[Congressional Record Volume 140, Number 53 (Thursday, May 5, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: May 5, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
CONFERENCE REPORT ON H. CON. RES. 218, CONCURRENT RESOLUTION ON THE
BUDGET FOR FISCAL YEAR 1995
Mr. BEILENSON. Mr. Speaker, by direction of the Committee on Rules, I
call up House Resolution 418 and ask for its immediate consideration.
The Clerk read the resolution, as follows:
H. Res. 418
Resolved, That upon adoption of this resolution it shall be
in order to consider the conference report to accompany the
concurrent resolution (H. Con. Res. 218) setting forth the
congressional budget for the United States Government for the
fiscal years 1995, 1996, 1997, 1998, and 1999. All points of
order against the conference report and against its
consideration are waived. The conference report shall be
considered as read. The conference report shall be debatable
for one hour equally divided and controlled by chairman and
ranking minority member of the Committee on the Budget.
Sec. 2. Rule XLIX shall not apply with respect to the
adoption by the Congress of the conference report to
accompany the concurrent resolution (H. Con. Res. 218)
setting forth the congressional budget for the United States
Government for the fiscal years 1995, 1996, 1997, 1998, and
1999.
The SPEAKER pro tempore. The gentleman from California [Mr.
Beilenson] is recognized for 1 hour.
Mr. BEILENSON. Mr. Speaker, for purposes of debate only, I yield the
customary 30 minutes to the gentleman from California [Mr. Dreier],
pending which I yield myself such time as I may consume. During
consideration of this resolution, all time yielded is for the purpose
of debate only.
(Mr. BEILENSON asked and was given permission to revise and extend
his remarks.)
Mr. BEILENSON. Mr. Speaker, House Resolution 418 is the rule
providing for the consideration of the conference report accompanying
H. Con. Res. 218, the resolution setting forth the budget for the
United States Government for fiscal years 1995 through 1999.
The rule provides 1 hour of debate on the conference report to be
equally divided and controlled by the chairman and the ranking minority
member of the Budget Committee. All points of order against the
conference report and against its consideration are waived.
Mr. Speaker, at this point I do wish to advise the Members that the
conference report was filed only yesterday and that it does, therefore,
violate the 3-day layover requirement. The committee generally does not
like waiving the 3-day layover rule. Members usually do need time to
read the conference report to become fully informed about it. In this
case, however, the Committee on Rules felt that there were simple and
persuasive reasons to waive that particular requirement. First is that
the broad outline of the conference committee agreement has been known,
with the exception of some details about Senate budget rules, since
Monday, and the change provided from the report originally passed in
the House are relatively minor. But more important, if we do not take
up the conference report today, we will not be able to take it up again
until next Thursday. The Committee on Appropriations has been waiting
on the budget appropriation to make their allocation and be able,
therefore, to begin moving on their bills and another week's delay
would push the appropriations bill past the Memorial Day recess.
Therefore, we felt that there was substantial and good reason to
waive that particular layover rule for that particular reason.
The rule before the Members also provides that rule XLIX will not
apply upon adoption of the conference report. House rule XLIX provides
for the automatic adoption by the House of a joint resolution changing
the statutory limit on the public debt to conform to amounts in the
budget resolution.
It is not necessary to apply rule XLIX this year since the current
statutory limit on the public debt, which was enacted as part of last
year's deficit reduction package, is expected to suffice until spring
or summer of 1995.
Mr. Speaker, I wish to commend the chairman of the Budget Committee,
the gentleman from Minnesota [Mr. Sabo], for his efforts in working
with the Senate to come to an agreement on a budget resolution that
includes $13 billion in cuts in discretionary spending over the next 5
years below the caps that we set last year.
{time} 2000
In all, implementation of the conference report will bring the 1995
deficit down to approximately $175 billion, the lowest level in 5
years, more than $100 billion lower than projections made just last
spring for fiscal year 1995. As a result, we will have reduced the
deficit by $115 billion in just 3 years, since 1992.
The conference agreement represents, as did last year's, real
substantive spending cuts. As Members will recall, the legislation we
passed last year was the largest deficit reduction package in U.S.
history, cutting the deficit by $47 billion in fiscal year 1994, and by
$496 billion over a 5-year period.
The spending levels in this year's Budget Resolution are below the
budget caps set by that agreement, and the conference agreement
includes a cut of $500 million below the caps in 1995.
In addition, relative to the size of the economy, discretionary
spending for 1995 is at its lowest level since 1948, and total Federal
spending is at its lowest level in 15 years.
Mr. Speaker, despite the substantial deficit reduction called for by
this agreement, the conference report contains $263.8 billion in budget
authority for defense spending in fiscal year 1995. For nondefense
spending, it generally reflects many of the President's spending
priorities including modest increases for such programs as education,
training, social services, community regional development and law
enforcement programs.
I would remind Members that this Budget Resolution is only the
blueprint for Federal spending. Decisions on actual program cuts and
spending remain to be made, and we shall have difficult choices to make
as we work through the appropriations process over the next few months.
Still, this agreement represents our continued serious effort to bring
Federal spending under control with a decent amount of success, if I
may say so.
I urge my colleagues to approve this today.
Mr. Speaker, I reserve the balance of my time.
Mr. DREIER. Mr. Speaker, I yield myself such time as I may consume.
(Mr. DREIER asked and was given permission to revise and extend his
remarks.)
Mr. DREIER. Mr. Speaker, let us look at this interesting day. Mr.
Speaker, we have dealt with gun control, abortion and now, at 8
o'clock, Thursday evening, we have decided that we are going to bring
up the Budget Conference Report, a report which few people have been
able to read.
Having said that, I rise in strong opposition to this rule. There is
absolutely no reason to waive all of the rules of the House in order to
race this conference report to the floor; in particular, the rule that
requires a 3-day layover before a conference report is considered
should not be waived.
It is very disappointing that the distinguished ranking member,
Republican member on the Committee on the Budget who has been applauded
for his serious and thoughtful work on these issues was forced to
hastily write a letter to the chairman of the Committee on Rules
yesterday stating that the committee was proceeding with consideration
of a conference report that the minority had not even had the chance to
review.
It is ridiculous that staff on both the Committee on the Budget and
the Committee on Rules had less than 3 hours to review the report
before it was considered in our Committee on Rules.
If this rule is passed and the conference report is brought up by
this evening, Members will also have just a few hours, let alone 3
days, as the rules mandate, to review this lengthy report before being
asked to cast their vote.
To avoid placing the House in that embarrassing predicament, I very
heartily concur with the statement made in the letter by the gentleman
from Ohio [Mr. Kasich] when he said:
On a measure as important and sweeping as the Budget
Resolution, it is eminently reasonable that Members have 3
days to review the document before they cast their votes.
One of the major points of contention in the conference committee was
the treatment of a $26 billion cut in discretionary spending passed by
the other body. I strongly supported that reasonable and prudent effort
and would have liked to have seen the conference committee include all
$26 billion. Unfortunately, the President and the Democrat leadership
in this House opposed any spending cuts.
The conference is reported to have split the difference resulting in
a $13 billion cut. And now, upon further review, it appears that the
spending reduction is not really $13 billion, and it is not one-half of
the Senate cut.
Instead, the only real cut is a $500 million reduction in budget
allocations and outlays in fiscal year 1995. . This is only one-third
of the Senate's original $1.6 billion reduction in outlays in fiscal
year 1995 and one-tenth of their $5.3 billion reduction in budget
allocations.
The outyear reductions can easily be overridden, as we all know, as
often happens around here, by future budget resolutions. Even the
meager fiscal year 1995 cut is largely ceremonial, because fiscal year
1995 entitlement spending has been increased by the same $500 million,
resulting in no outlay reduction at all.
Quite Simply, this is not the spending reduction being advertised
here.
The original Senate cut was a comparative drop in the bucket of
discretionary spending and budgetary red ink. This conference report
offers barely a fraction of that drop. We must do better, Mr. Speaker.
Another very important point of contention during the conference
report involved Budget Act rules in the other body, specifically as
they would apply to the legislation implementing the General Agreement
on Tariffs and Trade, Uruguay Round Agreement. This conference report
requires legislation to be budget-neutral for 1 year, 5 years, and 10
years.
For legislation that adds to the deficit, I strongly agree with that
provision. However, there should be a waiver for the GATT implementing
bill, because it will raise revenue and reduce the deficit.
The overwhelming economic evidence on this question shows a positive
budget impact for GATT in the first year and every year thereafter. The
only point of serious contention among economists is how positive an
impact, and at this point, Mr. Speaker, I am inserting at this point in
the Record a study that addresses this question very well, conducted by
the Institute for International Economics.
Impact of the Uruguay Round on United States Fiscal Revenue
(By William R. Cline, Institute for International Economics)
The Uruguay Round marks a watershed accomplishment in
opening the world trading regime. Without the agreement,
world trading partners could have entered a new period of
protection and exclusive regional blocs. The agreement
incorporated key sectors omitted in the previous seven post-
war rounds of negotiation: agriculture, textiles and apparel,
services, intellectual property, and investment. The stakes
are large for the US and world economies.
Congressional passage of the Uruguay Round agreement faces
a technical hurdle that stems from the US fiscal problem.
Under the budget discipline imposed by the Omnibus Budget
Reconciliation Act of 1993 (OBRA-93) and the Balanced Budget
and Emergency Deficit Control Act of 1985, Congress faces the
task of offsetting any prospective revenue losses resulting
from policy changes by taking compensatory tax or spending
measures. Because of Uruguay Round cuts tariffs on US
imports, the question arises as to whether a side effect of
the round is to reduce US tax revenue. If so, Congress would
be faced with the need to make adjustments elsewhere in the
budget.
This paper examines the likely impact of Uruguay Round
liberalization on US fiscal revenue. The principal question
is whether induced economic effects of liberalization provide
revenue gains that partially, completely, or more than
completely offset the direct tariff revenue losses. Such
offsets could provide the basis for a waiver of the budgetary
``scoring'' process and its assessed need to raise revenue
elsewhere (or cut spending) to compensate for tariff
reductions.
a simple model of trade liberalization revenue effects
At the first level of analysis, what may be called the
``primary direct'' tariff revenue loss may be estimated by
multiplying the change in the average tariff by the import
value base. US imports are approximately $580 billion. The
average tariff on both dutiable and duty-free imports stands
at about 3 percent. The Uruguay Round achieved an average
tariff cut of about one-third. Thus, fully phased in the
Round represents a direct tariff revenue loss of $5.8 billion
annually. As the phase-in period is 10 years, the implied
direct loss would be about one-thrid this large by the third
year, or about $2 billion. For a five year period, centered
around this average, the total loss would be on the order of
$10 billion. After allowing for inflation and import base
growth, this order of magnitude is similar to that identified
by the Office of Management and Budget: $13.9 billion revenue
loss over five years (Wall Street Journal, 3 March 1994).
However, there are three additional effects. They are:
tariff revenue on the increased volume of imports (a direct
effect; general tax revenue associated with static efficiency
gains (indirect); and general tax revenue associated with
dynamic growth effects (indirect).
Direct Revenue Effects--Figure 1 illustrates the first
effect. The figure shows the demand curve for imports of a
particular product. The price (vertical axis) equals the
world price plus the tariff. Before liberalization, the
tariff is t0. After liberalization, it is t1. At a
lower price, consumers purchase a larger volume of imports.
The import volume (and dollar value, given the usual
assumption of a horizontal world supply curve rises from
M0. to M1.
The original amount of tariff revenue is represented by the
areas of rectangles B+E. The height of this combined
rectangle is the original tariff times the world price. We
may set the world price arbitrarily at unity (by choosing the
right units for the volume), so this rectangle height is
t0. The initial import value (FOB) is M0. Tariff
collection is thus t0M0, or areas B+E.
After liberalization, tariff collection amounts to the new
tariff rate times the new import volume, or t1M1.
In the diagram, this amount equals the area of the two
rectangles E+D. Thus, the net change in tariff revenue is
[B+E] - [E+D] = -B+D. In contrast, the ``primary''
calculation just illustrated captures only the loss of
rectangle ``B'', and fails to measure the revenue gain of
rectangle ``D.'' For some sectors where tariffs will remain
relatively high even after liberalization, as in the cases of
textiles and apparel, this ``revenue on additional imports''
can be substantial.
If we designate the revenue impact just described as the
``full direct'' (as opposed to ``primary direct'') effect,
then we have the following estimate. Let a be the
proportionate cut in the tariff. (On average, a is
approximately 0.33 for the Uruguay Round.) In terms of figure
1, we have: t1 = t0(1-); and t0-
t1 = t0. The height of rectangle ``B'' is
thus t, and its base is the original import level,
M0. Similarly, the rectangle ``D'' has height (1-
)t0 and base M1-M0. Defining
M = M1-M0.
In turn, M can be estimated using the ``price
elasticity of import demand,'' . This parameter,
which is negative, tells the percent change in the import
volume for one percent change in the import price to the
consumer. The initial price to the consumer is 1+t0. The
change in price is -t0. Thus, the proportionate
price change is: -t0/(1+t0). Applying this
proportionate change to the price elasticity (),
the change in the level of imports caused by liberalization.
Note that because the elasticity () is negative,
the right hand side of equation 2 is positive, meaning that
imports rise.
In equation 3, if there were no ``import expansion''
effect, the revenue loss would simply be the original tariff
collection base (Mt) times the
proportionate tariff cut, the first term in the bracketed
expression (-a). However, there is a positive contribution to
revenue from the remaining tariff applied to the increase in
imports, captured by the second term within the brackets.
An important feature of the ``import expansion'' term is
that its contribution to revenue rises approximately with the
square of the original tariff. Consider that in equation 3),
the effect of multiplying the tariff t outside the
bracket by the second term within the brackets is to create a
term t\2\. This effect is analogous to the well-
known feature of ``static welfare gains'' of liberalization
(discussed below): they rise approximately with the square of
the tariff.
