EXECUTIVE
ORDER
EO 12857
Effective Date: August 09, 1993

Responsible Office: Office of the Chief Financial Officer/Comptroller
Subject: BUDGET CONTROL

			TEXT

By the authority vested in me as President of the United States
by the Constitution and the laws of the United States of America,
including section 1105 of title 31, United States Code, it is
hereby ordered as follows:

Section 1. Purpose.  The purpose of this order is to create a
mechanism to monitor total costs of direct spending programs,
and, in the event that actual or projected costs exceed targeted
levels, to require that the budget address adjustments in direct
spending.

Sec. 2. Establishment of Direct Spending Targets.
  (a) In General.  The initial direct spending targets for each
of fiscal years 1994 through 1997 shall equal total outlays for
all direct spending except net interest and deposit insurance as
determined by the Director of the Office of Management and Budget
(Director) under subsection (b).
  (b) Initial Report by Director. (1) Not later than 30 days
after the date of enactment of the Omnibus Budget Reconciliation
Act of 1993 (OBRA), the Director shall submit a report tot he
Congress setting forth projected direct spending targets for each
of fiscal years 1994 through 1997.
  (2) The Director's projections shall be based on legislation
enacted as of 5 days before the report is submitted under
paragraph (1).  To the extent feasible, the Director shall use
the same economic and technical assumptions used in preparing the
concurrent resolution on the budget for fiscal year 1994
(H.Con.Res.64).
  (c) Adjustments.  Direct spending targets shall be subsequently
adjusted by the Director under Section 6.

Sec.3. Annual Review od Direct Spending and Receipts by
President.  As part of each budget submitted under section
1105(a) of title 31, United States Code, the Director shall
provide an annual review of direct spending and receipts, which
shall include (1) information supporting the adjustment of direct
spending targets pursuant to Section 6, (2) information on total
outlays for programs covered by the direct spending targets,
including actual outlays for the prior fiscal year and projected
outlays for the current fiscal year and the 5 succeeding fiscal
years, and (3) information on the major categories of Federal
receipts, including a comparison between the levels of those
receipts and the levels projected as of the date of enactment of
OBRA.

Sec. 4. Special Direct Spending Message by President. (a)
Trigger.  In the event that the information submitted under
Section 3 indicates --
  (1) that actual outlays for direct spending in the prior fiscal
year exceeded the applicable direct spending target, or
  (2) that outlays for direct spending for the current or budget
year are projected to exceed the applicable direct spending
targets, the Director shall include in the budget a special
direct spending message meeting the requirements of     
subsection (b) of this Section.
  (b) Contents. (1) The special direct spending message shall
include:
  (A) An explanation of any adjustments to the direct spending
targets pursuant to Section 6.
  (B) An analysis of the variance in direct spending over the
adjusted direct spending targets.
  (C) The President's recommendations for addressing the direct
spending overages, if any, in the prior, current, or budget year.
  (2) The recommendations may consist of any of the following:
  (A) Proposed legislative changes to reduce outlays, increase
revenues, or both, in order to recoup or eliminate the overage
for the prior, current, and budget years in the current year, the
budget, and the 4 out-years.
  (B) Proposed legislative changes to reduce outlays, increased
revenues, or both, in order to recoup or eliminate part of the
overage for the prior, current, and budget year in the current
year, the budget year, and the 4 out-years, accompanied by a
finding by the President that, because of economic conditions or
for other specified reasons, only some of the overage should be
recouped or eliminated by outlay reductions or revenue increases
or both.
  (C) A proposal to make no legislative changes to recoup or
eliminate any overage, accompanied by a finding by the President
that, because of economic conditions or for other specified
reasons, no legislative changes are warranted.
  (3) Any proposed legislative change under paragraph (2) to
reduce outlays may include reductions in direct spending or in
the discretionary spending limits under section 601 of the
Congressional Budget Act of 1974.

