H. Rept. 106-862 - 106th Congress (1999-2000)
September 18, 2000, As Reported by the Ways and Means Committee

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House Report 106-862 - DEBT RELIEF LOCK-BOX RECONCILIATION ACT FOR FISCAL YEAR 2001




[House Report 106-862]
[From the U.S. Government Printing Office]



106th Congress                                            Rept. 106-862
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

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



 
      DEBT RELIEF LOCK-BOX RECONCILIATION ACT FOR FISCAL YEAR 2001

                                _______
                                

 September 18, 2000.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

    Mr. Archer, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 5173]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 5173) to provide for reconciliation pursuant to 
sections 103(b)(2) and 213(b)(2)(C) of the concurrent 
resolution on the budget for fiscal year 2001 to reduce the 
public debt and to decrease the statutory limit on the public 
debt, having considered the same, report favorably thereon with 
an amendment and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
  I. Summary and Background...........................................5
          A. Purpose and Summary.................................     5
          B. Background and Need for Legislation.................     5
          C. Legislative History.................................     6
 II. Explanation of the Bill..........................................6
          A. Present Law.........................................     6
          B. Reasons for Change..................................     7
          C. Explanation of Provisions...........................     7
III. Votes of the Committee...........................................9
 IV. Budget Effects of the Bill......................................10
  V. Other Matters To Be Discussed Under the Rules of the House......11
 VI. Changes in Existing Law Made by the Bill, as Reported...........12
VII. Additional Views................................................16

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Debt Relief Lock-box Reconciliation 
Act for Fiscal Year 2001''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds that--
          (1) fiscal discipline, resulting from the Balanced Budget Act 
        of 1997, and strong economic growth have ended decades of 
        deficit spending and have produced budget surpluses without 
        using the social security surplus;
          (2) fiscal pressures will mount in the future as the aging of 
        the population increases budget obligations;
          (3) until Congress and the President agree to legislation 
        that saves social security and medicare, the social security 
        and medicare surpluses should be used to reduce the debt held 
        by the public;
          (4) until Congress and the President agree on significant tax 
        reductions, amounts dedicated for that purpose shall be used to 
        reduce the debt held by the public;
          (5) strengthening the Government's fiscal position through 
        public debt reduction increases national savings, promotes 
        economic growth, reduces interest costs, and is a constructive 
        way to prepare for the Government's future budget obligations; 
        and
          (6) it is fiscally responsible and in the long-term national 
        economic interest to use a portion of the nonsocial security 
        and nonmedicare surpluses to reduce the debt held by the 
        public.
  (b) Purpose.--It is the purpose of this Act to--
          (1) reduce the debt held by the public by $240,000,000,000 in 
        fiscal year 2001 with the goal of eliminating this debt by 
        2012;
          (2) decrease the statutory limit on the public debt; and
          (3) ensure that the social security and hospital insurance 
        trust funds shall not be used for other purposes.

                    TITLE I--DEBT REDUCTION LOCK-BOX

SEC. 101. ESTABLISHMENT OF PUBLIC DEBT REDUCTION PAYMENT ACCOUNT.

  (a) In General.--Subchapter I of chapter 31 of title 31, United 
States Code, is amended by adding at the end the following new section:

``Sec. 3114. Public debt reduction payment account

  ``(a) There is established in the Treasury of the United States an 
account to be known as the Public Debt Reduction Payment Account 
(hereinafter in this section referred to as the `account').
  ``(b) The Secretary of the Treasury shall use amounts in the account 
to pay at maturity, or to redeem or buy before maturity, any obligation 
of the Government held by the public and included in the public debt. 
Any obligation which is paid, redeemed, or bought with amounts from the 
account shall be canceled and retired and may not be reissued. Amounts 
deposited in the account are appropriated and may only be expended to 
carry out this section.
  ``(c) There is hereby appropriated into the account on October 1, 
2000, or the date of enactment of this Act, whichever is later, out of 
any money in the Treasury not otherwise appropriated, $42,000,000,000 
for the fiscal year ending September 30, 2001. The funds appropriated 
to this account shall remain available until expended.
  ``(d) The appropriation made under subsection (c) shall not be 
considered direct spending for purposes of section 252 of Balanced 
Budget and Emergency Deficit Control Act of 1985.
  ``(e) Establishment of and appropriations to the account shall not 
affect trust fund transfers that may be authorized under any other 
provision of law.
  ``(f) The Secretary of the Treasury and the Director of the Office of 
Management and Budget shall each take such actions as may be necessary 
to promptly carry out this section in accordance with sound debt 
management policies.
  ``(g) Reducing the debt pursuant to this section shall not interfere 
with the debt management policies or goals of the Secretary of the 
Treasury.''.
  (b) Conforming Amendment.--The chapter analysis for chapter 31 of 
title 31, United States Code, is amended by inserting after the item 
relating to section 3113 the following:

``3114. Public debt reduction payment account.''.

SEC. 102. REDUCTION OF STATUTORY LIMIT ON THE PUBLIC DEBT.

  Section 3101(b) of title 31, United States Code, is amended by 
inserting ``minus the amount appropriated into the Public Debt 
Reduction Payment Account pursuant to section 3114(c)'' after 
``$5,950,000,000,000''.

SEC. 103. OFF-BUDGET STATUS OF PUBLIC DEBT REDUCTION PAYMENT ACCOUNT.

  Notwithstanding any other provision of law, the receipts and 
disbursements of the Public Debt Reduction Payment Account established 
by section 3114 of title 31, United States Code, shall not be counted 
as new budget authority, outlays, receipts, or deficit or surplus for 
purposes of--
          (1) the budget of the United States Government as submitted 
        by the President,
          (2) the congressional budget, or
          (3) the Balanced Budget and Emergency Deficit Control Act of 
        1985.

SEC. 104. REMOVING PUBLIC DEBT REDUCTION PAYMENT ACCOUNT FROM BUDGET 
                    PRONOUNCEMENTS.