An important implication of this consideration is that it
is necessary to disaggregate sectors to distinguish between
those with low, intermediate, and high tariffs. The ``import
expansion tariff revenue'' contribution will tend to be
relatively high for the high-tariff cases, by a degree that
exceeds the extent to which this contribution is low for the
low tariff cases. As a result, taking the simple average of
tariffs and applying it to the entire import base will
understate the import expansion tariff revenue effect. The
analysis that follows thus separates US imports into
categories with differing tariffs. The calculation in
equation 3) is then applied to each sector, individually
designated by an identifier ``i''. In addition, to
distinguish the (full) ``direct'' revenue effects from the
two other effects discussed above, it is useful to add the
superscript ``d''.
To this point, the analysis has concerned only the direct
effects of the tariff cut. The usual budget ``scoring''
process tends to permit inclusion of only direct effects,
although in the case of trade liberalization the indirect
effects discussed below are extremely important. Even within
the confines of the direct effects, however, it is important
to calculate the ``full'' direct effects shown in equation
3'), rather than just the ``primary'' revenue impact that
would be estimated by suppressing everything in the bracketed
term except the initial ``-''.
Static Welfare Gain Revenue Effect--The underlying reason
for trade liberalization is to achieve the economic welfare
gains that are associated from a more efficient allocation of
resources, whereby each country specializes more in the
products in which it has a comparative advantage. Yet the
direct revenue calculation, even ``full'' rather than
``primary,'' completely misses the likely revenue gains
that should result from these static welfare benefits.
The static welfare gains are most easily conceptualized in
the case of a product that is imported and not produced
domestically. Returning to figure 1, when the price including
tariff falls from Pw(1+to) to Pw(1+t1) and
import volume rises from Mo to M1, consumers enjoy
a gain in their so-called ``consumer surplus.'' This concept
represents how much more consumers would have been willing to
pay than they actually had to pay for a given amount
purchased. In the diagram of demand and supply, consumer
surplus is the area under the demand curve about the price
line.
Before liberalization, consumer surplus equals area ``A''.
After liberalization, it expands to A+B+C. Of the extra
consumer surplus ``B+C'', the amount ``B'' is simply a
transfer to consumers away from government tariff revenue.
This revenue is partly offset by revenue gains on new
imports, rectangle D. The traditional measure of the net
static welfare gain is thus the sum of the areas C+D.
Triangle C has altitude to and base
M. The area of rectangle D has been estimated above,
as the second right-hand-side term in the second line of
equation 3). The static welfare gain is thus:
The government can expect to collect its tax revenue share
in the static welfare benefits of liberalization. Thus,
consider what happens to the household that experiences a
gain in consumer welfare. It will have resources freed up to
reallocate to spending on other consumption items, raising
the consumption component of real gross domestic product and
thus the level of output. On the producer side,
liberalization will mean the shifting of resources out of
import-competing goods, where they are inefficiency used,
into export goods, where there is higher output per worker
and per unit of capital. The same supply of factors will
provide a higher level of production. As output rises, the
government will claim its normal share in the increase.
If the static welfare gain from liberalization is W, then
the induced increment in federal government revenue
Rw--where is the economy-wide federal
tax rate. A conservative formulation of the estimate would
set at the long-term average tax rate, or
approximately 19 percent (the ratio of federal revenue to
GDP; calculated from CEA, 1994, p. 362). A less conservative
estimate could with some justification use the marginal tax
rate, which would be higher at perhaps some 30 percent.
Dynamic Efficiency and Growth Effects--The largest gain
from trade liberalization are probably not the traditional
static welfare gains just set forth, but the favorable
effects on dynamic efficiency. Open trade stimulates
competition. As a result, it can encourage technological
change, as firms seek to respond to competitive pressures
from abroad. If there is an increase in the rate of
technological change, then there will be an increase in the
growth rate rather than just a one-time increase in
efficiency to a higher plateau.
In addition to the technological change argument, there is
the more recent ``endogenous growth'' approach related to
external economies of scale. In this literature (Roemer,
1986), the economy-wide returns to scale mean that any
positive shock to output raises overall efficiency of
production. The increase in output associated with the first-
round increased static allocative efficiency from trade
liberalization thus generates a second-round ``medium-term
growth bonus'' (Baldwin, 1989) that further raises the
overall level of GDP.
Francois, McDonald and Nordstrom (1993) have surveyed the
literature on dynamic growth effects of trade liberalization.
They note that although at the theoretical level trade
liberalization can either increase or reduce growth ``because
of trade-induced changes in the pattern of global
specialization,'' the empirical literature shows overwhelming
evidence on the side of a positive growth impact. Numerous
studies, some for developing countries, others including both
developing and industrial countries, find a positive
relationship between openness and growth.
The unfortunate fact remains that nothing in the literature
provides a concrete basis for estimating the growth impact of
liberalization. Instead, the typical practice is to ``guess''
that the dynamic growth effects might be of a hypothesized
amount. Subject to this caveat, we may estimate the fiscal
revenue effects of the ``dynamic growth'' impact of
liberalization as follows, for year ``k'' subsequent to
liberalization.
Where is the economy-wide federal tax rate, as
before; Y0 is the base year GDP; and g is the
increment in the economy-wide growth rate attributable to
the dynamic gains from trade liberalization.
Total Revenue Effects Over Time--To combine the ``full
direct'' and ``static efficiency'' revenue effects (equations
3' and 5) with the dynamic growth effects (equation 6), it is
necessary to specify a time path. The first two measures are
``comparative static'' concepts that consider the change once
liberalization is complete. In practice, however,
liberalization will be phased in over a period of time, which
we may designate as ``m'' years. Over this period the real
import base to which the effects apply proportionately will
be growing, at a ``baseline growth rate'' of ``gM''
(under ``business as usual'' or non-liberalization
assumptions). We may designate the scale expansion factor by
year ``k'' as Mk = (1+gM)k.
The consolidated revenue effects of import liberalization
in year ``k'' will be the first term on the right-hand side
() indicates that by year k, the fraction k/m of
total static effects will have been phased in. The summation
of the ``direct'' effects refers to adding up the individual
sectoral effects (i) over all ``n'' sectors.
data base and parameter values
Table 1 reports the base level of US imports and tariffs by
Harmonized Tariff Code chapter, and indicates the depth of
cut for the United States in the Uruguay Round in each
category. Table 2 sets forth the other parameters used to
implement the model developed here.
Table 1, from the US Trade Representative's data base,
covers a total of $336 billion in US imports in 1990, or 67
percent of total imports in that year. Most of the remainder
of the import total was in duty-free goods. The result of
multiplying each import category by its official tariff rate
yields an expected tariff revenue of $16.6 billion. As shown
in the table, the result of applying the depth of cut to the
original tariff and multiplying by the import base
(Moto, in the notation above) is a tariff
revenue loss of $5.42 billion annually, yielding an average
depth-of-cut of 32.6 percent. This revenue loss is the
``primary'' direct loss once of Round's liberalization is
fully phased in, on a 1990 real import base (thus excluding
both inflation and growth in the base). Nearly half of the
revenue loss is in just two sectors: chapters 84 and 85,
which include heavy electrical equipment and the electronics
industry.
On the basis of this data set, the average existing tariff
on dutiable imports, weighting by import value, is 4.9
percent. With an average tariff of just under 5 percent and
an average cut of approximately one-third, tariff
liberalization stands to reduce import prices on dutiable
goods by about 1\1/2\ percent. Although important, this
figure is modest, and suggests that the key trade results
of the Uruguay Round have more to do with new
liberalization of areas previously restricted by non-
tariff barriers, including agriculture, textiles,
services, intellectual property, and investment practices,
rather than with the traditional tariff-cutting exercises
that were so important in the seven earlier postwar GATT
rounds.
The limited contribution of tariff liberalization per se to
the total effects of the Uruguay Round is important in
arriving at a judgment on the size of the welfare gains to be
expected. As shown, in table 2, the calculations here use
five alternative measures of the static welfare gains from
the Round. The first is calculated directly from equation 4)
above, using a ``typical'' import price elasticity of -2. It
turns out that this measure of ``W'' (equation 4) is
surprisingly small: only $450 million annually.
The small static welfare gain from tariff cuts along
according to the traditional ``welfare triangles'' derives
from the low initial level of the tariff. Consider equation
4). If we divide both sides by the import base (Mo),
completely eliminate the tariff (=1), and set the
import elasticity at -2, then it turns out that the welfare
gain as a fraction of the import base is: W/
Mo=to2/(1+to). But to is only 5
percent, so to2=.0025. On this basis, even the
complete elimination of tariffs generates only one-quarter of
one percent of the import value base in static welfare gains.
Even that amount would be only $840 million annually; and the
tariff cut of one-third means that this traditional
calculation yields an even smaller figure.
This first estimate of the static welfare gain, then,
should be seen as a ``lower bound'' estimate. One of the
reasons it is low is that the potential for larger gains from
the consideration that tariff structure is disparate is
apparently not realized by the Round: the depth of tariff cut
for the highest tariffs tends to be low rather than average
or high. Thus, for apparel, where the tariff is in the range
of 18 to 24 percent, the depth of cut is only 9 percent
(chapters 61 and 62; table 1).
The static welfare effects of the Uruguay Round are likely
to be much larger than the direct estimate based on equation
4). One reason is that there can be important gains on the
export side, not captured by this equation. Thus, US
agricultural exporters may obtain important gains from
greater market opportunities, as European subsidized farm
exports are curbed. Another, and related, reason is that
there can be favorable terms-of-trade effects from
liberalization, as increased foreign demand for exports
raises the price of exports relative to imports. Still
another reason is that the removal of non-tariff barriers
generates welfare gains not captured by estimates based on
the existing tariffs. The phase-out of the textile and
apparel quotas under the Multi-Fiber Arrangement is an
important instance.
Several alternative estimates of the static welfare gains
have been prepared by official and academic groups. These
estimates typically attempt to include non-tariff barriers,
and often have a large emphasis on agriculture. Hufbauer and
Elliot (1994) calculate that existing protection costs U.S.
consumers $70 billion annually, and that net static welfare
costs are $11 billion annually. They suggest that the Uruguay
Round could eliminate one-half to two-thirds of this cost. On
this basis, table 2 thus shows $7 billion as a second
alternative estimate of static welfare gain.
Researchers at the OECD (Goldin, Knudsen, and van der
Mensbrugghe, 1992, p. 95) have estimated static welfare gains
from the Uruguay Round at 0.2 percent of GDP for the United
States, or $12 billion. Their model primarily captures gains
in agriculture, and welfare gains for U.S. agricultural
exports are not include in the Hufbauer-Elliott estimates
(which examines U.S. import protection only).
A general equilibrium model of world trade prepared by
Nguyen, Perroni and Wigle (1993) estimates that static
welfare gains from the Uruguay Round would amount to $36
billion annually for the United States. However, the
contribution from textile liberalization in this estimate
appears high ($21.6 billion, whereas Hufbauer and Elliott
place gains from complete liberalization of textiles and
apparel at only $8.6 billion annually; p. 15). Importantly,
the Nguyen-Perroni-Wigle estimate places U.S. welfare gains
in agriculture at $9.3 billion annually, and in services, at
$2 billion (a figure the authors consider understated).
The highest estimate of static welfare gains for the United
States is that by the U.S. Trade Representatives's office, at
$130 billion annually (Walters, 1990). That estimate is based
on a global general equilibrium model (Stoeckel, Pearce, and
Banks, 1990) that implies extremely high global welfare
gains--approximately 20 percent of the import base (see
Cline, 1994). The USTR estimate amounts to more than 2
percent of U.S. GDP for static welfare gains along. The
Council of Economic Advisers (1994, p. 234) more cautiously
suggests that static welfare gains could be 1 percent of U.S.
GDP (about $60 billion).
Table 2 specifies five alternative estimates of static
welfare gains. The first is the ``lower bound'' estimate
calculated directly from equation 4. The second is the $7
billion figure derived from the study by Hufbauer and
Elliott. The third estimate is hat may be considered a
``conservative central' estimate of $15 billion annually.
This is close to the OECD-based estimate. The fourth estimate
is the Nguyen-Perroni-Wigle calculation. Finally, the fifth
estimate is that by the USTR.
Table 2 next shows alternative assumptions for the
acceleration of the growth rate attributable to the dynamic
effects of import liberalization. At one extreme, a variant
is included in which these effects are set at zero. At the
opposite extreme, the USTR estimate of 0.2 percentage
point annual growth acceleration (Walters, 1990) is listed
as the fourth variant. Francois, McDonald and Nordstrom
(1993) venture a purely illustrative figure of 0.1
percentage point per year, included here as the third
variant.
Table 2 includes as the second, and ``conservative
central'' estimate for growth acceleration, an increment of
0.05 percentage point per year (one-twentieth of one
percentage point). Over a decade this impact would raise GDP
by one-half percentage point from its baseline, or by about
$30 billion against the initial GDP base of some $6 trillion.
This estimate would thus place the dynamic gains at twice the
static gains estimated under the same ``conservative
central'' approach. The combined gains of $45 billion
annually would amount to three-fourths of one percent of GDP.
In contrast, the Council of Economic Advisers (1990, p. 234)
suggests that the combined static and dynamic welfare effects
by the end of the period could be at least $100 billion (but
not more than $200 billion) annually. The lower end of this
range is not radically above the $45 billion estimate if
allowance is made for change in economic scale.
Finally, table 2 shows that the assumed growth rate of the
import base is 4 percent real per year, a relatively modest
rate. It also shows the two alternative assumptions about the
tax rate (19 percent average, 30 percent marginal).
simulation results
The combinations of the alternative parameter assumptions
yield 40 possible cases. Table 3 reports the calculation of
revenue effects of the Uruguay Round for each case, with
detail for each of the first five years of phase-in. The
revenue calculations are those set forth in equation 7)
above, and are reported so as to identify the three separate
components discussed above: ``direct'' (full); ``welfare''
(tax share in static welfare gains); and ``growth'' (tax
revenue from increased growth).