Sec. 5. Proposed Special Direct Spending Resolution.  If the
President recommends reductions consistent with subsection
4(b)(2)(A) or (B), the special direct spending message shall
include the text of a special direct spending resolution
implementing the President's recommendations through
reconciliation directives instructing the appropriate committees
of the House of Representatives and Senate to determine and
recommend changes in laws within their jurisdictions to reduce
outlays or increase revenues by specified amounts.  If the
President recommends no reductions pursuant to Section 4
(b)(2)(C), the special direct spending message shall include the
text of a special resolution concurring in the President's
recommendation of no legislative action.

Sec. 6. Adjustments to Direct Spending Targets.
  (a) Required Annual Adjustments.  Prior to the submission of
the President's budget for each of fiscal years 1995 through
1997, the Director shall adjust the direct spending targets in
accordance with this Section.  Any such adjustments shall be
reflected in the targets used in the report under Section 3 and
message (if any) under Section 4.
  (b) Adjustment for Increased in Beneficiaries.  (1) The
Director shall adjust the direct spending targets for increases
(f any) in actual or projected numbers of beneficiaries under
direct spending programs for which the number of beneficiaries 
is a variable in determining costs.
  (2) The adjustment shall be made by --
  (A) computing, for each program under paragraph (1), the
percentage change between (i) the annual average number of
beneficiaries under that program (including actual numbers of
beneficiaries for the prior fiscal year and projections for the
budget and subsequent fiscal year) to be used in the President's
budget with which the adjustments will be submitted, and (ii) the
annual average number of beneficiaries used in the adjustments
made in 1994, the annual average number of beneficiaries used in
the Director's initial report under Section 2(b));
  (B) applying the percentages computed under subparagraph (A) to
the projected levels of outlays for each program consistent with
the direct spending targets in effect immediately prior to the
adjustment; and
  (C) adding the results of the calculations required by
subparagraph (B) to the direct spending targets in effect
immediately prior to the adjustment.   
  (3) No adjustment shall be made for any program for a fiscal
year in which the percentage increase computed under paragraph
(2)(A) is less than or equal to zero.
  (c) Adjustments for Revenue Legislation.  The Director shall
adjust the targets as follows:
  (1) they shall be increased by the amount of any increase in
receipts; or
  (2) they shall be decreased by the amount of any decrease in
receipts, resulting from receipts legislation enacted after the
date of enactment of OBRA, except legislation enacted in response
to the message transmitted under Section 4.
  (d) Adjustments To Reflect Congressional Decisions.  Upon
enactment of a reconciliation bill enacted in response to a
message submitted under Section 4, the Director shall adjust
direct spending targets for the current year, the budget year,
and each outyear through 1997 by --
  (1) increasing the target for the current year and the budget
year by the amount stated for that year in that reconciliation
bill (but if a separate vote was required by Congressional rules,
only if that vote has occurred); and
  (2) decreasing the target for the current, budget, and outyears
through 1997 by the amount of reductions in direct spending
enacted in that reconciliation bill.
  (e) Designated Emergencies.  The Director shall adjust the
targets to reflect the costs of legislation that is designated as
an emergency by Congress and the President under section 252(e)
of the Balanced Budget and Emergency Deficit Control Act of 1985.
Sec. 7. Relationship to Balanced Budget and Emergency Deficit
Control Act.  Recommendations pursuant to Section 4 shall include
a provision specifying that reductions in outlays or increases in
receipts resulting from that legislation shall not be taken into
account for purposes of any budget enforcement procedures under
the Balanced Budget and Emergency Deficit Control Act of 1985.

Sec. 8. Estimating Margin.  For any fiscal year for which the
overage is less than one-half of 1 percent of the direct spending
target for that year, the procedures set forth in Section 4 shall
not apply.

Sec. 9. Means-Tested Programs.  In making recommendations under
Section 4, the Director shall seriously consider all other
alternatives before proposing reductions in means-tested
programs.

Sec. 10. Effective Date. This order shall take effect upon
enactment of OBRA.  This order shall apply to direct spending
targets for fiscal years 1994 through 1997 and shall expire at
the end of fiscal year 1997.

                                   /s/William J. Clinton


THE WHITE HOUSE,
August 4, 1993.
	
			

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