  (a) In General.--Any official statement issued by the Office of 
Management and Budget, the Congressional Budget Office, or any other 
agency or instrumentality of the Federal Government of surplus or 
deficit totals of the budget of the United States Government as 
submitted by the President or of the surplus or deficit totals of the 
congressional budget, and any description of, or reference to, such 
totals in any official publication or material issued by either of such 
Offices or any other such agency or instrumentality, shall exclude the 
outlays and receipts of the Public Debt Reduction Payment Account 
established by section 3114 of title 31, United States Code.
  (b) Separate Public Debt Reduction Payment Account Budget 
Documents.--The excluded outlays and receipts of the Public Debt 
Reduction Payment Account established by section 3114 of title 31, 
United States Code, shall be submitted in separate budget documents.

SEC. 105. REPORTS TO CONGRESS.

  (a) Reports of the Secretary of the Treasury.--(1) Within 30 days 
after the appropriation is deposited into the Public Debt Reduction 
Payment Account under section 3114 of title 31, United States Code, the 
Secretary of the Treasury shall submit a report to the Committee on 
Ways and Means of the House of Representatives and the Committee on 
Finance of the Senate confirming that such account has been established 
and the amount and date of such deposit. Such report shall also include 
a description of the Secretary's plan for using such money to reduce 
debt held by the public.
  (2) Not later than October 31, 2002, the Secretary of the Treasury 
shall submit a report to the Committee on Ways and Means of the House 
of Representatives and the Committee on Finance of the Senate setting 
forth the amount of money deposited into the Public Debt Reduction 
Payment Account, the amount of debt held by the public that was 
reduced, and a description of the actual debt instruments that were 
redeemed with such money.
  (b) Report of the Comptroller General of the United States.--Not 
later than November 15, 2002, the Comptroller General of the United 
States shall submit a report to the Committee on Ways and Means of the 
House of Representatives and the Committee on Finance of the Senate 
verifying all of the information set forth in the reports submitted 
under subsection (a).

            TITLE II--SOCIAL SECURITY AND MEDICARE LOCK-BOX

SEC. 201. PROTECTION OF SOCIAL SECURITY AND MEDICARE SURPLUSES.

  (a) Protection of Social Security and Medicare Surpluses.--Section 
201 of the concurrent resolution on the budget for fiscal year 2001 (H. 
Con. Res. 290, 106th Congress) is amended as follows:
          (1) In the section heading, by inserting ``AND MEDICARE'' 
        before ``SURPLUSES''.
          (2) By striking subsection (c) and inserting the following 
        new subsection:
  ``(c) Lock-box for Social Security and Hospital Insurance 
Surpluses.--
          ``(1) Concurrent resolutions on the budget.--It shall not be 
        in order in the House of Representatives or the Senate to 
        consider any concurrent resolution on the budget, or conference 
        report thereon or amendment thereto, that would set forth a 
        surplus for any fiscal year that is less than the surplus of 
        the Federal Hospital Insurance Trust Fund for that fiscal year.
          ``(2) Subsequent legislation.--(A) Except as provided by 
        subparagraph (B), it shall not be in order in the House of 
        Representatives or the Senate to consider any bill, joint 
        resolution, amendment, motion, or conference report if--
                  ``(i) the enactment of that bill or resolution as 
                reported;
                  ``(ii) the adoption and enactment of that amendment; 
                or
                  ``(iii) the enactment of that bill or resolution in 
                the form recommended in that conference report,
        would cause the on-budget surplus for any fiscal year to be 
        less than the projected surplus of the Federal Hospital 
        Insurance Trust Fund (as assumed in the most recently agreed to 
        concurrent resolution on the budget) for that fiscal year or 
        increase the amount by which the on-budget surplus for any 
        fiscal year would be less than such trust fund surplus for that 
        fiscal year.
          ``(B) Subparagraph (A) shall not apply to social security 
        reform legislation or medicare reform legislation.''.
          (3) By redesignating subsections (e) and (f) as subsections 
        (g) and (h), respectively, and inserting after subsection (d) 
        the following new subsections:
  ``(e) Content of Concurrent Resolution on the Budget.--The concurrent 
resolution on the budget for each fiscal year shall set forth 
appropriate levels for the fiscal year beginning on October 1 of such 
year and for at least each of the 4 ensuing fiscal years of the surplus 
or deficit in the Federal Hospital Insurance Trust Fund.
  ``(f) Definitions.--As used in this section:
          ``(1) The term `medicare reform legislation' means a bill or 
        a joint resolution to save Medicare that includes a provision 
        stating the following: `For purposes of section 201(c) of the 
        concurrent resolution on the budget for fiscal year 2001, this 
        Act constitutes medicare reform legislation.'.
          ``(2) The term `social security reform legislation' means a 
        bill or a joint resolution to save social security that 
        includes a provision stating the following: `For purposes of 
        section 201(c) of the concurrent resolution on the budget for 
        fiscal year 2001, this Act constitutes social security reform 
        legislation.'.''.
          (4) In the first sentence of subsection (h) (as 
        redesignated), by striking ``(1)''.
          (5) At the end, by adding the following new subsection:
  ``(i)  Effective Date.--This section shall cease to have any force or 
effect upon the enactment of social security reform legislation and 
medicare reform legislation.''.
  (b) Protection of Social Security and Medicare Surpluses.--(1) If the 
budget of the United States Government submitted by the President under 
section 1105(a) of title 31, United States Code, recommends an on-
budget surplus for any fiscal year that is less than the surplus of the 
Federal Hospital Insurance Trust Fund for that fiscal year, then it 
shall include proposed legislative language for social security reform 
legislation or medicare reform legislation.
  (2) Paragraph (1) shall cease to have any force or effect upon the 
enactment of social security reform legislation and medicare reform 
legislation as defined by section 201(f) of the concurrent resolution 
on the budget for fiscal year 2001 (H. Con. Res. 290, 106th Congress).
  (c) Conforming Amendment.--The item relating to section 201 in the 
table of contents set forth in section 1(b) of the concurrent 
resolution on the budget for fiscal year 2001 (H. Con. Res. 290, 106th 
Congress) is amended to read as follows:

``Sec. 201. Protection of social security and medicare surpluses.''.