It is first useful to consider the revenue effects from the
``direct'' estimates (Rd), which are from
equation 3'). In all cases, this time profile shows revenue
losses beginning at about $500 million in the first year,
reaching $1.7 billion by the third year, and reaching
approximately $3 billion by the fifth year. The five-year
total is $8.6 billion. All estimates here are in 1990 dollars
and against the 1990 trade base. Allowance for expansion to
current dollars and trade base over the five year period
would boost this ``direct'' estimate to approximately the
same range as estimated by the Office of Management and
Budget: $13.9 billion over five years (Wall Street Journal, 3
March 1994). It thus turns out that incorporation of the
``import expansion revenue'' effect has only a small
moderating impact on the revenue loss.
The next column in table 3 shows a large range of variation
in the tax revenue stemming from the government's fiscal
participation in the static welfare gain, corresponding to
the large range in the static welfare estimates (from $450
million annually to $130 billion annually). The penultimate
column shows an even wider range of revenue effects from the
alternative growth assumptions. Under the highest growth
assumption and using the highest tax rate, liberalization
from the Uruguay Round contributes a remarkable $17 billion
in annual fiscal revenue from growth effects by the fifth
year.
For purposes of a prudent analysis of the fiscal impact of
the Uruguay Round, the preferred case is probably number 10.
In this case, the more conservative tax rate is assumed
(=19 percent). The ``conservative central'' estimate
is used for both the static welfare effect ($15 billion
annually) and the dynamic growth effect (0.05 percentage
point acceleration in the annual growth rate). In this case,
there is a modest positive effect of the Round on US tax
revenue, rising from a net contribution of $294 million in
the first year to $1.1 billion by the fifth year. Thus, the
central finding of the analysis here is that the Uruguay
Round should increase rather than reduce net tax revenue.
There is also information to be derived from considering
the full range of estimates. Out of 40 cases, the net revenue
effects are positive in 33 and negative in only 7.
Considering that the array of parameter assumptions was
specified with the intention of being representative of a
probability distribution on likely values, rather than
heavily concentrated on either an optimistic or a pessimistic
side, a probabilistic interpretation of this finding might be
that the chances are about 5 to 1 that the net revenue
effects are positive rather than negative.
conclusion
The Uruguay Round is a crucial historical accomplishment in
the effort to open world markets and assure a favorable
climate for future economic growth. Its failure would have
meant serious risks of economic downturn (effects not
considered in the calculations here). It would be a good
bargain for the American public to pay the fiscal revenue
costs of adopting the Round even if these costs were as high
as a simple calculation of the direct tariff reductions might
suggest (along the lines of the OMB figure of $13.9 billion
over five years). However, the analysis here suggests that
even under conservative assumptions, the Round should
increase rather than reduce net fiscal revenue to the federal
government. This conclusion reinforces the policy implication
that the Uruguay Round agreement should be implemented rather
than blocked because of possible fiscal effects.
Whether the method of ``budget scoring'' should be waived
for these reasons is a matter of judgment. If the scoring
procedure is not changed, the implication is that somehow the
budget would have to pare spending or raise revenue
elsewhere. Whether that would be a good thing depends on
whether one thinks there has been too little fiscal
tightening already under the 1994 budget reform, or too
little, or just about the right amount. Cases can be made on
all three positions. Similarly, whether to adopt a scoring
``waiver'' for the Uruguay Round depends on evaluation of the
risks of opening a pandora's box for subsequent proposals
that might less legitimately claim a waiver, on the one hand,
as against the importance of assuring that the ``scoring''
procedure captures the best estimate of true economic
effects, on the other.
References
Baldwin, Richard E., 1989. ``The Growth Effects of 1992,''
Economic Policy, October, pp. 248-81.
CEA, 1994. Council of Economic Advisers, Economic Report of
the President (Washington: CEA, February)
Cline, William R., 1994. ``Evaluating the Uruguay Round,''
(Washington: Institute for International Economics, February,
mimeogr.)
Cline, William R., Noboru Kawanabe, T.O.M. Kronsjo, and
Thomas Williams, 1978. Trade Negotiations in the Tokyo Round:
A Quantitative Assessment (Washington: Brookings Institution)
Francois, Joseph, Bradley McDonald, and Hakan Nordstrom,
1993. ``The Growth Effects of the Uruguay Round,'' (Geneva:
GATT, Uruguay Round Background Paper, December)
Goldin, Ian, Odin Knudsen, and Dominique van der
Mensbrugghe, 1993. Trade Liberalisation: Global Economic
Implications (Paris: OECD)
Grossman, G.M., and E. Helpman, 1991. Innovation and Growth
in the Global Economy (Cambridge, Mass.: MIT Press)
Hufbauer, Gary Clyde, and Kimberly Ann Elliott, 1994a.
Measuring the Costs of Protection in the United States
(Washington: Institute for International Economics)
Nguyen, Trien, Carlo Perroni, and Randall Wigle, 1993. ``An
Evaluation of the Draft Final Act of the Uruguay Round, The
Economic Journal, No. 103, November, pp. 1540-49.
Roemer, Paul M, 1986. ``Increasing Returns and Long-Run
Growth,'' Journal of Political Economy, Oct., 94, pp. 1002-
38.
Stoeckel, Andrew, David Pearce, and Gary Banks, 1990.
Western Trade Blocs: Game, Set or Match for Asia-Pacific and
the World Economy? (Canberra, Australia: Centre for
International Economics)
Walters, David, 1990. ``Ten-Year Cumulative GDP Gains from
One-Third Cut in Global Tariff and Non-tariff Barriers,''
(Washington: United States Trade Representative, mimeogr.,
November)
TABLE 1.--IMPORTS, TARIFF CUT, AND PRE-ROUND TARIFF
[Dollar amounts in millions]
------------------------------------------------------------------------
Percent-- Primary
Harmonized Code 1990 -------------------------- revenue
chapter imports Cut Tariff loss\1\
------------------------------------------------------------------------
3 Fish.............. $3,487.2 51.7 0.1 $2.6
5 Animal nes........ 1.6 0.0 3.0 0.0
15 Fats, oils....... 4.8 0.0 4.8 0.0
16 Meat............. 562.2 11.6 9.3 6.1
25 Cement, sulfur... 894.8 67.7 0.7 4.2
26 Ores............. 1,179.8 26.8 0.6 2.0
27 Fuels............ 42,645.3 0.2 0.7 0.6
28 Inorgnic
chemicals.......... 3,070.2 18.8 0.9 5.2
29 Organic chemicals 6,425.2 45.7 7.2 210.5
30 Phamaceuticals... 1,123.5 100.0 4.0 45.4
31 Fertilizers...... 280.1 0.0 0.0 0.0
32 Paints........... 1,028.5 47.2 10.0 48.3
33 Resinoids........ 607.9 91.6 5.0 27.9
34 Soaps, waxes..... 208.6 59.5 4.9 6.1
35 Glues............ 187.4 82.7 3.8 6.0
36 Explosives....... 103.1 1.1 4.1 0.0
37 Photographic
goods.............. 1,623.0 6.6 3.9 4.2
38 Misc. chemical
goods.............. 627.4 29.3 4.3 8.0
39 Plastics......... 4,907.6 9.9 4.8 23.3
40 Rubber........... 4,195.1 24.5 2.8 29.3
41 Hides............ 728.9 24.4 3.9 6.9
42 Leather goods.... 3,811.9 8.7 11.0 36.4
43 Furs............. 323.2 34.1 5.4 6.0
44 Wood products.... 1,657.0 33.0 4.8 26.0
45 Cork goods....... 74.8 89.8 1.8 1.2
46 Straw goods...... 237.8 21.4 7.1 3.6
47 Pulp............. 391.4 0.0 0.0 0.0
48 Paper, paperboard 2,365.8 100.0 2.3 53.8
49 Books............ 1,173.9 100.0 0.4 4.8
50 Silk............. 281.6 94.6 5.1 13.7
51 Wool............. 160.6 47.6 20.0 15.3
52 Cotton........... 1,156.9 8.6 8.8 8.8
53 Vegt. txtl fibers 141.5 96.0 2.0 2.7
54 Man-made
filaments.......... 777.7 15.6 14.2 17.2
55 Man-made fibers.. 683.7 22.6 13.3 20.6
56 Cordage.......... 283.2 78.4 9.1 20.3
57 Carpets.......... 561.9 59.1 6.4 21.4
58 Woven fabrics.... 210.4 27.1 11.1 6.3
59 Laminated txtl
fabr............... 219.4 52.5 6.0 6.9
60 Knitted fabrics.. 104.6 24.5 14.3 3.7
61 Apparel, knit.... 7,426.3 9.4 23.9 166.7
62 Apparel, other... 12,924.7 8.8 17.7 201.4
63 Other made-up
txtl............... 1,084.7 21.2 9.1 21.0
64 Footwear......... 8,323.6 6.7 10.7 59.8
65 Hats............. 284.7 22.6 7.5 4.8
66 Umbrellas........ 134.8 29.3 8.3 3.3
67 Feathers, artif.
flowers............ 513.9 6.9 7.8 2.8
68 Stone, plaster
goods.............. 790.3 45.9 4.1 14.8
69 Ceramics......... 1,962.9 39.0 10.6 81.3
70 Glass............ 1,416.7 20.4 8.3 23.9
71 Precious stones,
jewelry............ 9,399.7 18.0 2.3 38.9
72 Iron, steel...... 7,100.1 93.6 4.7 312.1
73 Iron, steel
articles........... 5,337.0 63.6 4.0 135.9
74 Copper and
articles........... 1,761.2 36.8 2.1 13.3
75 Nickel and
articles........... 641.2 34.6 0.5 1.1
76 Aluminum and
articles........... 1,553.0 14.7 3.3 7.5
78 Lead and articles 32.4 39.7 3.6 0.5
79 Zinc and Articles 500.7 7.1 1.7 0.6
80 Tin and articles. 357.8 32.7 0.2 0.3
81 Other base metals 405.1 29.0 4.7 5.5
82 Implements of
base metal......... 1,831.6 27.7 6.4 32.5
83 Misc. base metal
goods.............. 1,367.2 29.1 4.9 19.5
84 Nuclear reactors,
boilers............ 51,611.8 64.7 3.6 1,187.8
85 Electr. mach.,
TVs, recorders..... 52,203.4 59.3 4.5 1,396.4
86 Locomotives,
rolling stock...... 218.3 24.7 3.4 1.8
87 Vehicles......... 49,384.7 4.1 3.8 78.1
88 Aircraft......... 2,260.8 99.3 0.5 11.6
89 Ships............ 476.2 19.3 1.2 1.1
90 Technical
instruments........ 11,575.1 65.5 4.7 355.1
91 Clocks........... 842.7 6.8 6.1 3.5
92 Musical
instruments........ 739.0 23.1 5.6 9.6
93 Arms............. 396.0 63.7 4.7 11.8
94 Furniture........ 4,110.8 53.8 4.5 99.4
95 Toys............. 7,648.7 87.1 5.9 390.8
96 Misc.
manufactures....... 1,183.8 33.6 6.5 25.9
---------------------------------------------------
Total......... 336,310.6 32.6 4.9 5,425.6
------------------------------------------------------------------------
\1\For instantaneous full implementation of tariff cut, on 1990 import
value base.
TABLE 2.--PARAMETERS AND ASSUMPTIONS
[Dollar amounts in billions]
------------------------------------------------------------------------
Category Symbol Cases Value Comment
------------------------------------------------------------------------
Import price eta 1 ....... -2 applied
elasticity. uniformly.
GDP base............. Yo 1 $5,546 1990 GDP.
Phase-in period...... m 1 ....... 10 years.
Static welfare....... W 1 ....... Calculated (eq. 4).
2 7 Hufbauer, Elliott.
3 15 Conservative
central.
4 36 Nguyen et al.
5 130 USTR.
Tax rate............. tau 1 ....... 0.19 Long-term
average
2 ....... 0.30 marginal.
Change in growth rate delta g 1 ....... 0 Sensitivity test.
(percent pa).
2 ....... 0.05 conservative
central.
3 ....... 0.1 Francois et al
(illustrative).
4 ....... 0.2 USTR.
Import base growth gM 1 ....... 4 Real.
rate (percent pa).
