What This Bill Does
This bill creates spending limits (called "outlay caps") for the federal government to prevent a fiscal crisis. Starting in fiscal year 2024, the government must reduce its total spending by 5 percent each year through 2027, then maintain spending at no more than 17.5 percent of the nation's total economic output (called gross domestic product) in 2028 and beyond. If the government spends more than these limits allow, automatic spending cuts (called sequestration) will be triggered.
Who It Affects
The Office of Management and Budget and the Congressional Budget Office must prepare reports and spending reduction plans. Congress must follow new rules when considering bills that would increase spending. Federal agencies will face automatic budget cuts if spending exceeds the caps. All federal spending programs are potentially affected, with limited exemptions.
Key Provisions
• The government must cap total spending at no more than $5,952,871,000,000 (excluding interest payments) in fiscal year 2024, then reduce that amount by 5 percent each year through 2027 (Sec. 2(a)(1)-(4))
• Starting in fiscal year 2028, total government spending cannot exceed 17.5 percent of the nation's gross domestic product for that year (Sec. 2(a)(5)(A))
• If projected spending exceeds the spending cap, the Office of Management and Budget must order automatic spending cuts within 45 calendar days of the fiscal year beginning (Sec. 2(b)(1)(A))
• Congress cannot vote on any bill, amendment, or resolution that would breach or increase the current spending cap without a two-thirds majority vote in both the Senate and House (Sec. 2(c) and Sec. 316)
• If a bill passed after October 31 causes spending to exceed the cap, that excess amount carries over and increases the next year's required spending cuts (Sec. 2(d))
What Changes
Congress faces new restrictions on legislation. Bills that increase spending beyond the caps become much harder to pass, requiring a two-thirds supermajority (two-thirds of members voting) instead of a simple majority. Federal agencies will receive automatic budget reduction orders if Congress does not prevent excess spending. Government budgeting processes must include new spending cap calculations and reports to Congress and the President.
Important Definitions
• "Outlay" means government spending or money paid out
• "Outlay cap" means the maximum amount the government can spend in a fiscal year
• "Excess outlay amount" means how much the government's projected spending exceeds the allowed cap
• "Sequestration" means automatic, across-the-board spending cuts ordered to meet the caps
• "Gross domestic product" means the total value of all goods and services produced in the nation in one year
Effective Date
This law applies to fiscal year 2023 and every fiscal year after that, including all required reports and calculations for fiscal year 2023 (Sec. 4).
I
118TH CONGRESS
1ST SESSION
H. R. 260
To prevent a fiscal crisis by enacting legislation to balance the Federal
budget through reductions of discretionary and mandatory spending,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 10, 2023
Mr. GOOD of Virginia (for himself, Mr. PERRY, and Mr. MOORE of Alabama)
introduced the following bill; which was referred to the Committee on the
Budget, and in addition to the Committee on Rules, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee con-
cerned
A BILL
To prevent a fiscal crisis by enacting legislation to balance
the Federal budget through reductions of discretionary
and mandatory spending, and for other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Nickel Plan Act’’.
4
VerDate Sep 11 2014
05:34 Jan 20, 2023
Jkt 039200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H260.IH
H260
kjohnson on DSK79L0C42PROD with BILLS
2
•HR 260 IH
SEC. 2. ESTABLISHMENT AND ENFORCEMENT OF SPEND-
1
ING CAPS.
2
(a) OUTLAY
CAPS.—The Balanced Budget and
3
Emergency Deficit Control Act of 1985 (2 U.S.C. 900 et
4
seq.) is amended by inserting after section 253 the fol-
5
lowing:
6
‘‘SEC. 253A. ESTABLISHING OUTLAY CAPS.
7
‘‘(a) OUTLAY CAPS.—In this section, the term ‘outlay
8
cap’ means:
9
‘‘(1) FISCAL YEAR 2024.—For fiscal year 2024,
10
total outlays (less net interest payments) shall be
11
not more than $5,952,871,000,000, less 5 percent.
12
‘‘(2) FISCAL YEAR 2025.—For fiscal year 2025,
13
total outlays (less net interest payments) shall be
14
not more than the amount computed under para-
15
graph (1), less 5 percent.
16
‘‘(3) FISCAL YEAR 2026.—For fiscal year 2026,
17
total outlays (less net interest payments) shall be
18
not more than the amount computed under para-
19
graph (2), less 5 percent.
20
‘‘(4) FISCAL YEAR 2027.—For fiscal year 2027,
21
total outlays (less net interest payments) shall be
22
not more than the amount computed under para-
23
graph (3), less 5 percent.