SEC. 202. REMOVING SOCIAL SECURITY FROM BUDGET PRONOUNCEMENTS.

  (a) In General.--Any official statement issued by the Office of 
Management and Budget, the Congressional Budget Office, or any other 
agency or instrumentality of the Federal Government of surplus or 
deficit totals of the budget of the United States Government as 
submitted by the President or of the surplus or deficit totals of the 
congressional budget, and any description of, or reference to, such 
totals in any official publication or material issued by either of such 
Offices or any other such agency or instrumentality, shall exclude the 
outlays and receipts of the old-age, survivors, and disability 
insurance program under title II of the Social Security Act (including 
the Federal Old-Age and Survivors Insurance Trust Fund and the Federal 
Disability Insurance Trust Fund) and the related provisions of the 
Internal Revenue Code of 1986.
  (b) Separate Social Security Budget Documents.--The excluded outlays 
and receipts of the old-age, survivors, and disability insurance 
program under title II of the Social Security Act shall be submitted in 
separate Social Security budget documents.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    The bill, H.R. 5173, the Debt Relief Lock-Box 
Reconciliation Act for Fiscal Year 2001, provides for 
reconciliation pursuant to sections 103(b)(2) and 213(b)(2)(C) 
of the concurrent resolution on the budget for fiscal year 2001 
to reduce the publicly held debt and to decrease the statutory 
limit on the public debt.
    The purpose of H.R. 5173 is to reduce the publicly held 
debt by $240 billion in fiscal year 2001 and to protect the 
projected Social Security and Medicare Hospital Insurance Trust 
Fund surpluses.
    The bill establishes an off-budget account in the U.S. 
Treasury, called the Public Debt Reduction Payment Account and 
deposits $42 billion of the projected on-budget surplus in the 
account in fiscal year 2001. Funds in the account could be used 
only to reduce the debt held by the public. H.R. 5173 would 
reduce the statutory debt limit by $42 billion. The reduction 
in the debt limit emphasizes Congress's intent to reverse years 
of increasing debt and rising debt limits. The bill also would 
require the Secretary of the Treasury and U.S. Comptroller 
General of the United States to report to Congress on how the 
funds were used to reduce the debt.
    To protect fiscal year 2001 surpluses that are projected in 
the Social Security and the Medicare Hospital Insurance Trust 
Funds, the bill provides a point of order in the House of 
Representatives or the Senate against any bill, amendment, or 
resolution that would reduce the Medicare Hospital Insurance 
Trust Fund's surplus in any fiscal year. An exception is made 
for legislation that saves Social Security or Medicare.

                 B. Background and Need for Legislation

    The gross federal debt consists of debt held by the public 
and debt held by government accounts, including the Social 
Security trust funds. Almost all of this debt is subject to a 
``debt limit,'' which was first established in statute in 1917. 
This limit represents the maximum amount the U.S. Treasury may 
borrow without receiving additional authority from Congress. 
The current statutory debt limit is $5.95 trillion. The 
outstanding debt subject to the limit was $5.568 trillion at 
the end of 1999. Of this amount, $3.633 trillion was held by 
the public, and $1.973 trillion was held by government 
accounts. Although the debt held by the public has decreased in 
recent years, the gross federal debt continues to rise because 
of increases in the government-held debt.
    Under present law, any budget surpluses remaining at the 
end of the fiscal year are used to reduce the debt held by the 
public. Thus, spending throughout the fiscal year limits the 
amount available for public debt reduction. Present law 
includes several mechanisms to limit spending, such as pay-as-
you-go scorekeeping rules and discretionary spending limits. 
Although these tools have effectively controlled spending in 
the past, they have been less effective in controlling spending 
during an era of budget surpluses. The current legislation is 
needed to help prevent additional surpluses from being spent as 
they arise, making it more likely that these surpluses will be 
used to reduce the debt held by the public. Increased efforts 
to limit spending are particularly important as estimates of 
the on-budget surplus continue to increase.
    Under present law, surpluses in the Social Security and 
Medicare Trust Funds are available to pay for government 
operating expenses not related to the Social Security and 
Medicare programs. The current legislation will make it more 
difficult to use these surpluses to finance other government 
expenses, making it more likely that Congress will balance the 
budget without using the Social Security and Medicare 
surpluses. As a result, these surpluses will automatically be 
used to pay down the public debt until legislation is passed to 
save Social Security and Medicare.

                         C. Legislative History

    The bill, H.R. 5173, was introduced by Mr. Fletcher et al. 
on September 14, 2000. The Committee marked up the bill on 
September 14, 2000, and approved the bill with a Chairman's 
amendment in the nature of a substitute, by a rollcall vote of 
33-0.