------------------------------------------------------------------------
TABLE 3.--REVENUE SIMULATION RESULTS
[Dollar amounts in millions]
----------------------------------------------------------------------------------------------------------------
Case W g Year Rd Rw Rg R*
----------------------------------------------------------------------------------------------------------------
1..................... 1 1 1 1 -$527 $9 ........... $-518
1..................... 1 1 1 2 -1,085 18 ........... -1,067
1..................... 1 1 1 3 -1,677 28 ........... -1,648
1..................... 1 1 1 4 -2,303 39 ........... -2,264
1..................... 1 1 1 5 -2,965 50 ........... -2,915
2..................... 1 1 2 1 -527 9 $527 9
2..................... 1 1 2 2 -1,085 18 1,054 -13
2..................... 1 1 2 3 -1,677 28 1,581 -67
2..................... 1 1 2 4 -2,303 39 2,109 -155
2..................... 1 1 2 5 -2,965 50 2,637 -278
3..................... 1 1 3 1 -527 9 1,054 536
3..................... 1 1 3 2 -1,085 18 2,109 1,042
3..................... 1 1 3 3 -1,677 28 3,164 1,516
3..................... 1 1 3 4 -2,303 39 4,221 1,958
3..................... 1 1 3 5 -2,965 50 5,279 2,365
4..................... 1 1 4 1 -527 9 2,107 1,590
5..................... 1 1 4 2 -1,085 18 4,219 3,152
4..................... 1 1 4 3 -1,677 28 6,335 4,687
4..................... 1 1 4 4 -2,303 39 8,455 6,192
4..................... 1 1 4 5 -2,965 50 10,580 7,665
5..................... 1 2 1 1 -527 137 ........... -390
5..................... 1 2 1 2 -1,085 282 ........... -803
5..................... 1 2 1 3 -1,677 436 ........... -1,241
5..................... 1 2 1 4 -2,303 599 ........... -1,704
5..................... 1 2 1 5 -2,965 771 ........... -2,194
6..................... 1 2 2 1 -527 137 527 137
6..................... 1 2 2 2 -1,085 282 1,054 251
6..................... 1 2 2 3 -1,677 436 1,581 341
6..................... 1 2 2 4 -2,303 599 2,109 405
6..................... 1 2 2 5 -2,965 771 2,637 443
7..................... 1 2 3 1 -527 137 1,054 664
7..................... 1 2 3 2 -1,085 282 2,109 1,306
7..................... 1 2 3 3 -1,677 436 3,164 1,924
7..................... 1 2 3 4 -2,303 599 4,221 2,518
7..................... 1 2 3 5 -2,965 771 5,279 3,086
8..................... 1 2 4 1 -527 137 2,107 1,718
8..................... 1 2 4 2 -1,085 282 4,219 3,416
8..................... 1 2 4 5 -1,677 436 6,335 5,094
8..................... 1 2 4 4 -2,303 599 8,455 6,751
8..................... 1 2 4 5 -2,965 771 10,580 8,386
9..................... 1 3 1 1 -527 294 ........... -233
9..................... 1 3 1 2 -1,085 605 ........... -480
9..................... 1 3 1 3 -1,677 934 ........... -742
9..................... 1 3 1 4 -2,303 1,283 ........... -1,019
9..................... 1 3 1 5 -2,965 1,652 ........... -1,313
10.................... 1 3 2 1 -527 294 527 294
10.................... 1 3 2 2 -1,085 605 1,054 574
10.................... 1 3 2 3 -1,677 934 1,581 839
10.................... 1 3 2 4 -2,303 1,283 2,109 1,090
10.................... 1 3 2 5 -2,965 1,652 2,637 1,324
11.................... 1 3 3 1 -527 294 1,054 821
11.................... 1 3 3 2 -1,085 605 2,109 1,628
11.................... 1 3 3 3 -1,677 934 3,164 2,422
11.................... 1 3 3 4 -2,303 1,283 4,221 3,202
11.................... 1 3 3 5 -2,965 1,652 5,279 3,967
12.................... 1 3 4 1 -527 294 2,107 1,874
12.................... 1 3 4 2 -1,085 605 4,219 3,739
12.................... 1 3 4 3 -1,677 934 6,335 5,593
12.................... 1 3 4 4 -2,303 1,283 8,455 7,436
12.................... 1 3 4 5 -2,965 1,652 10,580 9,267
13.................... 1 4 1 1 -527 705 ........... 178
13.................... 1 4 1 2 -1,085 1,451 ........... 366
13.................... 1 4 1 3 -1,677 2,242 ........... 566
13.................... 1 4 1 4 -2,303 3,079 ........... 777
13.................... 1 4 1 5 -2,965 3,965 ........... 1,000
14.................... 1 4 2 1 -527 705 527 705
14.................... 1 4 2 2 -1,085 1,451 1,054 1,420
14.................... 1 4 2 3 -1,677 2,242 1,581 2,147
14.................... 1 4 2 4 -2,303 3,079 2,109 2,886
14.................... 1 4 2 5 -2,965 3,965 2,637 3,637
15.................... 1 4 3 1 -527 705 1,054 1,231
15.................... 1 4 3 2 -1,085 1,451 2,109 2,475
15.................... 1 4 3 3 -1,677 2,242 3,164 3,730
15.................... 1 4 3 4 -2,303 3,079 4,221 4,998
15.................... 1 4 3 5 -2,965 3,965 5,279 6,279
16.................... 1 4 4 1 -527 705 2,107 2,285
16.................... 1 4 4 2 -1,085 1,451 4,219 4,585
16.................... 1 4 4 3 -1,677 2,242 6,335 6,901
16.................... 1 4 4 4 -2,303 3,079 8,455 9,232
16.................... 1 4 4 5 -2,965 3,965 10,580 11,580
17.................... 1 5 1 1 -527 2,544 ........... 2,017
17.................... 1 5 1 2 -1,085 5,241 ........... 4,156
17.................... 1 5 1 3 -1,677 8,097 ........... 6,420
17.................... 1 5 1 4 -2,303 11,120 ........... 8,817
17.................... 1 5 1 5 -2,965 14,317 ........... 11,353
18.................... 1 5 2 1 -527 2,544 527 2,544
18.................... 1 5 2 2 -1,085 5,241 1,054 5,210
18.................... 1 5 2 3 -1,677 8,097 1,581 8,002
18.................... 1 5 2 4 -2,303 11,120 2,109 10,927
18.................... 1 5 2 5 -2,965 14,317 2,637 13,989
19.................... 1 5 3 1 -527 2,544 1,054 3,071
19.................... 1 5 3 2 -1,085 5,241 2,109 6,264
19.................... 1 5 3 3 -1,677 8,097 3,164 9,585
19.................... 1 5 3 4 -2,303 11,120 4,221 13,039
19.................... 1 5 3 5 -2,965 14,317 5,279 16,632
20.................... 1 5 4 1 -527 2,544 2,107 4,125
20.................... 1 5 4 2 -1,085 5,241 4,219 8,375
20.................... 1 5 4 3 -1,677 8,097 6,335 12,756
20.................... 1 5 4 4 -2,303 11,120 8,455 17,273
20.................... 1 5 4 5 -2,965 14,317 10,580 21,932
21.................... 2 1 1 1 -527 14 ........... -513
21.................... 2 1 1 2 -1,085 29 ........... -1,056
21.................... 2 1 1 3 -1,677 45 ........... -1,632
21.................... 2 1 1 4 -2,303 61 ........... -2,241
21.................... 2 1 1 5 -2,965 79 ........... -2,886
22.................... 2 1 2 1 -527 14 832 319
22.................... 2 1 2 2 -1,085 29 1,664 608
22.................... 2 1 2 3 -1,677 45 2,497 865
22.................... 2 1 2 4 -2,303 61 3,330 1,089
22.................... 2 1 2 5 -2,965 79 4,164 1,278
23.................... 2 1 3 1 -527 14 1,664 1,151
23.................... 2 1 3 2 -1,085 29 3,329 2,273
23.................... 2 1 3 3 -1,677 45 4,996 3,364
23.................... 2 1 3 4 -2,303 61 6,665 4,424
23.................... 2 1 3 5 -2,965 79 8,336 5,450
24.................... 2 1 4 1 -527 14 3,328 2,815
24.................... 2 1 4 2 -1,085 29 6,662 5,606
24.................... 2 1 4 3 -1,677 45 10,003 8,371
24.................... 2 1 4 4 -2,303 61 13,350 11,109
24.................... 2 1 4 5 -2,965 79 16,705 13,819
25.................... 2 2 1 1 -527 216 ........... -310
25.................... 2 2 1 2 -1,085 446 ........... -640
25.................... 2 2 1 3 -1,677 688 ........... -988
25.................... 2 2 1 4 -2,303 945 ........... -1,357
25.................... 2 2 1 5 -2,965 1,217 ........... -1,747
26.................... 2 2 2 1 -527 216 832 521
26.................... 2 2 2 2 -1,085 466 1,664 1,025
26.................... 2 2 2 3 -1,677 688 2,497 1,509
26.................... 2 2 2 4 -2,303 945 3,330 1,973
26.................... 2 2 2 5 -2,965 1,217 4,164 2,416
27.................... 2 2 3 1 -527 216 1,664 1,353
27.................... 2 2 3 2 -1,085 446 3,329 2,690
27.................... 2 2 3 3 -1,677 688 4,996 4,008
27.................... 2 2 3 4 -2,303 945 6,665 5,308
27.................... 2 2 3 5 -2,965 1,217 8,336 6,588
28.................... 2 2 4 1 -527 216 3,328 3,017
28.................... 2 2 4 2 -1,085 446 6,662 6,022
28.................... 2 2 4 3 -1,677 688 10,003 9,015
28.................... 2 2 4 4 -2,303 945 13,350 11,993
28.................... 2 2 4 5 -2,965 1,217 16,705 14,957
29.................... 2 3 1 1 -527 464 ........... -63
29.................... 2 3 1 2 -1,085 955 ........... -130
29.................... 2 3 1 3 -1,677 1,475 ........... -201
29.................... 2 3 1 4 -2,303 2,026 ........... -277
29.................... 2 3 1 5 -2,965 2,608 ........... -356
30.................... 2 3 2 1 -527 464 832 769
30.................... 2 3 2 2 -1,085 955 1,664 1,534
30.................... 2 3 2 3 -1,677 1,475 2,497 2,296
30.................... 2 3 2 4 -2,303 2,026 3,330 3,053
30.................... 2 3 2 5 -2,965 2,608 4,164 3,808
31.................... 2 3 3 1 -527 464 1,664 1,601
31.................... 2 3 3 2 -1,085 955 3,329 3,199
31.................... 2 3 3 3 -1,677 1,475 4,996 4,795
31.................... 2 3 3 4 -2,303 2,026 6,665 6,389
31.................... 2 3 3 5 -2,965 2,608 8,336 7,980
32.................... 2 3 4 1 -527 464 3,328 3,264
32.................... 2 3 4 2 -1,085 955 6,662 6,531
32.................... 2 3 4 3 -1,677 1,475 10,003 9,801
32.................... 2 3 4 4 -2,303 2,026 13,350 13,074
32.................... 2 3 4 5 -2,965 2,608 16,705 16,349
33.................... 2 4 1 1 -527 1,112 ........... 586
33.................... 2 4 1 2 -1,085 2,292 ........... 1,206
33.................... 2 4 1 3 -1,677 3,540 ........... 1,864
33.................... 2 4 1 4 -2,303 4,862 ........... 2,560
33.................... 2 4 1 5 -2,965 6,260 ........... 3,296
34.................... 2 4 2 1 -527 1,112 832 1,418
34.................... 2 4 2 2 -1,085 2,292 1,664 2,871
34.................... 2 4 2 3 -1,677 3,540 2,497 4,361
34.................... 2 4 2 4 -2,303 4,862 3,330 5,890
34.................... 2 4 2 5 -2,965 6,260 4,164 7,459
35.................... 2 4 3 1 -527 1,112 1,664 2,249
35.................... 2 4 3 2 -1,085 2,292 3,329 4,536
35.................... 2 4 3 3 -1,677 3,540 4,996 6,860
35.................... 2 4 3 4 -2,303 4,862 6,665 9,225
35.................... 2 4 3 5 -2,965 6,260 8,336 11,631
36.................... 2 4 4 1 -527 1,112 3,328 3,913
36.................... 2 4 4 2 -1,085 2,292 6,662 7,868
36.................... 2 4 4 3 -1,677 3,540 10,003 11,867
36.................... 2 4 4 4 -2,303 4,862 13,350 15,910
36.................... 2 4 4 5 -2,965 6,260 16,705 20,000
37.................... 2 5 1 1 -527 4,017 ........... 3,490
37.................... 2 5 1 2 -1,085 8,275 ........... 7,190
37.................... 2 5 1 3 -1,677 12,785 ........... 11,108
37.................... 2 5 1 4 -2,303 17,558 ........... 15,255
37.................... 2 5 1 5 -2,965 22,606 ........... 19,641
38.................... 2 5 2 1 -527 4,017 832 4,322
38.................... 2 5 2 2 -1,085 8,275 1,664 8,854
38.................... 2 5 2 3 -1,677 12,785 2,497 13,605
38.................... 2 5 2 4 -2,303 17,558 3,330 18,585
38.................... 2 5 2 5 -2,965 22,606 4,164 23,805
39.................... 2 5 3 1 -527 4,017 1,664 5,154
39.................... 2 5 3 2 -1,085 8,275 3,329 10,519
39.................... 2 5 3 3 -1,677 12,785 4,996 16,105
39.................... 2 5 3 4 -2,303 17,558 6,665 21,921
39.................... 2 5 3 5 -2,965 22,606 8,336 27,977
40.................... 2 5 4 1 -527 4,017 3,328 6,818
40.................... 2 5 4 2 -1,085 8,275 6,662 13,852
40.................... 2 5 4 3 -1,677 12,785 10,003 21,111
40.................... 2 5 4 4 -2,303 17,558 13,350 28,606
40.................... 2 5 4 5 -2,965 22,606 16,705 36,346
----------------------------------------------------------------------------------------------------------------
Note.--Years 1 through 5 correspond to 1995-1999. Values in 1990 dollars and beginning at 1990-base scale.
Mr. Speaker, this budget resolution conference report should not be
considered until the Members of this House have had a chance to review
it thoroughly. I urge all of my colleagues to reject this rule so that
we can bring this report up next week at a far more appropriate time.
Mr. Speaker, I yield such time as he may consume to the gentleman
from Glens Falls, NY [Mr. Solomon], the very distinguished ranking
Republican on the Committee on Rules.
Mr. SOLOMON. Mr. Speaker, I rise today in opposition to the
conference report on the budget resolution. In 1816, Thomas Jefferson
in advising the American public wrote ``To preserve our independence,
we must not let our rulers load us with perpetual debt. We must make
our election between economy and liberty, or profusion and servitude.''
Today, Thomas Jefferson would be appalled to watch this House. While
the American taxpayer celebrates tax freedom day, this House will pass
a budget allowing the Federal debt to increase by over $900 billion in
the next 5 years.
