
($1,000 child credit, marriage penalty relief and a one-year 
extension of the 10-percent income tax bracket expansion) are 
permanently extended. The resolution assumes that the repeal of 
the death tax is accelerated by one year to 2009. The 
resolution reconciles the Finance Committee for a reduction in 
revenues consistent with these changes through 2009 (the scope 
of the budget resolution). The Finance Committee is instructed 
to report legislation to reduce revenues by $80.6 billion over 
the 2005-2009 period.
      The Senate resolution assumes, but does not reconcile, 
another $22.7 billion in tax relief over five years; this 
reflects making permanent: the JGTRRA dividends and capital 
gains tax rate structures, the 2001 Economic Growth and Tax 
Relief Reconciliation Act marginal rate reductions, estate tax 
repeal, education incentives, modifications of pension plans, 
and other incentives for families and children (adoption tax 
credit, employer-provided child care tax credit, and dependent 
care tax credit).
      The Senate resolution assumes $23.1 billion in tax relief 
for the President's proposal for a one-year extension of the 
alternative minimum tax exemption amount and the treatment of 
personal credits under the AMT. The resolution assumes $15 
billion in tax relief related to energy policy legislation. The 
resolution also assumes the revenue impact of medical 
malpractice reform.
      The Senate resolution assumes that Congress will act to 
close tax loopholes identified by the President and by the tax-
writing committees. For example, the Senate resolution assumes 
revenue from the President's proposal to increase disclosure of 
tax shelters and increase penalties for failure to disclose 
those shelter arrangements, from the President's proposal to 
shut down abusive leasing transactions between U.S. 
corporations and tax-exempt entities (so-called ``SILO'' 
transactions), and from the Finance Committee's proposal to 
shut down Enron-related tax shelters. The Senate resolution 
assumes that the revenue raised by closing loopholes and 
reducing fraud (such as in the Earned Income Credit, see 
function 600) is available to offset tax relief provisions that 
have been recommended by the President and supported by the 
Committee, such as the proposal to allow individuals to deduct 
the cost of high-deductible health plans, as well as many 
proposals that are being considered by Congress.
      During Senate consideration of the 2005 budget 
resolution, the Senate adopted by voice vote a Landrieu 
amendment (S.A. 2775) that increased revenues by $876 million 
in 2005 and by $5.5 billion over the 2005-2009 period.
House Amendment
      The House amendment calls for $1.457 trillion in on-
budget revenue for fiscal year 2005, and $8.539 trillion over 
2005-2009. Total revenue in the House amendment is $2.030 
trillion for fiscal year 2005 and $11.691 trillion over 2005-
2009. The House amendment assumes policies with a revenue 
impact of $19.919 billion for fiscal year 2005 and $145.799 
billion over 2005-2009. These effects are principally the 
result of preventing automatic tax increases that would 
otherwise occur.
      Although the House amendment does not explicitly define 
specific changes in tax policy, the revenue levels of the 
amendment are consistent with a general policy of not 
increasing taxes compared to policies currently in place. In 
particular, the amendment includes adjustments to revenue of 
sufficient size to accommodate continuation of specific 
provisions that are set to expire, including:
            No tax increase for those claiming the child tax 
        credit. The amendment provides for retaining the 
        current credit level of $1,000 per child. It assumes 
        Congress will act to prevent a reduction in the credit, 
        to $700 per child, scheduled to occur in 2005. In other 
        words, the House amendment accommodates changes to 
        prevent a potential tax increase of $600 on a family 
        with two children--from that provision alone--that 
        would otherwise occur.
            No increase in the marriage penalty. The amendment 
        accommodates changes to prevent a scheduled reduction 
        in the upper bound of the 15-percent bracket and 
        standard deduction for a married couple.
            No increase in taxes resulting from a reduction in 
        the upper threshold for the 10-percent income tax 
        bracket (e.g., scheduled to decline from $14,000 
        adjusted for inflation in 2004 for joint filers to 
        $12,000 in 2005 if not extended).
      The House amendment accommodates extending the small 
business expensing limits (the expensing of business equipment 
and computer software spending is scheduled to fall back to a 
limit of $25,000 in 2005, from the inflation-indexed level of 
$100,000 for 2003). Extension of bonus depreciation for 
corporate investment spending is not accommodated, reflecting 
the original intent of it serving as a temporary, short-run 
stimulus at the time of its adoption in 2002 and its extension 
in 2003.
      The House amendment sets the on-budget revenue level of 
the Federal government for 2004 and the next five years, but it 
is the responsibility of the Committee on Ways and Means to 
make the specific adjustments in law to implement these levels.
      The House amendment directs the Committee on Ways and 
Means to report legislation to the House floor by October 1, 
2004, making adjustments in current law to prevent tax 
increases of $13.182 billion in fiscal year 2005 and $137.580 
billion for fiscal year 2005-2009. These reconciled tax 
adjustments provide the full amount necessary to prevent tax 
increases from the provisions of law enacted in 2001 and 2003. 
The President's budget proposals assumed these amounts as a 
baseline adjustment.
Conference Agreement
      The conference agreement for revenues assumes a level 
sufficient to accommodate the extension of the $1,000 child 
credit, marriage penalty relief, and the expansion of the 10-
percent individual income tax bracket, all of which are 
scheduled to expire at the end of 2004. The conference 
agreement includes a reconciliation instruction to the House 
Ways and Means Committee and the Senate Finance Committee to 
report legislation by September 30, 2004, that reduces revenues 
by $22.9 billion and that increases related outlays by $4.6 
billion, which is sufficient to accommodate a one-year 
extension of certain expiring tax cuts. The reconciled amounts 
provide an amount sufficient to prevent the tax increases that 
would occur if these provisions were allowed to expire.
      The conference agreement also can accommodate, but does 
not reconcile, $27.7 billion (over five years) of tax relief.

                     Function 050: National Defense

Function Summary
      Function 050 includes funds to develop, maintain, and 
equip the military forces of the United States. More than 95 
percent of the funding in this function goes to Function 051--
Department of Defense [DOD] military activities; the remaining 
funding in the function applies to atomic energy defense 
activities of the Department of Energy (Function 053), and 
other defense-related activities (Function 054).
      Function 050 budget authority rose from $292.3 billion in 
fiscal year 1999 to $463.6 billion in fiscal year 2004, a 9.7-
percent average annual growth rate. During the same time 
period, outlays rose from $274.9 billion to $453.0 billion, a 
10.5 percent average annual growth rate (these figures include 
the effects of supplemental spending). The largest component of 
this was the budget of the Department of Defense, whose budget 
authority grew from $278.5 billion in fiscal year 1999 to 
$443.8 billion in 2004, a 9.8 percent average annual increase.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function would total $420.8 billion in budget authority 
and $447.1 billion in outlays for 2005. This represents a 
decrease of $38.3 billion in budget authority (-8.3 percent) 
and $4.8 billion in outlays (-1.1 percent) from the 2004 level, 
factoring in $65.1 billion in budget authority provided in the 
2004 Emergency Supplemental for military operations in Iraq and 
Afghanistan. When the Emergency funding is excluded the Senate 
resolution for 2005 represents an increase of $26.8 billion in 
budget authority (6.8 percent) above the 2004 level.
      To address the ongoing costs of military operations in 
Iraq and Afghanistan, the Senate resolution includes a $30 
billion reserve for supplemental appropriations. This ``war 
reserve'' is described in the enforcement title. When the war 
reserve is included, the Senate resolution for function 050 
represents an increase of $56.8 billion in budget authority 
(14.4 percent) above the 2004 level.
      The Senate resolution reflects the President's request 
for defense. Ultimately, the conference report on the 2005 
budget resolution will allocate one discretionary level to the 
Appropriations Committee (302(a) allocation), and it is in the 
jurisdiction of the Appropriations Committee, not the Budget 
Committee, to set appropriation levels for 2005 for all 
discretionary programs. In light of that reality, the Senate 
resolution encourages the Appropriations Committee to give 
careful consideration to the President's $72 million requested 
increase for the Radiation Exposure Compensation Act to ensure 
adequate resources will be available to pay all claimants 
through 2005.
House Amendment
      Note: In the House amendment as passed, funding amounts 
for certain homeland security activities were moved out of this 
function into a separate category, Function 100--Homeland 
Security. The effect applied only to non-military, non-
Department of Defense activities. Accordingly, the House-passed 
totals in these functions do not precisely correspond with 
those in the Senate-passed resolution. The customary 
correspondence was restored in the process of developing the 
conference agreement.
      The amendment calls for $419.6 billion in budget 
authority and $447.1 billion in outlays in fiscal year 2005. 
The function totals are $2.321 trillion in budget authority and 
$2.285 trillion in outlays over 5 years. Mandatory spending is 
$1.4 billion in budget authority and $2.4 billion in outlays in 
fiscal year 2005, and totals $15.8 billion in budget authority 
and $16.9 billion in outlays over 5 years. Discretionary 
spending is $418.3 billion in budget authority and $444.7 
billion in outlays in fiscal year 2005; and over 5 years, it is 
$2.305 trillion in budget authority and $2.268 trillion in 
outlays.
            Mandatory
      Function 050 contains numerous small mandatory accounts 
such as stock funds, trust funds, and gift funds whose receipts 
vary from year to year. The resolution assumes 2005 mandatory 
spending that matches the President's request. For 2004, the 
amendment accommodates $13 million to retroactively compensate 
service members for purchase of domestic airline tickets used 
for travel from the Iraqi theater of war to their final 
destination. The Supplemental Appropriations Act for Fiscal 
Year 2004 (Public Law 108-106) specified that funds be used to 
reimburse service members, but DOD did not authorize 
disbursement until 19 December 2003. Under current government 
compensation rules, no decision can be implemented 
retroactively; hence there is a need to allocate direct 
spending to fund a provision that would specifically reimburse 
service members not compensated under the supplemental 
appropriation.
            Discretionary
      Figures show a recommended increase of 7 percent 
(excluding the 2004 supplemental), fully accommodating the 
President's request. Department of Defense discretionary 
funding, at $401.8 billion, matches the President's request. 
The national defense budget presented here is part of a 
multiyear plan enabling the military to fight the war against 
terrorism now, and to transform to counter unconventional 
threats in the future. Elsewhere (in Function 920) the 
resolution includes $50 billion to anticipate additional needs 
in the Afghanistan and Iraq theaters. This is a mid-range 
estimate for anticipated annual costs. It is not an attempt to 
predetermine the scope of operations or which weapons and 
supplies DOD will need, but rather an effort to make the budget 
reflect a likely future outlay.
      A special procedure provided for in the budget resolution 
would exempt appropriations related to the global war on 
terrorism, and hence a supplemental appropriation toward this 
end will not trigger a point of order.
      A saving of $199 million from the request in Functions 
053 and 054 is assumed for efficiencies; it should be noted, 
however, that the 2005 resolution total (including Homeland 
Security accounts) for these functions is $543 million more 
than the previous year's appropriations. This modest adjustment 
does not affect Department of Defense funding or ongoing 
contingency operations.
Conference Agreement
      The conference agreement assumes the President's 
requested levels for national defense plus $50 billion for 
supplemental appropriations for operations in the Afghan and 
Iraqi theaters. The conference agreement for this function 
reflects total spending of $472.2 billion in budget authority 
and $474.3 billion in outlays for fiscal year 2005. Mandatory 
spending for this function is $1.4 billion in budget authority 
and $2.4 billion in outlays in fiscal year 2005. Discretionary 
spending for this function is $470.8 billion in budget 
authority and $471.9 billion in outlays in fiscal year 2005.
      During the conference on the budget resolution, conferees 
received information that the Department of Defense is likely 
to reach the current statutory limit on the number of military 
housing projects allowed under the Military Housing 
Privatization Initiative [MHPI] sometime during fiscal year 
2005. The administration and the General Accounting Office are 
reviewing the program. The conferees understand the importance 
of improved military housing for the quality of life of service 
personnel and their families and are committed to working with 
the committees of jurisdiction to address procedural issues 
that could apply to legislation allowing a temporary extension 
of military family housing improvements.

                  Function 150: International Affairs

Function Summary
      Function 150 includes international development and 
humanitarian assistance; international security assistance; the 
conduct of foreign affairs; foreign information and exchange 
activities; and international financial programs. Function 150 
supports the Department of State and related international 
affairs organizations including the U.S. Agency for 
International Development [USAID].
      Function 150 budget authority rose from $37.9 billion in 
fiscal year 1999 to $43.7 billion in fiscal year 2004, a 2.9 
percent average annual growth rate. During the same time 
period, outlays rose from $15.2 billion to $29.3 billion, a 
14.0 percent average annual growth rate. The largest component 
of this was the budget of the Department of State, whose budget 
authority grew from $8.8 billion in 1999 to $10.6 billion in 
fiscal year 2004, a 3.7 percent average annual increase.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of $32.3 billion in budget authority and $37.0 
billion in outlays for 2005. This represents a decrease of 
$16.3 billion in budget authority (-33.6 percent) and an 
increase of $2.9 billion in outlays (8.5 percent) from the 2004 
level, factoring in $21.8 billion in budget authority provided 
in the 2004 Emergency Supplemental for international affairs 
activities (including $19.4 billion for international relief 
and reconstruction activities in Iraq). When this funding is 
excluded the resolution for 2005 represents an increase of $5.5 
billion in budget authority (20.3 percent).
      The Senate resolution reflects the President's request 
for international affairs (Lugar Amendment 2845) plus $730 
million in additional funding. The Senate resolution assumes 
$330 million would be added to the requested level for the 
Child Survival and Health program (DeWine Amendment 2697), $300 
million would be added to the requested level for fighting 
global HIV/AIDS (Lugar Amendment 2845), and $100 million would 
be added for Haiti reconstruction (DeWine Amendment 2715). The 
amendments adopted by the Senate included corresponding 
negative entries for function 920 to result in no net effect on 
the overall budget.
      The Senate resolution supports the use of United States 
contributions to the Global Fund to Fight AIDS, Tuberculosis 
and Malaria as leverage for increasing the amount of 
international financial support in this battle. However, the 
Senate is concerned by recent reports that suggest the Fund has 
been making grants to finance the purchase of ineffective 
malaria drugs, contrary to preferred World Health Organization 
policy on malaria treatment. The reports have called into 
question whether the nascent Fund has the necessary mechanisms 
in place to guarantee the effective use of United States and 
international contributions to the Fund. Because continued 
support for the Fund depends upon transparency and 
accountability in the Fund's grant-making process, the Senate 
believes the United States should work with foreign governments 
and international organizations to ensure that the Fund has the 
necessary capabilities to use its contributions most 
effectively.
            Mandatory
      The resolution assumes no mandatory increases or 
decreases in this function.
House Amendment
      The amendment calls for $26.5 billion in budget authority 
and $32.8 billion in outlays in fiscal year 2005. The function 
totals are $138.5 billion in budget authority and $140.0 
billion in outlays over 5 years. Mandatory spending is -$0.4 
billion in budget authority and -$3.0 billion in outlays in 
fiscal year 2005, and totals $2.8 billion in budget authority 
and -$13.0 billion in outlays over 5 years. Discretionary 
spending is $26.9 billion in budget authority and $35.8 billion 
in outlays in fiscal year 2005; and over 5 years, it is $135.8 
billion in budget authority and $153.0 billion in outlays.
      The negative budget authority and outlay levels in 
mandatory spending reflect receipts of the Foreign Military 
Sales Trust Fund, interest income earned on U.S. Government 
securities held by the Exchange Stabilization Fund, and the 
liquidation of economic assistance loans, foreign military 
financing loans, Export-Import Bank loans, loans to the United 
Kingdom, and loan guarantees to Israel.
            Mandatory
      There are no specific mandatory assumptions in this 
function. In fiscal year 2005, the mandatory budget authority 
and outlay levels are negative, reflecting receipts of the 
Foreign Military Sales Trust Fund, and the liquidation of 
economic assistance loans, foreign military financing loans, 
Export-Import Bank loans, loans to the United Kingdom, and loan 
guarantees to Israel.
            Discretionary
      Specific programs will be increased or decreased when the 
Appropriations subcommittees write their respective bills. 
Outyear levels result from applying a simple computation of 
modest growth, consistent with the President's budget. Outyear 
levels are not binding and will be revisited in subsequent 
years.
Conference Agreement
      The conference agreement for this function reflects total 
spending of $28.9 billion in budget authority and $32.8 billion 
in outlays for fiscal year 2005. Mandatory spending for this 
function is -$357 million in budget authority and -$3.0 billion 
in outlays in fiscal year 2005. Discretionary spending for this 
function is $29.3 billion in budget authority and $35.8 billion 
in outlays in fiscal year 2005. The conference agreement for 
International Affairs is sufficient to support an historic 
level of funding for HIV/AIDS.

          Function 250: General Science, Space, and Technology

Function Summary
      Function 250 consists of General Science, Space and 
Technology programs. The largest component of this function--
about two-thirds of total spending--is for the space flight, 
research, and supporting activities of the National Aeronautics 
and Space Administration [NASA]. The function also contains 
general science funding, including the budgets for the National 
Science Foundation [NSF], and the fundamental science programs 
of the Department of Energy [DOE].
      Function 250 budget authority rose from $18.9 billion in 
fiscal year 1999 to $23.4 billion in fiscal year 2004, a 4.4 
percent average annual growth rate. During the same period, 
outlays rose from $18.1 billion to $22.3 billion, a 4.2 percent 
average annual growth rate.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of $24.2 billion in budget authority and $23.6 
billion in outlays for 2005. This represents an increase of 
$0.9 billion in budget authority and $1.4 billion in outlays 
from the 2004 level. The resolution includes the following 
specific assumptions:
      For NASA (including function 250 and 400 accounts), $16.2 
billion is assumed, a 5.6 percent increase over 2004. The 
Senate resolution assumes fully funding the President's request 
for NASA in 2005 and the outyears. The Committee-reported 
resolution did not assume fully funding the President's request 
in 2005, but an amendment (SA 2733) offered by Senator Sessions 
and adopted by the Senate increased NASA by $600 million in 
2005 and reduced function 800 by a like amount, resulting in no 
net effect on the overall budget.
      For the Department of Energy Office of Science, the 
resolution rejects the President's requested cut, and instead 
assumes an additional $38 million (1.1 percent) above the 2004 
level.
            Mandatory
      The Senate resolution assumes no mandatory increases or 
decreases for this function.
House Amendment
      The amendment calls for $22.8 billion in budget authority 
and $22.5 billion in outlays in fiscal year 2005. The function 
totals are $115.2 billion in budget authority and $113.5 
billion in outlays over five years. Mandatory spending is $30 
million in budget authority and $111 million in outlays in 
fiscal year 2005, and totals $154 million in budget authority 
and $321 million in outlays over five years. Discretionary 
spending is $22.8 billion in budget authority and $22.3 billion 
in outlays in fiscal year 2005; and over five years, it is 
$115.1 billion in budget authority and $113.2 billion in 
outlays.
            Mandatory
      There are no specific mandatory assumptions in this 
function.
            Discretionary
      Specific programs will be increased or decreased when the 
Appropriations subcommittees write their respective bills. 
Outyear levels result from applying a simple computation of 
modest growth, consistent with the President's budget. Outyear 
levels are not binding and will be revisited in subsequent 
years.
Conference Agreement
      The conference agreement for this function reflects total 
spending of $23.9 billion in budget authority and $23.3 billion 
in outlays for fiscal year 2005. Mandatory spending for this 
function is $30 million in budget authority and $111 million in 
outlays in fiscal year 2005. Discretionary spending for this 
function is $23.9 billion in budget authority and $23.2 billion 
in outlays in fiscal year 2005.
      The conferees support the President's Vision for 
Exploration and believe the fiscal year 2005 funding for 
Function 250 should provide sufficient funding to initiate the 
process. Additionally, the bulk of the requested increase for 
fiscal year 2005 is for return to flight of the Space Shuttle 
and continued assembly and operations for the International 
Space Station. The Conferees hope that these two must-fund 
requirements will be taken into account during their 
consideration of the NASA appropriation. The conferees also 
recognize the importance of the research and education 
initiatives of the Department of Energy's Office of Science and 
the National Science Foundation.

