S. 1351 — Introduced in Senate

II 113th CONGRESS 1st Session S. 1351 IN THE SENATE OF THE UNITED STATES July 24, 2013 Mr. Thune (for himself, Mr. Kaine, Mr. Portman, and Mr. Coons) introduced the following bill; which was read twice and referred to the Committee on the Budget A BILL To provide for fiscal gap and generational accounting analysis in the legislative process, the President’s budget, and annual long-term fiscal outlook reports. 1. Short title This Act may be cited as the Intergenerational Financial Obligations Reform Act or the INFORM Act. 2. Definitions In this Act: (1) Fiscal gap The term fiscal gap means an economic analysis that— (A) calculates the difference between the present value of all projected future Federal spending, including interest and principal payments on the initial outstanding debt, and the present value of all projected future Federal revenues, over an infinite time horizon; (B) calculates the permanent Federal revenue increases and spending reductions and identifies the combination of fiscal policy options starting in the budget year, and 5, 10, 15, and 25 years after the budget year, needed to eliminate the infinite horizon fiscal gap calculated as of the budget year; and (C) calculates the increases in the levels of annual rates of economic growth factors, including technological change, labor productivity, and capital deepening, starting in the budget year, and 5, 10, 15, and 25 years after the budget year, needed to eliminate the infinite horizon fiscal gap calculated as of the budget year. (2) Generation The term generation means a 1-year age cohort. (3) Generational accounting The term generational accounting means an economic analysis that calculates— (A) the projected present value lifetime net Federal tax burden facing each living adult generation over 18 years of age; and (B) the present value lifetime net Federal tax burdens facing each current generation of children 18 years of age and under, as well as each future generation, assuming— (i) the sum of all present value lifetime net Federal tax burdens facing each current generation of children 18 years of age and under, as well as each future generation, covers the present value of future discretionary spending, including interest and principal payments on the initial outstanding debt, less the sum of all present value lifetime net Federal tax burdens facing living adult generations over 18 years of age; and (ii) the lifetime net Federal tax burden of generations 18 years of age and under, as well as future generations, increases with year of birth at the projected growth rate of labor productivity. (4) Net Federal tax burden The term net Federal tax burden means the difference between Federal taxes paid and transfer payments received. 3. The Congressional Budget Office Report Section 202(e) of the Congressional Budget Act of 1974 is amended by inserting at the end the following: (4) (A) For any legislation or resolution considered in the Senate or the House of Representatives that would impact revenues or mandatory spending by greater than 0.5 percent of gross domestic product over the following 10-fiscal-year period and upon request relating to such legislation or resolution by the Chairmen or Ranking Members of the Committees on the Budget of the House of Representatives or the Senate, the Congressional Budget Office shall be required to provide, with respect to such legislation or resolution— (i) a fiscal gap and generational accounting analysis, including the change in the fiscal gap and generational accounting analysis relative to the baseline; and (ii) the Federal deficit, at current spending levels, in the fiscal year that is 75 years and the stock of the debt in the 75th year after the fiscal year in which the legislation is being considered. (B) In this paragraph— (i) the term fiscal gap means an economic analysis that— (I) calculates the difference between the present value of all projected future Federal spending, including interest and principal payments on the initial outstanding debt, and the present value of all projected future Federal revenues, over an infinite time horizon; (II) calculates the permanent Federal revenue increases and spending reductions and identifies the combination of fiscal policy options starting in the budget year, and 5, 10, 15, and 25 years after the budget year, needed to eliminate the infinite horizon fiscal gap calculated as of the budget year; and (III) calculates the increases in the levels of annual rates of economic growth factors, including technological change, labor productivity, and capital deepening, starting in the budget year, and 5, 10, 15, and 25 years after the budget year, needed to eliminate the infinite horizon fiscal gap calculated as of the budget year; (ii) the term generation means a 1-year age cohort; (iii) the term generational accounting means an economic analysis that calculates— (I) the projected present value lifetime net Federal tax burden facing each living adult generation over 18 years of age; and (II) the present value lifetime net Federal tax burdens facing each current generation of children 18 years of age and under, as well as each future generation, assuming— (aa) the sum of all present value lifetime net Federal tax burdens facing each current generation of children 18 years of age and under, as well as each future generation, covers the present value of future discretionary spending, including interest and principal payments on the initial outstanding debt, less the sum of all present value lifetime net Federal tax burdens facing living adult generations over 18 years of age; and (bb) the lifetime net Federal tax burden of generations 18 years of age and under, as well as future generations, increases with year of birth at the projected growth rate of labor productivity; and (iv) the term net Federal tax burden means the difference between Federal taxes paid and transfer payments received. . 4. CBO annual report (a) In general The Congressional Budget Office shall produce an annual fiscal gap and generational accounting analysis within its annual Long-Term Budget Outlook. (b) Public Report The Director of the Congressional Budget Office shall post the report described in subsection (a) on the Congressional Budget Office public website. 5. GAO annual report (a) In general The Comptroller General shall produce an annual fiscal gap and generational accounting analysis within its annual Long-Term Fiscal Outlook. (b) Public report The Comptroller General shall post the report described in subsection (a) on the General Accountability Office public website. 6. The President’s budget Section 1105 of title 31, United States Code, is amended— (1) in subsection (a), by— (A) redesignating paragraph (37) following paragraph (38) as paragraph (39); and (B) adding at the end the following: (40) an analysis including— (A) a fiscal gap and generational accounting analysis of the full budget proposal; (B) a fiscal gap and generational accounting analysis of specific policy changes that would impact revenues or mandatory spending by greater than 0.5 percent of gross domestic product over the following 10-fiscal year period; and (C) the Federal deficit, at current spending levels, in the fiscal year that is 75 years and the stock of the debt in the 75th year after the fiscal year in which the policy is being considered. ; and (2) by inserting at the end the following: (i) For purposes of subsection (a)(40)— (1) the term fiscal gap means an economic analysis that— (A) calculates the difference between the present value of all projected future Federal spending, including interest and principal payments on the initial outstanding debt, and the present value of all projected future Federal revenues, over an infinite time horizon; (B) calculates the permanent Federal revenue increases and spending reductions and identifies the combination of fiscal policy options starting in the budget year, and 5, 10, 15, and 25 years after the budget year, needed to eliminate the infinite horizon fiscal gap calculated as of the budget year; and (C) the increases in the levels of annual rates of economic growth factors, including technological change, labor productivity, and capital deepening, starting in the budget year, and 5, 10, 15, and 25 years after the budget year, needed to eliminate the infinite horizon fiscal gap calculated as of the budget year; (2) the term generation means a 1-year age cohort; (3) the term generational accounting means an economic analysis that calculates— (A) the projected present value lifetime net Federal tax burden facing each living adult generation over 18 years of age; and (B) the present value lifetime net Federal tax burdens facing each current generation of children 18 years of age and under, as well as each future generation, assuming— (i) the sum of all present value lifetime net Federal tax burdens facing each current generation of children 18 years of age and under, as well as each future generation, covers the present value of future discretionary spending, including interest and principal payments on the initial outstanding debt, less the sum of all present value lifetime net Federal tax burdens facing living adult generations over 18 years of age; and (ii) the lifetime net Federal tax burden of generations 18 years of age and under, as well as future generations, increases with year of birth at the projected growth rate of labor productivity; and (4) the term net Federal tax burden means the difference between Federal taxes paid and transfer payments received. .