This budget is flawed both for what it does not do and for what it
does do. First, contrary to the claims of many, this budget is not a
blueprint to balance the budget, it does not even completely reverse
the runaway deficit trend.
In fact, the deficit in 1999 will be at least $200 billion--up, not
down from $180 billion in 1995.
This House had at least three opportunities, just this year, to
further address the deficit--all of which were based upon the belief
that Government is too big, spending is too high and the debt is
crushing our children.
First, came my ``balanced budget'' which would have balanced the
budget solely through $698 billion in spending cuts and a downsizing of
Government over 5 years. Second came ``putting families first'' which
would also have reduced the deficit by $150 billion more than this
budget. Third, we had the motion to instruct the House conferees to
accept the Senate's level of spending cuts--$26 billion lower than the
House. Unfortunately, this House voted down every one of these credible
and serious budget proposals.
Now we have a budget before us which leaves a national debt of $6.3
trillion in 1999, a budget that actually increases spending for the IRS
to hire 5,000 new IRS agents on Tax Freedom Day, a budget that
maintains yearly debt interests payments in excess of $200 billion.
A budget whose authors decided $26 billion in additional spending
cuts was too much to handle. A budget which claims to have compromised
by accepting $13 billion in spending cuts with less than $500 million
in cuts for 1995, the only year for which this budget is binding.
Today is Tax Freedom Day--the American people are lucky to get tax
freedom. I wonder when this Congress will get the guts to give the
taxpayer a debt freedom day.
Obviously, this will not occur anytime soon. I urge my colleagues to
vote against this spending and debt increasing bill.
{time} 2010
Mr. DREIER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, first I would like to associate myself with the statement
of my friend, the gentleman from Glens Falls [Mr. Solomon]--not his
singing, but the statement--and I congratulate him on it.
I assume his statement was based, in large part, on the concern he
has about the obligation for future generations such as his grandson,
Mark, who has joined him on the floor, that we are going to saddle them
with the payment of much of this debt.
Mr. Speaker, I yield such time as he may consume to our friend the
gentleman from Colorado [Mr. Allard], who has had an amendment which
unfortunately was denied.
(Mr. ALLARD asked and was given permission to revise and extend his
remarks.)
Mr. ALLARD. Mr. Speaker, I thank the gentleman for yielding time to
me.
Mr. Speaker, there are many reasons to be frustrated with the way
this House conducts business--closed rules, appropriations bills
written in secret and in the dead of night, copies of 500 page bills
available for review only hours before a vote.
All of these are very frustrating, but to me the most frustrating
action is when both Houses of Congress make clear their view on an
issue, and then presto! it somehow disappears in Conference.
Once again this had happened. Both the House and the Senate included
language in the Budget Resolution stating that any Government-mandated
health care reform should be treated as part of the Federal budget.
This means that any mandated payroll premiums would be scored as
receipts and that any mandated payments to health alliances would be
scored as Government expenditures. The Senate even went so far as to
state that any health care reform would be subject to pay-as-you-go
requirements.
Early in the year, Representative Penny and I sponsored legislation
directing that all Government-mandated health care reform be on-budget
where the American people can see the true cost. Our resolution
attracted 143 cosponsors and similar legislation was carried in the
Senate.
The Congressional Budget Office came down on our side and agreed that
the Clinton health plan should be on-budget.
I then offered language in the Budget Committee which passed by a
wide margin. This language was removed in the conference.
I am very disappointed that the clear will of Congress has been
ignored here. Our directive has been replaced with watered down and
meaningless language.
Congress is now about to begin debate on a massive overhaul of our
Nation's health care system. The administration wants to shift one-
seventh of our economy from the private sector to the Government. And
yet this budget document completely ignores that fact.
I urge all my colleagues who want a budget that demands
accountability and who want a budget that will accurately reflect the
size and power of Government over our lives, to join with me in
opposing this rule and then the budget resolution unless these
provisions are restored and put back into the conference committee
report as it was reported out of the House.
Mr. DREIER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, at this point I have no further requests for time, but
let me add that I strongly oppose this rule, as do my friends, the
gentleman from Colorado and the gentleman from New York, along with
many others on this side of the aisle. We have not had time to consider
this measure. The 3-day layover requirement has been waived. We have
dealt with a wide range of issues today. Let us move until next week
before we deal with this so that Members can have the appropriate time
to consider it.
Mr. Speaker, I yield back the balance of my time.
Mr. BEILENSON. Mr. Speaker, we have no further requests for time, and
I urge my colleagues to approve what we believe to be a very fair and
responsible budget resolution so that we can move forward with the
appropriations process in a timely fashion.
Mr. Speaker, I yield back the balance of my time, and I move the
previous question on the resolution.
The previous question was ordered.
The SPEAKER pro tempore (Mr. McNulty). The question is on the
resolution.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. BEILENSON. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 228,
nays 168, not voting 36, as follows:
[Roll No. 160]
YEAS--228
Abercrombie
Ackerman
Andrews (ME)
Andrews (NJ)
Applegate
Bacchus (FL)
Baesler
Barca
Barlow
Barrett (WI)
Becerra
Beilenson
Berman
Bilbray
Bishop
Bonior
Borski
Boucher
Brewster
Brooks
Browder
Brown (CA)
Brown (FL)
Brown (OH)
Byrne
Cantwell
Cardin
Carr
Chapman
Clayton
Clyburn
Coleman
Collins (IL)
Collins (MI)
Condit
Conyers
Cooper
Coppersmith
Costello
Coyne
Cramer
Danner
de la Garza
Deal
DeFazio
DeLauro
Dellums
Derrick
Deutsch
Dicks
Dingell
Dixon
Durbin
Edwards (CA)
Edwards (TX)
Engel
English
Eshoo
Evans
Farr
Fazio
Fields (LA)
Filner
Fingerhut
Flake
Ford (MI)
Ford (TN)
Frank (MA)
Frost
Furse
Gejdenson
Gephardt
Geren
Gibbons
Glickman
Gonzalez
Gordon
Green
Gutierrez
Hall (OH)
Hamburg
Hamilton
Harman
Hastings
Hayes
Hefner
Hilliard
Hinchey
Hoagland
Hochbrueckner
Holden
Hoyer
Hutto
Inslee
Jacobs
Johnson (GA)
Johnson (SD)
Johnson, E.B.
Johnston
Kanjorski
Kaptur
Kennedy
Kennelly
Kildee
Kleczka
Klein
Klink
Kopetski
Kreidler
LaFalce
Lambert
Lancaster
Lantos
LaRocco
Lehman
Levin
Lewis (GA)
Lipinski
Lloyd
Lowey
Maloney
Mann
Manton
Margolies-Mezvinsky
Markey
Martinez
Mazzoli
McCloskey
McCurdy
McDermott
McHale
McKinney
McNulty
Meehan
Meek
Menendez
Mfume
Miller (CA)
Mineta
Minge
Mink
Moakley
Mollohan
Montgomery
Murphy
Murtha
Nadler
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Orton
Owens
Pallone
Parker
Pastor
Payne (NJ)
Payne (VA)
Pelosi
Penny
Peterson (FL)
Peterson (MN)
Pickett
Pickle
Pomeroy
Poshard
Rahall
Rangel
Reed
Reynolds
Richardson
Roemer
Rose
Rostenkowski
Rowland
Roybal-Allard
Rush
Sabo
Sanders
Sarpalius
Sawyer
Schenk
Schroeder
Schumer
Scott
Shepherd
Sisisky
Skaggs
Slattery
Slaughter
Smith (IA)
Spratt
Stenholm
Stokes
Strickland
Studds
Stupak
Swift
Synar
Tanner
Tauzin
Tejeda
Thompson
Thornton
Thurman
Torres
Torricelli
Towns
Traficant
Tucker
Unsoeld
Valentine
Velazquez
Vento
Visclosky
Volkmer
Waters
Watt
Waxman
Wheat
Whitten
Williams
Wise
Woolsey
Wyden
Wynn
Yates
NAYS--168
Allard
Archer
Armey
Bachus (AL)
Baker (CA)
Baker (LA)
Ballenger
Barcia
Barrett (NE)
Bartlett
Barton
Bateman
Bentley
Bereuter
Bilirakis
Bliley
Blute
Boehlert
Boehner
Bonilla
Bunning
Burton
Buyer
Callahan
Calvert
Camp
Canady
Castle
Clinger
Coble
Combest
Crane
Crapo
Cunningham
DeLay
Diaz-Balart
Dickey
Dornan
Dreier
Duncan
Dunn
Ehlers
Emerson
Everett
Ewing
Fawell
Fields (TX)
Fowler
Franks (CT)
Franks (NJ)
Gallegly
Gallo
Gekas
Gilchrest
Gillmor
Gilman
Gingrich
Goodlatte
Goodling
Goss
Grams
Greenwood
Gunderson
Hancock
Hansen
Hastert
Hefley
Hobson
Hoekstra
Hoke
Horn
Houghton
Huffington
Hunter
Hutchinson
Hyde
Inglis
Inhofe
Istook
Johnson (CT)
Johnson, Sam
Kasich
Kim
King
Kingston
Klug
Knollenberg
Kolbe
Kyl
Lazio
Leach
Levy
Lewis (FL)
Lightfoot
Linder
Livingston
Machtley
Manzullo
McCrery
McDade
McHugh
McInnis
McKeon
McMillan
Meyers
Mica
Michel
Miller (FL)
Molinari
Moorhead
Morella
Myers
Nussle
Oxley
Packard
Paxon
Petri
Pombo
Porter
Portman
Quillen
Quinn
Ramstad
Ravenel
Regula
Ridge
Roberts
Rohrabacher
Ros-Lehtinen
Roth
Roukema
Royce
Santorum
Saxton
Schaefer
Schiff
Sensenbrenner
Shaw
Shays
Shuster
Skeen
Skelton
Smith (MI)
Smith (NJ)
Smith (OR)
Smith (TX)
Snowe
Solomon
Spence
Stearns
Stump
Sundquist
Talent
Taylor (MS)
Taylor (NC)
Thomas (CA)
Thomas (WY)
Torkildsen
Upton
Vucanovich
Walker
Walsh
Weldon
Wolf
Young (AK)
Young (FL)
Zeliff
Zimmer
NOT VOTING--36
Andrews (TX)
Bevill
Blackwell
Bryant
Clay
Clement
Collins (GA)
Cox
Darden
Dooley
Doolittle
Fish
Foglietta
Grandy
Hall (TX)
Herger
Hughes
Jefferson
Laughlin
Lewis (CA)
Long
Matsui
McCandless
McCollum
Moran
Neal (NC)
Price (NC)
Pryce (OH)
Rogers
Sangmeister
Serrano
Sharp
Stark
Swett
Washington
Wilson
{time} 2035
The Clerk announced the following pair:
On this vote:
Mr. Matsui for, with Mr. McCollum against.
So the resolution was agreed to.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Mr. SABO. Mr. Speaker, pursuant to House Resolution 418, I call up
the conference report on the concurrent resolution (H. Con. Res. 218)
setting forth the congressional budget for the U.S. Government for the
fiscal years 1995, 1996, 1997, 1998, and 1999, and providing that rule
XLIX shall not apply with respect to the adoption of that conference
report.
The Clerk read the title of the concurrent resolution.
The SPEAKER pro tempore (Mr. McNulty). Pursuant to House Resolution
418, the conference report is considered as having been read.
(For conference report and statement, see proceedings of the House of
Wednesday May 4, 1994, at page H2998.)
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Minnesota [Mr. Sabo] will be recognized for 30 minutes, and the
gentleman from Ohio [Mr. Kasich] will be recognized for 30 minutes.
The Chair recognizes the gentleman from Minnesota [Mr. Sabo].
Mr. SABO. Mr. Speaker, I yield myself such time as I may consume.
(Mr. SABO asked and was given permission to revise and extend his
remarks, and include extraneous material.)
Mr. SABO. Mr. Speaker, before I speak to the resolution, let me
recognize some Members who have served with distinction on our
committee and will be leaving at the end of this term, as this is our
final budget resolution.
We have five Members on our side whose 6 years on the Committee on
the Budget is up this year, and this is the final budget resolution
that they are a part of: the gentleman from Michigan [Mr. Kildee] who
has been Mr. Education for years in this House; the gentleman from
California [Mr. Beilenson] who handled our rule tonight and is always a
quiet and thoughtful contributing member of our committee; the
gentleman from California [Mr. Berman] with wide-ranging interests, but
in particular has been very helpful with his background in issues that
relate to foreign affairs; the gentleman from West Virginia [Mr. Wise]
who is Mr. Infrastructure of the Committee on the Budget; the gentleman
from Texas [Mr. Bryant], a very thoughtful member of our committee,
particularly on issues relating to the judiciary and some of the issues
that relate to the southern part of our country, is always a
contributor and has been very concerned over the issue of burden
sharing on this country.
Their interests have been wide ranging, and they have made a great
contribution.
We also have two Members who chose to run for other office, the
gentleman from Tennessee [Mr. Cooper] and the gentleman from Texas [Mr.
Andrews] and we thank them for their contribution: Mr. Cooper, who has
always been very concerned over fiscal discipline and health care, and
Mr. Andrews of Texas, with a wide-ranging interest in a whole series of
issues relating to human resources in this country.
{time} 2040
To my colleagues on the other side, the gentleman from North Carolina
[Mr. McMillan] is leaving our committee. I regret that he made a
decision to retire from the Congress. He has been a thoughtful Member
with particular emphasis on health care, and we are going to miss him,
not only in our committee but in the Congress.
While I have a chance, I would like to say to our Chief of Staff,
Eileen Baumgartner, and all the staff members of the House Committee on
the Budget, I deeply appreciate all their work and effort. They do
incredible service for this House and for this Congress. I, and I know
all the other members of the committee, deeply appreciate it.