                          Function 270: Energy

Function Summary
      Function 270 includes civilian energy and environmental 
programs of the Department of Energy [DOE] (it does not include 
DOE's national security activities--the National Nuclear 
Security Administration--which are in Function 050, or its 
basic research and science activities, which are in Function 
250). Function 270 also includes the Rural Utilities Service of 
the Department of Agriculture, the Tennessee Valley Authority 
[TVA], the U.S. Enrichment Corporation, the Federal Energy 
Regulatory Commission, and the Nuclear Regulatory Commission.
      Function 270 budget authority rose from $979 million in 
fiscal year 1999 to $2.4 billion in fiscal year 2004, a 19.2 
percent average annual growth rate. During the same time 
period, outlays dropped from $911 million to $84 million, a 
37.9 percent average annual reduction rate. Receipts, 
repayments, and electricity sales (negative spending) result in 
negative budget authority and are the primary causes for the 
drop in outlays.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of $2.0 billion in budget authority and $2.1 
billion in outlays for 2005. The Senate resolution includes the 
following specific assumptions:
      The Senate resolution includes $1 billion for non-defense 
Environmental Management, which is $86 million more than last 
year. There is also $7.0 billion for Defense Environmental 
Management, which is the same as the President's request and 
$365 million more than last year in function 050. This 
resolution does not assume that any of this funding will be 
delayed until legal uncertainties regarding high level nuclear 
waste are resolved.
      The resolution does not assume the President's cuts to 
Fossil Energy Research and Development, and instead funds the 
program at $673 million which is the same as last year.
      The resolution assumes $834 million for Energy supply 
which is the same level as the President's request and $81 
million more than last year's level. The resolution assumes 
that $55 million of this increase will be for Nuclear Energy, 
Science, and Technology, and will support the Generation IV 
Nuclear Energy Systems Initiative, Nuclear Hydrogen Initiative, 
and Advanced Fuel Cycle Initiative.
      During floor debate on the Senate resolution, the Levin 
amendment (SA 2817) was accepted on a roll call vote. This 
amendment reduced spending in this function by $1.7 billion by 
canceling the royalty in kind program for the Strategic 
Petroleum Reserve, $1.5 billion of this amount was then 
redirected towards Homeland Security activities in a reserve 
fund.
            Mandatory
      The Senate resolution includes a reserve fund for an 
energy bill totaling $261 million in fiscal year 2005 and $1.5 
billion over five years. This includes provisions dealing with 
renewable energy, oil and gas, coal, electricity, energy tax 
incentives, and ethanol.
House Amendment
      The amendment calls for $2.9 billion in budget authority 
and $1.2 billion in outlays in fiscal year 2005. The function 
totals are $13.0 billion in budget authority and $5.2 billion 
in outlays over five years. Mandatory spending is -$0.6 billion 
in budget authority and -$2.3 billion in outlays in fiscal year 
2005. Over the 2005-2009 period, mandatory spending is -$4.7 
billion in budget authority and -$12.7 billion in outlays due 
to increasing offsetting receipts from various loan repayments 
and liquidations, electricity sales, and fees. Discretionary 
spending is $3.5 billion in budget authority and $3.5 billion 
in outlays in fiscal year 2005; and over five years, it is 
$17.6 billion in budget authority and $17.9 billion in outlays.
            Mandatory
      As noted, the negative figures in mandatory spending 
result from increasing offsetting receipts from various loan 
repayments and liquidations, electricity sales, and fees.
      The amendment accommodates the conference version of the 
H.R. 6, the Energy Policy Act of 2003, which passed the House 
on 18 November 2003, but has not been passed by the Senate. The 
assumption is reflected in the allocation to the Committee on 
Energy and Commerce. The authorizing committee is free to 
determine its own policies within the allocation limits.
            Discretionary
      Specific programs will be increased or decreased when the 
Appropriations subcommittees write their respective bills. 
Outyear levels are not binding and will be revisited in 
subsequent years.
Conference Agreement
      The conference agreement for this function reflects total 
spending of $3.0 billion in budget authority and $1.4 billion 
in outlays for fiscal year 2005. Mandatory spending for this 
function is -$0.6 billion in budget authority and -$2.4 billion 
in outlays in fiscal year 2005. Discretionary spending for this 
function is $3.6 billion in budget authority and $3.8 billion 
in outlays in fiscal year 2005.

            Function 300: Natural Resources and Environment

Function Summary
      Function 300 consists of water resources, conservation, 
land management, pollution control and abatement, and 
recreational resources. Major departments and agencies in this 
function are the Department of Interior, including the National 
Park Service [NPS], the Bureau of Land Management [BLM], the 
Bureau of Reclamation, and the Fish and Wildlife Service [FWS]; 
conservation-oriented and land management agencies within the 
Department of Agriculture [USDA] including the Forest Service; 
the National Oceanic and Atmospheric Administration [NOAA] in 
the Department of Commerce; the Army Corps of Engineers; and 
the Environmental Protection Agency [EPA].
      Function 300 budget authority rose from $24.4 billion in 
1999 to $32.3 billion in 2004, a 5.8 percent average annual 
growth rate. During the same period, outlays increased from 
$24.0 billion to $30.5 billion, a 4.9 percent average annual 
increase.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of $33.3 billion in budget authority and $29.4 
billion in outlays for 2005. The Senate passed resolution 
includes the following specific assumptions:
      The resolution does not accept the Administration's cuts 
to the Corps of Engineers and instead assumes $4.4 billion, 
which is the same level of funding as last year. This includes 
$1.4 billion for operation and maintenance and $1.6 billion for 
construction.
      The resolution assumes $11.6 billion for the 
Environmental Protection Agency. This includes $7.0 billion for 
State and Tribal Assistance Grants plus an additional $65 
million for the new clean school bus program. This level also 
includes the President's request of $1.4 billion for Superfund, 
which is an increase of $138 million or 11 percent from last 
year. This level also assumes $3 million within the EPA budget 
to fund the establishment of an independent Office of 
Ombudsman, pending enactment of authorizing legislation.
      The Senate resolution assumes $907 million for fire 
suppression within the Forest Service and Department of the 
Interior. This is the same as the President's request and $117 
million more than was spent last year after adjusting emergency 
funding out of the 2004 level. In addition, the resolution 
includes language that will allow up to $500 million in 
additional funds for wildfire suppression to be appropriated 
without penalty if the 10-year average is appropriated in the 
Interior Appropriations bill. In addition the Senate resolution 
supports the establishment of cost containment measures for 
fire suppression.
      The resolution does not accept the Administration's cuts 
to State and Private Forestry, and instead assumes $429 
million, the same level of funding as last year. The Committee 
recognizes the important role that these programs play in order 
to implement cooperative forestry across federal, state and 
private lands.
      The resolution assumes $5 million will be spent within 
the Bureau of Land Management on wilderness proposals resulting 
from the collaborative process.
      The resolution supports payments of $53 million in 2005 
and $265 million over 5 years from the Abandoned Mine 
Reclamation Fund to the certified public lands states.
      The resolution supports continued funding of programs 
within the expired Conservation Spending Caps.
      The resolution assumes $100 million for Pacific Coastal 
Salmon Recovery. This is an $11 million increase over last 
year's level and the same as the President's request.
      The resolution assumes that $410 million from mandatory 
Farm Bill conservation programs will be used as discretionary 
offsets in 2005.
      During floor debate on the Senate resolution, the Senate 
accepted a Wyden amendment (SA 2717) by voice vote which added 
$343 million in 2005 to this function for hazardous fuels 
reduction and reduced function 920 by the same amount. In 
addition, the Senate accepted a Crapo amendment (SA 2784) by 
voice vote that added $3 billion in 2005 to this function for 
the EPA clean and safe drinking water revolving funds and was 
offset in function 920.
            Mandatory
      The Senate passed resolution assumes the President's 
proposal allowing the Park Service to change rental payments to 
the city of San Francisco for the Hetch Hetchy Dam in Yosemite 
National Park.
      The resolution assumes a technical correction to the 
baseline that will allow technical assistance for the 
Conservation Reserve Program and the Wetlands Reserve Program 
to come out of mandatory Agriculture funds as was intended in 
2002 Farm Bill.
      The Committee adopted an amendment by Senator Grassley 
during the Committee markup that added $531 million over five 
years to this function to support farm conservation programs.
House Amendment
      The amendment calls for $31.2 billion in budget authority 
and $30.9 billion in outlays in fiscal year 2005. The function 
totals are $159.6 billion in budget authority and $159.9 
billion in outlays over five years. Mandatory spending is $2.7 
billion in budget authority and $1.8 billion in outlays in 
fiscal year 2005. Over the 2005-2009 period, mandatory spending 
increases by $15.7 billion in budget authority and $15.3 
billion in outlays. Discretionary spending is $28.5 billion in 
budget authority and $29.1 billion in outlays in fiscal year 
2005; and over five years, it is $143.9 billion in budget 
authority and $144.6 billion in outlays.
            Mandatory
      The assumptions accommodate legislation, H.R. 313, to 
assist the United Mine Workers of America Combined Benefit Fund 
in averting financial crisis by transferring to it any 
additional interest from the Abandoned Mine Land Reclamation 
Fund. The measure was reported by the Committee on Resources on 
1 October 2003. The resolution also accommodates legislation 
that passed the House last year and is awaiting Senate action 
to increase the waiver requirement for certain local matching 
requirements for grants provided to American Samoa, Guam, the 
Virgin Islands, or the Commonwealth of the Northern Mariana 
Islands. These assumptions are reflected in the allocation to 
the Committee on Resources, which is free to determine its own 
policies within the allocation limits. The accommodation is 
necessary to allow for a potential conference agreement.
            Discretionary
      The amendment can accommodate full funding for the 
Healthy Forests Initiative legislation (H.R. 1904) signed into 
law last year. The Healthy Forests Initiative is a critical 
tool for reducing the threat of severe wildfire and insect 
infestation in heavily forested communities.
      The amendment also can accommodate full funding for 
numerous other Federal agencies and programs, including the 
Army Corps of Engineers, the Superfund program, and reducing 
the Operations and Maintenance backlog within the National Park 
Service.
      Outyear levels are not binding and will be revisited in 
subsequent years.
Conference Agreement
      The conference agreement for this function reflects total 
spending of $32.1 billion in budget authority and $31.4 billion 
in outlays for fiscal year 2005. Mandatory spending for this 
function is $2.8 billion in budget authority and $1.8 billion 
in outlays in fiscal year 2005. Discretionary spending for this 
function is $29.3 billion in budget authority and $29.7 billion 
in outlays in fiscal year 2005.
      The agreement assumes a technical correction to the 
baseline that will allow technical assistance for the 
Conservation Reserve Program and the Wetlands Reserve Program 
to come out of mandatory agriculture spending.
      The funding levels in this agreement assume funding 
levels equal to the 10 year average for wildland fire 
suppression within the Forest Service and Department of 
Interior.
      The agreement can accommodate level funding for the Army 
Corps of Engineers.
      The conferees support restoring funding for beach 
renourishment projects for local communities with contractual 
agreements with the Army Corps of Engineers. These projects are 
critical for combating erosion caused by the federal 
government's coastal navigation construction projects.

                       Function 350: Agriculture

Function Summary
      Function 350 includes funds for direct assistance and 
loans to food and fiber producers, export assistance, market 
information, inspection services, and agricultural research. 
Farm policy is driven by the Farm Security and Rural Investment 
Act of 2002, which provides producers with continued planting 
flexibility while protecting them against unique uncertainties 
such as poor weather conditions and unfavorable market 
conditions.
      Function 350 budget authority fell from $23.9 billion in 
1999 to $20.2 billion in 2004, a 3.3 percent average annual 
reduction rate. During the same time period, outlays dropped 
from $22.9 billion to $18.8 billion, a 3.9 percent average 
annual reduction rate. The primary reason for this reduction is 
more favorable overall commodity prices. Commodity prices often 
fluctuate from year to year. This has a significant impact on 
mandatory programs, which account for the vast majority of 
spending within Function 350.
Senate Resolution
            Discretionary
      The resolution assumes discretionary spending in this 
function of $5.4 billion in budget authority and $5.6 billion 
in outlays for 2005. This represents a decrease of $0.2 billion 
in budget authority and an increase of $0.1 billion in outlays 
from the 2004 level. The Committee-reported resolution includes 
the following specific assumptions:
      The resolution assumes an increase of $294 million in 
budget authority from last year's level for activities related 
to homeland security, a 94 percent increase over last year. 
This includes a $115 million increase for the Agriculture 
Research Service to provide for the acceleration of the 
completion of the animal research lab in Ames, Iowa.
      The resolution assumes an increase of $85 million over 
last year for activities to respond to the discovery of Bovine 
Spongiform Encephalopathy [BSE] in the United States and 
Canada. Of this increase, $50 million is in this function for 
the Animal and Plant Health Inspection Service. The remaining 
$35 million increase is for the Food Safety Inspection Service 
and appears in function 550.
      The resolution assumes $105 million for PL 480 Title I 
funding. This is the same as last year, but $15 million over 
the President's request.
      The resolution did not accept any of the Administration's 
proposed user fees for this function.
      The resolution assumes $260 million in discretionary 
savings by blocking funding for the Initiative for Future 
Agriculture and Food Systems. This proposal was enacted in the 
2004 Agriculture Appropriations Bill.
            Mandatory
      The resolution includes an amendment (by Senator 
Grassley) adopted during mark-up to reduce farm program 
payments in this function and provide additional funds for 
agriculture conservation programs, food nutrition programs and 
rural development programs in functions 300, 450 and 600.
House Amendment
      The amendment calls for $21.1 billion in budget authority 
and $20.5 billion in outlays in fiscal year 2005. The function 
totals are $117.7 billion in budget authority and $112.9 
billion in outlays over five years. Mandatory spending is $16.3 
billion in budget authority and $15.4 billion in outlays in 
fiscal year 2005. Over the 2005-2009 period, mandatory spending 
increases by $93.4 billion in budget authority and $88.4 
billion in outlays. Discretionary spending is $4.8 billion in 
budget authority and $5.1 billion in outlays in fiscal year 
2005; and over five years, it is $24.3 billion in budget 
authority and $24.6 billion in outlays.
            Mandatory
      The amendment assumes no new mandatory spending 
proposals.
            Discretionary
      The amendment can accommodate full funding for enhanced 
efforts to protect the food supply from Bovine Spongiform 
Encephalopathy [BSE], or Mad Cow Disease, as well as other 
important food safety and agricultural research programs within 
function 350. Outyear levels are not binding and will be 
revisited in subsequent years.
Conference Agreement
      The conference agreement for this function reflects total 
spending of $21.8 billion in budget authority and $21.0 billion 
in outlays for fiscal year 2005. Mandatory spending for this 
function is $16.5 billion in budget authority and $15.5 billion 
in outlays in fiscal year 2005. Discretionary spending for this 
function is $5.3 billion in budget authority and $5.5 billion 
in outlays in fiscal year 2005.
      The conference agreement assumes funding for agriculture 
related homeland security activities that could accommodate a 
substantial increase in Agriculture Research Service.

               Function 370: Commerce and Housing Credit

Function Summary
      Function 370 includes four components: mortgage credit 
(usually negative budget authority because receipts tend to 
exceed the losses from defaulted mortgages); the Postal Service 
(mostly off budget); deposit insurance (negative outlays 
resulting from payment of deposit insurance premiums currently 
more than outweigh low outlays for losses); and other 
advancement of commerce (the majority of the discretionary and 
mandatory spending in this function). This last component 
includes most of the Commerce Department, including the 
International Trade Administration, Bureau of Economic 
Analysis, Patent and Trademark Office, National Institute of 
Standards and Technology, National Telecommunications and 
Information Administration, and the Bureau of the Census; as 
well as independent agencies such as the Securities and 
Exchange Commission, the Commodity Futures Trading Commission, 
the Federal Trade Commission, the Federal Communications 
Commission, and all the activities of the Small Business 
Administration that are not related to disaster assistance.
      About $7 billion of the spending in function 370 is out 
of the FCC's Universal Service Fund, which subsidizes service 
to rural and low-income users, high-cost areas, and public 
institutions such as schools and libraries. This spending has 
no net impact on the deficit because it is offset on the 
revenue side of the budget by fees collected by providers of 
telecommunications services from their customers.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of $1.8 billion in budget authority and -$0.5 
billion in outlays for 2005 (several activities in this 
function are funded by offsetting collections that exceed the 
level of spending). The Senate resolution includes the 
following specific assumptions:
      The President's requested increases in 2005 (compared to 
2004) for conducting the decennial census (45 percent), for 
strengthening the Securities and Exchange Commission (12.4 
percent), and for making homeland security investments in the 
Department of Commerce (4.6 percent).
      The President's budget proposes to eliminate the Advanced 
Technology Program [ATP] in the Department of Commerce because 
private investors are better able than the federal government 
to decide which research efforts should be funded. The U.S. 
venture-capital markets are the best developed in the world, do 
an effective job of funding new ideas, and focus on many of the 
same research areas as the ATP. Venture-capital funds have 
grown enormously since the ATP was conceived. Therefore, this 
proposal is reflected in the Senate resolution.
      The President's budget proposes to terminate payments of 
tariffs (collected under antidumping or countervailing duty 
orders) over to affected industries. Before 2001, these tariffs 
were deposited in and retained by the Treasury. Since then, the 
tariffs have become mandatory payments. The World Trade 
Organization has ruled that such payments violate international 
trade agreements. On March 2, 2004, CBO released an analysis of 
these payments that said the following:

            The Continued Dumping and Subsidy Offset Act 
        [CDSOA] of 2000 can be expected to result in more 
        antidumping and countervailing-duty petitions and more 
        support for those petitions by import-competing 
        industries. That, in turn, would lead to the initiation 
        of more AD/CVD cases, the imposition of more duties, 
        and greater consequent harm to the economy as a whole . 
        . . Under CDSOA, the firm sees a lower cost than the 
        true cost to the economy of its output. As a result, 
        the firm increases its output beyond the point where 
        the unsubsidized cost to the firm--and thus to the 
        economy--is balanced by the price. Since the price or 
        value is less than the cost to the economy of that 
        additional output, the economic welfare of the country 
        is reduced . . . Consequently, U.S. gross domestic 
        product and gross national product decline.

This proposal is assumed in the Senate resolution, saving $1.45 
billion in budget authority in 2005.
      The Senate resolution reflects the Snowe amendment (SA 
2839) adopted by a voice vote in the Senate to increase the 
level in this function by $121 million in budget authority in 
2005 for programs of the Small Business Administration. The 
amendment included a corresponding negative entry for function 
920 to result in no net effect on the overall budget.
            Mandatory
      The Senate resolution assumes no mandatory increases or 
decreases in this function.
House Amendment
      For on-budget amounts, the House amendment calls for 
$10.8 billion in budget authority and $5.8 billion in outlays 
in fiscal year 2005. The function totals are $50.0 billion in 
budget authority and $23.3 billion in outlays over five years. 
Mandatory spending is $9.7 billion in budget authority and $4.8 
billion in outlays in fiscal year 2005, and totals $44.4 
billion in budget authority and $17.7 billion in outlays over 
five years. Discretionary spending is $1.1 billion in budget 
authority and $1.0 billion in outlays in fiscal year 2005; and 
over five years, it is $5.6 billion in budget authority and 
$5.6 billion in outlays.
            Discretionary
      The Committee on Appropriations will determine how funds 
will be apportioned among the various discretionary programs. 
Specific programs will be increased or decreased when the 
Appropriations subcommittees write their respective bills. 
Outyear levels result from applying a simple computation of 
modest growth, consistent with the President's budget. Outyear 
levels are not binding and will be revisited in subsequent 
years.
            Mandatory
      The House amendment accommodates the following measures: 
H.R. 758, the Business Checking Freedom Act, which passed the 
House on 1 April 2003; H.R. 522, the Federal Deposit Insurance 
Reform Act of 2003, which passed the House on 2 April 2003; and 
H.R. 1375, the Financial Services Regulatory Relief Act of 
2003, which passed the House on 18 March 2004. All three bills 
are awaiting action in the Senate. The assumptions are 
reflected in the allocation to the Committee on Financial 
Services.
Conference Agreement
      For on-budget spending, the conference agreement for this 
function reflects $9.3 billion in budget authority and $3.3 
billion in outlays for fiscal year 2005. Discretionary spending 
for this function is -$0.4 billion in budget authority and 
-$0.2 billion in outlays in fiscal year 2005. On-budget 
mandatory spending for this function is $9.7 billion in budget 
authority and $3.5 billion in outlays in fiscal year 2005.
      Including on- and off-budget spending, the conference 
agreement for this function reflects total spending of $7.2 
billion in budget authority and $1.2 billion in outlays for 
fiscal year 2005. Discretionary spending for this function is 
-$0.4 billion in budget authority and -$0.2 billion in outlays 
in fiscal year 2005. Mandatory spending for this function is 
$7.6 billion in budget authority and $1.4 billion in outlays in 
fiscal year 2005.

                     Function 400: Transportation 

Function Summary
      Function 400 includes the Federal Highway Administration; 
the Federal Transit Administration; the National Rail Passenger 
Corporation [Amtrak]; highway, motor carrier and rail safety 
programs; the Federal Aviation Administration; the aeronautical 
activities of the National Aeronautics and Space 
Administration; the Coast Guard; and the Maritime 
Administration.
      Function 400 budget authority rose from $51.6 billion in 
1999 to $69.2 billion in fiscal year 2004, a 6.1 percent 
average annual growth rate. During the same time period, 
outlays rose from $42.5 billion to $65.7 billion, a 9.1 percent 
average annual growth rate.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of $23.8 billion in budget authority and $66.2 
billion in outlays for 2005. This represents an increase of 
$0.1 billion in budget authority and $2.3 billion in outlays 
from the 2004 level.
      The Senate resolution reflects the President's full 
request for the homeland security activities in this function 
(a 13.2 percent increase over 2004).
            Discretionary and Mandatory
      The budgetary presentation of federal transportation 
programs is complicated by the fact that most of the budget 
authority for the programs is (because of committee 
jurisdictions) classified as mandatory while the related 
outlays are considered discretionary. The Senate-passed surface 
transportation bill for highways and transit (S. 1072--SAFETEA) 
exceeded the level allowed by the fiscal year 2004 budget 
resolution by $41 billion in contract authority over 2004-2009. 
In addition, the bill would increase the deficit by spending a 
net of $30 billion (over the next six years) more than the 
highway trust fund revenues that would be collected under 
current law (estimated to be $228 billion over 2004-2009, only 
a 14.6 percent increase over the $199 billion in highway trust 
fund receipts that were collected over 1998-2003 during TEA-
21.)
      The Administration has informed Congress that the 
President's senior advisors would recommend that he veto S. 
1072 as passed by the Senate. In light of this veto threat, the 
Senate resolution reflects the President's request for surface 
transportation mandatory contract authority (with related 
outlays on the discretionary side of the budget) for the next 
five years. As in the 2004 budget resolution, the Senate 
resolution for 2005 includes a mechanism by which these initial 
levels could be increased if legislation is considered by the 
Senate that would levy and deposit net new transportation user 
fee revenues (which are not already being collected by the 
federal government under current law) into the Highway Trust 
Fund.
      The President's proposal for the transportation 
reauthorization bill is $256 billion (in terms of the figures 
usually discussed, this includes both contract authority as 
well as an authorization of $8 billion in discretionary budget 
authority for transit programs for 2004-2009). This is a 17 
percent increase over the total level enacted in the previous 
authorization bill [TEA-21], which was $218 billion for 1998-
2003. In contrast, according to the CBO estimate of the bill as 
passed by the Senate, S. 1072 totals $322 billion (including 
discretionary budget authority for transit), which is a 48 
percent increase over TEA-21 and is 26 percent more than the 
President's request.
House Amendment
      The House amendment calls for $65.0 billion in budget 
authority and $62.0 billion in outlays in fiscal year 2005. The 
function totals are $339.4 billion in budget authority and 
$328.3 billion in outlays over five years. Mandatory spending 
is $47.2 billion in budget authority and $2.0 billion in 
outlays in fiscal year 2005, and totals $249.6 billion in 
budget authority and $8.8 billion in outlays over five years. 
Discretionary spending is $17.8 billion in budget authority and 
$60.0 billion in outlays in fiscal year 2005; and over five 
years, it is $89.8 billion in budget authority and $319.5 
billion in outlays. Homeland security components formerly found 
in Function 400--including the Transportation Security 
Administration, the United States Coast Guard, and the Federal 
Air Marshals--are recorded in Function 100: Homeland Security, 
and are consistent with the President's request.
            Discretionary
      Specific programs will be increased or decreased when the 
Appropriations subcommittees write their respective bills. 
Outyear levels are not binding and will be revisited in 
subsequent years.
            Mandatory
      The House amendment creates a reserve fund that allows 
the chairman of the House Budget Committee to adjust the 
allocation of budget authority to the Committee on 
Transportation and Infrastructure for any measure that 
reauthorizes surface transportation programs and provides new 
budget authority for highway and transit spending. The 
adjustment may only be made if it is offset by changes in law, 
either included in the same measure or by previously enacted 
legislation. The language in the House amendment regarding this 
contingency measure is identical to that included in the budget 
resolution for fiscal year 2004.
      The House amendment assumes a stream of mandatory budget 
authority for a reauthorization of surface transportation 
programs. It also creates a reserve fund to provide additional 
budget authority for such a bill to the extent that it is 
offset in the same or other legislation.
Conference Agreement
      The conference agreement for this function reflects total 
spending of $71.8 billion in budget authority and $68.6 billion 
in outlays for fiscal year 2005. Discretionary spending for 
this function is $24.1 billion in budget authority and $66.4 
billion in outlays in fiscal year 2005. Mandatory spending for 
this function is $47.7 billion in budget authority and $2.2 
billion in outlays in fiscal year 2005.
      Regarding the levels for the reauthorization of the 
highway bill, the Senate recedes to the House. The conference 
agreement includes an adjustment mechanism (section 311) to 
accommodate higher spending than the levels assumed in the 
conference agreement to the extent the additional spending is 
offset through reduced outlays from, or additional receipts to, 
the Highway Trust Fund.

