A bill to provide new discretionary spending limits for fiscal year 2002, and for other purposes.

Amends the Balanced Budget and Emergency Deficit Control Act of 1985 to increase the discretionary spending limits for FY 2002. Provides a new allocation to the appropriations committees for FY 2002. Increases the recommended levels of total new budget authority and budget outlays for FY 2002. Limits the adjustments for emergency discretionary spending required in certain sequestration reports under the Balanced Budget and Emergency Deficit Control Act of 1985. Excludes from such adjustment limit emergency funding in response to the terrorist attacks of September 11, 2001.

Requires the Director of the Office of Management and Budget (OMB), in preparing the final pay-as-you-go and deficit sequestration reports, to change any balance of direct spending and receipts legislation for FY 2002 so as to eliminate any balances resulting from legislation enacted prior to the date of the enactment of this Act.

Repeals the mechanism for congressional implementation of an increase of FY 2002 discretionary spending limits and the Senate defense firewall prohibiting consideration of any legislation that exceeds specified limits for defense and non-defense discretionary spending.