                      II. EXPLANATION OF THE BILL


                             A. Present Law

    The public debt outstanding comprises the total face amount 
or principal of marketable and non-marketable securities 
currently outstanding. With the exception of certain debt,\1\ 
currently representing less than $100 billion, the Congress has 
established a public debt limit that represents the maximum 
amount of money the Federal Government is allowed to borrow 
without receiving additional authority from the Congress. Debt 
subject to the public debt limit generally includes debt owed 
to the public that comprises all Federal securities held by 
individuals, corporations, State and local governments, foreign 
governments, and other foreign persons, and debt held by the 
Federal Government that comprises Federal securities held by 
Government trust funds, revolving funds, and special funds.
---------------------------------------------------------------------------
    \1\ Debt not subject to the public debt limit includes unamortized 
discount on Treasury bills and zero-coupon Treasury bonds, certain old 
debt, held by the Federal Financing Bank, and certain guaranteed debt.
---------------------------------------------------------------------------
    The statutory limit on the public debt currently is $5.95 
trillion. It was set at this level in the Balanced Budget Act 
of 1997 (P.L. 105-33), enacted into law on August 5, 1997.
    With the approval of the President, the Secretary of the 
Treasury may use money received from the sale of bonds or notes 
of the United States and other money in the general fund of the 
Treasury to make purchases, redemptions, or refunds of bonds, 
notes, certificates of indebtedness, Treasury bills, or savings 
certificates of the United States Government at or before 
maturity of such instruments of indebtedness.
    By June 1 of each year, the Secretary of the Treasury must 
submit a report to the Congress regarding the Treasury's public 
debt activities.
    The Concurrent Resolution on the Budget for Fiscal Year 
2001 requires that the House Committee on Ways and Means report 
to the House a reconciliation bill that reduces the debt held 
by the public for fiscal year 2001 (sec. 103(b)(2)). In 
addition, the Concurrent Resolution permits adjustments in the 
amount of debt reduction if the amount of the on-budget surplus 
exceeds the on-budget surplus set forth in the Congressional 
Budget Office's March 2000 budget and economic outlook.

                         B. Reasons for Change

    The U.S. economy continues its healthy growth. As a result, 
what were reasonable projections of the Federal Government's 
surplus have been revised upwards. In particular, the non-
social security, non-Medicare (part A) portion of the Federal 
budget is in surplus. Although government bookkeeping provides 
that revenues unspent by the government by the close of a 
fiscal year result in a reduction in debt held by the public, 
the Committee believes the reduction of the debt held by the 
public is a priority of the Congress and should not be left as 
a residual after other policy initiatives. The Committee 
believes the Congress should pro-actively set aside a portion 
of the non-social security, non-Medicare surplus for this 
purpose. Accordingly, the Committee believes that to help 
enforce fiscal discipline $42 billion from the projected non-
Social Security and non-Medicare surpluses for fiscal year 2001 
should be appropriated to a newly established account from 
which the Secretary of the Treasury should draw funds to retire 
debt held by the public.
    The Committee also believes it is important to reduce the 
statutory limit on the public debt to mark the progress the 
Federal Government has made in maintaining fiscal discipline.
    The bill also contains language directing the Secretary of 
the Treasury and the Director of the OMB to use the money to 
pay down the debt in a manner consistent with sound debt 
management. In its management of the public debt, Treasury 
generally adheres to three goals: (1) ensuring adequate cash 
balances to the government can pay its day-to-day operating 
expenses, (2) financing the debt at the lowest cost to 
taxpayers, and (3) promoting efficient capital markets. The 
bill provides Treasury with maximum flexibility in using the 
funds to pay down the debt so that none of these goals are 
compromised.
    In addition to dedicating $42 billion of the projected on-
budget surplus for debt reduction, the Committee also believes 
that the Social Security and Medicare Trust Fund surpluses 
should be used to reduce the publicly-held debt until 
legislation to save these programs is enacted. In the past, 
these surpluses were used to finance government operating 
expenses unrelated to Social Security and Medicare. However, 
fiscal discipline and a strong economy have allowed Congress to 
balance the budget without using the Social Security and 
Medicare surpluses. The Committee believes that the Social 
Security and Medicare surpluses should not be used to finance 
other government operating expenses. Instead, these surpluses 
should be used to pay down the publicly-held debt or to pay for 
Social Security and Medicare reform.

                      C. Explanation of Provisions


Debt reduction lock-box

    H.R. 5173 establishes an account in the Treasury to be 
called the Public Debt Reduction Payment Account (``the 
Account''). Under the bill, $42 billion is appropriated on the 
later of October 1, 2000, or the date of enactment and 
deposited into the Account from the General Fund for the 2001 
fiscal year. Amounts appropriated to the Account may only be 
expended to pay at maturity, or to redeem or buy before 
maturity, any obligation of the Federal government held by the 
public and included in the public debt. Any such obligation 
paid, redeemed, or bought would be canceled and could not be 
reissued.
    The bill provides that the establishment of the Account and 
the appropriation of funds to the Account do not affect trust 
fund transfers that are authorized under any other provision of 
the law.
    The amounts appropriated to the Account will not be 
considered direct spending for purposes of the Balanced Budget 
and Emergency Deficit Control Act of 1985. In addition, the 
bill provides that the Account has off-budget status for 
purposes of the budget submitted by the President, the 
Congressional budget, and the Balanced Budget and Emergency 
Deficit Control Act of 1985.
    The bill provides that any official statement regarding 
surplus or deficit totals of the Federal Government issued by 
the Office of Management and Budget, the Congressional Budget 
Office, or any other agency of the Federal Government exclude 
the outlays and receipts of the Account. The outlays and 
receipts of the Account are to be submitted in separate budget 
documents.
    The bill reduces the statutory limit on the public debt by 
the amount deposited into the Account. That is, the current 
statutory debt limit of $5.95 trillion is reduced by $42 
billion.
    The bill requires the Secretary of the Treasury to make two 
reports to the House Committee on Ways and Means and Senate 
Committee on Finance related to the Account. The first report 
is due within 30 days after the appropriation is deposited into 
the Account. This report requires the Secretary to confirm the 
establishment of the Account and provide a description of the 
Secretary's plan for using the money deposited into the Account 
to retire debt held by the public. The second report is due no 
later than October 31, 2002. This report requires the Secretary 
to provide a detailed accounting of the debt redeemed from 
amounts deposited into the Account. The proposal further 
requires that the Comptroller General verify the accuracy of 
the Secretary's report not later than November 15, 2002.