            Function 450: Community and Regional Development

Function Summary
      Function 450 includes programs that provide Federal 
funding for economic and community development in both urban 
and rural areas, including: Community Development Block Grants 
[CDBGs]; the non-power activities of the Tennessee Valley 
Authority; the non-roads activities of the Appalachian Regional 
Commission; the Economic Development Administration [EDA]; and 
partial funding for the Bureau of Indian Affairs. Funding for 
disaster relief and insurance--including the Federal Emergency 
Management Agency [FEMA], now part of the Department of 
Homeland Security [DHS]--also appear here.
      Function 450 budget authority rose from $11.3 billion in 
fiscal year 1999 to $16.7 billion in fiscal year 2004, an 8.2 
percent average annual growth rate. During the same time 
period, outlays rose from $11.9 billion to $16.7 billion, a 7 
percent average annual growth rate.
      A factor in this growth was the presence of Federal 
Emergency Management Agency [FEMA] funding for first responders 
and one-time New York City recovery funds in the wake of the 
events of 9-11.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of $13.5 billion in budget authority and $15.2 
billion in outlays for 2005, a decrease of $2.2 billion in 
budget authority and $0.9 billion in outlays from the 2004 
level. The Senate resolution includes the following specific 
assumptions:
      For the Office of Domestic Preparedness, the Senate 
resolution fully supports the President's proposal for first 
responders and assumes $3.6 billion to ensure that they are 
properly trained and equipped. This includes $500 million for 
assistance to firefighters and $500 million for state and local 
law enforcement antiterrorism activities. Since 2001, Congress 
has appropriated close to $15 billion (or $20 billion if 
programs outside the Department of Homeland Security are 
included) for state and local first responders. The Senate 
notes with concern reports about misuse of money provided to 
states and localities under this program and supports policies 
to ensure these funds are being properly spent.
      The Senate resolution assumes $3.0 billion in 2005 for 
disaster relief activities. This level is consistent with the 
average annual cost of (non-terrorist) disaster events over the 
past five years. This includes $2.2 billion in new budget 
authority, as well as money left over from prior years. This 
$2.2 billion in new money represents an increase of $384 
million, or 21.7 percent, over the 2004 level.
      The Senate resolution supports the pre-disaster 
mitigation grant program that helps communities prevent, rather 
than react to, disasters. The Senate resolution assumes $169 
million for the program, an amount equal to last year's level.
      The Senate resolution assumes continuation of the 
Community Development Block Grant Program, but proposes to 
target CDBG entitlement grants to lower income communities.
      The Senate resolution reflects a Dorgan amendment, (SA 
2850) adding $260 million in budget authority in 2005 (and in 
each year thereafter through 2009) for a new Homestead Venture 
Capital Fund.
            Mandatory
      The Senate resolution assumes a savings proposal that 
would deny federal flood insurance for certain repeatedly 
flooded properties. The National Flood Insurance Program [NFIP] 
currently insures roughly 45,000 repeatedly flooded properties, 
representing about 1 percent of all policies in force but 
accounting for a much larger share of annual flood losses.
House Amendment
      The House amendment calls for $11.9 billion in budget 
authority and $14.2 billion in outlays in fiscal year 2005. The 
function totals are $58.7 billion in budget authority and $61.2 
billion in outlays over five years. Mandatory spending is $402 
million in budget authority and -$183 million in outlays in 
fiscal year 2005, and totals $780 million in budget authority 
and -$924 million in outlays over five years. The negative 
figures appear because of receipts to revolving loan funds. 
Discretionary spending is $11.5 billion in budget authority and 
$14.4 billion in outlays in fiscal year 2005; and over five 
years, it is $57.9 billion in budget authority and $62.2 
billion in outlays.
            Mandatory
      The House amendment assumes no new mandatory spending 
proposals.
            Discretionary
      The House amendment does not assume specific levels for 
individual discretionary programs within Function 450. Instead, 
$11.5 billion in budget authority and $14.4 billion in outlays 
in fiscal year 2005 is assumed for overall discretionary 
spending within the function. The Committee on Appropriations 
will determine how these funds will be apportioned among the 
various discretionary Community and Regional Development 
programs. Outyear levels are not binding and will be revisited 
in subsequent years.
Conference Agreement
      The conference agreement for this function reflects total 
spending of $13.6 billion in budget authority and $17.4 billion 
in outlays. Mandatory spending for this function is $0.4 
billion in budget authority and -$0.2 billion in outlays in 
fiscal year 2005. Discretionary spending for this function is 
$13.2 billion in budget authority and $17.6 billion in outlays 
in fiscal year 2005.

   Function 500: Education, Training, Employment, and Social Services

Function Summary
      Function 500 primarily covers federal spending within the 
Departments of Education, Labor, and Health and Human Services 
for programs that directly provide--or assist states and 
localities in providing--services to young people and adults. 
Its activities provide developmental services to low-income 
children; help fund programs for disadvantaged and other 
elementary and secondary school students, make grants and loans 
to post secondary students, and fund job-training and 
employment services for people of all ages.
      Function 500 budget authority rose from $55.5 billion in 
1999 to $89.5 billion in 2004, a 10 percent average annual 
growth rate. During the same period, outlays rose from $50.6 
billion to $86.5 billion, an 11.3 percent average annual growth 
rate.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of $83.9 billion in budget authority and $78.3 
billion in outlays for 2005. This represents an increase of 
$5.9 billion (7.5 percent) in budget authority and $1.2 billion 
in outlays from the 2004 level. The resolution includes the 
following specific assumptions:
      Consistent with the President's proposals, the increases 
assumed in the Senate resolution would bring our Nation's 
overall investment in elementary and secondary education to 
nearly $500 billion, surpassing spending on our national 
defense and exceeding per-pupil education spending of every 
other nation except Switzerland.
      The Senate resolution includes $13.3 billion in 2005 for 
Title I grants to Local Education Agencies [LEAs]--the largest 
component of the No Child Left Behind Act. The $1.0 billion 
(8.1 percent) increase over 2004 would fund services to 
disadvantaged students and improvements for low-performing 
schools. At this level, funding for Title I grants would be 
$4.6 billion (52 percent) greater than in 2001.
      The Senate resolution would increase funding for Part B 
Grants to States for individuals with disabilities by $1.0 
billion in each of the next two years. This is the fourth in a 
series of consecutive $1.0 billion annual increases, which 
cumulatively have raised the Federal share of average per pupil 
expenditures to nearly 20 percent, the highest level of Federal 
support ever provided to disabled children. With 2005 funding 
at $11.1 billion, funding for Part B Grants would reflect an 
increase of $4.7 billion (75 percent) since 2001.
      The Senate resolution does not incorporate any of the 
President's program terminations. However, the resolution 
supports the President's effort to eliminate duplicative and 
unproductive programs and encourage the Appropriations 
Committees to carefully examine these proposals to maximize 
efficient use of taxpayer dollars during this challenging 
budget cycle.
      For Pell Grants, the Senate resolution assumes a $2.7 
billion increase over 2004, which provides a total of $14.7 
billion to fully fund a $4,500 maximum award. This level 
reflects the Senate's adoption of the Coleman amendment (SA 
2821), which increased the level assumed for Pell Grants by 
$1.9 billion. The amendment included a corresponding negative 
entry for function 920 to result in no net effect on the 
overall budget. In recent years, the shortfall in the Pell 
Grant program has grown dramatically due to insufficient 
appropriations. The program may not continue to be financially 
viable unless this shortfall is addressed.
      The resolution also incorporates the $0.9 billion cost of 
Senators Dorgan and Brownback's American Heartland amendment 
(SA 2850), which provides 50% loan forgiveness to recent 
graduates who live and work in out migration counties. In 
addition, the resolution incorporates the cost of the Enzi-
Cantwell amendment (SA 2832), which added $250 million in 2005 
for job training funding under the Workforce Investment Act.
      Currently, the administrative expenses of the Federal 
Direct Student Loan Program receive a permanent mandatory 
appropriation. No other federal credit program has such a 
mandatory appropriation for administrative expenses. Instead, 
they are subject to annual review by the Appropriations 
committee. The Senate resolution, consistent with the 
President's proposal, assumes shifting the $795 million in 
mandatory spending for these administrative expenses (Sec. 458) 
to an annual discretionary appropriation.
      The resolution recognizes how important the Impact Aid 
Program is for school districts serving the needs of federally 
connected children throughout the country especially the 
emotional and family needs of military dependent children 
during this time of conflict in Iraq. The resolution urges that 
sufficient resources be provided allowing school districts to 
maintain the same level of service as what they were able to 
provide in fiscal year 2004.
            Mandatory
      The Senate resolution provides a reserve fund to 
facilitate consideration of the Higher Education 
Reauthorization. This fund provides a total of $5 billion to 
the Health, Education, Labor and Pensions [HELP] Committee for 
the 2005-2009 period. These funds may be used to increase 
student loan limits, reduce borrower origination fees or 
maintain the existing variable rate interest structure for 
Stafford loans after 2006.
House Amendment
      The amendment calls for $92.5 billion in budget authority 
and $90.5 billion in outlays in fiscal year 2005. The function 
totals are $470.5 billion in budget authority and $465.4 
billion in outlays over 5 years. Mandatory spending is $11.8 
billion in budget authority and $10.0 billion in outlays in 
fiscal year 2005, and totals $63.0 billion in budget authority 
and $55.5 billion in outlays over 5 years. Discretionary 
spending is $80.7 billion in budget authority and $80.5 billion 
in outlays in fiscal year 2005, and totals $407.4 billion in 
budget authority and $409.9 billion in outlays over 5 years.
            Mandatory
      The assumptions accommodate H.R. 438, the Teacher 
Recruitment and Retention Act of 2003, which passed the House 
on 9 July 2003 and is awaiting action in the Senate. The 
assumption is reflected in the allocation to the Committee on 
Education and the Workforce, which is free to determine its own 
policies within the allocation limits.
            Discretionary
      The amendment gives Function 500 priority status within 
the overall framework of level funding for fiscal year 2005 in 
non-defense, non-homeland-security spending. The resolution 
calls for an increase from level funding of $2.8 billion in 
budget authority and $3.6 billion in outlays. This increase is 
intended to accommodate increases in the funding levels for 
priority programs, such as special education state grants, 
Title I grants to local education agencies, and Pell Grants for 
low-income college students. Outyear levels are not binding and 
will be revisited in subsequent years.
Conference Agreement
      The conference agreement for this function reflects total 
spending of $92.8 billion in budget authority and $90.7 billion 
in outlays for fiscal year 2005. Mandatory spending for this 
function is $11.8 billion in budget authority and $10.0 billion 
in outlays in fiscal year 2005. Discretionary spending for this 
function is $81.0 billion in budget authority and $80.7 billion 
in outlays in fiscal year 2005.
      The conference agreement provides sufficient funding to 
accommodate increases consistent with the President's budget 
for Title I grants to local education agencies and state grants 
for special education. In addition, the conference agreement 
recognizes the importance of Pell Grants for low-income 
undergraduates and will continue to work with the 
Appropriations Committee and other interested parties to ensure 
it is a financially sound and robust program.
      While the conferees support the Federal student loan 
programs, the conference is concerned that the Ford Direct Loan 
Program's subsidy estimates do not reflect the program's true 
cost to the Federal Government. Therefore the conferees support 
the Department of Education's continuing efforts to refine and 
improve its cost estimating techniques.
      The conference agreement assumes additional funding for 
the Workforce Investment Act (this could accommodate additional 
funding for WIA consistent with the Enzi amendment # 2832.)

                          Function 550: Health

Function Summary
      Function 550 consists of health care services, including 
Medicaid, the Nation's major program covering medical and long-
term care costs for low-income persons; the State Children's 
Health Insurance Program [SCHIP], health research and training, 
including the National Institutes of Health [NIH] and substance 
abuse prevention and treatment; and consumer and occupational 
health and safety, including the Occupational Safety and Health 
Administration. Medicaid represents about 72 percent of the 
spending in this function.
      Function 550 budget authority rose from $142.2 billion in 
1999 to $241.8 billion in 2004, an 11.2 percent average annual 
growth rate. During the same time period, outlays rose from 
$141.1 billion to $239.6 billion, an 11.2 percent average 
annual growth rate. The largest component of this was the 
budget of the Medicaid, for which federal payments grew from 
$108.0 billion in 1999 to $173.9 billion in fiscal year 2004, a 
10 percent average annual increase.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of 55.1 billion in budget authority and $50.4 
billion in outlays for 2005. The resolution includes the 
following specific assumptions:
      The Omnibus Appropriations Bill of 2003 completed the 
planned five-year doubling of the NIH budget from $13.7 billion 
in 1998 to $27.2 billion in 2003. The Senate resolution 
includes an additional increase in 2005, bringing the total NIH 
funding to $28.7 billion. As part of this, the resolution 
assumes $1.7 billion for NIH biodefense efforts, an increase of 
7.5 percent over 2004.
      The resolution also assumes a $35 million increase in 
food safety and inspections at USDA. These funds will help USDA 
detect and prevent BSE (mad cow disease) as well as help detect 
bioterrrorism.
      The resolution also includes two one-year changes in 
Medicaid to offset 2005 discretionary spending. The first is a 
reduction in the federal medical assistance percentage [FMAP] 
for information systems from a 90 percent to 75 percent federal 
share. The second is a reduction in federal reimbursement for 
the administrative costs of Medicaid to reflect the share 
assumed in the Temporary Assistance for Needy Families [TANF] 
block grant and prohibit states from using TANF funds to pay 
those costs in 2005.
      The Senate adopted an amendment (SA 2780) by Senator 
Clinton creating a deficit-neutral reserve fund for 
appropriations addressing minority health disparities.
      The Senate adopted an amendment (SA 2741) by Senator 
Specter to increase the level in this function by $1.3 billion 
in budget authority in 2005 for the National Institutes of 
Health. The amendment included a corresponding negative entry 
for function 920 to result in no net effect on the overall 
budget.
      The Senate adopted an amendment (SA 2822) by Senator 
Murkowski to increase the level in this function by $282 
million in budget authority in 2005 for Indian Health Services. 
The amendment included a corresponding negative entry for 
function 920 to result in no net effect on the overall budget.
      The Senate adopted an amendment (SA 2794) by Senator 
Thomas to increase the level in this function by $100 million 
in budget authority in 2005 for rural health programs. The 
amendment included a corresponding negative entry for function 
920 to result in no net effect on the overall budget.
            Mandatory
      The Senate-passed resolution provides for a one-year 
extension of the QI-1 program, under which Medicaid pays the 
Medicare Part B premium for low-income beneficiaries.
      The Senate recognizes that the Temporary Assistance for 
Needy Families [TANF] reauthorization is likely this year, and 
that the reauthorization will be paid for with spending 
reductions and not increase the deficit.
      The Senate also notes that there is great potential for 
savings in the Medicaid program due to waste and abuse in the 
system. The Senate points out that many states are using 
Medicaid funds to provide health care to low-income individuals 
and understands the need to balance all issues when addressing 
this issue.
      The resolution also includes a deficit-neutral reserve 
fund for legislation that addresses access to health-care 
services and health insurance for the uninsured. This reserve 
fund allows the chairman of the Budget Committee to adjust 
applicable allocations and aggregates to accommodate this 
legislation if the Committee on Finance or the Committee on 
Health, Education, Labor, and Pensions reports a bill that 
provides health insurance for the uninsured or that increases 
access to health insurance through lowering costs--provided 
that any such measure does not increase the costs of current 
health coverage.
      The Senate understands that protecting patients' access 
to quality and affordable health care by reducing the effects 
of excessive liability costs is important to improve access to 
health-care providers and reduce health-care costs. The Senate 
encourages the committees of jurisdiction to examine such 
concepts as sensible limits on non-economic damages and 
reserving punitive damages for case that justify them.
      Public and private health plans and employers pay the 
medical expenses of insured individuals when they are injured 
by a third party, but in these circumstances public and private 
health plans and employers are entitled under federal law to be 
repaid if the individual later recovers damages from the third 
party causing the injury. The right of recovery is an important 
means to restore federal revenue, to contain private health 
plan and employer costs and to reduce health care premiums for 
individuals. The Senate understands the recovery rights of 
federal health programs (Medicare, FEHPB and M+C) and private 
health plans have been eroded by recent court decisions. The 
result is higher federal and private health plan costs. Last 
year, Congress acted to shore up the Medicare program's 
recovery right. The Senate encourages the committees of 
jurisdiction to examine proposals that will strengthen the 
right of recovery for federal programs and private health plans 
and employers.
      The Senate adopted an amendment (SA 2699) by Senator 
Kennedy that allows legislation that maintained expiring SCHIP 
funds to be included in the reserve fund for the uninsured.
      The Senate adopted an amendment (SA 2833) by Senator 
Bingaman that establishes a deficit-neutral reserve fund for 
legislation reforming the vaccines for children program.
House Amendment
      The House amendment calls for $245.1 billion in budget 
authority and $244.9 billion in outlays in fiscal year 2005. 
The function totals are $1.353 trillion in budget authority and 
$1.350 trillion in outlays over 5 years. Mandatory spending is 
$198.8 billion in budget authority and $198.9 billion in 
outlays in fiscal year 2005, and totals $1.119 trillion in 
budget authority and $1.120 trillion in outlays over 5 years. 
Discretionary spending is $46.3 billion in budget authority and 
$46.1 billion in outlays in fiscal year 2005; and over 5 years, 
it is $233.9 billion in budget authority and $230.4 billion in 
outlays.
            Mandatory
      The assumptions accommodate H.R. 4, the Personal 
Responsibility, Work, and Family Promotion Act of 2003, which 
passed the House on 13 February 2003, and is awaiting action in 
the Senate. The assumption is necessary to allow for a 
potential conference agreement. The assumption is reflected in 
the allocation to the Committee on Energy and Commerce.
            Discretionary
      The Committee on Appropriations will determine how funds 
will be apportioned among the various discretionary programs. 
Specific programs will be increased or decreased when the 
Appropriations subcommittees write their respective bills. 
Outyear levels are not binding and will be revisited in 
subsequent years.
            Reserve Fund
      The House amendment provides a reserve fund to reflect 
the savings from legislation that has passed the House of 
Representatives and is pending in the Senate ``that provides 
for the safe importation of FDA-approved prescription drugs or 
places limits on medical malpractice litigation.'' This reserve 
fund affects Function 570 as well as Function 550.
      The adjustment will be made by the chairman of the 
Committee on the Budget to the allocations and aggregates to 
reflect any resulting savings from any such measure. The effect 
of any adjustment would be to lock in the savings for deficit 
reduction. The chairman of the Budget Committee will consult 
with the committees of jurisdiction before making any 
adjustments pursuant to this section.
      The House amendment also provides a deficit-neutral 
reserve fund for the period of fiscal years 2005-2009 for 
legislation that addresses access to health care services and 
health insurance for the uninsured. The reserve fund is needed 
to allow an initiative for the uninsured to come to the floor 
as long as it is deficit neutral in the first year and over the 
5-year period.
      The House amendment also provides a reserve fund for the 
Family Opportunity Act. If legislation is reported by the 
Energy and Commerce Committee that provides Medicaid coverage 
for children with special needs (the Family Opportunity Act), 
the chairman of the Budget Committee may adjust the levels in 
the allocations and aggregates to the extent such legislation 
is deficit neutral in fiscal year 2005, and the period of 
fiscal years 2005-2009. The reserve fund would allow these 
initiatives to come to the floor with offsets, as long as that 
initiative is deficit neutral in the first year and over the 5-
year period.
Conference Agreement
      The conference agreement for this function reflects total 
spending of $252.4 billion in budget authority and $250.0 
billion in outlays for fiscal year 2005. Mandatory spending for 
this function is $199.1 billion in budget authority and $199.2 
billion in outlays in fiscal year 2005. Discretionary spending 
for this function is $53.3 billion in budget authority and 
$50.8 billion in outlays in fiscal year 2005.
      The conference agreement can accommodate a 1-year 
extension of the QI-1 program. It also includes a deficit-
neutral reserve fund for the enactment of the Family 
Opportunity Act for both the House and the Senate. Finally, the 
agreement recognizes the importance of addressing the problem 
of the uninsured and includes two separate reserve funds, one 
for the House and one for the Senate.