24
‘‘(5) FISCAL YEAR 2028 AND SUBSEQUENT FIS-
25
CAL YEARS.—
26
VerDate Sep 11 2014
05:34 Jan 20, 2023
Jkt 039200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H260.IH
H260
kjohnson on DSK79L0C42PROD with BILLS
3
•HR 260 IH
‘‘(A) IN GENERAL.—For fiscal year 2028
1
and each fiscal year thereafter, total outlays
2
(including net interest payments) shall be not
3
more than 17.5 percent of the gross domestic
4
product for that fiscal year, as estimated by the
5
Office of Management and Budget prior to
6
March of the previous fiscal year.
7
‘‘(B) LIMITATION.—Notwithstanding sub-
8
paragraph (A), for any fiscal year beginning
9
with fiscal year 2029, total projected outlays
10
may not be less than total projected outlays for
11
the preceding fiscal year.
12
‘‘(b) SEQUESTRATION.—
13
‘‘(1) IN GENERAL.—
14
‘‘(A) EXCESS SPENDING.—Not later than
15
45 calendar days after the beginning of a fiscal
16
year, the Office of Management and Budget
17
shall prepare and the President shall order a
18
sequestration to eliminate any excess outlay
19
amount.
20
‘‘(B) DEFINITIONS.—
21
‘‘(i) FISCAL
YEARS
2024
THROUGH
22
2027.—For each of fiscal years 2024
23
through 2027 and for purposes of this sub-
24
section, the term ‘excess outlay amount’
25
VerDate Sep 11 2014
05:34 Jan 20, 2023
Jkt 039200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H260.IH
H260
kjohnson on DSK79L0C42PROD with BILLS
4
•HR 260 IH
means the amount by which total projected
1
Federal outlays (less net interest pay-
2
ments) for a fiscal year exceeds the outlay
3
cap for that fiscal year.
4
‘‘(ii) FISCAL YEAR 2028 AND SUBSE-
5
QUENT
FISCAL
YEARS.—For fiscal year
6
2028 and each fiscal year thereafter and
7
for purposes of this subsection, the term
8
‘excess outlay amount’ means the amount
9
by which total projected Federal outlays
10
for a fiscal year exceeds the outlay cap for
11
that fiscal year.
12
‘‘(2) SEQUESTRATION.—
13
‘‘(A) CBO PREVIEW REPORT.—On August
14
15 of each year, the Congressional Budget Of-
15
fice shall issue a sequestration preview report
16
as described in section 254(c)(4).
17
‘‘(B) OMB PREVIEW REPORT.—On August
18
20 of each year, the Office of Management and
19
Budget shall issue a sequestration preview re-
20
port as described in section 254(c)(4).
21
‘‘(C) FINAL REPORT.—On October 31 of
22
each year, the Office of Management and Budg-
23
et shall issue a final sequestration report as de-
24
scribed in section 254(f)(3), which shall be ac-
25
VerDate Sep 11 2014
05:34 Jan 20, 2023
Jkt 039200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H260.IH
H260
kjohnson on DSK79L0C42PROD with BILLS
5
•HR 260 IH
companied by a Presidential order detailing
1
spending reductions equal to the excess outlay
2
amount.
3
‘‘(D) PROCESS.—The reductions shall gen-
4
erally follow the process set forth in sections
5
253 and 254, except as provided in this section.
6
‘‘(3) CONGRESSIONAL ACTION.—If the August
7
20 report by the Office of Management and Budget
8
projects a sequestration, the Committee on the
9
Budget of the Senate and the Committee on the
10
Budget of the House of Representatives may report
11
a resolution directing committees of their House to
12
change the existing law to achieve the spending re-
13
ductions outlined in the August 20 report necessary
14
to meet the outlay limits.
15
‘‘(c) NO EXEMPT PROGRAMS.—Section 255 and sec-
16
tion 256 shall not apply to this section or any sequestra-
17
tion order issued under this section.
18
‘‘(d) LOOK BACK.—If, after October 31, a bill result-
19
ing in outlays for the fiscal year in progress is enacted
20
that causes excess outlays, the excess outlay amount for
21
the next fiscal year shall be increased by the amount or
22
amounts of that breach.’’.
23
(b) CONFORMING AMENDMENTS TO BBEDCA.—
24
VerDate Sep 11 2014
05:34 Jan 20, 2023
Jkt 039200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H260.IH
H260
kjohnson on DSK79L0C42PROD with BILLS
6
•HR 260 IH
(1) SEQUESTRATION PREVIEW REPORTS.—Sec-
1
tion 254(c)(4) of the Balanced Budget and Emer-
2
gency Deficit Control Act of 1985 (2 U.S.C.