Mr. Speaker, it is indeed a pleasure to be back before you with the
conference ageeement on the 1995 budget resolution.
The House conferees worked hard to preserve the House position and I
think this is a good agreement.
As you already know, the major point of controversy between the House
and the Senate on this resolution involved the additional $26 billion
in cuts that has been added to the Senate package by Senators Exon and
Grassley.
We resolved our differences on this matter by accepting outlay cuts
of $13 billion below the budget caps. For 1995, the report includes an
outlay cut of $500 million below the caps and the agreement is below
the caps in each of the next 5 years.
Additional items in the agreement include an assumption of the
President's crop insurance reform proposal and his request for funds
for IRS enforcement. It does not include his proposal to freeze
reimbursements for university overhead expenses on Federal research
grants.
Lest anyone misunderstand, 1995 is a very tight year. In fact,
discretionary spending in 1995 is approximately $800 million below this
year's level.
As many of you may remember, we had to cut $3.1 billion out of the
President's original budget request this year just to meet CBO scoring
requirements. We worked very hard in the House to come up with a fair
way of allocating that $3.1 billion reduction. Our original proposals
followed the President's policy direction in most areas, but was very
tight. This additional $500 million cut will add to that constraint.
My advice to those who are concerned about where these additional
cuts will fall is to expect your favorite program to be affected, and
be pleasantly surprised if it is not.
The reward for this fiscal discipline is our improving economy and
continued dramatic reduction in the Federal deficit.
The agreement brings the 1995 deficit down to $175.4 billion, the
lowest level in 5 years, and more than $100 billion below the
projections made by CBO last spring.
Not only is discretionary spending in 1995 below last year's dollar
level, but total Federal spending is at its lowest level in 15 years
when measured in relation to the economy.
And with regard to the economy, news on that front remains
overwhelmingly positive.
Forecasts continue to predict strong, steady growth at 3 percent or a
little higher for the year,
We have added 2.3 million private payroll jobs since January 1993 and
economists expect job creation to continue growing,
Manufacturing orders continue to rise and the auto industry is
producing at full capacity; and
Inflation, at a 2\1/2\ percent rate, is at its lowest level in 7
years.
This good news is directly related to the economic program we passed
last year. The conference agreement builds on that program. Clearly, it
is working for the majority of America's people.
Mr. Speaker--Members of the House, I urge you to stay the course and
join me in voting for the adoption of the conference report.
Mr. Speaker, I reserve the balance of my time.
Mr. KASICH. Mr. Speaker, I yield myself such time as I may consume.
I know Members want to go home, but this story is too good not to be
told about the pattern of spending in this House. The first thing I
wanted to talk about is the deal, the deal that was made that we were
going to cut $26 billion from the House-passed version of the budget.
Now, as Members can see, from the House-passed version of this
budget, our math would say that when we cut $26 billion and we get up
with a compromise, it says we will split the difference. When we say we
are going to cut 26 but we are going to split the difference, that
means we ought to come out with 13. That is the way we figure it out in
Ohio. Half of 26 is 13.
But what we did is, we took half of 26 and what we came out with was
$5.8 billion less than the House-passed level.
That is the first problem. We are not splitting the difference of the
$26 billion.
Now, let us talk about the first year's cuts that we were going to
do. What happened was, Senator Exon agreed that we would cut in the
first year, in the first year, the only year that counts, the only year
that matters, we would cut $1.6 billion deeper than what we did in the
House, 1.6. Their math was 1.6. But we would split the difference on
that. We would not cut the full 1.6; we would just split the
difference, like the deal was.
So when we split the difference of the 1.6, we come out with .8. But
it is interesting. When the conference split the difference of the 1.6,
they came out with .5. So we went from a $1.6 billion cut in the first
year, this mammoth $1.6 billion cut in the first year, we said we
cannot afford all that, so we have to cut it in half. And instead of
going to $800 million, which is what half of it would be, we did not
even achieve that, we are at .5. It gets better, my colleagues.
This is the spending difference. This is the chart. I bring a lot of
charts out here to the floor, but there is no chart quite like this
one.
The House-passed deficit in the bill that we passed, the deficit in
the House-passed version was $175.3 billion in deficits.
Now, we take the .5, remember the .5 I just showed Members here, and
we subtract it from $175 billion. That should give us an expected
deficit of $174.8 billion, because if you take a half a billion in the
cuts, subtract it from the House-passed deficit, that gives you a lower
deficit by half a billion dollars; right? But guess what happened? The
actual conference deficit is $175.4 billion.
In essence, the deal that we got out of the conference committee that
is supposed to cut spending increases the deficit.
So let me tell Members what I told Senator Exon today. We are going
to have an increase in the deficit of $600 million as a result of the
Exon-Grassley $26 billion out. So I told Senator Exon, maybe we ought
to think about spending more because the more we cut, the deeper in
debt we go.
Can you imagine, my colleagues, that we actually are emerging from
the conference committee, and I want to repeat this so no one is
confused, because of the efforts to cut $26 billion by Grassley and
Exon, which was supposed to be shaved to 13, which did not end up 13,
only ended up 5.8, and in the first year we were supposed to cut $1.6
billion in year one, the only year that matters, 1.6, but we did not
cut 1.6, we only cut a half billion. But if we were to cut a half a
billion from what the deficit was going to be, our deficits ought to be
lower and, in fact, deficits and spending go up.
{time} 2050
Deficits in spending go up as a result of that deal.
Let us get back to the sliver. You all remember the sliver that I
brought out here before. This is the sliver. I do not have my
magnifying glass tonight to show the Members, but they might notice
here that Exon-Grassley cuts from 5 to 99. I know Members are having
trouble seeing it. It is a good chance to see whether Members need
eyeglasses or not, but there is a sliver here. This what the Exon-
Grassley cut would be.
That represented a .3 percent cut in total Federal spending. This is
the Exon-Grassley cut that represented .3 percent of spending. That was
too deep for the conference committee, so what they came up with was a
.07 percent cut, which is even smaller than the .03 percent cut that
was called for under Exon-Grassley.
We keep hearing about these 3 years of declining deficits. This is
what we get with deficits. As we can see, they are headed back up
again. It is interesting, is it not, that they are actually trying to
claim deficit reduction for 1993, when the first year of the
President's proposal affecting the budget started in 1994? They do not
have 3 years of declining deficits as of this point. We will have to
see what happens.
Here is the result. Let us go back. Let us go back one more time, to
the fact that cutting spending in the House of Representatives actually
resulted in an increase in the deficit as we came out of conference.
Mr. Speaker, this does not sell anywhere. This is not right. This is
not what we ought to be doing. What I would suggest is that we defeat
this conference report, what we send this thing back to the conference
committee, and let us do some real deficit reduction. I hear about all
the good economic news, and I am pleased that we have seen some growth
in this economy. But what the markets are saying, the markets are
saying that they do not believe that a pattern of increased taxes and
increased government and increased regulation is good for the long-term
growth and job prospects and low inflationary prospects and low
interest rate prospects for the United States of America. Let us send
this back to committee, and let us really do a good job of giving the
American people what they really want.
Mr. Speaker, I reserve the balance of my time.
Mr. SABO. Mr. Speaker, I yield 5 minutes to the distinguished
gentleman from Massachusetts [Mr. Frank].
Mr. FRANK of Massachusetts. Mr. Speaker, I am pleased that the
previous speaker welcomes growth. We ought to be very clear. It is
growth which has happened in absolute contradiction to the predictions
he made last year.
The Republican Members of the House consistently last year made a set
of predictions about the budget we adopted which have been proven wrong
in a decisive way. The deficit is lower, economic growth is greater,
unemployment is less. All of their predictions were wrong.
But their predictions are of less interest to me than the relevance
of this budget today. I am going to vote for this budget. I signed the
conference report. It is a budget, however, which in my judgment
significantly underfunds important programs. As we pass this budget, I
hope we will begin to look at the larger issue.
We have, I think, within the framework of the basic spending that has
been within this Federal Government for years, done as good a job as we
could do in deficit reduction. We were not going to get further in the
area of deficit reduction without doing one of several things:
One, we can, as many of my Republican colleagues would like to do,
severely slash Federal spending for a while variety of issues. I think
that would be a mistake.
We need more money to be spent on the environment. We need more money
to go to cities and towns and States to deal with clean water. We need
more money to help them with police. We need more money to help provide
decent housing for people. We need more money in the short run to make
the kind of changes in the welfare system that are in the national
interest, without imposing cruelty on helpless small children.
I would reject that, Mr. Speaker. We could get a substantial tax
increase, and I do not think this is the right time economically to do
that, if there is any need to do it at all.
There is an area that is left that we have to confront. If we
continue as a Nation to spend on national security at almost the level
that we spent for most of the cold war, excluding only those
extraordinarily aberrant periods in the middle of the Reagan years when
we were wasting money with a vengeance, we will not be able to continue
on a path of deficit reduction and meet important domestic needs.
I think we should be very clear to the American people, Mr. Speaker.
Members of Congress who say we are going to do more for law
enforcement, we are going to do more about cleaning up the environment,
we are going to do more to help local communities meet Federal
mandates, we are going to do a better job in education, people who say
that and decline to commit themselves to substantial reductions in
overseas military expenditures are not being straightforward. There
simply is no way we can do it.
We cannot continue to fund the current range of activities, and in
particular, I think the time has come as a Nation to say, ``Is it
essential that we maintain a military establishment capable of fighting
two full-scale conventional wars simultaneously with virtually no
help?'' Because that is the goal.
That is the two-war strategy. The two-war strategy assumes that
American full-fledged participation, with South Koreans, which is nice
of them, because the war would be in South Korea, and it is very
considerate they would help us defend their country, and at the same
time a major conventional war in the Middle East, which assumes
virtually no participation from our allies. I think that is a mistake.
The United States ought to be the strongest Nation in the world for
our own protection. The point is that we can be for a military
expenditure significantly less than we have today.
That is a lesson that is understood by the Japanese and the British
and the French and the Belgians and the Norwegians and the Danes and
the Italians and the Germans. They all understand the economic value
and social benefit of substantially reduced military budgets, because
we have got a military budget larger than all of them put together. We
do not have a population larger than all of them put together, we do
not have a gross product larger than all of them put together, we have
a military budget larger than all of them put together.
We have an intelligence budget, combined, of the CIA and the military
intelligence services, that has declined scarcely at all from the
height of the cold war. That is a grave error. We have substantial
military resources going into the fruitless task of trying to interdict
drugs, trying in this free and open society, with its free market and
free movement of people, to do the physically impossible.
If we continue this level of national security expenditure, we cannot
also do deficit reduction and meet important domestic programs, and I
hope we will begin to address this.
Mr. KASICH. Mr. Speaker, I yield 2 minutes to the gentleman from
Minnesota [Mr. Grams].
Mr. GRAMS. Mr. Speaker, I thank the gentleman for yielding time to
me.
Mr. Speaker, just this week, Morton Kondracke wrote that President
Clinton will propose a middle-class tax cut. In 1996.
For those with short-term memory loss, that's the same promise he
made in 1992--and the same promise he broke in 1993.
Someone should tell the President that Republicans have already done
his work for him. In March, we offered the Families First budget, which
provided a $500 per child tax credit for working-class American
families. It would have provided $25 billion annually in much-needed
tax relief for those families who work hard, pay their bills, and raise
their kids the best they can. It would have placed families at the head
of the line for a change and left the Washington bureaucrats behind.
But something got in the way of the middle-class tax cut of 1994.
The Democratic leadership, said the tax cut cost too much--that
Congress simply could not afford it--that the failed social programs of
the Great Society were worth more than the American family.
Mr. Speaker, that is simply shameful. American families need tax
relief now. They cannot wait 2 years until the next election for Santa
Clinton to arrive. And they cannot afford the budget resolution this
body will pass today.
Mr. Speaker, I say to my colleagues we should not lock the American
family out of the House of Representatives again today. Vote against
the budget resolution conference report.
{time} 2100
Mr. KASICH. Mr. Speaker, I yield 2 minutes to the gentleman from
Illinois, [Mr. Ewing].
Mr. EWING. Mr. Speaker, tonight we are considering a budget
resolution for $1.5 trillion for fiscal year 1995. That plan was
finalized only a few hours ago.
The majority in this House on this side have waived the House budget
rules requiring a 3-day layover so Members could review this proposal.
That rule was designed to give us all an opportunity to study this
legislation before we cast our vote. We did not work hard last week, we
are not going to work hard next week, but we have to ram this through
tonight.
Mr. Speaker, the majority party is ramming this huge budget through
the legislative process, yet earlier this week, and this is the part
that bothers me, the Speaker said he was fighting against the A to Z
plan because we would not have time to consider these budget cuts.
Mr. Speaker, what is this? The Members are not given time to study a
$1.5 trillion budget but the majority says the leaders do not have time
to deliberate on cuts.
Mr. Speaker, this is the ultimate in hypocrisy. It is just another
example of how the majority cares more about taxing and spending than
they do about balancing the budget.
Mr. KASICH. Mr. Speaker, I yield 2 minutes to the gentleman from
Ohio, [Mr. Hoke].
Mr. HOKE. Mr. Speaker, I thank the gentleman from Ohio for yielding
time to me.
Mr. Speaker, as we prepare to vote on final passage of next year's
budget, I keep looking over my shoulder for Rod Serling and listening
for the Twilight Zone's theme song, because what I am hearing and
seeing is simply unreal.
We have got a $4.6 trillion public debt, a $225 billion budget
deficit and yet the Clinton White House and all of its minions here in
Congress have officially declared victory and they have left the budget
battlefield.
The President and his supporters in Congress want the American people
to believe that the budget battle has been fought and won. Rod Serling,
where are you when we need you to bring us back to reality?