                         Function 570: Medicare

Function Summary
      Function 570 reflects the Medicare Part A Hospital 
Insurance [HI] Program, Part B Supplementary Medical Insurance 
[SMI] Program, and premiums paid by qualified aged and disabled 
beneficiaries. In addition, with the enactment of H.R. 1 last 
year, the Medicare Advantage Program replaced Medicare+Choice 
under Part C and a new Voluntary Prescription Drug Benefit 
Program was established under Part D of Medicare. Prior to 
implementation of the new drug benefit in 2006, certain low-
income seniors will be eligible for transitional low-income 
drug assistance of up to $600 in conjunction with their 
prescription drug discount card.
      Function 570 budget authority rose from $190.6 billion in 
1999 to $269.6 billion in 2004, a 7.2 percent average annual 
growth rate. During the same time period, outlays rose from 
$190.4 billion to $268.8 billion, a 7.1 percent average annual 
growth rate. This function consists entirely of the Medicare 
program.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of $3.7 billion in budget authority and $3.7 
billion in outlays for 2005. This represents a decrease of $0.2 
billion in budget authority and $0.1 billion in outlays from 
the 2004 level. The resolution includes the following specific 
assumptions:
      The resolution assumes three relatively minor changes 
proposed by the President to offset discretionary spending. 
These are user fees relating to claims, a change to the 
Medicare secondary payer [MSP], and a change in durable medical 
equipment. These proposals would save approximately $1 billion 
over the next five years.
      The Senate resolution recognizes the importance of the 
proper and timely implementation of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003, P.L. 108-173 
and assumes increased funding for administering this new 
program in 2005 and beyond.
      The Senate resolution also recognizes the importance of 
the administrative funding for the Social Security 
Administration included in this function, and assumes the 
increased funding proposed by the President.
House Amendment
      The House amendment calls for $288.2 billion in budget 
authority and $289.1 billion in outlays in fiscal year 2005. 
The function totals are $1.776 trillion in budget authority and 
$1.776 trillion in outlays over 5 years. Mandatory spending is 
$284.0 billion in budget authority and $285.1 billion in 
outlays in fiscal year 2005, and totals $1.755 trillion in 
budget authority and $1.756 trillion in outlays over 5 years. 
Discretionary spending is $4.1 billion in budget authority and 
$4.0 billion in outlays in fiscal year 2005; and over 5 years, 
it is $20.9 billion in budget authority and $20.7 billion in 
outlays.
            Mandatory
      The House amendment assumes growth in mandatory spending 
to accommodate projected caseloads, inflation, and other normal 
factors. It also provides for the continuation of the new 
modernization of Medicare with prescription drug coverage that 
was enacted by the President and Congress last year. The 
assumptions appear in the allocations of the respective 
committees of jurisdiction, which limit the amount that 
programs can be increased. The authorizing committees are free 
to determine their own policies, so long as they stay within 
the allocation limits.
            Discretionary
      The House amendment gives Function 570 priority status 
within the overall framework of level funding for fiscal year 
2005 in non-defense, non-homeland-security spending. 
Consequently, the amendment calls for an increase from level 
funding of $302 million in budget authority and $199 million in 
outlays. This amount accommodates the President's request for 
Function 570 discretionary--including the President's $100-
million request for additional funds for prescription drug 
administrative costs--without including any of the President's 
offsets. Outyear levels are not binding and will be revisited 
in subsequent years.
            Reserve Fund
      The House amendment provides a reserve fund to reflect 
the savings from legislation that has passed the House of 
Representatives and is pending in the Senate ``that provides 
for the safe importation of FDA-approved prescription drugs or 
places limits on medical malpractice litigation.'' This reserve 
fund affects Function 550 as well as Function 570.
      The adjustment will be made by the chairman of the 
Committee on the Budget to the allocations and aggregates to 
reflect any resulting savings from any such measure. The effect 
of any adjustment would be to lock in the savings for deficit 
reduction. The chairman of the Budget Committee will consult 
with the committees of jurisdiction before making any 
adjustments pursuant to this section.
Conference Agreement
      The conference agreement for this function reflects total 
spending of $287.9 billion in budget authority and $289.0 
billion in outlays for fiscal year 2005. Mandatory spending for 
this function is $284.0 billion in budget authority and $285.1 
billion in outlays in fiscal year 2005. Discretionary spending 
for this function is $3.9 billion in budget authority and $3.9 
billion in outlays in fiscal year 2005. The conference 
agreement assumes the QI-1 program will be extended for one 
year.

                     Function 600: Income Security

Function Summary
      Function 600 includes most of the Federal Government's 
income support programs. These include: general retirement and 
disability insurance (excluding Social Security)--mainly 
through the Pension Benefit Guaranty Corporation--and benefits 
to railroad retirees. Other components are Federal employee 
retirement and disability benefits (including military 
retirees); unemployment compensation; low-income housing 
assistance, including section 8 housing; food and nutrition 
assistance, including food stamps and school lunch subsidies; 
and other income security programs.
      This last category includes: Temporary Assistance for 
Needy Families [TANF]; Supplemental Security Income [SSI]; 
spending for the refundable portion of the Earned Income Credit 
[EIC]; and the Low Income Home Energy Assistance Program 
[LIHEAP]. Agencies involved in these programs include the 
Departments of Agriculture, Health and Human Services, Housing 
and Urban Development, the Social Security Administration (for 
SSI), and the Office of Personnel Management (for Federal 
retirement benefits).
      Function 600 budget authority rose from $243.5 billion in 
1999 to $329.3 billion in 2004, a 6.2 percent average annual 
growth rate. During the same period, outlays rose from $242.4 
billion to $336.1 billion, a 6.8 percent average annual growth 
rate.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of $46.4 billion in budget authority and $51.4 
billion in outlays for 2005. This represents an increase of 
$1.8 billion in budget authority and a decrease of $1.7 billion 
in outlays from the 2004 level. The Senate resolution includes 
the following specific assumptions:
      The Senate resolution incorporates the President's 
funding proposal for the Special Supplemental Nutrition Program 
for Women, Infants and Children [WIC]. The resolution provides 
$4.8 billion in 2005, an increase of $175 million from 2004, or 
3.8 percent.
      The Senate resolution assumes the President's funding 
level for the Low Income Home Energy Assistance Program. The 
resolution assumes $2 billion in 2005, a $112 million (6 
percent) increase.
      The Senate resolution assumes the President's proposed 
funding level of $2.1 billion for discretionary payments to the 
States for the Child Care Development and Block Grant Program. 
This represents a $13 million increase from 2004.
      Under the Senate resolution, sufficient budget authority 
and outlays are provided to renew all utilized section 8 
housing contracts. The resolution does not reflect the 
Administration's block grant proposal (consistent with 
Congressional action in 2004 appropriations on a similar 
proposal in 2004 budget request). The Senate resolution assumes 
the President's proposal to complete the phase-out of funding 
for revitalization of severely distressed public housing [HOPE 
VI] because the program has achieved its goal of demolishing 
100,000 severely distressed public housing units by 2003.
            Mandatory
      The Senate resolution assumes $18 billion in additional 
outlays (over five years) that are related to the President's 
proposal to extend the $1,000 child credit and marriage penalty 
relief.
      The Senate resolution recognizes that TANF 
reauthorization is likely this year and assumes that the 
reauthorization will be paid for with spending cuts and will 
not increase the deficit. The Senate is supportive of efforts 
to recognize and develop the role of self-sustainable social 
services, such as Goodwill, which are critical in the success 
of moving welfare recipients to work.
      The Senate resolution also assumes aspects of the 
President's proposal to enhance Child Support Enforcement 
collections. These efforts will increase collections and direct 
more of the support collected to children and families.
      The Senate resolution recognizes that the Child Nutrition 
program is likely to be reauthorized this year, and assumes 
$11.7 billion for these programs in 2005. The Senate resolution 
also assumes $232 million for fiscal years 2005-2009 for the 
continued cost of excluding certain military housing allowances 
from income when determining eligibility for free and reduced-
price school meals, and allowing for-profit child care centers 
to participate in the Child and Adult Care Food Program 
[CACFP]. By voice vote, the Senate adopted an amendment (SA 
2844, offered by Senator Dole) to increase the level in this 
function by $842 million in budget authority from 2005-2009 for 
Child Nutrition Programs. The amendment included a 
corresponding reduction for function 920 to result in no net 
effect on the overall budget.
      The Senate resolution assumes the President's proposal 
for an administrative fee for non-TANF child support 
collections of at least $500, saving $199 million over 5 years.
      The Senate resolution assumes the President's funding 
level of $28.3 billion for the Food Stamp program in 2005.
      The Senate resolution incorporates the Administration's 
plan to change the Federal Employee Compensation [FECA] benefit 
structure and reform proposal.
      The Senate resolution assumes savings from reform of the 
Earned Income Credit. The cost of the EIC has skyrocketed in 
recent years due to program expansions, fraud, and errors, with 
total program costs growing from $6.6 billion in 1990 to nearly 
$36 billion in 2003. IRS and GAO estimate that over-claim rates 
on 1999 tax returns were about 30 percent.
      The Senate resolution assumes $665 million over five 
years in new mandatory spending for Food and Nutrition 
Programs.
House Amendment
      The House amendment calls for $337.3 billion in budget 
authority and $341.7 billion in outlays in fiscal year 2005. 
The function totals are $1.728 trillion in budget authority and 
$1.742 trillion in outlays over 5 years. Mandatory spending is 
$291.5 billion in budget authority and $290.7 billion in 
outlays in fiscal year 2005, and totals $1.496 trillion in 
budget authority and $1.492 trillion in outlays over 5 years. 
Discretionary spending is $45.8 billion in budget authority and 
$51.0 billion in outlays in fiscal year 2005; and over 5 years, 
it is $231.4 billion in budget authority and $250.3 billion in 
outlays.
            Discretionary
      The Committee on Appropriations will determine how these 
funds will be apportioned among the various discretionary 
income security programs. Outyear levels are not binding and 
will be revisited in subsequent years.
            Mandatory
      The assumptions accommodate H.R. 4, the Personal 
Responsibility, Work, and Family Promotion Act of 2003, which 
passed the House on 13 February 2003; H.R. 7, the Charitable 
Giving Act of 2003, which passed the House on 17 September 
2003; and H.R. 1000, the Pension Security Act of 2003, which 
passed the House on 14 May 2003. All three measures are 
awaiting action in the Senate. The assumptions also accommodate 
H.R. 3108, the Pension Funding Equity Act of 2003, which passed 
the House on 8 October 2003 and was in conference with the 
Senate at the time the House considered the budget resolution. 
These accommodations are necessary to allow for potential 
conference agreements.
      The assumptions are reflected in the allocations to the 
respective committees of jurisdiction, which limit the amount 
that programs can be increased.
Conference Agreement
      The conference agreement for this function reflects total 
spending of $339.2 billion in budget authority and $345.7 
billion in outlays for fiscal year 2005. Mandatory spending for 
this function is $292.8 billion in budget authority and $291.6 
billion in outlays in fiscal year 2005. Discretionary spending 
for this function is $46.4 billion in budget authority and 
$54.1 billion in outlays in fiscal year 2005.
            Discretionary
      The level of discretionary spending in the conference 
agreement could allow for the President's funding proposal for 
the Special Supplemental Nutrition Program for Women, Infants, 
and Children [WIC] and for the Low Income Home Energy 
Assistance Program. The conference agreement also provides a 
level that could allow for the President's proposal for 
discretionary payments to the states for the Child Care and 
Development Grant Program.
            Mandatory
      The conference agreement assumptions accommodate H.R. 4, 
the Personal Responsibility, Work, and Family Promotion Act of 
2003, which passed the House in February 2003. The conference 
agreement also accommodates assumptions in H.R. 3873, which 
continues the cost of excluding certain military housing 
allowances from income when determining eligibility for free 
and reduced-price school meals, and allowing for-profit child 
care centers to participate in the Child and Adult Care Food 
Program, but could also be used to fund other Child Nutrition 
programs, such as funding additional school lunches.

                     Function 650: Social Security

Function Summary
      Function 650 consists of the Social Security program, or 
Old-Age, Survivors, and Disability Insurance, the Government's 
largest entitlement program. Social Security consists of two 
parts, each tied to a trust fund. The Old-Age and Survivors 
Insurance program provides monthly benefits to eligible retired 
workers and their families and survivors. The Disability 
Insurance program provides monthly benefits to eligible 
disabled workers and their families.
      Under provisions of the Budget Enforcement Act, Social 
Security trust funds are off budget.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of $4.2 billion in budget authority and $4.3 
billion in outlays for 2005. This represents an increase of 2.8 
percent, or $0.1 billion, in budget authority compared to 2004.
            Mandatory
      The Senate resolution assumes the President's proposal to 
close an existing loophole that allows former state and local 
employees to receive their public pension and Social Security 
benefits even though they did not pay Social Security taxes. 
The resolution assumes the President's proposal to improve the 
reporting of non-covered pension income through pension 
administrators for state and local pensions sharing information 
with the Social Security Administration.
House Amendment
      The amendment calls for $15.1 billion in budget authority 
and $15.1 billion in outlays in fiscal year 2005. The function 
totals are $91.7 billion in budget authority and $91.7 billion 
in outlays over five years. All of this spending is mandatory; 
all discretionary spending in function 650 is off budget, but 
is included in the section 302(a) allocation to the Committee 
on Appropriations.
            Mandatory
      There are no specific mandatory assumptions in this 
function.
            Discretionary
      The Committee on Appropriations will determine how funds 
in this function are apportioned. Outyear levels are not 
binding and will be revisited in subsequent years.
Conference Agreement
      For on-budget spending, the conference agreement for this 
function reflects $15.2 billion in budget authority and outlays 
for fiscal year 2005. Mandatory spending for this function is 
$15.2 billion in budget authority and outlays in fiscal year 
2005. There is no on-budget discretionary spending for this 
function.
      Including on- and off-budget spending, the conference 
agreement reflects a total of $518.9 billion in budget 
authority and $517.2 billion in outlays for fiscal year 2005. 
Mandatory spending for this function is $514.7 billion in 
budget authority and $512.9 billion in outlays in fiscal year 
2005. Discretionary spending for this function is $4.2 billion 
in budget authority and $4.3 billion in outlays in fiscal year 
2005.

              Function 700: Veterans Benefits and Services

Function Summary
      Function 700 includes funding for the Department of 
Veterans Affairs [VA], which provides benefits to veterans who 
meet various eligibility rules. Benefits range from income 
security for veterans, principally disability compensation and 
pensions; veterans education, training, and rehabilitation 
services; hospital and medical care for veterans; and other 
veterans benefits and services, such as home loan guarantees. 
There are about 25 million veterans.
      Function 700 budget authority rose from $44.2 billion in 
1999 to $61.5 billion in 2004, a 6.8 percent average annual 
growth rate. During the same time period, outlays rose from 
$43.2 billion to $60.1 billion, a 6.8 percent average annual 
growth rate. The two largest components of this growth were 
veterans medical care, whose budget authority grew from $17.8 
billion in 1999 to $28.0 billion in 2004, a 9.4 percent average 
annual increase, and disability compensation, whose budget 
authority grew from $18.7 billion in 1999 to $30.7 billion in 
2004, a 10.4 percent average annual increase.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of $31.7 billion in budget authority and $30.7 
billion in outlays for 2005.
      The Senate resolution assumes $30.3 billion in total 
funding for VA medical programs. This reflects a Murkowski 
amendment (SA 2846) to increase Veterans medical care by $1.2 
billion. The Murkowski amendment included a corresponding 
reduction to function 920 to result in no net effect on the 
overall budget. This includes $28.3 billion in budget authority 
and $2 billion in offsetting collections from the Medical Care 
Collections Fund [MCCF]. This is an increase of 9.4 percent, or 
$2.6 billion, over the 2004 enacted level. VA Medical Care 
spending has grown by 100 percent since 1993 and 42 percent 
since 2001.
      The Senate resolution does not assume the President's 
proposal to establish a new $250 enrollment fee for priority 
level 7 and 8 veterans or to increase the insurance and 
prescription drug co-payments for Priority 7 and 8 veterans 
from $7 to $15.
            Mandatory
      The Senate resolution assumes a 1.3 percent cost of 
living adjustment for compensation benefits that is due in 2005 
under current law. After the adjustment, total mandatory 
spending in this function is projected to be $39.8 billion in 
2005, an increase of 23.6 percent or $7.6 billion over the 2004 
enacted level. Mandatory spending includes funding for veterans 
compensation, pensions, insurance funds and readjustment 
programs.
      The Senate resolution assumes the President's proposal to 
restore the original interpretation of section 1110 of title 38 
of the U.S. Code. This section prohibits veterans from 
receiving disability compensation for alcohol or drug abuse 
which arises secondarily from a service connected disability. 
In February 2001, the U.S. Court of Appeals decided that 
section 1110 did not preclude compensation for alcohol or drug 
abuse arising secondarily from a service-connected disability. 
If this legislation were enacted it would save $9 million in 
fiscal year 2005 and $95 million for fiscal years 2005-2009 
period.
House Amendment
      Note: In the House amendment as passed, funding amounts 
for certain homeland security activities were moved out of this 
function into a separate category, Function 100--Homeland 
Security. Accordingly, the House-passed totals in these 
functions do not precisely correspond with those in the Senate-
passed resolution, and the figures in the House-passed and 
Senate-passed measures cannot be compared at face value. The 
customary correspondence was restored in the process of 
developing the conference agreement.
      The House amendment calls for $70.5 billion in budget 
authority and $68.6 billion in outlays in fiscal year 2005. The 
function totals are $346.0 billion in budget authority and 
$341.7 billion in outlays over five years. Mandatory spending 
is $39.8 billion in budget authority and $39.5 billion in 
outlays in fiscal year 2005, and totals $190.9 billion in 
budget authority and $190.4 billion in outlays over five years. 
Discretionary spending is $30.7 billion in budget authority and 
$29.1 billion in outlays in fiscal year 2005; and over five 
years, it is $155.1 billion in budget authority and $151.4 
billion in outlays.
            Mandatory
      There are no specific mandatory assumptions in this 
function.
            Discretionary
      During markup, the Budget Committee adopted an amendment 
offered by Representative Brown-Waite adding $200 million to 
the Chairman's Mark in veterans benefits and services. As a 
result, the amendment includes an increase in total veterans 
budget authority of $1.2 billion in fiscal year 2005 over the 
President's request with none of the fees in the President's 
budget. Outyear levels are not binding and will be revisited in 
subsequent years.
Conference Agreement
      The conference agreement for this function reflects total 
spending of $70.8 billion in budget authority and $68.9 billion 
in outlays for fiscal year 2005. Mandatory spending for this 
function is $39.8 billion in budget authority and $39.5 billion 
in outlays in fiscal year 2005. Discretionary spending for this 
function is $31.0 billion in budget authority and $29.4 billion 
in outlays in fiscal year 2005. The conference agreement 
includes $1.2 billion more than the President's request, 
consistent with the funding need identified by Secretary of 
Veterans Affairs Anthony J. Principi.