3
904(c)(4)) is amended to read as follows:
4
‘‘(4) OUTLAY CAP SEQUESTRATION REPORTS.—
5
The preview reports shall set forth for the budget
6
year estimates for the following:
7
‘‘(A)(i) For each of budget years 2023
8
through 2027, total projected outlays (less net
9
interest payments), less five percent.
10
‘‘(ii) For budget year 2028 and each sub-
11
sequent budget year, the estimated gross do-
12
mestic product for that budget year.
13
‘‘(B) The amount of reductions required
14
under section 253A.
15
‘‘(C) The sequestration percentage nec-
16
essary to achieve the required reduction under
17
section 253A.’’.
18
(2) FINAL SEQUESTRATION REPORTS.—Section
19
254(f)(3) of the Balanced Budget and Emergency
20
Deficit Control Act of 1985 (2 U.S.C. 904(f)(3)) is
21
amended to read as follows:
22
‘‘(3)
OUTLAY
CAPS
SEQUESTRATION
RE-
23
PORTS.—The final reports shall contain all the infor-
24
mation required in the outlay cap sequestration pre-
25
VerDate Sep 11 2014
05:34 Jan 20, 2023
Jkt 039200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H260.IH
H260
kjohnson on DSK79L0C42PROD with BILLS
7
•HR 260 IH
view reports. In addition, these reports shall contain,
1
for the budget year, for each account to be seques-
2
tered, estimates of the baseline level of sequestrable
3
budgetary resources and resulting outlays and the
4
amount of budgetary sources to be sequestered and
5
result in outlay reductions. The reports shall also
6
contain estimates of the effects on outlays on the se-
7
questration of each outyear for direct spending pro-
8
grams.’’.
9
(c) ENFORCEMENT.—Title III of the Congressional
10
Budget Act of 1974 (2 U.S.C. 631 et seq.) is amended
11
by adding after section 315 the following:
12
‘‘SEC. 316. ENFORCEMENT PROCEDURES.
13
‘‘(a) OUTLAY CAPS.—It shall not be in order in the
14
House of Representatives or the Senate to consider any
15
bill, joint resolution, amendment, amendment between the
16
Houses, or conference report that includes any provision
17
that would cause the most recently reported, current out-
18
lay cap set forth in section 253A of the Balanced Budget
19
and Emergency Deficit Control Act of 1985 to be
20
breached or increased.
21
‘‘(b) WAIVER OR SUSPENSION.—
22
‘‘(1) IN THE SENATE.—The provisions of this
23
section may be waived or suspended in the Senate
24
VerDate Sep 11 2014
05:34 Jan 20, 2023
Jkt 039200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H260.IH
H260
kjohnson on DSK79L0C42PROD with BILLS
8
•HR 260 IH
only by the affirmative vote of two-thirds of the
1
Members, duly chosen and sworn.
2
‘‘(2) IN THE HOUSE.—The provisions of this
3
section may be waived or suspended in the House of
4
Representatives only by a rule or order proposing
5
only to waive such provisions by an affirmative vote
6
of two-thirds of the Members, duly chosen and
7
sworn.
8
‘‘(c) POINT OF ORDER PROTECTION.—In the House,
9
it shall not be in order to consider a rule or order that
10
waives the application of paragraph (2) of subsection (b).
11
‘‘(d) MOTION TO SUSPEND.—It shall not be in order
12
for the Speaker to entertain a motion to suspend the appli-
13
cation of this section under clause 1 of rule XV.’’.
14
SEC. 3. CONFORMING AMENDMENTS.
15
The table of contents set forth in—
16
(1) section 1(b) of the Congressional Budget
17
and Impoundment Control Act of 1974 is amended
18
by inserting after the item relating to section 315
19
the following new item:
20
‘‘Sec. 316. Enforcement procedures.’’;
and
21
(2) section 250(a) of the Balanced Budget and
22
Emergency Deficit Control Act of 1985 is amended
23
VerDate Sep 11 2014
05:34 Jan 20, 2023
Jkt 039200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H260.IH
H260
kjohnson on DSK79L0C42PROD with BILLS
9
•HR 260 IH
by inserting after the item relating to section 253
1
the following new item:
2
‘‘Sec. 253A. Establishing outlay caps.’’.
SEC. 4. EFFECTIVE DATE.
3
This Act and the amendments made by this Act shall
4
apply to fiscal year 2023 and each fiscal year thereafter,
5
including any reports and calculations required for imple-
6
mentation in fiscal year 2023.
7
Æ
VerDate Sep 11 2014
05:34 Jan 20, 2023
Jkt 039200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6301
E:\BILLS\H260.IH
H260
kjohnson on DSK79L0C42PROD with BILLS