Social Security and Medicare lock-box

    The bill provides a point of order in the House of 
Representatives or the Senate against consideration of any 
concurrent budget resolution or conference report or amendment 
to a concurrent budget resolution that would set forth an on-
budget surplus for any fiscal year that is less than the 
projected surplus of the Federal Hospital Insurance Fund for 
that fiscal year (as assumed in such resolution).
    In addition, the bill provides a point of order in the 
House of Representatives or the Senate to consider any bill, 
joint resolution, amendment, motion, or conference report if 
the enactment of such bill, etc., would cause the on-budget 
surplus for any fiscal year to be less than the projected 
surplus of the Federal Hospital Insurance Trust Fund for such 
year or increase the amount by which the on-budget surplus for 
any fiscal year would be less than such trust fund surplus for 
that year.
    The point of order is not applicable to social security 
reform legislation or Medicare reform legislation.
    The bill requires any official Federal Government statement 
of the Federal or congressional budget surplus or deficit 
totals to exclude the outlays and receipts of the Old Age, 
Survivors, and Disability Insurance Program under the Social 
Security Act. The bill requires such receipts and outlays to be 
submitted in separate social security documents.

                             Effective Date

    The provisions of the bill relating to the Public Debt 
Reduction Payment Account are effective on the later of October 
1, 2000, or the date of enactment. The provisions of the bill 
relating to the Social Security and Medicare lock box are 
effective on the date of enactment and cease to have any force 
or effect upon the enactment of Social Security reform 
legislation and Medicare reform legislation.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statements are made 
concerning the votes of the Committee on Ways and Means in its 
consideration of the bill, H.R. 5173.

                       Motion To Report the Bill

    The bill, H.R. 5173, as amended, was ordered favorably 
reported by a rollcall vote of 33 yeas to 0 nays (with a quorum 
being present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
        Representatives             Yea       Nay     Present    Representatives      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Archer.....................        X   ........  .........  Mr. Rangel.......        X   ........  .........
Mr. Crane......................        X   ........  .........  Mr. Stark........        X   ........  .........
Mr. Thomas.....................        X   ........  .........  Mr. Matsui.......  ........  ........  .........
Mr. Shaw.......................        X   ........  .........  Mr. Coyne........        X   ........  .........
Mrs. Johnson...................        X   ........  .........  Mr. Levin........        X   ........  .........
Mr. Houghton...................        X   ........  .........  Mr. Cardin.......        X   ........  .........
Mr. Herger.....................        X   ........  .........  Mr. McDermott....        X   ........  .........
Mr. McCrery....................        X   ........  .........  Mr. Kleczka......        X   ........  .........
Mr. Camp.......................        X   ........  .........  Mr. Lewis (GA)...  ........  ........  .........
Mr. Ramstad....................        X   ........  .........  Mr. Neal.........  ........  ........  .........
Mr. Nussle.....................        X   ........  .........  Mr. McNulty......  ........  ........  .........
Mr. Johnson....................        X   ........  .........  Mr. Jefferson....  ........  ........  .........
Ms. Dunn.......................        X   ........  .........  Mr. Tanner.......        X   ........  .........
Mr. Collins....................        X   ........  .........  Mr. Becerra......  ........  ........  .........
Mr. Portman....................        X   ........  .........  Mrs. Thurman.....        X   ........  .........
Mr. English....................        X   ........  .........  Mr. Doggett......        X   ........  .........
Mr. Watkins....................        X   ........  .........  .................  ........  ........  .........
Mr. Hayworth...................        X   ........  .........  .................  ........  ........  .........
Mr. Weller.....................        X   ........  .........  .................  ........  ........  .........
Mr. Hulshof....................        X   ........  .........  .................  ........  ........  .........
Mr. McInnis....................        X   ........  .........  .................  ........  ........  .........
Mr. Lewis (KY).................        X   ........  .........  .................  ........  ........  .........
Mr. Foley......................        X   ........  .........  .................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------

                     IV. BUDGET EFFECTS OF THE BILL


              A. Committee Estimates of Budgetary Effects

    In compliance with clause 3(d)(2) of rule XIII of the Rules 
of the House of Representatives, the following statement is 
made concerning the effects on the budget of the bill, H.R. 
5173, as reported.
    The Committee has provided the estimate of the 
Congressional Budget Office, which is below.

    B. Statement Regarding New Budget Authority and Tax Expenditures


Budget authority

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves no new or increased budget authority.

Tax expenditures

    In compliance with clause 2(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves no increased tax expenditures.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the Congressional Budget Office (``CBO''), the 
following statement by CBO is provided.
                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 18, 2000.
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5173, the Debt 
Relief Lock-box Reconciliation Act for Fiscal Year 2001.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Paul 
Cullinan.
            Sincerely,
                                          Dan L. Crippen, Director.
    Enclosure.

H.R. 5173.--Debt Relief Lock-box Reconciliation Act for Fiscal Year 
        2001

    H.R. 5173 would establish the Public Debt Reduction Payment 
Account, a new account in the Treasury of the United States, 
and would appropriate $42 billion into that account for fiscal 
year 2001. Transactions of the new account would be off-budget, 
and funds in the account would be used to retire or purchase 
outstanding federal debt held by the public. The bill would 
also reduce the statutory limit on the public debt by $42 
billion. In addition, H.R. 5173 would create additional 
procedures--so-called ``lockboxes''--to deter legislation that 
would result in total budget surpluses that were less than the 
combined surpluses of the Social Security and Medicare Hospital 
Insurance programs. The bill also would prohibit the Office of 
Management and Budget (OMB), the Congressional Budget Office, 
and any other federal agency from including in budgetary totals 
the outlays and receipts of the Social Security program.
    This bill would not affect the total spending, receipts, or 
surplus of the federal government. This bill is intended to 
increase the off-budget surplus by reducing the on-budget 
surplus. Whether it would affect the allocation of the budget 
surplus between the on-budget and off-budget categories would 
depend on the budgetary treatment chosen by OMB.
    H.R. 4601 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would have no effect on the budgets of state, local, or tribal 
governments.