Ladies and gentlemen, the Federal Government's budget is completely
out of control. Spending will continue to increase every single year
under this budget and every claim to the contrary notwithstanding, this
budget plan ignores all of these problems and keeps feeding the Federal
Government's insatiable appetite for more taxes and more spending.
Even the modest $26 billion in spending cuts that the Senate tried to
include in this budget were far too draconian for all the President's
men. Oh, no. Apparently realizing that these cuts could not be
completely ignored, the House and the Senate Budget Committee added $13
billion in new spending back into the plan and now they are asking us
to approve their handiwork.
Mr. Speaker, I cannot strongly enough urge all of my colleagues on
the other side of the aisle to ignore the siren calls of the Clinton
White House and the House's Democratic leadership to support this
resolution and instead join with me and many others in rejecting this
bill because it is a fantasy land budget that ignores the real fiscal
problems that are facing our Nation.
Vote this budget down. Get out of the Twilight Zone and join the rest
of us in the real world where we balance our checkbooks, we raise our
families, and we do not spend money that we do not have.
Mr. SABO. Mr. Speaker, I yield such time as he may consume to the
gentleman from Texas [Mr. Stenholm].
(Mr. STENHOLM asked and was given permission to revise and extend his
remarks.)
Mr. STENHOLM. Mr. Speaker, I rise today in support of the conference
report on H. Con. Res. 218, the Budget Resolution for fiscal year 1995.
I was happy to be able to support this resolution when it passed the
House of Representatives 2 months ago and I am even more pleased with
the improvements that have been made to the resolution since then.
This resolution includes spending levels which are below the budget
caps in each of the next 5 years. Under the agreement, the 1995 deficit
is brought down to $175.4 billion, the lowest level in 5 years, and
more than $100 billion below the projections made last spring.
I know that there has been some controversy over how to express the
compromise achieved during conference concerning the only major
disagreement between the House and Senate budget resolutions. The
outlay cut proposed by Senators Exon and Grassley when the Senate
passed its budget amounted to $26 billion over the next 5 years. The
conference agreement contains an outlay cut of $13 billion below the
caps over the same time frame.
I want to make it clear there is no dispute that the cut is $13
billion below the caps. Now, because the House-passed resolution was
itself already about $7 billion below the caps, the compromise amounts
to cuts of a little less than $4.9 billion from the House-passed
resolution.
Some people want to complain that the $13 billion is counted below
the cap, not below the House resolution. In fact, some of my most
fiscally responsible friends want to complain about that. Well, here's
what I think.
Too often around here, we call something which is really an increase
a cut. Now we have something which really is a cut and some people act
like they want us to call it an increase. I don't get it.
You know, as a cosponsor of the A-to-Z bill, I support having the
chance for more budget cuts to be considered on the House Floor. Of
course we have no idea what some of those amendments will be once we
get that Floor opportunity, but my guess is that out of those 56-plus
amendments, many will not achieve as much as $5 or $6 billion in
savings. That doesn't mean they will be bad amendments. It just means
that you don't too often get the chance to eliminate 4.9 billion
dollars' worth of spending in one vote.
We can talk about false advertising or about how much more needs to
be done or about discharge petitions or whatever else we want to talk
about. But I, for one, am not going to pass up this opportunity for
deficit reduction. I wait too long and fight too hard for just those
opportunities and for the life of me, I can't see any reason to walk
away from this golden opportunity.
In addition to these cuts, I am pleased by several other things
related to the budget resolution. First, I greatly appreciate the
positive response I have received from my leadership to follow through
on the promise for budget process votes. I have been working with my
good friends John Kasich and Tim Penny to develop the legislative
language that would deal with ensuring that appropriation cuts are
dedicated to reducing the deficit, establishing an improved procedure
for disaster and other emergency appropriations, and granting the
President expedited rescission authority over appropriations measures.
In addition, several of us are working on entitlement caps and
reestablishing the discretionary firewalls.
Finally, and even though the language is non-binding, I am very
pleased with some of the report language which was included in this
resolution. I feel that the language concerning entitlement spending
growth and budget baselines, as well as the language regarding unfunded
federal mandates was all very constructive.
As usual, I have found it a pleasure to work with my chairman, Mr.
Sabo, and I am proud to stand with him this evening to support this
resolution. I urge my colleagues to vote ``aye.''
Mr. SABO. Mr. Speaker, I yield 2 minutes to the gentlewoman from the
District of Columbia [Ms. Norton].
Ms. NORTON. Mr. Speaker, I rise in support of the budget resolution
and appreciate that important language has been included in the report
of this bill and in the Senate bill regarding the search for
alternatives for pay raises for Federal employees. But what brings me
to the floor is a much more important subject and that is the $105
billion that goes to Federal contractors that is largely unaccountable
to us. There is an indefensible distinction that we make between two
sets of employees paid with Federal funds. There are civil servants who
annually get pay cuts and then there are Federal contractors who have
gotten no cuts of any kind. This year we had $1.1 billion for raises
that will cost $2.7 billion.
Mr. Speaker, allowing cuts in benefits annually is contrary to good
management practice. What the private sector does is to make whatever
cuts or buyouts it is going to do and give small increments, and that
is all it would be, to the remaining employees.
Mr. Speaker, there is an important issue far beyond these raises, and
that is getting a hold of runaway contracting costs.
Mr. Speaker, $105 billion is a nice piece of change. Leon Panetta
said early in the term that we do not know it is being spent. Yet OMB
recommended no cuts in this $105 billion this year.
Mr. Speaker, do we know how much health care just a chunk of that
money would buy? This Congress needs to find the methodology and the
will to look beyond our direct expenditures to Federal contractors. We
must hold them as accountable as we hold direct expenditures, we must
hold the shadow government as accountable as those we can see.
Mr. KASICH. Mr. Speaker, I yield 1 minute to our final speaker, the
gentleman from Michigan [Mr. Smith].
He has come to Washington.
Mr. SMITH of Michigan. Mr. Speaker, I thank the gentleman for
yielding me this time.
Mr. Speaker, has anybody thought about the uniqueness of today? Today
is Tax Fairness Day, and it is the day that we are going to vote on a
budget that is the highest in this Nation's history. Tax Fairness Day,
by the way, is how many days it takes to work every day, taking that
money and paying it for taxes at the local, State and national level.
Mr. Speaker, I find it interesting that our taxes now, to an average
American paying taxes, consumes 41 percent out of every dollar he
makes. It is interesting that this budget, if we pass it, goes from
$4.5 trillion, a 40 percent increase, to $6.3 trillion.
Mr. Speaker, if we do not want to borrow more money to put our kids
at risk and our grandkids at risk by mortgaging their future, if we do
not want to raise taxes more than what it already is, 41 percent of our
income, what is left? What is left is to cut spending. This budget does
not do it.
Mr. Speaker, colleagues, let us vote this down.
Mr. HUGHES. Mr. Speaker, I rise in support of House Concurrent
Resolution 218, the fiscal 1995 budget resolution.
This resolution continues the progress we started last year with the
adoption of the 5-year budget agreement initiated by President Clinton.
That plan provided for some $496 billion in deficit reduction over 5
years, more than half of which comes from hard cuts in every category
of Federal spending.
That budget amendment has been enormously successful to date. Indeed,
the budget deficit was $300 billion when President Bush left office in
1992. It was $180 billion at the end of 1993. While that is a lot of
red ink, clearly we are heading in the right direction.
The budget resolution we are considering today continues us along the
path of deficit reduction and fiscal restraint. It aims to achieve $13
billion in deficit reduction in addition to the $496 billion in deficit
reduction enacted last year. The agreement achieves this reduction
through cuts in discretionary spending below the caps set last year.
For fiscal year 1995, the agreement cuts outlays by $3.1 billion more
than the president's proposals in order to meet the outlay cap set last
year. Moreover, the agreement cuts an additional $500 million below the
spending cap for even greater deficit reduction. For fiscal year 1995,
discretionary spending will be set at $540.6 billion which represents
the first time in some 27 years that discretionary spending will
actually fall.
For those who believe, as I do, that the best way to balance the
budget is to cut spending, this is certainly welcome news. Indeed,
under this resolution, the deficit will fall to $175.4 billion in
fiscal 1995, the lowest level in 5 years and more than $100 billion
lower than projections made last spring. Moreover, this deficit as a
percentage of our economy will decrease from 4.9 percent of our economy
which it was in 1992 to 2.5 percent representing the lowest percentage
of the economy since the Carter administration in 1979.
Just as importantly, it achieves these targets without increasing
taxes, and without forcing any single industry or sector of the economy
to bear a disproportionate burden of the spending cuts.
While I am generally satisfied with the framework of this budget
agreement, I really believe we should be doing even more in the way of
spending cuts. Accordingly, I intend to continue my efforts this year,
just as I have always done in the past, to identify and vote against
those spending programs which we don't need or can't afford.
For example I intend to vote once again to terminate funding for the
$30-billion space station, which we just can not afford. I also intend
to support across the board cuts where necessary, and to vote against
any appropriations bills which comes before the House where spending
levels cannot be justified.
In other words, I view this budget resolution as only a starting
point for deficit reduction, one which we can and will improve on
through the adoption of additional spending cuts this year.
As far as entitlements are concerned, I am generally pleased with the
progress we have made over this past year. Indeed, last year's budget
agreement provided for $88 billion in entitlement savings which have
already been enacted. I believe that we must continue this progress by
examining ways to control the rising costs of Medicare and other
entitlement programs.
Although the agreement we are considering today does not call for
further reductions in entitlement spending, it does not preclude the
enactment of entitlement legislation, such as health care reform, as
long as it meets ``pay-as-you-go'' requirements.
This is extremely important because, as my colleagues know, health
care spending is the single fastest growing part of the Federal budget.
And if we are really serious about deficit reduction, then we must
start by getting health care costs under control.
This agreement will allow us to pursue the critical agenda for
national health care reform without locking us into a fiscal
straitjacket, where long-term health care spending and the Federal
deficit will continue to soar, in exchange for some limited short term
deficit reduction.
I believe that this resolution is a fair and balanced compromise. It
offers a reasoned combination of spending cuts for the most part, and
it contains a variable enforcement mechanism. I urge my colleagues to
support the resolution.
Mr. FRANKS of Connecticut. Mr. Speaker, I will not vote for this
budget resolution. First, I do not approve of how the House Democratic
leadership decided to have the House vote on this budget before the
minority party had a chance to examine it. Few members have been able
to read this budget. On a measure that approves the spending of $1.5
trillion in taxpayer money, Congress should have at least 3 days to
look at it. We need to see what spending programs are being expanded
and what defense projects are being cut.
For while I may not be familiar with every aspect of this budget, we
in Congress know in general what it contains. We know that this budget
will allow the Federal deficit to grow by almost $900 billion in the
next 5 years. We know that the $26 billion spending cut included in
this budget by the Senate was decimated by the President and Democratic
leadership. We know that this budget leans on ill-advised defense
reductions.
I regret that the Republican ``Putting Families First'' budget
considered in March did not pass. That budget contained tax credits for
families with children, genuine spending cuts, a crime bill that
focused on discouraging criminal behavior, a responsible health care
bill, and a defense budget that reflects the need for a strong
military. I hope that my colleagues across the aisle will have the
courage to consider the ideas in this alternative budget in the future.
Mr. MINETA. Mr. Speaker, I rise in strong support of the conference
agreement on H. Con. Res. 218, the concurrent resolution on the budget
for fiscal year 1995.
First of all, I want to commend the distinguished Chair of the Budget
Committee, the gentleman from Minnesota [Mr. Sabo], for his outstanding
leadership and hard work in crafting this important agreement.
Mr. Speaker, I am pleased to report that the conference agreement
effectively assumes full-funding for highways at the levels authorized
in the Intermodal Surface Transportation Efficiency Act of 1991.
There certainly can be no question of the need for full funding of
ISTEA highways. There are some 235,000 miles of Federal highways that
are in poor or mediocre condition and need repair. The cost to
eliminate backlog highway deficiencies is about $212 billion, and the
annual cost to maintain Federal-aid highways in their 1991 condition is
$48.4 billion (in 1991 dollars).
In addition, there are approximately 118,000 structurally deficient
bridges whose conditions would cost $78 billion to correct. The annual
cost to maintain bridges in their 1991 conditions is $5.2 billion (in
1991 dollars).
The President's budget assumed an overall obligation ceiling of
$19.969 billion for highways. This included $18.332 billion for the so-
called highway core programs and $1.6 billion for both Minimum
Allocation [MA] and way demonstration projects program. An additional
$100 million, outside the $19.969 billion ceiling, was assumed for the
emergency relief [ER] program. The President's budget assumed
rescission of highway projects, first effective for fiscal year 1994.
The Budget Conference Agreement, in assuming effectively full-funding
of ISTEA highways, also specifically assumes a core obligational
ceiling of $18.332 billion. In addition, per ISTEA, it assumes no
change in existing law for MA and demos which are outside the
obligational ceiling. The conference agreement also does not assume the
rescission of any highway demonstration projects.
A second and equally important area of difference with the President
is transit operating assistance where the resolution restores $200
million to the President's request, thus equaling the fiscal year 1994
appropriations for operating assistance. While this still falls far
short of full-funding ISTEA transit, it does represent continued
commitment on the part of the Congress in addressing a key funding
component of our Nation's transit system. Even though the $200-million
restoration comes as a result of reducing section 9 capital grants by
$400 million, the conference agreement still includes an overall
section 9 assumption of about $223 million more than the fiscal year
1994 appropriation.
Mr. Chairman, a recent survey conducted by the American Public
Transit Association estimates that more than $7 billion in Federal
funds could be quickly obligated over and above existing transit
program funding levels. This number only represents the immediate
backlog of unmet transit needs--to restore transit to its pre-1980's
level would require an investment of $11 billion per year. In addition,
the passage of the Americans With Disabilities Act placed new financial
demands on transit operators across the country.
A third difference between the budget conference agreement and the
President's budget is funding for the Airport Improvement Program. The
President's budget assumes $1.690 billion for this program; that is, a
freeze at the fiscal year 1994 appropriated level. The budget agreement
assumes $2.165 billion in contract authority or nearly one-half-billion
dollars more than the President to reflect the authorized level of
House-passed H.R. 2739, the Aviation Infrastructure Investment Act of
1993. This critical piece of legislation has been awaiting Senate
action since October 13, 1993.
Mr. Speaker, the infrastructure needs of the Nation's airports
continue to grow. We now have 23 so-called problem airports. These
airports are each experiencing more than 20,000 hours of aircraft delay
annually. Without remedial action, that number is expected to rise to
36 by 2001. The capital needed to alleviate airport congestion and
flight delays averages $10 billion a year for the next 5 years.
Such projects, if funded, would increase airport capacity and reduce
system delays. This is important in that the Nation's economy would
become more productive and competitive if the air transportation system
becomes more efficient. We need at a bare minimum for fiscal year 1995
the authorized level passed by the House and assumed in this conference
agreement.
Mr. Speaker, the conference agreement is, in general, responsive to
the infrastructure needs of our Nation. It deserves our support and I
urge its adoption.
Mr. FAZIO. Mr. Speaker, I rise in support of the conference report on
H. Con. Res. 218--the budget resolution for fiscal year 1995.
Last year, Congress enacted a 5 year deficit reduction package that
was modeled on President Clinton's economic program. This package--the
largest deficit reduction package in our history--cut our deficit by
$47 billion in fiscal year 1994, and by a total of $496 billion over
the next 5 years.
And now, the House of Representatives and Senate have reached
agreement on a budget resolution that will determine the overall goals
for our spending priorities during the upcoming fiscal year. However,
this agreement accelerates the pace we set last year. It pushes us
harder in our efforts to change our spending habits. It moves us
further away from our old practice of depleting our valuable resources
with nothing to show for it, and closer to our new strategy of long-
term investment that nets a return on our money, as we move toward
economic growth.
This budget resolution builds on last year's efforts in support of
the President's investment strategy by adding another $13 billion in
deficit reduction to the $496 billion that was enacted last year. Under
this resolution, the deficit is projected to fall to $175.4 billion
next year--the lowest level in four years. The resolution also reduces
our discretionary spending for the upcoming year below what it was for
this year. This means that this is the first time since 1969 that
discretionary spending has decreased from one year to the next.
I would like to once again commend Chairman Sabo and the members and
staff of the House Budget Committee for their outstanding work in
sustaining this strategy. They have produced a budget resolution that
provides us with the means to maintain the course that we set last
year. We can continue to make the necessary, critical, long-term
investments in our country's infrastructure, in jobs, and in the
health, safety and welfare of all Americans and, at the same time,
couple these sound investments with aggressive deficit reduction. This
approach can only yield prolonged economic benefits for all Americans.
Ms. SNOWE. Mr. Speaker, the budget resolution passed by the
conference committee is an indictment on the lack of resolve on the
part of Congress to seriously address fiscal problems hampering our
economy. It is an unfortunate testament to the fact that this
institution is satisfied with the status quo--with high deficits, a
rising national debt, and continued deficit spending that stunt
economic growth and inhibit job creation.
I am dismayed that we in this body could not take advantage of the
many opportunities placed before us over the last year to confront
these problems. Now, with this conference report representing our
remaining chance to cut spending and reduce the deficit--to jump on
``the last train leaving the station,'' as my distinguished colleague
John Kasich put it--we could manage to trim only a meager one-half of
one percent of discretionary spending over 5 years. This resolution
does not adequately address the economic difficulties facing this
country, and therefore I cannot support it.
Problems associated with a $223 billion deficit and a $4.6 trillion
national debt, like diminished employment growth and reduced economic
expansion, will not simply evaporate. Fifty-four percent of all
personal income taxes paid to the government are being used to make
debt service payments. These are resources that could be used to
reinvest in the economy but instead are devoted to paying for
government borrowing. Yet, it seems to be the attitude of those who
support this budget resolution that such problem will take care of
themselves. Proponents are playing a naive and foolish game with the
American people with regard to the Nation's fiscal problems: ignore
them and they will go away.
This budget resolution shows that old habits are hard to break. It
calls for another increase in federal spending in fiscal year 1995, to
$1.5 trillion. This represent a 2.3 percent increase over this year's
levels. Oh, and by the way, this does not include whatever the costs of
health care will be. Proponents are quick to point out that the
projected deficit will be $175 billion by the end of fiscal year 1995,
but are reluctant to admit that the same projections show a deficit
rising to over $200 billion after 1999. Whether $175 billion or $200
billion, we should not be content with yearly deficits of any size. The
American people do not find this acceptable and neither should this
administration and this Congress.
And what of the national debt? Present economic policies do nothing
to stop its steady rise from $4.6 trillion now to $5.6 trillion in 1997
to $6.3 trillion in 1999. This represents an increase of $1.7 trillion
in 5 years, and every incremental rise establishes a new threshold of
government red ink.
The consequences of this sea of red ink cannot be ignored. The
economy grew at an anemic rate of 2.8 percent for 1993. Annual economic
growth since World War II, including recession years, has averaged over
3 percent. At this juncture after previous economic downturns, total
employment has traditionally risen by an average of 9.2 percent. Since
the end of the latest recession, total employment has increased by only
2.5 percent. According to the Department of Labor, after the previous
four recessions, 44 percent of laid off workers expected to be recalled
once the economy improved. After this last recession, however, only 14
percent of job losers expected to be recalled to work.
In short, this budget resolution would have us believe that enough
has already been done to reduce the deficit and spur economic growth,
and that no further action on the deficit is necessary. As we can see,
however, nothing could be further from the truth. The failure to
capitalize on opportunities to reduce the deficit and Federal debt
represents a short-term view of our economy which allows it to
underperform.
Over the recent past this Congress has had such opportunities, but
unfortunately we have let them slip by. Last year, the Republicans
offered an alternative to the reconciliation bill that matched the
President's deficit reduction goals without raising taxes. This was
rejected. Last fall, the Penny-Kasich amendment dedicated $90 billion
in spending cuts to deficit reduction, but this, too, was defeated. Two
months ago, the Republicans presented a budget that reduced spending in
FY 1995 alone by $19 billion less than what this resolution proposes.
Again, the House repudiated it. These measures offered substantive
spending cuts and deficit reduction, unlike this resolution, which
simply takes a token approach to these issues.
Even more disturbing is that this budget resolution, like the
President's own budget proposal, does not account for the costs of
health care reform and other initiatives--welfare, crime--likely to be
enacted over the next few years. In February, the Congressional Budget
Office ruled that the President's mandate to require employers to pay
for 80 percent of their employees' health insurance premiums should be
counted on budget and that it would increase the deficit by $74 billion
through the year 2000. This resolution ignores these costs, just as it
ignores the general problems of continued deficits and higher debt.
This budget resolution perpetuates the status quo, and the status quo
is just not good enough. In fact, the status quo robs this economy of
its potential, a situation that many Americans and many Mainers are
experiencing through slow economic and employment growth. This is why I
cannot support it. Deficit reduction and stopping the growth of the
national debt are serious matters. This resolution does not present the
serious solutions that this country needs to deal with these serious
issues.
Mr. KASICH. Mr. Speaker, I yield back the balance of my time.
Mr. SABO. Mr. Speaker, I urge a yes vote and yield back the balance
of my time.
The SPEAKER pro tempore. Without objection, the previous question is
ordered on the conference report.
There was no objection.
The SPEAKER pro tempore. The question is on the conference report.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. SABO. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 220,
nays 183, not voting 29, as follows:
[Roll No. 161]
YEAS--220
Abercrombie
Ackerman
Andrews (ME)
Andrews (TX)
Applegate
Bacchus (FL)
Baesler
Barca
Barlow
Barrett (WI)
Becerra
Beilenson
Berman
Bilbray
Bishop
Bonior
Borski
Boucher
Brewster
Brooks
Browder
Brown (CA)
Brown (FL)
Brown (OH)
Bryant
Byrne
Cantwell
Cardin
Carr
Chapman
Clayton
Clyburn
Coleman
Collins (IL)
Collins (MI)
Condit
Conyers
Coppersmith
Costello
Coyne
Cramer
Danner
Darden
de la Garza
DeLauro
Dellums
Derrick
Deutsch
Dicks
Dingell
Dixon
Dooley
Durbin
Edwards (CA)
Edwards (TX)
Engel
Eshoo
Evans
Farr
Fazio
Fields (LA)
Filner
Flake
Ford (TN)
Frank (MA)
Frost
Furse
Gejdenson
Gephardt
Geren
Gibbons
Glickman
Gonzalez
Gordon
Green
Gutierrez
Hall (OH)
Hamburg
Hamilton
Harman
Hastings
Hayes
Hefner
Hilliard
Hinchey
Hoagland
Hochbrueckner
Holden
Hoyer
Hughes
Inslee
Jefferson
Johnson (GA)
Johnson (SD)
Johnson, E.B.
Johnston
Kanjorski
Kaptur
Kennedy
Kennelly
Kildee
Kleczka
Klein
Klink
Kopetski
Kreidler
LaFalce
Lambert
Lancaster
Lantos
LaRocco
Lehman
Levin
Lewis (GA)
Lloyd
Long
Lowey
Maloney
Manton
Markey
Martinez
Mazzoli
McCloskey
McCurdy
McDermott
McHale
McKinney
McNulty
Meehan
Meek
Menendez
Mfume
Miller (CA)
Mineta
Minge
Mink
Moakley
Mollohan
Montgomery
Moran
Murphy
Murtha
Nadler
Oberstar
Obey
Olver
Ortiz
Orton
Owens
Pallone
Parker
Pastor
Payne (NJ)
Payne (VA)
Pelosi
Peterson (FL)
Peterson (MN)
Pickle
Pomeroy
Poshard
Rahall
Rangel
Reed
Reynolds
Richardson
Roemer
Rose
Rostenkowski
Rowland
Roybal-Allard
Rush
Sabo
Sanders
Sarpalius
Sawyer
Schenk
Schroeder
Schumer
Scott
Shepherd
Skaggs
Slattery
Slaughter
Smith (IA)
Spratt
Stenholm
Stokes
Strickland
Studds
Stupak
Swift
Synar
Tanner
Tauzin
Tejeda
Thompson
Thornton
Thurman
Torres
Torricelli
Towns
Tucker
Unsoeld
Valentine
Velazquez
Vento
Visclosky
Volkmer
Waters
Watt
Waxman
Wheat
Whitten
Williams
Wilson
Wise
Woolsey
Wyden
Wynn
Yates
NAYS--183
Allard
Andrews (NJ)
Archer
Armey
Bachus (AL)
Baker (CA)
Baker (LA)
Ballenger
Barcia
Barrett (NE)
Bartlett
Barton
Bateman
Bentley
Bereuter
Bilirakis
Bliley
Blute
Boehlert
Boehner
Bonilla
Bunning
Burton
Buyer
Callahan
Calvert
Camp
Canady
Castle
Clinger
Coble
Collins (GA)
Combest
Cooper
Cox
Crane
Crapo
Cunningham
Deal
DeFazio
DeLay
Diaz-Balart
Dickey
Dornan
Dreier
Duncan
Dunn
Ehlers
Emerson
English
Everett
Ewing
Fawell
Fields (TX)
Fingerhut
Fowler
Franks (CT)
Franks (NJ)
Gallegly
Gallo
Gekas
Gilchrest
Gillmor
Gilman
Gingrich
Goodlatte
Goodling
Goss
Grams
Grandy
Greenwood
Gunderson
Hancock
Hansen
Hastert
Hefley
Hobson
Hoekstra
Hoke
Horn
Houghton
Huffington
Hunter
Hutchinson
Hutto
Hyde
Inglis
Inhofe
Istook
Jacobs
Johnson (CT)
Johnson, Sam
Kasich
Kim
King
Kingston
Klug
Knollenberg
Kolbe
Kyl
Lazio
Leach
Levy
Lewis (CA)
Lewis (FL)
Lightfoot
Linder
Livingston
Machtley
Mann
Manzullo
Margolies-Mezvinsky
McCrery
McDade
McHugh
McInnis
McKeon
McMillan
Meyers
Mica
Michel
Miller (FL)
Molinari
Moorhead
Morella
Nussle
Packard
Paxon
Penny
Petri
Pickett
Pombo
Porter
Portman
Quillen
Quinn
Ramstad
Ravenel
Regula
Ridge
Roberts
Rohrabacher
Ros-Lehtinen
Roth
Roukema
Royce
Saxton
Schaefer
Schiff
Sensenbrenner
Shaw
Shays
Shuster
Sisisky
Skeen
Skelton
Smith (MI)
Smith (NJ)
Smith (OR)
Smith (TX)
Snowe
Solomon
Spence
Stearns
Stump
Sundquist
Talent
Taylor (MS)
Taylor (NC)
Thomas (CA)
Thomas (WY)
Torkildsen
Traficant
Upton
Vucanovich
Walker
Walsh
Weldon
Wolf
Young (AK)
Young (FL)
Zeliff
Zimmer
NOT VOTING--29
Bevill
Blackwell
Clay
Clement
Doolittle
Fish
Foglietta
Ford (MI)
Hall (TX)
Herger
Laughlin
Lipinski
Matsui
McCandless
McCollum
Myers
Neal (MA)
Neal (NC)
Oxley
Price (NC)
Pryce (OH)
Rogers
Sangmeister
Santorum
Serrano
Sharp
Stark
Swett
Washington
{time} 2127
The Clerk announced the following pairs:
On this vote:
Mr. Matsui for, with Mr. Doolittle against.
Mr. Sangmeister for, with Mr. Herger against.
Mr. