Common Sense Spending Act - Amends the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act) to extend discretionary spending limits through FY 2008.
Repeals requirements for adjustments to discretionary limits for: (1) continuing disability reviews by the Social Security Administration; (2) specified allowances for the International Monetary Fund and international arrearages; (3) any earned income tax credit compliance initiative; (4) adoption incentive payments; and (5) conservation spending.
Requires an adjustment to discretionary spending limits equal to the estimated resulting reduction in mandatory budget authority and outlays utilizing accrual methods, if enacted legislation charges Federal agencies for the full cost of accrued Federal retirement and health benefits, and an appropriations Act provides new budget authority to carry out such legislation.
Repeals the exemption of appropriations to cover agricultural crop disaster assistance from the application of mandatory adjustments in discretionary spending limits in a sequestration report and subsequent budgets for emergency appropriations for discretionary accounts. (Thus applies such mandatory adjustments in the total amount of emergency appropriations to appropriations covering agricultural crop disaster assistance.)
Revises PAYGO requirements to remove receipts from the requirement that any legislation enacted before FY 2009 affecting direct spending (currently, direct spending and receipts) that increases the deficit will trigger an offsetting sequestration. Revises the formula for calculating the amount of deficit increase or decrease by the Office of Management and Budget (OMB).
States that, with respect to eliminating a deficit increase, accounts shall be assumed to be at the level in the baseline.
Revises the definition of baseline to exclude emergency appropriations and legislation.
Prohibits such emergency appropriations from being extended in the baseline.
Amends the Congressional Budget and Impoundment Control Act of 1974 to define: (1) "emergency" as an unanticipated situation that requires new budget authority and outlays (or new budget authority and the outlays flowing therefrom) for the prevention or mitigation of, or response to, loss of life or property, or a threat to national security; and (2) "unanticipated" as an underlying situation that is sudden, which means quickly coming into being or not building up over time, urgent, which means a pressing and compelling need requiring immediate action, unforeseen, which means not predicted or anticipated as an emerging need, and temporary, which means not of a permanent duration.
Amends the Congressional Budget Act of 1974 to require that the committee report and any statement of managers accompanying proposed legislation analyze whether a proposed emergency requirement meets such definition of "emergency." Prohibits the consideration of any such legislation that does not meet this "emergency" definition.