Budgetary implications

    Although H.R. 5173 would have no overall budgetary effect, 
the bill could change the on-budget and off-budget surpluses 
depending on OMB's treatment of the transactions. If the 
treatment parallels the budgetary treatment of subsidiary 
appropriations to the Postal Service and interest payments to 
the Social Security trust funds, the on-budget outlays would be 
offset by off-budget receipts or collections. In that case, the 
bill would reduce the on-budget surplus, increase the off-
budget surplus, but leave the total federal surplus unaffected. 
(It is possible, however, that OMB would choose an alternative 
approach, which could result in no change in either the on-
budget or off-budget surplus.)
    To the extent that any on-budget surplus is not used for 
additional spending or for reductions in taxes, it would 
automatically be used to reduce the federal debt. This bill, 
therefore, would help reduce the public debt by reducing the 
reported on-budget surplus, but only if it inhibits the use of 
some of that surplus for spending increases or tax reductions.

Budgetary treatment

    For Congressional scorekeeping purposes, CBO would record 
payments from the general fund of the Treasury to the off-
budget Public Debt Reduction Payment Account as direct 
spending. H.R. 5173, however, specifies that the appropriation 
to the amount would not be classified as direct spending. 
Therefore, once the bill is enacted into law, pay-as-you-go 
procedures would not apply to the appropriation. However, that 
language does not affect the treatment of the bill for 
Congressional scorekeeping purposes.
    The CBO staff contact for H.R. 5173 is Paul Cullinan. This 
estimate was approved by Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee advises that it was the result of the Committee's 
oversight review concerning the statutory limit on the public 
debt that the Committee concluded that it is appropriate and 
timely to enact the provisions included in the bill as 
reported. On January 20, 1999, the Committee on Ways and Means 
held a public hearing on ``the Outlook for the State of the 
U.S. Economy in 1999'' which discussed the benefits of using 
budget surpluses to reduce the debt held by the public. On 
September 29, 1999, the Committee on Ways and Means held a 
public hearing on ``Treasury's Debt Buyback Proposal'' which 
discussed Treasury's debt management policies.

    B. Summary of Findings and Recommendations of the Committee on 
                           Government Reform

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that no 
oversight findings or recommendations have been submitted to 
this Committee by the Committee on Government Reform with 
respect to the provisions contained in the bill.

                 C. Constitutional Authority Statement

    With respect to clause (3)(d)(1) of rule XIII of the Rules 
of the House of Representatives (relating to Constitutional 
Authority), the Committee states that the Committee's action in 
reporting this bill is derived from Article I of the 
Constitution, Section 8 (``The Congress shall have the Power To 
lay and collect Taxes, Duties, Imposts and Excises * * *''), 
and from the 16th Amendment to the Constitution.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                     TITLE 31, UNITED STATES CODE

           *       *       *       *       *       *       *


                  SUBTITLE III--FINANCIAL MANAGEMENT

           *       *       *       *       *       *       *


                        CHAPTER 31--PUBLIC DEBT

                    SUBCHAPTER I--BORROWING AUTHORITY

Sec.
3101.  Public debt limit.
     * * * * * * *
3114.  Public debt reduction payment account.

                   SUBCHAPTER I--BORROWING AUTHORITY

Sec. 3101. Public debt limit

  (a)  * * *
  (b) The face amount of obligations issued under this chapter 
and the face amount of obligations whose principal and interest 
are guaranteed by the United States Government (except 
guaranteed obligations held by the Secretary of the Treasury) 
may not be more than $5,950,000,000,000 minus the amount 
appropriated into the Public Debt Reduction Payment Account 
pursuant to section 3114(c) outstanding at one time, subject to 
changes periodically made in that amount as provided by law 
through the congressional budget process described in Rule XLIX 
of the Rules of the House of Representatives or otherwise.

           *       *       *       *       *       *       *


Sec. 3114. Public debt reduction payment account

  (a) There is established in the Treasury of the United States 
an account to be known as the Public Debt Reduction Payment 
Account (hereinafter in this section referred to as the 
``account'').
  (b) The Secretary of the Treasury shall use amounts in the 
account to pay at maturity, or to redeem or buy before 
maturity, any obligation of the Government held by the public 
and included in the public debt. Any obligation which is paid, 
redeemed, or bought with amounts from the account shall be 
canceled and retired and may not be reissued. Amounts deposited 
in the account are appropriated and may only be expended to 
carry out this section.
  (c) There is hereby appropriated into the account on October 
1, 2000, or the date of enactment of this Act, whichever is 
later, out of any money in the Treasury not otherwise 
appropriated, $42,000,000,000 for the fiscal year ending 
September 30, 2001. The funds appropriated to this account 
shall remain available until expended.
  (d) The appropriation made under subsection (c) shall not be 
considered direct spending for purposes of section 252 of 
Balanced Budget and Emergency Deficit Control Act of 1985.
  (e) Establishment of and appropriations to the account shall 
not affect trust fund transfers that may be authorized under 
any other provision of law.
  (f) The Secretary of the Treasury and the Director of the 
Office of Management and Budget shall each take such actions as 
may be necessary to promptly carry out this section in 
accordance with sound debt management policies.
  (g) Reducing the debt pursuant to this section shall not 
interfere with the debt management policies or goals of the 
Secretary of the Treasury.

           *       *       *       *       *       *       *

                              ----------                              


        CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2001

                   [H. Con. Res. 290, 106th Congress]

SECTION 1. CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2001.

  (a)  * * *
  (b) Table of Contents.--

Sec. 1. Concurrent resolution on the budget for fiscal year 2001.
     * * * * * * *

               TITLE II--BUDGET ENFORCEMENT AND RULEMAKING

                     Subtitle A--Budget Enforcement

[Sec. 201. Lock-box for Social Security surpluses.]
Sec. 201. Protection of social security and medicare surpluses.

           *       *       *       *       *       *       *


              TITLE II--BUDGET ENFORCEMENT AND RULEMAKING

                     Subtitle A--Budget Enforcement

SEC. 201. LOCK-BOX FOR SOCIAL SECURITY AND MEDICARE SURPLUSES.

  (a)  * * *

           *       *       *       *       *       *       *

  [(c) Point of Order.--
          [(1) In general.--It shall not be in order in the 
        House of Representatives or the Senate to consider any 
        revision to this resolution or a concurrent resolution 
        on the budget for fiscal year 2002, or any amendment 
        thereto or conference report thereon, that sets forth a 
        deficit for any fiscal year.
          [(2) Deficit levels.--For purposes of this 
        subsection, a deficit shall be the level (if any) set 
        forth in the most recently agreed to concurrent 
        resolution on the budget for that fiscal year pursuant 
        to section 301(a)(3) of the Congressional Budget Act of 
        1974.]
  (c) Lock-box for Social Security and Hospital Insurance 
Surpluses.--
          (1) Concurrent resolutions on the budget.--It shall 
        not be in order in the House of Representatives or the 
        Senate to consider any concurrent resolution on the 
        budget, or conference report thereon or amendment 
        thereto, that would set forth a surplus for any fiscal 
        year that is less than the surplus of the Federal 
        Hospital Insurance Trust Fund for that fiscal year.
          (2) Subsequent legislation.--(A) Except as provided 
        by subparagraph (B), it shall not be in order in the 
        House of Representatives or the Senate to consider any 
        bill, joint resolution, amendment, motion, or 
        conference report if--
                  (i) the enactment of that bill or resolution 
                as reported;
                  (ii) the adoption and enactment of that 
                amendment; or
                  (iii) the enactment of that bill or 
                resolution in the form recommended in that 
                conference report,
        would cause the on-budget surplus for any fiscal year 
        to be less than the projected surplus of the Federal 
        Hospital Insurance Trust Fund (as assumed in the most 
        recently agreed to concurrent resolution on the budget) 
        for that fiscal year or increase the amount by which 
        the on-budget surplus for any fiscal year would be less 
        than such trust fund surplus for that fiscal year.
          (B) Subparagraph (A) shall not apply to social 
        security reform legislation or medicare reform 
        legislation.

           *       *       *       *       *       *       *

  (e) Content of Concurrent Resolution on the Budget.--The 
concurrent resolution on the budget for each fiscal year shall 
set forth appropriate levels for the fiscal year beginning on 
October 1 of such year and for at least each of the 4 ensuing 
fiscal years of the surplus or deficit in the Federal Hospital 
Insurance Trust Fund.
  (f) Definitions.--As used in this section:
          (1) The term ``medicare reform legislation'' means a 
        bill or a joint resolution to save Medicare that 
        includes a provision stating the following: ``For 
        purposes of section 201(c) of the concurrent resolution 
        on the budget for fiscal year 2001, this Act 
        constitutes medicare reform legislation.''.
          (2) The term ``social security reform legislation'' 
        means a bill or a joint resolution to save social 
        security that includes a provision stating the 
        following: ``For purposes of section 201(c) of the 
        concurrent resolution on the budget for fiscal year 
        2001, this Act constitutes social security reform 
        legislation.''.
  [(e)] (g) Social Security Look-Back.--If in fiscal year 2001 
the Social Security surplus is used to finance general 
operations of the Federal Government, an amount equal to the 
amount used shall be deducted from the available amount of 
discretionary spending for fiscal year 2002 for purposes of any 
concurrent resolution on the budget.
  [(f )] (h) Waiver and Appeal.--Subsection (c)[(1)] 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 in the Senate to 
sustain an appeal of the ruling of the Chair on a point of 
order raised under this section.
  (i)  Effective Date.--This section shall cease to have any 
force or effect upon the enactment of social security reform 
legislation and medicare reform legislation.

           *       *       *       *       *       *       *


                         VII. ADDITIONAL VIEWS

    H.R. 5173 does very little of substance. Essentially, it 
would put into law the non-binding opinion that $42 billion in 
federal debt should be retired next year, using money from the 
non-Social-Security non-Medicare budget. I agree that debt 
reduction is a priority. The American people want to sustain 
their prosperity with a prudent fiscal policy. They are willing 
to give up the instant gratification of big immediate tax cuts 
in order to reduce the debt that they will pass on to their 
children. For these reasons, I voted for the bill.
    However, claiming that this bill is much more than a 
symboled exercise seriously misleads the American people. 
Technically, the bill appropriates $42 billion into a new 
account for debt reduction. But, what if the Congress, as 
constitutionally it is entitled to do, enacts laws that use all 
the projected budget surplus money for tax cuts or spending, 
and the $42 billion is not left for debt reduction? The 
appropriation still occurs, of course, but in that case the 
Treasury Department would have to borrow the money to fund the 
appropriation in this bill that is supposed to be used to 
retire debt.
    Clearly, that would be a shell game--borrowing the money to 
retire debt. What really produces debt reduction is discipline 
in terms of spending and refraining from enacting the too-large 
tax cuts that Republicans have put forward. When we do that, 
debt is paid down automatically. There is no need for 
legislation to make it happen. In other words, we do not need 
to say we are for debt reduction, we just need to vote 
responsibly on tax and spending bills.
    The votes that really count for debt reduction are the 
votes on tax cuts and spending bills. Among the votes that have 
occurred so far this year, the votes to sustain the President's 
vetoes of large tax cuts have been the most consistent with the 
stated purpose of this legislation. By sustaining these vetoes, 
the Congress made sure that there would be surplus funds for 
debt reduction. It is puzzling why, on the same day that 
Republican Leaders were demanding that anti-debt-reduction 
votes be made on big tax cuts, they were announcing their new 
plan to appropriate money for debt reduction.
    I hope that the one-week-old Republican emphasis on debt 
reduction is not ephemeral. I hope that the Republicans have 
reconsidered the merits and decided that paying off the debt by 
2012, as the President proposes in his budget, is indeed the 
best course of action for the country over enacting imprudent 
tax cuts. I hope that they are not simply pushing a one-year 
plan until November because public opinion polls place debt 
reduction well ahead of big tax cuts on the priority list of 
most Americans.
    Despite these hopes, I must remain skeptical. For two 
years, the Republican Leadership of this Committee and this 
House has placed as their top priority a near trillion dollar 
tax cut, in which the lion's share of the benefits go to the 
top income earners.
    This year Republican tactics changed, but their policy did 
not. They pursued a tax-cut-bill-a-week plan which, when added 
up, constituted almost $1 trillion over 10 years. When higher 
debt service costs are counted, this cost exceeds their 
original tax cut that so clearly was rejected by the American 
public. Now, the American people are expected to believe the 
Republicans are serious when, in the same week that they took 
to the floor to advocate this fiscally irresponsible tax-
cutting program, they argue that they have changed their ways 
and now support a debt reduction plan that is incompatible with 
their previous tax cuts.
    Thus, while I support the legislation, I remain highly 
suspect that the motive now is to distract attention from the 
Republican tax policies which they have pursued for nearly 20 
months in this Congress. The fact that the legislation's debt 
reduction mechanism is for one year only is evidence of this. 
If this bill is more than a gimmick, why limit the debt 
reduction to one year?
    If this legislation is just an opportunity for Republicans 
to put out press releases, then I must protest that this 
Committee and the Congress should not spend any of our limited 
remaining time on it. There are so many important, substantive 
matters that this Committee and this Congress so far have left 
undone. The new fiscal year begins in two weeks, and yet 
Congress has enacted only 2 of 13 appropriations bills. We 
still have not passed a bipartisan prescription drug benefit 
that can become law. We still have not done anything to help 
build new schools and decrease classroom size. The Patients' 
Bill of Rights is stuck in conference. This Congress has not 
passed any legislation that would strengthen Social Security 
and Medicare in the future.
    As I have said when this Committee has considered similar 
legislation before, it is difficult to vote against a piece of 
legislation that does so little.
    Clearly, the other body feels this way because they have 
not even bothered to take up the debt reduction legislation 
that this Committee and the House passed months ago.
    Despite my support for H.R. 5173, it is important to record 
my objections to some of its components. H.R. 5173 expresses as 
``findings'' several provocative opinions with which I 
disagree. One is that ``fiscal discipline'' resulting from the 
1997 Balanced Budget Act has a major role in producing budget 
surpluses without using the Social Security surplus.
    According to Congressional Budget Office (CBO) estimates, 
the 1997 legislation is doing very little to create surpluses 
compared to the 1993 budget legislation passed without a single 
Republican vote. The 1993 Democratic-sponsored budget 
legislation reduced the 1998 deficit by $122 billion according 
to CBO. (1998 is the last year for which an official estimate 
was done.) In contrast, CBO reports that for 1998, the 1997 
legislation increased the deficit by $21 billion. This is not 
surprising; the bill was front-loaded with tax cuts. For 1999, 
CBO estimated that the 1997 bill reduced deficits by only $4 
billion.
    Furthermore, CBO estimates show that legislation enacted by 
the 105th and 106th Congresses, both Republican-controlled 
Congresses, have reduced the year 2000 surplus by $68 billion, 
primarily as a result of appropriations bills.
    Bipartisan legislation would be easier to craft without 
this kind of provocation that ignores the facts.
    H.R. 5173 has a second component, called a ``lock box'' for 
Social Security and Medicare. Again, this takes the form of a 
promise, this time with fingers crossed behind the back.
    The promise comes not as a real bipartisan budget 
agreement, but as points of order against consideration of 
future budget resolutions and legislation that would result in 
a budget surplus, excluding Social Security, that is less than 
the Medicare Hospital Insurance surplus.
    Budget points of order have their uses. However, the House 
Committee on Rules, with only a majority vote from the House, 
waives these kinds of rules when they are inconvenient. Perhaps 
new rules can be a little more effective in the Senate. 
However, these points of order are flawed.
    One point of order, which would be added by H.R. 5173, 
seems to be an attempt to make it out of order to have an 
economic recession. There is an inadequate allowance for 
economic recessions under this rule. If we had an economic 
recession that reduced budget surpluses too much, it then would 
be out of order to admit what was happening in a budget 
resolution. Another point of order would create a legislative 
sprint race. The first spending or tax-cut bills to get across 
the budget finish line would be okay under this new rule, but 
too bad for that last bill that used up too much of a projected 
budget surplus. Because appropriations bills usually are 
considered late in the legislative calendar, I wonder which of 
the annual appropriations bills is likely to be held hostage by 
this point of order.
    Another peculiarity of these points of order is that they 
stop short of taking Medicare truly off-budget, even though 
some of the rhetoric surrounding this legislation would lead 
one to believe that this bill would do so.
    Why are fingers crossed behind the back? It is because the 
``lock box'' in this bill has a trap door. The key to the trap 
door is the magic word ``reform.'' The points of order no 
longer would apply to legislation that describes itself as is 
either Social Security or Medicare ``reform,'' no matter how 
much of a budget deficit might be created by this legislation.
    Finally, the bill reduces the statutory ceiling on the 
debt. Many people may not realize it, but Treasury securities 
held by Social Security, Medicare, and other trust funds count 
against the statutory debt ceiling. Too low a debt ceiling 
works against protecting and strengthening these trust funds.
    Lowering the debt ceiling does not reduce the debt. It is 
just a recipe for getting more quickly to the kind of debt 
ceiling crisis we had 5 years ago when the Republicans 
threatened to ``shut down the government.'' All that happened 
was that the Nation's credit rating and the government's 
ability to pay Social Security benefits were put at risk. This 
legislation would be better for leaving out the debt ceiling 
provision.
    I have many concerns about specific parts of this 
legislation, but the need to protect and preserve Social 
Security and Medicare and save our children from a massive 
Federal debt run up primarily under Presidents Reagan and Bush 
is vitally important. Therefore, I must vote for any 
legislation, even if merely symbolic, which promotes this goal. 
I can only hope that if this bill moves forward, corrections 
will be made, and that somehow the long-term actions of the 
Republicans someday will match the nice words they have written 
in this legislation.
                                                 Charles B. Rangel.