                Function 750: Administration of Justice

Function Summary
      Function 750 supports the majority of Federal justice and 
law enforcement programs and activities. This includes funding 
for the Department of Justice, a large portion of the 
Department of Homeland Security [DHS], as well as the financial 
law enforcement activities of the Department of the Treasury, 
Federal courts and prisons, and criminal justice assistance to 
State and local governments.
      Function 750 budget authority rose from $28.1 billion in 
1999 to $41.2 billion in 2004, an 8.0 percent average annual 
growth rate. During the same time period, outlays rose from 
$26.5 billion to $39.6 billion, an 8.3 percent average annual 
growth rate. The largest component of this growth was for 
Federal law enforcement activities, with budget authority 
growing from $11.9 billion in 1999 to $19.0 billion in 2004, a 
9.9 percent average annual increase.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of $37.5 billion in budget authority and $37.0 
billion in outlays for 2005, an increase of $0.4 billion in 
budget authority and an increase of $1.5 billion in outlays 
from the 2004 level. The Senate resolution includes the 
following specific assumptions:
      The Senate resolution assumes a total of $4.6 billion for 
the Federal Bureau of Investigation [FBI], an increase of $0.5 
billion or 12.8 percent over the 2004 level. Another $0.5 
billion is assumed for the FBI in the defense function of the 
federal budget. Overall, the budget for the FBI is $5.1 
billion. The Senate resolution concurs with the President's 
proposal to dramatically increase the agency's funding in order 
to fulfill the FBI's primary mission of preventing further 
terrorist attacks in America. A large portion of the funding 
increases will go to improve the FBI's intelligence 
capabilities, counterterrorism investigations, and combating 
cybercrime.
      The Senate resolution includes $1.7 billion for a 
restructured account entitled Justice Assistance. The Senate 
resolution concurs with the President's proposal to consolidate 
many duplicative grant programs within the Department of 
Justice in order to achieve better effectiveness. Programs from 
the State and Local Law Enforcement Assistance account, the 
Juvenile Justice account, and the Community Oriented Policing 
Services [COPS] account are combined under Justice Assistance 
in the Committee-reported resolution. Some highlights of this 
new Justice Assistance account include a $509 million Justice 
Assistance Grant Program, the $176 million DNA Initiative, the 
Southwest Border Prosecution Initiative, and funding for 
bulletproof vests.
      For the Bureau of Alcohol, Tobacco, Firearms and 
Explosives, the Senate resolution assumes a level of $868 
million, which represents an increase of $41 million or 5 
percent above the 2004 level.
      The Senate resolution assumes $4.6 billion for the 
salaries and expenses of the Bureau of Customs and Border 
Protection, an increase of $207 million or 4.7 percent above 
the 2004 level. The increase in funding will enhance border 
patrol surveillance and technology, continue the Container 
Security Initiative, and support the purchase of radiation 
detection equipment.
      The Senate resolution assumes $4.0 billion for the 
salaries and expenses of the Federal Courts of Appeals, 
District Courts, and other judicial services. This matches the 
President's request for 2005 and represents an increase of $357 
million or 9.7 percent above the 2004 level.
      The Senate is concerned about efficiency and cost-
effectiveness of first responder spending and training. 
Therefore, the Senate resolution encourages the use of homeland 
security funds to examine and possibly expand upon the Federal 
Law Enforcement Training Center's Distributed Learning Program 
for the purpose of secure, encrypted, geographically dispersed 
first responder e-learning.
      The Senate resolution reflects a Hatch amendment (SA 
2843) adding $600 million in 2005 for various law enforcement 
grant programs.
            Mandatory
      The Senate resolution assumes the extension of two types 
of Customs User Fees, yielding $784 million in 2005, $7.6 
billion over 5 years, and $18.6 billion over 10 years.
      The Senate resolution does not assume any funding for the 
creation of a government-administered trust fund intended to 
resolve the claims of victims for bodily injury caused by 
asbestos exposure. Although the Senate recognizes the urgent 
need for litigation reform designed to expedite justice for 
legitimate victims of asbestos exposure and to halt the 
corrosive effect that litigation abuse has on the economy, it 
is concerned that the creation of a new uncapped government 
entitlement, during a period requiring austere budget 
discipline, would be imprudent and inconsistent with fiscal 
responsibility. The proposed use of mandatory contributions 
from defendant companies and insurers does not alleviate those 
concerns if the private contributions are capped at a finite 
level and the fund is not expected to meet the total liability 
of anticipated asbestos claims. The Senate does not believe it 
would be prudent to rely upon ``sunset'' provisions that would 
be triggered upon fund insolvency, thus returning potentially 
large numbers of unpaid claimants to the federal tort system. 
Past experience with government administered trust funds 
designed to mandate a ``no-fault'' solution for liability 
claimants demonstrate that, even with specific legislative 
language to the contrary, there is a low probability of an 
actual return to the tort system. Political resistance to 
implementing such a reversion will likely be insurmountable. In 
essence, the Senate is concerned that under such a scenario 
there is a possibility that a massive taxpayer bail-out could 
occur if Congress is forced to step in and sustain the fund.
House Amendment
      The amendment calls for $30.1 billion in budget authority 
and $30.0 billion in outlays in fiscal year 2005. The function 
totals are $140.4 billion in budget authority and $141.0 
billion in outlays over five years. Mandatory spending is $5.0 
billion in budget authority and $4.3 billion in outlays in 
fiscal year 2005, and totals $13.2 billion in budget authority 
and $13.1 billion in outlays over five years. Discretionary 
spending is $25.2 billion in budget authority and $25.7 billion 
in outlays in fiscal year 2005; and over five years, it is 
$127.2 billion in budget authority and $127.9 billion in 
outlays. Homeland security components formerly found in 
Function 750 are recorded in Function 100: Homeland Security.
            Mandatory
      The assumptions accommodate H.R. 975, the Bankruptcy 
Abuse Prevention and Consumer Protection Act of 2003, which 
passed the House on 19 March 2003 and is awaiting action in the 
Senate. The accommodation is needed to allow for a potential 
conference agreement. The assumption is reflected in the 
allocation to the Committee on the Judiciary, which is free to 
determine its own policies within the allocation limits.
            Discretionary
      The Committee on Appropriations will determine how these 
funds will be apportioned among the various discretionary 
programs. Outyear levels are not binding and will be revisited 
in subsequent years.
Conference Agreement
      The conference agreement for this function reflects total 
spending of $41.9 billion in budget authority and $41.8 billion 
in outlays for fiscal year 2005. Mandatory spending for this 
function is $5.1 billion in budget authority and $4.5 billion 
in outlays in fiscal year 2005. Discretionary spending for this 
function is $36.8 billion in budget authority and $37.3 billion 
in outlays in fiscal year 2005.

                    Function 800: General Government

Function Summary
      Function 800 consists of the activities of the 
Legislative Branch; the Executive Office of the President; 
general tax collection and fiscal operations of the Department 
of Treasury (including the Internal Revenue Service); the 
Office of Personnel Management; the property and personnel 
costs of the General Services Administration; general purpose 
fiscal assistance to States, localities, the District of 
Columbia, and U.S. territories; and other general Government 
activities.
      Function 800 budget authority rose from $16.7 billion in 
1999 to $23.9 billion in 2004, a 7.5 percent average annual 
growth rate. During the same time period, outlays rose from 
$15.3 billion to $24.7 billion, a 10.0 percent average annual 
growth rate.
Senate Resolution
            Discretionary
      The Senate resolution assumes discretionary spending in 
this function of $14.4 billion in budget authority and $15.0 
billion in outlays for 2005. The Senate resolution includes the 
following specific assumptions:
      The Senate resolution assumes that $1.4 billion provided 
for election reform programs in 2004 is not continued in the 
budget. To date, appropriations for election reform have been 
essentially at the level recommended by the authorizing bill, 
totaling just over $3.0 billion. The disbursement of these 
funds has been significantly delayed while awaiting the 
formation of the Election Assistance Commission [EAC], which is 
responsible for the oversight and disbursement of the federal 
grants to the states. The EAC was formed earlier this year and 
it is attempting to distribute these funds before the fall 
elections. The Senate resolution does assume $40 million for 
the Election Assistance Commission.
      The Senate resolution reflects two amendments, a Dorgan 
amendment (SA 2850) and a Hatch amendment (SA 2843), that 
reduced the general government function by $1.2 billion in 2005 
to pay for other discretionary spending.
            Mandatory
      Under current law, there is a significant drop in 
mandatory spending from 2004 to 2005. This decrease is due to 
$5.0 billion in state assistance provided as one-time funds for 
2004 by the Jobs and Growth Tax Relief and Reconciliation Act 
of 2003.
      The Senate resolution assumes an adjustment to the 
current fee structure for the National Indian Gaming 
Commission, which regulates and monitors gaming operations on 
Indian lands. Since 1998, the Commission has been prevented 
from collecting additional annual fees from gaming operations 
to cover the costs of its oversight responsibilities. The 
assumed restructuring of fees would allow the Commission to 
adjust its activities to the growth in the Indian gaming 
industry.
House Amendment
      The amendment calls for $17.2 billion in budget authority 
and $17.9 billion in outlays in fiscal year 2005. The function 
totals are $86.8 billion in budget authority and $86.8 billion 
in outlays over five years. Mandatory spending is $1.8 billion 
in budget authority and $1.7 billion in outlays in fiscal year 
2005, and totals $8.9 billion in budget authority and $8.9 
billion in outlays over five years. Discretionary spending is 
$15.4 billion in budget authority and $16.2 billion in outlays 
in fiscal year 2005; and over five years, it is $77.9 billion 
in budget authority and $77.9 billion in outlays. Homeland 
security components formerly found in Function 800--including 
the Federal Protective Service--are recorded in Function 100: 
Homeland Security, and are consistent with the President's 
request.
            Mandatory
      Mandatory totals allow for inclusion of H.R. 2751, the 
GAO Human Capital Reform Act of 2003, as passed by the House 
last year. The accommodation is needed to allow for a potential 
conference agreement. The amendment assumes growth in mandatory 
spending to accommodate projected inflation, and other normal 
factors. The assumptions appear in the allocations of the 
respective committees of jurisdiction, which are free to 
determine their own policies within the allocation limits.
            Discretionary
      The amendment can accommodate funding for the Payment in 
Lieu of Taxes [PILT] program at the fully authorized level. 
Specific programmatic decisions will be made by the Committee 
on Appropriations. Outyear levels are not binding and will be 
revisited in subsequent years.
Conference Agreement
      The conference agreement for this function reflects total 
spending of $17.4 billion in budget authority and $18.0 billion 
in outlays for fiscal year 2005. Mandatory spending for this 
function is $1.8 billion in budget authority and $1.7 billion 
in outlays in fiscal year 2005. Discretionary spending for this 
function is $15.6 billion in budget authority and $16.2 billion 
in outlays in fiscal year 2005.

                       Function 900: Net Interest

Function Summary
      Function 900 includes net interest, which is the interest 
paid for the Federal Government's borrowing less the interest 
received by the Federal Government from trust fund investments 
and loans to the public. It is a mandatory payment, with no 
discretionary components.
      Net interest spending declined from $229.8 billion in 
1999 to $154.8 billion in 2004, an average annual reduction of 
7.6 percent. This decline was caused by lower interest paid to 
finance the debt, as well as higher interest received by the 
continued build-up of off-budget trust funds.
Senate Resolution
      The Senate resolution sets forth $179.9 billion in budget 
authority and outlays for fiscal year 2005 and $1.220 trillion 
in budget authority and outlays over 5 years. On-budget net 
interest is $270.1 billion in budget authority and outlays in 
2005 and $1,766 trillion in budget authority and outlays over 5 
years. Off-budget interest collections are $90.2 billion in 
budget authority and outlays in 2005 and $545.5 billion in 
budget authority and outlays over 5 years.
House Amendment
      The House amendment calls for $180.5 billion in budget 
authority and outlays in fiscal year 2005. The function totals 
are $1.235 trillion in budget authority and outlays over 5 
years. On-budget spending is $270.7 billion in budget authority 
and outlays in fiscal year 2005, and totals $1.780 trillion in 
budget authority and outlays over 5 years. Off-budget interest 
collections are $90.2 billion in budget authority and outlays 
in fiscal year 2005; and over 5 years, $545.5 billion in budget 
authority and outlays. There are no specific mandatory 
assumptions in this function.
Conference Agreement
      For on-budget spending, the conference agreement for this 
function reflects $270.4 billion in budget authority and 
outlays for fiscal year 2005. Total on- and off-budget spending 
is $180.3 billion in budget authority and outlays for fiscal 
year 2005.

                        Function 920: Allowances

Function Summary
      Function 920, Allowances, is used for planning purposes 
to address the budgetary effects of proposals or assumptions 
that cross various other budget functions. Once such changes 
are enacted, the budgetary effects are distributed to the 
appropriate budget functions.
Senate Resolution
            Discretionary
      This function includes -$11.2 billion in discretionary 
budget authority and -$4.3 billion in outlays for 2005. This is 
the result of amendments adopted during consideration of the 
resolution on the Senate floor that were ``offset'' in function 
920.
            Mandatory
      This function includes -$256 million in mandatory budget 
authority and -$235 million in outlays for 2005. This reflects 
the Dole child nutrition amendment that was adopted during 
Senate consideration of the committee-reported resolution and 
the total combined impact of the Committee-adopted amendment by 
Senator Stabenow to allow drug reimportation, rather than 
reflecting the effects across the various federal health 
programs (e.g. Medicaid, Medicare, FEHBP, military health) as 
they would occur in their respective functions.
House Amendment
      The amendment calls for $50.0 billion in budget authority 
and $24.9 billion in outlays in fiscal year 2005. This provides 
for an expected supplemental spending bill to address 
operations in Afghanistan and Iraq. The function totals are 
$50.0 billion in budget authority and $49.8 billion in outlays 
over 5 years. Discretionary spending is $50.0 billion in budget 
authority and $24.9 billion in outlays in fiscal year 2005; and 
over 5 years, it is $50.0 billion in budget authority and $49.8 
billion in outlays.
            Mandatory
      There is no mandatory spending in this function.
Conference Agreement
      The conference agreement for this function reflects total 
spending of -$7.2 billion in budget authority and -$14.5 
billion in outlays for fiscal year 2005. There is no mandatory 
spending in this function. These amounts will be restored via 
cap adjustments when certain conditions are met.

            Function 950: Undistributed Offsetting Receipts

Function Summary
      Function 950 consists of receipts to the Treasury. 
Receipts recorded in this function are either intrabudgetary (a 
payment from one Federal agency to another, such as agency 
payments to the retirement trust funds) or proprietary (a 
payment from the public for some kind of business transaction 
with the Government). The main types of receipts recorded in 
this function are: the payments Federal employees and agencies 
make to employee retirement trust funds; and payments by those 
who bid for the right to buy or use public property or 
resources, such as licenses to use the electromagnetic spectrum 
or the right to explore and produce oil and gas on the Outer 
Continental Shelf. By convention, these receipts are treated as 
negative spending, with budget authority and outlays matching 
exactly for each account. There is no discretionary spending in 
this function.
Senate Resolution
            Mandatory
      The Senate resolution assumes the President's proposal to 
extend the authority of the Federal Communications Commission 
to auction spectrum, which would otherwise expire at the end of 
2007.
House Amendment
      The House amendment calls for -$63.7 billion in budget 
authority and -$63.8 billion in outlays in fiscal year 2005. 
(The minus signs indicate receipts into the Treasury.) The 
function totals are -$360.4 billion in budget authority and 
-$361.4 billion in outlays over 5 years.
            Mandatory
      The assumptions accommodate H.R. 1320, which passed the 
House on 11 June 2003, and is awaiting action in the Senate. 
Although H.R. 1320 has budgetary effect in Function 950 
(Undistributed Offsetting Receipts) because it is a receipt 
against spending, it is within the scope of the Federal 
Communications Commission. The accommodation is needed to allow 
for a potential conference agreement.
Conference Agreement
      For on-budget offsetting receipts, the conference 
agreement for this function reflects -$52.5 billion in budget 
authority and outlays for fiscal year 2005.
      The combined on- and off-budget offsetting receipts, the 
conference agreement for this function reflects -$63.9 billion 
in budget authority and outlays for fiscal year 2005.

                      RECONCILIATION INSTRUCTIONS

      Under section 310(a) of the Congressional Budget Act, the 
budget resolution may include directives to the committees of 
jurisdiction to make revisions in law necessary to accomplish a 
specified change in spending or revenues. If the resolution 
includes a reconciliation directive to only one committee of 
the House or Senate, then that committee is required to 
directly report to its House the legislative language that 
would implement the spending or revenue changes provided for in 
the resolution. If the resolution includes an instruction with 
directives to more than one committee, the reporting committees 
submit their recommendations to the Budget Committee, which 
then packages them together and votes to report one bill, 
without substantive change, to its respective House. Under 
either scenario, the committees have discretion as to how they 
meet the targets, as long as the targets are met within the 
respective committees' jurisdictions. Any bill considered 
pursuant to a reconciliation instruction is subject to special 
procedures set forth in section 310 and, in the Senate, section 
313 of the Budget Act.

                        TITLE II: RECONCILIATION

Senate Resolution
            Section 201: Reconciliation in the Senate
      Section 201 includes two reconciliation directives to the 
Finance Committee (with a reporting date not later than 
September 30, 2004). The Finance Committee is instructed to 
report legislation to reduce revenues by not more than $12.3 
billion in 2005 and $80.6 billion for the period 2005-2009 and 
to increase outlays by not more than $2 billion for the period 
2005-2009. The Finance Committee is free to satisfy this 
instruction with legislation of its choosing, but the Senate 
resolution assumes the 2005-2009 revenue effects of extending 
the $1,000 child tax credit, extending marriage penalty relief, 
extending the expanded 10 percent individual income tax 
bracket, and accelerating the repeal of the death tax to 2009. 
The outlay increase instruction was added with the adoption of 
an amendment (SA 2837) which the Senate accepted by voice vote.
      The second instruction directs the Finance Committee to 
report legislation to increase the statutory debt limit by 
$664.028 billion. The current statutory debt ceiling is $7.384 
trillion; under the Senate resolution, the debt subject to 
limit is projected to be $8.051 trillion at the end of fiscal 
year 2005.
      By a vote of 53-43, the Senate agreed to the Baucus 
amendment (SA 2751), which struck the reconciliation 
instruction to the Finance Committee to reduce outlays by $2.9 
billion in 2005 and by $3.4 billion over the period 2005-2009.
House Amendment
            Section 201: Reconciliation in the House
      The House amendment provides instructions for two 
reconciliation bills. The first instructs five authorizing 
committees to report changes in current law to achieve 
specified level of deficit reduction on the assumption that the 
savings will come from the elimination of waste, fraud and 
abuse in specific programs in their jurisdictions. The 
committees may make whatever changes in the law they deem 
appropriate to achieve the specified amount of savings for 
fiscal year 2005 and for the period of fiscal years 2005 
through 2009. The Agriculture Committee is instructed to save 
$110 million in 2005 and $371 million for fiscal years 2005-
2009; the Education and Workforce Committee is instructed to 
save $5 million in fiscal year 2005 and $43 million for fiscal 
years 2005-2009, under the assumption such savings will be 
achieved through changes in the Federal Employees Compensation 
Act; the Energy and Commerce Committee is instructed to save 
$410 million in fiscal year 2005 and $2.185 billion for fiscal 
years 2005-2009; the Government Reform Committee is instructed 
to save $170 million in fiscal year 2005 and $2.365 billion for 
fiscal years 2005-2009; and, the Committee on Ways and Means is 
instructed to reduce the deficit by $1.126 billion in fiscal 
year 2005 and by $8.269 billion for fiscal years 2005-2009. The 
first reconciliation bill has a reporting deadline of July 15, 
2004.
      The second reconciliation bill directs the Committee on 
Ways and Means to report a measure that would reduce taxes by 
$13.182 billion in 2005 and by $137.580 billion for fiscal 
years 2005-2009. These amounts are sufficient to accommodate an 
extension of certain expiring tax provisions from the 2001 
Economic Growth and Tax Relief Reconciliation and the 2003 Jobs 
and Growth Tax Relief Reconciliation Acts.
      While the resolution only reconciles changes in revenue 
for the second reconciliation bill, it includes authority for 
the Budget Committee chairman to adjust the reconciliation 
instructions, the Committee on Ways and Means' allocations and 
other appropriate levels to accommodate outlays (largely 
related to certain refundable tax provisions). The authority 
may only be exercised for a reconciliation bill that does not 
cost more in total outlay increases and revenue reductions than 
the underlying reconciliation instruction. The second 
reconciliation bill has a reporting deadline of October 1, 
2004.
            Section 202: Submission of report on defense savings
      This section requires the House Armed Services Committee 
to submit to the Budget Committee a set of findings that 
identify $2 billion dollars in savings from activities that are 
determined to be of low priority or wasteful or unnecessary to 
national defense. These savings then can be used to accommodate 
other priorities such as force protection, munitions and 
surveillance capabilities. The report must be submitted by May 
15, 2004. Its submission would not be considered under 
reconciliation procedures and it is assumed the savings would 
be discretionary. The Budget Committee chairman is then 
required to submit the report for inclusion in the 
Congressional Record by no later than May 21, 2004.
Conference Agreement
            Section 201: Reconciliation in the Senate
      The conference agreement contains two instructions for 
reconciliation in the Senate. Section 201(a) instructs the 
Finance Committee to report a reconciliation bill (not later 
than September 30, 2004) that reduces revenues by not more than 
$22.9 billion and that increases outlays by not more than $4.6 
billion. This is an amount sufficient to accommodate a 
permanent extension of the $1,000 child credit, the marriage 
penalty relief, and the 10 percent marginal tax rate bracket. 
The outlay instruction is included to allow for a fungibility 
adjustment between outlays and revenues, so that the Finance 
Committee may include legislation affecting refundable credits 
in the legislation they report.
      Section 201(b) instructs the Finance Committee to report 
a reconciliation bill (not later than September 10, 2004) that 
increases the statutory debt limit by $689.946 billion.
            Section 211: Reconciliation in the House
      The conference agreement contains one instruction for 
reconciliation in the House. Section 211(a) instructs the House 
Committee on Ways and Means to report a measure by September 
30, 2004 that will reduce taxes by $22.9 billion and increase 
outlays by $4.6 billion.
      Section 211(b) also authorizes the chairman of the House 
Committee on the Budget to make deficit-neutral adjustments in 
the allocations and aggregates for a reconciliation bill that 
complies with the so-called 20 percent fungibility rule under 
section 310 of the Congressional Budget Act. This authority is 
consistent with section 310(c)(2) of the Budget Act, which 
allows the chairman of the Senate Committee on the Budget to 
conform the budget resolution to a reconciliation bill that 
satisfies the 20 percent rule under section 310(c) in the 
Senate.

                     RESERVE FUNDS AND ADJUSTMENTS

      A budget resolution does not become law and cannot amend 
law. However, pursuant to section 301(b)(4) of the 
Congressional Budget Act, some provisions in the resolution may 
affect the consideration of legislation in order to implement 
and enforce the policy assumptions underlying such resolution. 
The conference agreement contains a number of provisions which 
may affect the consideration of legislation implementing the 
policies assumed in this resolution.

                TITLE III: RESERVE FUNDS AND ADJUSTMENTS

      In general, a reserve fund (or discretionary adjustment) 
permits the chairman of the Committee on the Budget to increase 
the section 302 allocation and other appropriate levels set out 
in this resolution (including, in the Senate, the discretionary 
spending limits) once certain conditions have been met. The 
authority to make these adjustments is solely within the 
discretion of the chairman and may be made when the committee 
of jurisdiction reports a measure that satisfies all the 
conditions set in the reserve funds.
Senate Resolution
      During Senate consideration of the Committee-reported 
resolution, six additional deficit-neutral reserve funds were 
adopted in the Senate by voice vote. All envision the committee 
of jurisdiction reporting a specific measure (or in the case of 
three of the reserve funds, the Committee on Appropriations 
reporting an appropriations measure) for which the chairman of 
the Committee on the Budget may then make appropriate budgetary 
adjustments. These six are discussed below:

                       Subtitle A: Reserve Funds

            Section 301: Reserve fund for health insurance for the 
                    uninsured
      The Senate resolution provides a deficit-neutral reserve 
fund for the period of fiscal years 2005 through 2009 for 
legislation that addresses access to health care services and 
health insurance for the uninsured. The chairman of the 
Committee on the Budget may adjust the applicable allocations 
and aggregates to accommodate this legislation so long as the 
total cost of the legislation does not increase the deficit for 
fiscal year 2005 or for the sum of fiscal year 2005 through 
2009. The adjustment may be made only if the Committee on 
Finance or the Committee on Health, Education, Labor and 
Pensions reports a bill that provides health insurance for the 
uninsured (including a measure providing for tax deductions for 
the purchase of health insurance or other measures) or that 
increases access to health insurance through lowering costs; 
provided that any such measure does not increase the costs of 
current health insurance coverage.
      An amendment (SA 2699) offered by Senator Kennedy was 
adopted by voice vote that expands the purposes of the reserve 
fund to include ``legislation to reallocate and maintain 
expiring SCHIP funds rather than allowing such funds to revert 
to the Treasury.''
            Section 302: Reserve fund for higher education
      The Senate resolution provides additional resources to 
the Committee on Health, Education, Labor and Pensions for 
reauthorization of the Higher Education Act. The mechanism will 
make available an additional $1 billion for fiscal year 2005 
and $5 billion for fiscal years 2005 through 2009 for 
reauthorization of the Higher Education Act of 1965. This 
section also makes available an additional $3.7 billion for 
fiscal year 2005 in budget authority only in order to permit 
the authorizing committee to rectify an accumulated short fall 
in the federal Pell Grant account.
            Section 303: Reserve fund for energy legislation
      The Senate resolution provides a mechanism to make 
additional resources available for a measure setting out a 
national energy policy (including a bill, joint resolution, 
amendment, motion, or conference report), that is predominately 
within the jurisdiction of the Committee on Energy and Natural 
Resources. Such measure may also include revenue reductions. 
Unlike most reserve funds, this one is not dependent upon the 
committee of jurisdiction reporting new legislation. Section 
303 is intended to facilitate the consideration of S. 2095, the 
Energy Policy Act, or a similar measure in any number of 
different procedural situations.
      Regardless of the procedural posture in which such a 
measure comes before the Senate, the chairman of the Committee 
on the Budget may make adjustments to committee allocations and 
relevant budgetary aggregates provided that the cost of the 
measure does not exceed $261 million in new budget authority 
and $221 million in outlays for fiscal year 2005 and $1.5 
billion in new budget authority and $1.5 billion in outlays for 
fiscal year 2005 through 2009 and the revenue reductions do not 
exceed $1.8 billion for fiscal year 2005 and $15.1 billion for 
fiscal year 2005 through 2009. Note that these revenue 
reductions are assumed in the Senate resolution and thus 
section 303 does not provide any authority for changing the 
revenue aggregate. Rather, it makes not exceeding the maximum 
revenue reduction a condition of making the spending-related 
adjustments.
            Section 304: Reserve fund for Guard and Reserve health care
      An amendment (SA 2731) offered by Senators Graham (of 
South Carolina) and Bunning was adopted by voice vote that 
would make additional resources (not to exceed $5.6 billion for 
the period fiscal year 2005 through 2009) available to either 
the Committee on Armed Services or the Committee on 
Appropriations to expand access to health care for members of 
the reserve component.
            Section 305: Reserve fund for Montgomery GI bill benefits
      An amendment (SA 2731) offered by Senators Graham (of 
South Carolina) and Bunning was adopted by voice vote that 
would make additional resources (not to exceed $1.2 billion for 
the period fiscal year 2005 through 2009) available to either 
the Committee on Armed Services or the Committee on 
Appropriations to increase benefit levels under the Montgomery 
GI bill for members of the Selected Reserves.
            Section 306: Reserve for funding of Hope Credit
      An amendment (SA 2820) offered by Senator Mikulski was 
adopted by voice vote that would make additional resources 
available to the Committee on Finance to increase the Hope 
Credit to $4,000, makes the Credit available for 4 years, and 
make the Credit refundable.
            Section 307: Reserve fund for expansion of pediatric 
                    vaccine distribution program
      An amendment (SA 2833) offered by Senator Bingaman was 
adopted by voice vote that would make additional resources 
available to the Committee on Finance to expand the pediatric 
vaccine distribution program established under section 1928 of 
the Social Security Act to include coverage for children 
administered a vaccine at a public health clinic or Indian 
clinic and repels the price cap for pre-1993 vaccines.
            Section 308: Reserve fund for addressing minority health 
                    disparities
      An amendment (SA 2780) offered by Senator Clinton was 
adopted by voice vote that would make additional resources (not 
to exceed $400 million for fiscal year 2005) available to the 
Committee on Appropriations for legislation that addresses 
minority health disparities through activities including those 
at the HHS Office of Minority Health, the Office of Civil 
Rights, the National Center on Minority Health and Health 
Disparities, the Minority HIV/AIDS initiative, health 
professions training, and through the Racial and Ethnic 
Approaches to Community Health at the Centers for Disease 
Control. This amendment would more properly be classified as an 
adjustment to the discretionary spending limits rather than a 
reserve fund for additional mandatory spending.
            Section 309: Reserve for Postal Service reform
      An amendment (SA 2852) offered by Senator Collins was 
adopted by voice vote that would make additional resources 
available to the Committee on Governmental Affairs for 
legislation that reforms the United States Postal Service to 
improve its economic viability.

     Subtitle B: Adjustments With Respect to Discretionary Spending

            Section 311: Adjustment for surface transportation
      The Senate resolution provides a mechanism (reinforcing 
the intent of a comparable mechanism in the 2004 budget 
resolution) to make additional contract authority and outlay 
allocations available to the relevant committees for highway 
and transit programs for the reauthorization of and 
appropriation for surface transportation programs, provided 
that the reauthorization (by virtue of a title reported by the 
Committee on Finance) makes available new net resources for the 
highway trust fund that offset the resulting outlays--without 
increasing the deficit.
            Section 312: Adjustment for supplemental appropriations for 
                    activities in Afghanistan and Iraq
      The Senate resolution provides a mechanism to make 
available to the Committee on Appropriations additional 
resources for supplemental appropriations for military 
activities in Iraq and Afghanistan. This mechanism requires 
that the President transmit a budget request for such funds and 
limits the adjustment to $30 billion in new budget authority 
for fiscal year 2005 or the President's request--whichever is 
lower. This mechanism is intended to accommodate incremental 
expenditures associated with ongoing military operations in 
Iraq and Afghanistan.
            Section 313: Adjustment for emergency fire suppression 
                    activities
      The Senate resolution provides a mechanism to make 
available up to $500 million per year in additional resources 
to the Committee on Appropriations for supplemental 
appropriations for fire suppression activities for fiscal years 
2004 through 2006. Such additional resources will only be made 
available if the regular appropriation for that year has been 
enacted and is not less than the 10-year average for those 
accounts and the severity of the fire season necessitates 
providing additional funding in a timely manner.
      The resolution permits the chairman of the Committee on 
the Budget to adjust the discretionary spending limits, the 
committee allocation and other appropriate budgetary aggregates 
by not more than $400 million each year for fiscal years 2005 
and 2006 for the Forest Service and not more than $100 million 
each year for fiscal years 2005 and 2006 for the Department of 
the Interior. With respect to fiscal year 2004, the 10-year 
average has already been appropriated in the regular 2004 
appropriations bills. If additional resources are required for 
fire suppression in fiscal year 2004, rather than making an 
adjustment to the fiscal year 2004 levels, the chairman has the 
authority to hold harmless a measure that provides up to $400 
million for the Forest Service and up to $100 million for the 
Department of the Interior for fire suppression activities.
      These funds can be made available on any appropriations 
bill, amendment, joint resolution or conference report, and are 
only available for fire suppression. The Senate resolution 
anticipates that the Forest Service and Department of Interior 
will work with Congress to develop cost containment measures 
for fire suppression operation and encourages the Forest 
Service and Department of the Interior to report to Congress 
how the funds above the 10-year average were used.
            Section 314: Reserve fund for eliminating survivor benefit 
                    plan--Social Security offset
      During Senate consideration of the Committee-reported 
resolution, an amendment (SA 2775) offered by Senator Landrieu 
was adopted by voice vote that would make additional resources 
(not to exceed $2.757 billion for the period of fiscal years 
2005 through 2009) available to either the Committee on Armed 
Service or the Committee on Appropriations to provide an 
increase to the minimum Survivor Benefit Plan basic annuity for 
surviving spouses age 62 or older. The amendment does not 
require that the increased spending be deficit-neutral.
            Section 514: Reserve fund for homeland security grant 
                    program, assistance to firefighter grants and port 
                    security grants
      During Senate consideration of the Committee-reported 
resolution, an amendment (SA 2817) offered by Senators Levin 
and Collins was adopted by a vote of 52 to 43 that would make 
additional resources (not to exceed $1.545 billion for fiscal 
year 2005) for programs at the Department of Homeland Security. 
A sense of the Senate provision that was also part of this 
amendment stated that this increase in funding is to come from 
the cancellation of planned future deliveries of oil to the 
Strategic Petroleum Reserve.
House Amendment

    Subtitle A: Reserve Funds for Legislation Assumed in the Budget 
                               Aggregates

            Section 301: Deficit-neutral reserve fund for health 
                    insurance for the uninsured
      This section of the House Amendment allows adjustments to 
be made in the allocations and aggregates for certain deficit-
neutral legislation. If a committee reports legislation that 
provides health insurance for the uninsured, the chairman of 
the Budget Committee may adjust the levels in the allocations 
and aggregates to the extent such legislation is deficit-
neutral in fiscal year 2005, and the period of fiscal years 
2005 through 2009.
            Section 302: Deficit-neutral reserve fund for the Family 
                    Opportunity Act
      This section of the House Amendment allows adjustments to 
be made in the allocations and aggregates for certain deficit-
neutral legislation. If the Energy and Commerce Committee 
reports legislation that provides Medicaid coverage for 
children with special needs (the Family Opportunity Act), the 
chairman of the Budget Committee may adjust the levels in the 
allocations and aggregates to the extent such legislation is 
deficit-neutral in fiscal year 2005, and the period of fiscal 
years 2005 through 2009. This section allows these initiatives 
to come to the floor with offsets, as long as that initiative 
is deficit-neutral in the first year and over the 5-year 
period.
            Section 303: Deficit-neutral reserve fund for the Military 
                    Survivors Benefit Plan
      This section of the House Amendment establishes a 
deficit-neutral reserve fund should legislation be reported, an 
amendment offered, or conference report submitted which 
increases military survivor's benefits. The purpose of this 
section is to encourage an examination of existing mandatory 
spending accounts so that appropriate reductions may be used to 
offset a potential survivor benefit expansion.
            Section 304: Reserve fund for pending legislation
      This section of the House Amendment allows an adjustment 
to be made for any bill, including a bill that provides for the 
safe importation of FDA-approved prescription drugs or places 
limits on medical malpractice litigation, that has been adopted 
by the House in the first session of the 108th Congress and 
enacted into law. The adjustment may be made by the chairman of 
the Committee on the Budget to the allocations and aggregates 
to reflect any resulting savings from any such measure. The 
effect of any adjustment would be to lock in the savings for 
deficit reduction. The chairman of the Budget Committee would 
consult with the committees of jurisdiction before making any 
adjustments pursuant to this section.

                   Subtitle B: Contingency Procedure

            Section 311: Contingency procedure for surface 
                    transportation
      This section of the House Amendment permits the chairman 
of the Committee on the Budget to adjust the appropriate levels 
in the budget resolution to accommodate legislation increasing 
spending for highway and transit programs above the levels in 
the budget resolution to the extent there are offsets for the 
additional spending. This contingency is essentially identical 
to that included in the conference report on the budget 
resolution for fiscal year 2004.
      Subsection (a) permits the chairman of the Committee on 
the Budget to increase the Committee on Transportation and 
Infrastructure's allocation for legislation that increases 
mandatory contract authority for highway and transit programs 
financed out of the Highway Trust Fund. In order to make the 
adjustment, the additional spending must be offset by a 
reduction in mandatory outlays out of the Fund or receipts 
appropriated to the Fund.
      Since any additional contract authority provided pursuant 
to subsection (b) would be made available for obligation 
through a change in obligation limitations, subsection (c) 
permits the chairman of the Committee on the Budget to increase 
the appropriate committee's allocation of discretionary outlays 
to the extent legislation increases the obligation limits for 
the highway and transit programs above the levels assumed in 
the budget resolution. In order to make the adjustment, 
legislation must first be enacted in compliance with subsection 
(a).
Conference Agreement

                       Subtitle A: Reserve Funds

      In general, the reserve funds set out in subtitle A of 
title III of the Conference Report permit the appropriate 
chairman of the Committee on the Budget to adjust committee 
allocations for the named authorizing committees, the spending 
and revenue aggregates and functional levels in the budget 
resolution if legislation is considered that satisfies the 
conditions set out in each particular reserve fund. Adjustments 
may only be made for reported bills, amendments thereto 
(including motions to recommit with amendment) and conference 
reports thereon.
      Note that, in the Senate, this language is not intended 
to permit revisions or adjustments to the pay-as-you-go 
scorecard. In both the House and Senate, to the extent a 
reserve fund for an authorizing committee is required to be 
deficit-neutral and it is offset through a reduction in 
spending, such reduction within the committee's jurisdiction to 
achieve deficit neutrality must be in mandatory outlays. These 
``reserve funds'' are not intended to accommodate floor 
amendments offered to unrelated measures. All (except for 
section 307) are required to be deficit-neutral in order for 
any adjustments to be made.
            Section 301: Deficit-neutral reserve fund for health 
                    insurance for the uninsured
      The conference agreement retains both the Senate (section 
301(a)) and House (section 301(b)) reserve funds for 
legislation relating to health insurance for the uninsured. 
There are modest differences between the House and Senate with 
respect to the policies required for any adjustments. Both 
reserve funds are deficit-neutral.
            Section 302: Deficit-neutral reserve fund for higher 
                    education
      The conference agreement includes a reserve fund for both 
the Committee on Health, Education, Labor and Pensions in the 
Senate and the Committee on Education and the Workforce in the 
House for legislation reauthorizing the Higher Education Act. 
Similar language was contained in section 302 of the Senate 
resolution.
            Section 303: Deficit-neutral reserve fund for Montgomery GI 
                    benefits
      The conference agreement includes a deficit-neutral 
reserve fund for the committees of jurisdiction for legislation 
that increases benefits under the Montgomery GI bill for 
members of the Selected Reserves. Substantially similar 
language was contained in section 305 of the Senate resolution.
            Section 304: Deficit-neutral reserve fund for Postal 
                    Service reform
      The conference agreement includes a deficit-neutral 
reserve fund for the Senate Governmental Affairs Committee and 
the House Committee on Government Reform for legislation that 
reforms the U.S. Postal Service. Substantially similar language 
was contained in section 309 of the Senate resolution.
            Section 305: Deficit-neutral reserve fund for the Family 
                    Opportunity Act
      The conference agreement includes a deficit-neutral 
reserve fund for the Senate Finance Committee and the House 
Energy and Commerce Committee for legislation that provides 
Medicaid coverage for children with special needs. 
Substantially similar language was contained in section 302 of 
the House amendment.
            Section 306: Deficit-neutral reserve fund for eliminating 
                    survivor benefit plan--Social Security offset
      The conference agreement includes a deficit-neutral 
reserve fund for both the Senate and the House Armed Services 
Committees for legislation that increases the minimum Survivor 
Benefit Plan basis annuity for surviving spouses age 62 and 
older. Substantially similar language was contained in section 
314 of the Senate resolution.
            Section 307: Reserve fund for pending legislation
      The conference agreement includes a reserve fund for 
certain House-passed legislation, with modifications. It 
permits the House Budget Committee chairman to ensure that the 
savings resulting from the enactment of certain measures would 
go to deficit reduction. The reserve fund allows the chairman 
to make adjustments in the budget resolution aggregates and 
allocations upon the enactment of legislation providing for the 
safe importation of FDA-approved prescription drugs and 
legislation imposing limits on medical malpractice litigation.

     Subtitle B: Adjustments With Respect to Discretionary Spending

      In general, the adjustments set out in subtitle B of 
title III of the Conference Report permit the appropriate 
chairman of the Committee on the Budget to adjust committee 
allocations for the Committees on Appropriations and the 
spending aggregates and functional levels in the budget 
resolution if the particular requirements of each section are 
satisfied. In the Senate, this includes the discretionary 
spending limits set out in section 404. Note that no adjustment 
made under this subtitle is intended to permit resources or 
adjustments to the pay-go-you-go scorecard for the Senate's 
paygo point of order.
            Section 311: Adjustment for surface transportation
      Section 311 of the conference agreement is similar to 
section 311 of the House amendment and section 311 of the 
Senate resolution. However, the chairmen of the Budget 
Committees will not make any adjustment for fiscal year 2004, 
which is not revised in this conference agreement.
            Section 312: Adjustment for wildland fire suppression
      The conference agreement retains the language from 
section 313 of the Senate resolution, extends it to the House, 
and makes a number of minor modifications. Subsection (a) 
states that the intent of this section is to accommodate 
additional appropriations for wildland fire suppression if such 
activities are funded at the 10-year average, there are 
insufficient funds available in the wildland fire suppression 
account, and the fire season is of sufficient severity to merit 
additional appropriations.
      Subsection (b)(1) clarifies that CBO will calculate the 
ten-year average of obligations for wildland fire suppression, 
defined as the ``base amount'', in consultation with the 
Committees on the Budget and on Appropriations.
      Under subsection (b)(2) the chairmen of the Committees on 
the Budget of the House and the Senate would accommodate 
additional spending by the Committees on Appropriations for any 
appropriation for wildland fire suppression above the base 
amount by increasing the Committees' allocation and other 
appropriate aggregates for fiscal year 2005.
      Under subsection (b)(3) there is a special rule for 
fiscal year 2004 that allows the chairman of the Committee on 
the Budget of the House to accommodate additional spending by 
the Committee on Appropriations for additional appropriations 
for wildland fire suppression by increasing the Committee's 
allocation and other appropriate aggregates, but not to exceed 
$500 million. In the Senate, for fiscal year 2004, the chairman 
of the Committee on the Budget may hold the Committee on 
Appropriations harmless (by not scoring) for any additional 
appropriations for wildland fire suppression, only to the 
extent such amounts do not exceed $500 million.
            Section 313: Mechanism for adjusting appropriate 
                    discretionary levels
      Subsection (a) establishes a mechanism to increase the 
discretionary levels from the discretionary limits that are 
binding in the Senate (by virtue of section 504 of the fiscal 
year 2004 budget resolution) to the levels envisioned by this 
conference agreement. It is similar to the mechanism set out in 
section 203 of the fiscal year 2002 budget resolution (H. Con. 
Res. 83, 107th Cong.).
      Subsection (a) provides the chairmen of the Committees on 
the Budget the authority to increase the section 302(a) 
allocation to the Committees on Appropriations (as well as the 
discretionary spending limits set out in section 404 and other 
levels in this conference agreement) when the first regular 
appropriations bill for fiscal year 2005 is reported in its 
respective House. The conference agreement will provide an 
additional $4.630 billion in new budget authority and $14.240 
billion in outlays to the Committee on Appropriations. The 
functional levels in this conference agreement, including a 
necessary adjustment in function 920 envision an ultimate level 
of discretionary spending of $821.419 billion in new budget 
authority and $905.328 billion in outlays for fiscal year 2005.
      Subsection (b) establishes a procedure to adjust the 
allocation to the Committees on Appropriations by the amount of 
the advance appropriation for fiscal year 2005 for Project 
Bioshield (already enacted in the fiscal year 2004 bill making 
appropriations for the Department of Homeland Security). It 
would provide $2.528 billion in budget authority and $0.276 
billion in outlays. This adjustment is necessary to achieve 
comparability between the President's budget request and this 
conference agreement with respect to the budgetary treatment of 
Project Bioshield. This adjustment will be made at the same 
time as the adjustment made pursuant to subsection (a).

                ITEMS DROPPED FROM THE SENATE RESOLUTION

      The following provisions from the Senate resolution were 
not retained in any form in the conference agreement:

Section 303--Reserve Fund for Energy Legislation
Section 304--Reserve Fund for Guard and Reserve Health Care
Section 306--Reserve Fund for Funding of Hope Credit
Section 307--Reserve Fund for Expansion of Pediatric Vaccine 
        Distribution Program
Section 308--Reserve Fund for Addressing Minority Health 
        Disparities
Section 514--Reserve Fund for Homeland Security Grants

                           BUDGET ENFORCEMENT

      Under section 301 of the Budget Act, the budget 
resolution may include special procedures to enforce the 
spending and revenue levels contained in the resolution and the 
allocations found in the accompanying joint statement of 
managers.

                      TITLE IV: BUDGET ENFORCEMENT

Senate Resolution
            Section 401: Restriction on advance appropriations in the 
                    Senate
      The Senate resolution includes language limiting the use 
of advance appropriations. This restriction was first included 
in the fiscal year 2001 budget resolution and was included and 
revised in the fiscal year 2002 and fiscal year 2004 
resolutions as well. The Senate resolution continues to 
restrict advance appropriations to an annual limit of $23.158 
billion with respect to both the fiscal years 2005 and 2006 
appropriations bills and to those programs that are listed in 
the statement of managers accompanying the conference report on 
the budget resolution. The resolution also continues the 
exception for advances with respect to the Corporation for 
Public Broadcasting.
      The list of permissible advances in the respective 
appropriations bill is as follows:

             Accounts Identified for Advance Appropriations

Interior: Elk Hills

Labor, HHS:
      Corporation for Public Broadcasting
      Employment and Training Administration
      Education for the Disadvantaged
      School Improvement
      Children and Family Services (Head Start)
      Special Education
      Vocational and Adult Education

Transportation, Treasury: Payment to Postal Service

Veterans, HUD: Section 8 Renewals
            Section 402: Emergency legislation
      In general, the Senate's emergency rule addresses two 
issues with respect to emergency spending: the ability to 
designate spending as an emergency and the restatement of the 
Senate point of order with respect to the use of that 
designation.
      Section 402 of the Senate resolution is virtually 
identical to section 502(c) of the 2004 resolution, which sets 
out the Senate's rule with respect to emergency legislation. 
Subsection (a) states the general purpose for the rule, and 
subsection (b) sets out the rule as it is applied in the House 
of Representatives and thus is appropriately not addressed in 
the Senate-passed 2005 resolution. The only change to the 
current Senate rule (set out in section 502(c) of the 2004 
resolution) is of a technical nature and makes clear that the 
adjustment authority provided in section 402 of the 2005 
resolution is applicable to all future budget resolutions as 
well. The following is a review of the history of this 
provision.
      The authority to designate spending as an ``emergency'' 
existed as a part of the statutory discretionary spending 
limits and the pay-as-you-go rules set out in sections 251 and 
252 of the Balanced Budget and Emergency Deficit Control Act of 
1985. The purpose of the designation was to create a ``safety 
valve'' for unexpected, emergency expenditures that would be 
exempt from sequestration, which served as the enforcement 
mechanism for the caps and PAYGO. With the expiration of 
section 251 on September 30, 2002 and the de facto expiration 
of section 252 (by virtue of setting the scorecard to zero for 
all fiscal years), section 502 of the 2004 resolution 
reestablished the authority of the Senate to designate spending 
and revenue changes as an emergency. In doing so, section 502 
codified the criteria used in the definition of an emergency 
and required committee reports and statements of managers to 
justify the use of emergency designations with these criteria. 
The criteria are as set out in subsection (c)(3)(B).
      If an item of discretionary spending is accompanied by an 
emergency designation, the discretionary spending limit and the 
allocation to the Committee on Appropriations (as well as all 
other levels in the most recently adopted budget resolution) is 
held harmless for the costs associated with that spending. If a 
revenue reduction or mandatory spending increase is accompanied 
by an emergency designation, then the committee allocation and 
the Senate's pay-go scorecard is also be held harmless 
accordingly (again, as well as all other appropriate levels in 
the resolution).
      Section 402 of the 2005 Senate resolution restates (with 
a technical correction) the Senate's emergency designation 
point of order. This point of order was first included in the 
fiscal year 2000 budget resolution. This point of order allows 
any member to question the use of an emergency designation 
while the bill, amendment or conference report containing the 
designation is before the Senate (except for defense 
appropriations). Once the point of order is made, it requires 
60 votes to waive the point of order and retain the 
designation. If the motion to waive is not successful, the 
designation would be removed from the measure, and the spending 
item would remain, in all likelihood making the bill (or 
amendment) subject to a Budget Act point of order, which would 
also require 60 votes to overcome. The removal of the 
designation is accomplished by the same method as provided for 
in the Byrd Rule (section 313 of the Congressional Budget Act 
of 1974).
            Section 403: Discretionary spending limits in the Senate
      Section 504 of the 2004 budget resolution set out 
discretionary spending limits for fiscal years 2003, 2004, and 
2005. These limits are enforced in the Senate with a 60-vote 
point of order. The limits set out with respect to fiscal year 
2005 are applicable during consideration of the budget 
resolution in the Senate. Therefore, any amendment that would 
increase the level of discretionary spending over the level set 
out in the 2004 resolution would also be subject to a 60-vote 
point of order.
      Section 402 of the Senate resolution sets out 
congressional discretionary spending limits for the first two 
years covered by the 2005 budget resolution (fiscal years 2005 
and 2006) with respect to both budget authority and outlays. 
Since the advent of statutory discretionary spending limits in 
1990, a majority of budget resolution conference reports have 
included language dealing with ``congressional caps.'' \1\
---------------------------------------------------------------------------
    \1\ See: section 12(b) of H. Con. Res. 64 (103rd Cong.) the fiscal 
year 1994 Concurrent Resolution on the Budget; section 24 of H. Con. 
Res. 218 (103rd Cong.) the fiscal year 1995 Concurrent Resolution on 
the Budget; Section 201 of H. Con. Res. 67 (104th Cong.) the fiscal 
year 1996 Concurrent Resolution on the Budget; Section 301 of H. Con. 
Res. 178 (104th Cong.) the fiscal year 1997 Concurrent Resolution on 
the Budget; Section 201 of H. Con. Res. 84 (105th Cong.) the fiscal 
year 1998 Concurrent Resolution on the Budget (all establishing 
multiyear caps); Section 206 of H. Con. Res. 290 (106th Cong.) the 
fiscal year 2001 Concurrent Resolution on the Budget; Section 203 of H. 
Con. Res. 83 (107th Cong.) the fiscal year 2002 Concurrent Resolution 
on the Budget (both providing a mechanism to accommodate an increase to 
the current year's statutory cap); section 504 of H. Con. Res. 95 
(108th Cong.) the fiscal year 2004 Concurrent Resolution on the Budget.
---------------------------------------------------------------------------
      During debate of the Committee-reported resolution, an 
amendment (SA 2742, offered by Senator Warner) to increase 
discretionary spending for fiscal year 2005 through 2009 in 
order to provide full funding of the President's request for 
national defense was adopted by a vote of 95 to 4. The 
amendment also called for an explicit increase to the 
discretionary limits set out in the Committee-reported 
resolution of $6.900 billion in budget authority and $5.409 
billion in outlays for 2005 and $1.594 billion in outlays for 
2006. No point of order was raised during consideration of this 
amendment. As passed, the Senate resolution sets the following 
amounts as the discretionary spending limits:
            For fiscal year 2005: $819.673 billion in new 
        budget authority and $823.694 billion in outlays for 
        the discretionary category; $33.393 billion in outlays 
        for the highway category, and $1.488 billion in new 
        budget authority and $6.726 billion in outlays for the 
        transit category, for a total of $821.161 billion in 
        new budget authority and $863.813 billion in outlays.
            For fiscal year 2006: $852.257 billion in new 
        budget authority and $885.860 billion in outlays for 
        the discretionary category. The Senate resolution sets 
        out only one unified category for 2006.
      The Senate resolution also provides for a number of so-
called cap adjustments. The cap adjustments permit the chairman 
of the Committee on the Budget to increase the discretionary 
spending limit, the section 302(a) allocation to the Committee 
on Appropriations, and any other appropriate levels in the 
resolution if an appropriations bill provides additional 
resources for the programs specified in the adjustment. These 
are set out in title III of the resolution.
      These discretionary spending limits would continue to be 
enforced by a 60-vote point of order on two fronts: (1) there 
would be a point of order against the fiscal year 2006 budget 
resolution if it exceeds the limits for that year set in the 
2005 resolution (or against any revision to the fiscal year 
2005 resolution that does so) and (2) there would be a point of 
order against any appropriations bill that causes any of the 
discretionary limits to be exceeded.
            Section 404: Scoring rules
      Section 404 of the Senate resolution includes a number of 
``scorekeeping rules.'' Pursuant to section 312(a) of the 
Congressional Budget Act, the chairmen of the Committees on the 
Budget of the House and Senate are responsible for determining 
the costs of legislative proposals in their respective 
chambers. From time to time, new scoring issues arise as 
Congress responds to various fiscal needs. The rules set forth 
in this section will serve as guidance to the chairman of the 
Committee on the Budget, and the Senate as a whole, in 
evaluating the cost of legislative proposals and applying the 
budgetary discipline set out in budget resolutions and the 
Congressional Budget Act of 1974.
      As originally reported from the Committee on the Budget, 
section 404(a) had set out a scoring rule (similar to the 
President's proposal) intended to equalize the scoring 
treatment of budget authority and outlays for the Pell Grant 
program. Amendment 2851 was adopted by voice vote that 
eliminated this provision in its entirety.
      Subsection (a)--Bioshield. As reported from the Committee 
on the Budget, section 404(b) had set out a scoring rule with 
respect to possible changes in the availability of funding 
already provided for Project Bioshield. The Bioshield program 
was proposed in the President's fiscal year 2004 budget as a 
new mandatory program. The fiscal year 2004 budget resolution 
contained a ``reserve fund'' in the Senate in order to 
accommodate the spending for this new proposal. In the absence 
of authorization language, the Bioshield program was funded, in 
its entirety, in the fiscal year 2004 appropriations act for 
the Department of Homeland Security. Full funding (for the 
period requested by the President) was accomplished by means of 
an advance appropriation. This provision provided budget 
authority as follows: $0.890 billion in new budget authority 
for fiscal year 2004, $2.528 billion in new budget authority 
for fiscal year 2005 and $2.175 billion in new budget authority 
for fiscal year 2009. The amounts for 2005 and 2009 are advance 
appropriations and, when combined with all the usual advance 
appropriations, exceeded the cap on advance appropriations set 
by section 501 of the 2004 budget resolution. Section 501 
contains both a dollar limit for fiscal year 2005 and an 
exclusive list of programs for which permissible advances may 
be made. The Bioshield advance also violated the program list. 
This new scoring rule, proposed under section 404(b) of the 
Committee reported-resolution, provided that any legislative 
change in the availability of these funds (such as a recission) 
would not be scored for the purposes of budgetary enforcement. 
Consequently, recissions of budget authority would not be 
available as an offset for spending on other programs.
      The Senate adopted an amendment (SA 2848 offered by 
Senator Byrd, adopted by voice vote), that deleted the 
Committee-reported Bioshield rule and replaced it with an 
entirely new rule. The new rule, (now found in subsection (a)) 
requires the chairman of the Committee on the Budget to revise 
the allocations and other budgetary aggregates by $2.528 
billion (the amount of the advance appropriation already 
enacted for Project Bioshield for fiscal year 2005) when the 
2005 Homeland Security appropriations bill is reported. This 
would hold the Committee on Appropriations harmless with 
respect to the discretionary caps and the Committee's section 
302(a) allocation for the cost of the 2005 advance 
appropriation for Bioshield that was made in the 2004 
appropriations bill.
      Subsection (b)--Energy Savings Performance Contracts. The 
Senate also adopted an amendment (SA 2823 offered by Senator 
Inhofe, adopted by voice vote) that provides a directed-scoring 
rule with respect to energy savings performance contracts 
[ESPCs]. This new rule is now found in subsection (b) of 
section 404. The rule would permit ESPCs to be reauthorized 
without recognizing (scoring) the costs. Current authority of 
federal agencies to enter into obligations for ESPCs has 
expired (their cost has recently been about $250 million per 
year). The conference report on the Energy bill (H.R. 6) 
included a provision to reauthorize ESPCs, which CBO estimated 
would cost $267 million in 2005 and $1.4 billion over 10 years.
            Section 405: Adjustments to reflect changes in concepts and 
                    definitions
      Section 405(a) of the Senate resolution is virtually 
identical to section 508 of the 2004 budget resolution. It 
provides that upon enactment of legislation that changes 
funding of an existing program from discretionary to mandatory 
(or vice versa) the chairman of the Committee on the Budget 
will adjust the levels in this budget resolution (including the 
discretionary spending limits) to reflect such a change.
      Section 405(b) of the Senate resolution provides a 
similar rule for reported legislation that addresses changes in 
the nature of offsetting receipts from the Power Marketing 
Administration.
            Section 406: Application and effect of changes in 
                    allocations and aggregates
      The Senate resolution retains language from previous 
resolutions clarifying the process for implementing any 
adjustment made pursuant to the reserve funds and discretionary 
adjustments and the status of these adjusted levels. It also 
clarifies that the Budget Committee determines scoring for 
purposes of points of order.
            Section 407: Rulemaking authority
      The Senate resolution includes language identical to 
section 222 of the fiscal year 2002 budget resolution, which 
simply states Congress' authority to legislate rules of 
procedure for either chamber.
            Section 408: Pay as you go point of order in the Senate
      The Committee-reported resolution did not contain any 
language with respect to the pay-as-you-go rule because the 
current rule (set out in section 505 of H. Con. Res. 95, the 
fiscal year 2004 budget resolution) would not have expired 
until September 30, 2008. The original Senate pay-as-you-go 
point of order first appeared in the fiscal year 1994 budget 
resolution. The previous version expired in its entirety on 
September 30, 2002. The point of order was revised and extended 
through April 15, 2003 when the Senate adopted S. Res. 304 
(107th Congress) on October 16, 2002. S. Res. 304 included a 
new provision of the pay-as-you-go rule making the rule 
applicable to mandatory spending in appropriations bills in 
order to prevent the exploitation of the fact that there were 
no limits on discretionary spending for fiscal year 2003 due to 
the expiration of the discretionary spending limits and the 
lack of a fiscal year 2003 budget resolution.
      The section 505 pay-as-you-go rule did not retain the 
expanded application temporarily applied to appropriation bills 
in S. Res. 304. Rather it resembles the previous versions of 
the rule with one change: it applies on a post-budget 
resolution policy basis. To accomplish this, a scorecard is 
maintained by the chairman of the Committee on the Budget that 
sets out the total level of change to the deficit assumed by 
the most recently adopted budget resolution. Subsequent 
legislation is to be measured against these balances.
      But the current section 505 paygo rule was replaced by an 
amendment to the 2005 budget resolution (SA 2748 offered by 
Senator Feingold; adopted by a vote of 51 to 48). The amendment 
reinstates the Senate's pay-as-you-go rule as it was in effect 
prior to its expiration on September 30, 2002: any increases in 
mandatory spending or reductions in revenues must be fully 
offset (i.e., deficit-neutral) for the 1st year, the sum of 
years 1 through 5, and the sum of years 6 through 10 with 
respect to the most recently agreed to concurrent resolution on 
the budget. The Feingold rule would remain in effect through 
September 30, 2009.
House Amendment
            Section 401: Restrictions on advance appropriations
      Section 401 imposes a limitation on advance 
appropriations similar to a provision included in the last 
several budget resolutions. It effectively limits which 
programs may receive an advance appropriation and establishes 
an overall amount of advanced appropriations. The section 
includes a general restriction that limits the programs that 
may receive an advance appropriation and the total level of 
such appropriations. Advance appropriations may be provided for 
the accounts in appropriation bills identified under the 
section ``Accounts Identified for Advanced Appropriations'' in 
the Joint Statement of Managers on the Conference Report on the 
Budget Resolution. The list is expected to be the same as that 
which appears in this report in the section ``Additional Report 
Language'' and with the same heading. Total advance 
appropriations for these accounts may not exceed $23.568 
billion in budget authority. The amount is essentially the same 
as provided in previous budget resolutions, but it was adjusted 
to reflect total advance appropriations provided for fiscal 
years 2006 and 2007 (and any subsequent fiscal years, if 
applicable). The section defines an ''advance appropriation'' 
as any new discretionary budget authority making general 
appropriations or continuing appropriations for fiscal year 
2005 that first becomes available for any fiscal year after 
2005.
      The limitation may be enforced by any member making a 
point of order at the appropriate time against any advance 
appropriations not falling within an exception or exceeding the 
overall limit. The effect of a point of order under this 
section, if sustained by the Chair, is to cause the 
appropriation(s) to be stricken from the bill or joint 
resolution. The bill itself, however, would still be considered 
in the House.
            Section 402: Emergency legislation
      Section 402 provides the House with the authority to 
designate spending provisions as ``emergencies.'' It adopts 
criteria for evaluating emergency spending. It also exempts 
from Congressional budgetary controls supplemental 
appropriations for the Department of Defense for contingency 
operations related to the global war on terrorism.
      Subsection (a) provides a special exemption from budget 
controls for a supplemental spending measure for the Department 
of Defense for ``contingency operations related to the global 
war on terrorism.'' Though $50 billion has been budgeted for 
fiscal year 2005 in the budget resolution for this purpose, the 
exact final amount has yet to be determined. The final level of 
the supplemental will depend on the President's request and the 
response of the Appropriations Committees of the House and the 
Senate.
      In order to trigger the exemption, the House must 
specifically designate the appropriations as ``contingency 
operations'' under section 402(a) of H. Con. Res. 393. As in an 
emergency designation, such designated amounts will not be 
counted in the determination of the cost of measures and hence 
will not trigger a point of order under sections 302, 303, and 
401 of the Congressional Budget Act.
      Subsection (b) exempts spending designated as an 
emergency under this section from the budget resolution and, as 
such, spending would not trigger a point of order. This is 
largely the same procedure as was included in the budget 
resolution from fiscal year 2004, H. Con. Res. 95. Instead of 
adjusting the allocations and budget aggregates by the amount 
designated as an emergency, as was the case prior to the 
expiration of the emergency designation at the end of fiscal 
year 2002, subsection (b) provides that the spending (or 
receipts) resulting from such a provision will not be counted 
for purposes of determining whether a measure complies with the 
budget resolution. This is consistent with the congressional 
scoring conventions prior to the Balanced Budget Act of 1997. 
Assuming a measure that includes this emergency designation is 
otherwise in compliance with the budget resolution, it would 
not be subject to a point of order under sections 302(f), 
303(a), 311(a) or 401 of the Congressional Budget Act of 1974.
      Committees reporting a measure that designates spending 
as an emergency should include in the accompanying report, or 
the conference committee in the joint statement of managers, a 
statement justifying the emergency designation on the basis of 
certain criteria. The criteria for designating a legitimate 
emergency is that the underlying situation to which the 
provision applies must pose a threat to life, property, or 
national security and is also: sudden, quickly coming into 
being, and not building up over time; an urgent, pressing, and 
compelling need requiring immediate action; unforeseen, 
unpredictable, unanticipated, and not permanent.
      This definition was adapted from criteria developed by 
previous administrations as part of an OMB Circular (A-11) on 
the preparation and submission of budget estimates. The 
subsection continues the practice of allowing the provisions 
designated as emergencies to be exempt from the budget controls 
and points of orders of the Congressional Budget Act.
            Section 403: Compliance with section 13301 of the Budget 
                    Enforcement Act of 1990
      This section provides authority to include the 
administrative expenses related to Social Security in the 
allocation to the Appropriations Committee. This language is 
necessary to ensure that the Appropriations Committee retains 
control of administrative expenses through the Congressional 
budget process. In the 106th Congress, the joint Leadership of 
the House and Senate Budget Committees decided to discontinue 
the practice of including administrative expenses in the budget 
resolution. This change was intended to make the budget 
resolution consistent with the Congressional Budget Office's 
baseline which does not include administrative expenses for 
Social Security. At the same time, the House Budget Committee 
believed that these expenses should continue to be reflected in 
the 302(a) allocations to the Appropriations Committee. Absent 
a waiver of section 302(a) of the Budget Act, the inclusion of 
these expenses in the allocation is construed as violating 
302(a) of the Budget Act which states that the allocations must 
reflect the discretionary amounts in the budget resolution (and 
arguably, section 13301 of the Budget Enforcement Act, which 
states that Social Security benefits and revenues are off-
budget).
            Section 404: Application and effects of changes in 
                    allocations and aggregates
      This section sets forth the procedures for making 
adjustments for the reserve funds included in this resolution. 
Subsection (a)(1) and (2) provide that the adjustments may only 
be made during the interval that the legislation is under 
consideration and do not take effect until the legislation is 
actually enacted. This is consistent with the procedures for 
making adjustments for various initiatives under section 314 of 
the Congressional Budget Act.
      Subsection (a)(3) directs the chairman of the House 
Budget Committee to insert the adjustments authorized by the 
various reserve funds in the Congressional Record.
      Subsection (b) clarifies that any adjustments made under 
any of the reserve funds in the resolution have the same effect 
as if they were part of the original levels set forth in 
section 101. Therefore the adjusted levels are used to enforce 
points of order against legislation inconsistent with the 
allocations and aggregates included in the concurrent 
resolution on the budget. Spending and tax measures are 
compared to these adjusted levels to determine if they are 
consistent with the budget resolution.
      Subsection (c) clarifies that the House Budget Committee 
determines the levels and estimates used to enforce points of 
order, as is the case for enforcing budget-related points of 
order. This section of the Budget Act provides the chairman of 
the Budget Committee with the authority to advise the chairman 
of the Committee of the Whole House on the appropriate levels 
and estimates related to legislation being considered on the 
floor.
Conference Agreement
            Section 401: Restriction on advance appropriations
      Section 401 reflects the Senate resolution's overall 
limit on advance appropriations of $23.158 billion in fiscal 
year 2006 as opposed to the House amendment, which limited 
total advance appropriations to $23.568 billion over a two-year 
(fiscal years 2006 and 2007) period. For the House, the 
language is identical to section 501 in the Fiscal Year 2004 
budget resolution, H. Con. Res. 95.
      The list of permissible advances is as follows:

      Accounts Identified for Advance Appropriations in the Senate

Interior: Elk Hills.

Labor, HHS:
      Corporation for Public Broadcasting
      Employment and Training Administration
      Education for the Disadvantaged
      School Improvement
      Children and Family Services (Head Start)
      Special Education
      Vocational and Adult Education

Transportation, Treasury: Payment to Postal Service

Veterans, HUD: Section 8 Renewals

      Accounts Identified for Advance Appropriations in the House

          PART A: ADVANCE APPROPRIATIONS FOR FISCAL YEAR 2006

Interior Appropriations: Elk Hills

Labor, Health and Human Services, Education Appropriations:
      Employment and Training Administration
      Education for the Disadvantaged
      School Improvement
      Child and Family Services [Head Start]
      Special Education
      Vocational and Adult Education

Treasury, General Government Appropriations: Payment to Postal 
Service

Veterans, Housing and Urban Development Appropriations: Section 
8 Renewals

          PART B: ADVANCE APPROPRIATIONS FOR FISCAL YEAR 2007

Labor, Health and Human Services, Education Appropriations: 
Corporation for Public Broadcasting
            Section 402: Emergency legislation
      The conference agreement adopts section 402 of the House 
amendment with respect to the rule on emergency spending. The 
major difference between the House and Senate language was the 
Senate requirement that the President explicitly agree to a 
``contingent'' designation by the Congress (i.e., a spending 
item with an emergency designation that originated in the 
Congress and that was not originally requested by the 
President). There were also minor differences in the criteria 
used to evaluate the appropriate use of the emergency 
designation. In addition, the conference agreement retains, for 
the Senate only, the current Senate point of order regarding 
the use of the emergency designation. The conference agreement 
also adopts the House approach regarding the treatment of 
supplemental appropriations for Iraq, but includes a level of 
$50 billion for this purpose. The conference agreement sets out 
this language in section 403--Exemption of Overseas Contingency 
Operations.
            Section 403: Exemption of overseas contingency operations
      Section 403 of the conference agreement adopts language 
from section 402(a) of the House amendment with a modification 
reflecting the $50 billion assumed for overseas contingency 
operations in the global war on terrorism to be provided in a 
supplemental appropriations bill. In order to trigger the 
exemption, funds must be ``designated by the Congress to be 
contingency operations pursuant to section 403 of S. Con. Res. 
95.'' As in an emergency designation, such designated amounts 
will not be counted in the determination of the cost of 
measures and hence will not trigger a point of order under 
sections 302, 303, and 401 of the Congressional Budget Act or 
sections 404 and 407 of the conference agreement. Provisions 
exempted under this section may be included in any number of 
measures provided the cumulative total does not exceed $50 
billion.
            Section 404: Discretionary spending limits in the Senate
      Section 404 of the conference agreement retains the 
language from section 403 (except the conference agreement 
contains no 2006 limit) of the Senate resolution. Virtually 
identical language was included in section 504 of last year's 
budget resolution (H. Con. Res. 95, 108th Cong.). Section 403 
sets out congressional discretionary spending limits for fiscal 
year 2005 with respect to both budget authority and outlays. 
Since the advent of statutory discretionary spending limits in 
1990, a majority of budget resolution conference reports have 
included language dealing with ``congressional caps'' (see 
detailed discussion accompanying description of the Senate 
resolution). These limits are enforced in the Senate with a 60-
vote point of order.
      The limits set out in the conference agreement are as 
follows:

            With respect to fiscal year 2005: Because the 
        language in section 504 of the fiscal year 2004 
        resolution still governs the consideration of this 
        conference agreement, the limits for fiscal year 2005 
        are the same as those set out in that section (as 
        subsequently modified by permissible adjustments). 
        Although an amendment was adopted during consideration 
        in the Senate that increased this level, a waiver was 
        not sought or obtained.

      Section 404 provides the chairman of the Committee on the 
Budget with the authority to make adjustments to these 
discretionary limits and the committee allocations for: (A) 
transportation, (B) wildland fire suppression, and (C) 
compliance with section 504 of H. Con. Res. 95 and the advance 
appropriation provided in fiscal year 2004 for Project 
Bioshield.
            Section 405: Adjustments to reflect changes in concepts and 
                    definitions
      The House recedes to the Senate on section 405 of the 
Senate resolution with an amendment. Subsection (a) authorizes 
the chairmen of the Committees on the Budget of the House and 
the Senate to adjust the resolution to take into account 
changes in budgetary concepts and definitions upon enactment of 
such legislation.
      Subsection (b)(1) reflects the language from section 
405(b) of the Senate resolution permitting the chairman of the 
Committee on the Budget in the Senate to adjust the budget 
resolution to accommodate legislation converting Power 
Marketing Administration customer receipts, which are currently 
treated as mandatory offsetting receipts, to offsetting 
collections, which would then be credited against spending in 
an appropriations measure. The language specifies the intent of 
the Conferees that the proceeds from these customer receipts 
would be available only to the Corps of Engineers and the Pick-
Sloan Missouri Basin project within the Bureau of Reclamation.
      Subsection (b)(2) permits the House Budget Committee 
chairman to make deficit neutral adjustments in the appropriate 
spending and revenue levels in the budget resolution to permit 
the consideration of legislation (other than reconciliation) 
that extends the child tax credit.
            Section 406: Application of changes in allocations and 
                    aggregates
      Section 406 of the conference agreement retains the 
language of section 406 of the Senate Resolution (which is 
similar to section 404 of the House amendment) clarifying both 
the process for making adjustments under the reserve funds and 
the status of the adjusted levels. It also determines scoring 
for purposes of enforcing budget related points of order.
            Section 407: Pay-as-you-go point of order in the Senate
      The conference agreement retains the Senate's pay-as-you-
go provision, with an exemption for legislation considered 
pursuant to Title II of this resolution. The Senate point of 
order expires on April 15, 2005.
            Section 408: Compliance with section 13301 of the Budget 
                    Enforcement Act of 1990
      Section 408 of the conference agreement retains the 
language of section 402 of the House amendment regarding the 
budgetary treatment in the House of discretionary spending for 
the Social Security Administration.

                     Subtitle B: Report Submissions

            Section 411: Submission of report on defense savings
      Section 411 of the conference agreement retains the 
language of section 202 of the House amendment, which requires 
the House Armed Services Committee to submit a set of findings 
to the House Budget Committee. Section 411 adds a comparable 
requirement for the Senate Armed Services Committee to submit 
findings to the Senate Budget Committee. The findings must 
identify $2 billion dollars in savings from activities that are 
determined to be of low priority or wasteful or unnecessary to 
national defense. These savings can be used to accommodate 
other priorities such as force protection, munitions and 
surveillance capabilities. The report must be submitted to the 
respective Budget Committees by June 25, 2004, and included in 
the Congressional Record.
            Section 412: Submission of report on homeland security
      Section 412 of the conference agreement includes a 
requirement that, the Senate Governmental Affairs Committee and 
the House Select Homeland Security Committee submit to the 
relevant Budget Committees findings that identify $150 million 
dollars in savings from activities that are determined to be of 
low priority, wasteful or unnecessary to homeland security. The 
findings must also include recommendations on how to reallocate 
the savings to programs and activities considered top priority 
or which directly contribute to enhancing homeland defense. The 
report must be submitted to the respective Budget Committees by 
June 25, 2004 and included in the Congressional Record.

               Subtitle C: Exercise of Rulemaking Powers

            Section 421: Exercise of rulemaking powers
      The House recedes to section 425 of the Senate 
resolution, which affirms that the budget resolution is an act 
of congressional rulemaking and subject to revisions by either 
House. Section 421 of the conference agreement states the 
authority by which Congress adopts the various budgetary 
enforcement rules and procedures for the consideration of 
certain legislation set out in the budget resolution.
Other Provisions
Senate Resolution
      With respect to section 404 of the Senate resolution 
(``Scoring Rules''), the conference agreement retains language 
with respect to Project Bioshield which was set out in 404(a) 
with some modifications which are discussed in section 313 of 
the conference agreement. The language of section 404(b) with 
respect to energy savings performance contracts has not been 
retained in any form.

           TITLE V: REQUIRED LEVELS AND AMOUNTS FOR OUTYEARS

      This title reflects budgetary aggregates and function 
totals for fiscal years 2006-2009, to comply with section 301 
of the Congressional Budget Act.

          TITLE VI: SENSE OF THE SENATE AND SENSE OF THE HOUSE

Senate Resolution
      The Senate resolution contains twenty-two sections 
dealing with ``Sense of the Senate'' provisions that were 
adopted either during the markup or during consideration on the 
Senate floor.
House Amendment
      The House amendment contains two sections dealing with 
``Sense of the House'' provisions.
Conference Agreement
      The conference agreement contains the following 
provisions:

                    Subtitle A: Sense of the Senate

      Section 601: Sense of the Senate on budget process 
reform.
      Section 602: Sense of the Senate on budget process reform 
with regard to the creation of bipartisan commissions to combat 
waste, fraud, and abuse and to promote spending efficiency.
      Section 603: Sense of the Senate on the relationship 
between annual deficit spending and increases in debt service 
costs.
      Section 604: Sense of the Senate regarding the costs of 
the medicare prescription drug program.
      Section 605: Sense of the Senate on returning stability 
to payments under medicare physician fee schedule.
      Section 606: Sense of the Senate supporting funding 
restoration for agriculture re-search and extension.
      Section 607: Sense of the Senate concerning a national 
animal identification program.
      Section 608: Sense of the Senate regarding contributions 
to The Global Fund to Fight AIDS, Tuberculosis, and Malaria.
      Section 609: Sense of the Senate concerning child 
nutrition funding.
      Section 610: Sense of the Senate regarding compensation 
for exposure to toxic substances at the Department of Energy.
      Section 611: Sense of the Senate regarding tax incentives 
for certain rural communities.
      Section 612: Sense of the Senate concerning summer food 
pilot projects.
      Section 613: Sense of the Senate regarding closing the 
``tax gap''.

                     Subtitle B: Sense of the House

      Section 621: Sense of the House on entitlement reform.

                     Subtitle C: Sense of Congress

      Section 631: Sense of Congress on spending 
accountability.

     ADDITIONAL BUDGET PROCESS AND ENFORCEMENT ITEMS IN THE SENATE

      The Senate resolution was considered with the 
acknowledgement that a number of provisions from previous 
budget resolutions remain in effect. For the convenience of the 
Senate, they are set out below.
I. Sense of the Senate amendments not germane on floor
      One provision (section 204) of the fiscal year 2001 
resolution (H. Con. Res. 290 106th Cong., 2nd Sess.) remains in 
effect. It is discussed and set out below:
            Section 204: Mechanisms for Strengthening Budgetary 
                    Integrity (see subsection (g) regarding precatory 
                    amendments)
      The intent of subsection (g) was discussed on page 74 of 
the conference report--explaining the Senate amendment--for the 
fiscal year 2001 resolution. The conference adopted the Senate 
language with a minor modification. Page 74 provides in 
pertinent part:

            Section 210(g) of the Senate amendment provides 
        guidance for interpreting the germaneness requirement 
        found in section 305(b)(2) of the Budget Act. Section 
        305 requires that all amendments offered on the floor 
        to a budget resolution or a reconciliation bill must be 
        germane to the underlying legislation and is enforced 
        by a 60-vote point of order in the Senate. The Senate 
        amendment states that an amendment will be considered 
        not germane if it contains only precatory (non-binding) 
        language. This is designed to place a 60-vote hurdle 
        with respect to what is commonly referred to as a 
        ``sense of the Senate'' amendment. Note that it is not 
        meant to preclude the inclusion of ``purpose'' or 
        ``findings'' language that is part of an otherwise 
        substantive amendment.

      The minor modification adopted by the conferees was the 
addition of the word ``predominately'' before ``precatory'' to 
make clear that otherwise substantive provisions would not be 
subject to 60-vote discipline. The text of subsection (g) is 
set out below:

SEC. 204. MECHANISMS FOR STRENGTHENING BUDGETARY INTEGRITY.

           *       *       *       *       *       *       *


      (g) Precatory Amendments.--For purposes of interpreting 
section 305(b)(2) of the Congressional Budget Act of 1974, an 
amendment is not germane if it contains predominately precatory 
language.

      Two provisions (sections 503 and 505) from the fiscal 
year 2004 resolution (H. Con. Res. 95, 108th Cong. 1st Sess.) 
remain in effect in the Senate. They are set out or described 
below.
II. 60-vote points of order through the end of fiscal year 2008
            Section 503: Extension of supermajority enforcement
      This section of the 2004 resolution extended for 5 years 
(until September 30, 2008) the 60-vote requirement for waivers 
and appeals with respect to those Budget Act points of order. 
This requirement expired on September 30, 2002 (and was 
temporarily extended through April 15, 2003 in S. Res. 304, 
106th Congress).

                              ALLOCATIONS

      As required in section 302 of the Congressional Budget 
Act, the joint statement of managers includes an allocation, 
based on the conference agreement, of total budget authority 
and total budget outlays to each of the appropriate committees. 
The allocations are as follows:

  SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET
                                           ACT, BUDGET YEAR TOTAL 2005
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                Direct spending jurisdiction      Entitlements funded in annual
                                             ----------------------------------        appropriations acts
                  Committee                                                    ---------------------------------
                                                   Budget          Outlays           Budget
                                                 authority                         authority         Outlays
----------------------------------------------------------------------------------------------------------------
  Appropriations:
    General Purpose Discretionary...........          812,773          850,693                0                0
                                             ===================================================================
        On-budget, regular..................          808,524          814,021                0                0
        Off-budget, regular.................            4,249            4,264                0                0
                                             -------------------------------------------------------------------
          Subtotal, regular.................          812,773          818,285                0                0
        On-budget, emergency................                0           32,408                0                0
    Highways................................                0           33,393                0                0
    Mass Transit............................            1,488            6,726                0                0
    Mandatory...............................          460,008          445,525                0                0
                                             -------------------------------------------------------------------
      Total.................................        1,274,269        1,336,337                0                0
                                             ===================================================================
Agriculture, Nutrition, and Forestry........            4,148           17,218           58,312           44,305
Armed Services..............................           85,814           86,744               41               61
Banking, Housing and Urban Affairs..........           14,425            2,646              175              107
Commerce, Science, and Transportation.......           11,487            6,618              864              860
Energy and Natural Resources................            4,633            3,541               54               59
Environment and Public Works................           35,818            2,279                0                0
Finance.....................................          810,529          811,603          339,533          339,450
Foreign Relations...........................           11,352           11,619              176              176
Governmental Affairs........................           70,453           68,764           18,048           18,048
Judiciary...................................            9,232            8,665              574              575
Health, Education, Labor, and Pensions......           11,028           10,192            2,966            2,928
Rules and Administration....................               77               35              113              112
Intelligence................................                0                0              239              239
Veterans' Affairs...........................            1,247            1,266           38,913           38,605
Indian Affairs..............................              674              668                0                0
Small Business..............................                0                0                0                0
Unassigned to Committee.....................         -385,673         -392,557                0                0
                                             -------------------------------------------------------------------
      Total.................................        1,959,513        1,975,638          460,008          445,525
----------------------------------------------------------------------------------------------------------------


  SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET
                                          ACT, 5-YEAR TOTAL: 2005-2009
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                          Direct spending jurisdiction          Entitlements funded in annual
                                     --------------------------------------          appropriations acts
              Committee                                                    -------------------------------------
                                       Budget authority       Outlays        Budget authority       Outlays
----------------------------------------------------------------------------------------------------------------
Agriculture, Nutrition, and Forestry             29,045            101,509            297,690            224,223
Armed Services......................            470,311            470,952                201                278
Banking, Housing and Urban Affairs..             77,878             12,531                875                476
Commerce, Science, and                           47,046             20,708              4,692              4,671
 Transportation.....................
Energy and Natural Resources........             19,198             17,286                270                281
Environment and Public Works........            187,471             10,026                  0                  0
Finance.............................          4,700,524          4,708,257          2,179,994          2,179,013
Foreign Relations...................             62,368             59,526                870                870
Governmental Affairs................            378,764            370,008             97,537             97,537
Judiciary...........................             33,945             33,977              2,856              2,856
Health, Education, Labor, and                    59,206             55,352             15,521             15,315
 Pensions...........................
Rules and Administration............                374                359                605                604
Intelligence........................                  0                  0              1,275              1,275
Veterans' Affairs...................              6,225              6,500            186,134            185,440
Indian Affairs......................              3,290              3,381                  0                  0
Small Business......................                  0                  0                  0                  0
----------------------------------------------------------------------------------------------------------------


  ALLOCATION OF SPENDING AUTHORITY TO HOUSE COMMITTEES FOR BUDGET YEAR
                    2005--COMMITTEE ON APPROPRIATIONS
                          [Millions of dollars]
------------------------------------------------------------------------
                                                                  2005
------------------------------------------------------------------------
Discretionary Action:
    General Purpose:
        BA....................................................   814,261
        OT....................................................   890,812
    Section 313 Adjustments *:
        BA....................................................     7,158
        OT....................................................    14,516
          Total Discretionary Action: BA......................   821,419
After Section 313 Adjustments: OT.............................   905,328
Current Law Mandatory:
    BA........................................................   459,142
    OT........................................................   444,662
------------------------------------------------------------------------
* To be released by the Chairman of the Committee on the Budget upon
  reporting by the Committee on Appropriations of the first bill or
  joint resolution making regular appropriations for fiscal year 2005.


  ALLOCATIONS OF SPENDING AUTHORITY TO HOUSE COMMITTEES FOR BUDGET YEAR
   2005 AND FUTURE FISCAL YEARS--COMMITTEES OTHER THAN APPROPRIATIONS
                          [Millions of dollars]
------------------------------------------------------------------------
                                                             Total 2005-
                                                    2005         2009
------------------------------------------------------------------------
             Agriculture Committee

Current Law:
    BA........................................       18,219       86,778
    OT........................................       17,297       86,272
Reauthorizations:
    BA........................................  ...........       71,905
    OT........................................  ...........       70,494
Total:
    BA........................................       18,219      158,683
    OT........................................       17,297      156,766

           Armed Services Committee

Current Law:
    BA........................................       85,817      470,326
    OT........................................       86,748      470,968

   Committee on Education and the Workforce

Current Law:
    BA........................................        7,097       39,185
    OT........................................        6,105       34,962
Discretionary Action:
    BA........................................           68          236
    OT........................................           56          230
Reauthorizations:
    BA........................................          399       10,479
    OT........................................          397        8,201
Total:
    BA........................................        7,564       49,900
    OT........................................        6,558       43,393

         Energy and Commerce Committee

Current Law:
    BA........................................      154,932    1,129,671
    OT........................................      155,872    1,134,400
Discretionary Action:
    BA........................................          576        4,350
    OT........................................          483        3,381
Reauthorizations:
    BA........................................  ...........       10,080
    OT........................................  ...........        4,814
Total:
    BA........................................      155,508    1,144,101
    OT........................................      156,355    1,142,595

         Financial Services Committee

Current Law:
    BA........................................        3,855       17,997
    OT........................................         -361       -4,931
Discretionary Action:
    BA........................................            1           17
    OT........................................            1           17
Total:
    BA........................................        3,856       18,014
    OT........................................         -360       -4,914

          Government Reform Committee

Current Law:
    BA........................................       69,443      374,624
    OT........................................       67,754      365,868
Discretionary Action:
    BA........................................            1           19
    OT........................................            1           19
Total:
    BA........................................       69,444      374,643
    OT........................................       67,755      365,887

       Committee on House Administration

Current Law:
    BA........................................           77          374
    OT........................................           35          359

       International Relations Committee

Current Law:
    BA........................................       11,425       62,733
    OT........................................       11,712       59,925

              Resources Committee

Current Law:
    BA........................................        4,788       20,522
    OT........................................        3,792       18,794
Discretionary Action:
    BA........................................            2           10
    OT........................................            2           10
Total:
    BA........................................        4,790       20,532
    OT........................................        3,794       18,804

              Judiciary Committee

Current Law:
    BA........................................        9,357       34,610
    OT........................................        8,790       34,642
Discretionary Action:
    BA........................................           15           35
    OT........................................           15           35
Total:
    BA........................................        9,372       34,645
    OT........................................        8,805       34,677

  Transportation and Infrastructure Committee

Current Law:
    BA........................................       16,755       77,995
    OT........................................       13,788       68,720
Discretionary Action:
    BA........................................        1,737       22,070
    OT........................................            4           12
Reauthorizations:
    BA........................................       41,010      212,450
    OT........................................          330        2,630
Total:
    BA........................................       59,502      312,515
    OT........................................       14,122       71,362

               Science Committee

Current Law:
    BA........................................           31          159
    OT........................................          112          326

           Small Business Committee

Current Law:
    BA........................................  ...........  ...........
    OT........................................  ...........  ...........

          Veterans' Affairs Committee

Current Law:
    BA........................................        1,247        6,225
    OT........................................        1,266        6,500
Reauthorizations:
    BA........................................          467        7,530
    OT........................................          466        7,388
Total:
    BA........................................        1,714       13,755
    OT........................................        1,732       13,888

           Ways and Means Committee

Current Law:
    BA........................................      641,589    3,782,374
    OT........................................      643,106    3,788,443
Discretionary Action:
    BA........................................        1,368        3,470
    OT........................................          804        3,244
Reconciliation:
    BA........................................  ...........        4,600
    OT........................................  ...........        4,600
Reauthorizations:
    BA........................................       19,606      100,666
    OT........................................       18,606      100,069
Total:
    BA........................................      662,563    3,891,110
    OT........................................      662,516    3,896,356
------------------------------------------------------------------------

                          ECONOMIC ASSUMPTIONS

      Section 301(g)(2) of the Congressional Budget Act 
requires that the joint explanatory statement accompanying a 
conference report on a budget resolution set forth the common 
economic assumptions upon which the joint statement and 
conference report are based. The conference agreement is built 
upon the economic forecasts developed by the Congressional 
Budget Office [CBO] and presented in CBO's ``The Budget and 
Economic Outlook: Fiscal Years 2005-2014'' (January 2004).
      Senate Resolution.--CBO's economic assumptions were used.
      House Amendment.--CBO's economic assumptions were used.
      Conference Agreement.--CBO's economic assumptions were 
used.

                                    ECONOMIC ASSUMPTIONS OF BUDGET RESOLUTION
                                           [Calendar years 2004-2009]
----------------------------------------------------------------------------------------------------------------
                                                              2004     2005     2006     2007     2008     2009
----------------------------------------------------------------------------------------------------------------
Percent Change (Year to Year):
    Real GDP..............................................      4.8      4.2      3.2      2.7      2.8      2.8
    GDP Price Index.......................................      1.1      1.1      1.5      1.8      1.9      1.9
    Consumer Price Index..................................      1.6      1.7      2.0      2.2      2.2      2.2
Annual Rate
    Unemployment..........................................      5.8      5.3      5.0      5.1      5.2      5.2
    Three-Month T-Bill....................................      1.3      3.0      4.0      4.6      4.6      4.6
    Ten-Year T-Note.......................................      4.6      5.4      5.5      5.5      5.5      5.5
----------------------------------------------------------------------------------------------------------------
Source: CBO.

 PUBLIC DEBT: AMENDING THE STATUTORY LIMIT PURSUANT TO HOUSE RULE XXVII

      The adoption of this conference agreement by the two 
Houses would result in the engrossment of a House Joint 
Resolution adjusting the level of the statutory limit on the 
public debt pursuant to House Rule XXVII. In consonance with 
clause 3 of that rule, the conferees contemplate a joint 
resolution of the following form:

            Resolved, by the Senate and the House of 
        Representatives of the United States of America in 
        Congress assembled, That subsection (b) of section 3101 
        of title 31, United States Code, is amended by striking 
        out the dollar limitation contained in such subsection 
        and inserting in lieu thereof $8,074,000,000,000.

      If the joint resolution is enacted to raise the debt 
limit to the level contemplated by this conference agreement, 
the limit will be increased from $7.384 trillion to $8.074 
trillion.
      Legislative jurisdiction over the public debt remains 
with the Finance Committee in the Senate and the Committee on 
Ways and Means in the House.
General Considerations
      Rule XXVII in the House, related to amending the 
statutory public debt level, does not preclude the committees 
of jurisdiction from originating public debt limit bills 
whenever necessary. The Senate resolution includes a 
reconciliation instruction to the Finance Committee to report a 
bill increasing the statutory limit on the public debt; the 
House amendment contains no debt limit reconciliation language. 
The conference agreement contains instructions to the Finance 
Committee in the Senate to report a bill to increase the 
statutory debt limit by $690 billion.

                                   Jim Nussle,
                                   Rob Portman,
                                 Managers on the Part of the House.

                                   Don Nickles,
                                   Pete Domenici,
                                   Chuck Grassley,
                                   Judd Gregg,
                                Managers on the Part of the Senate.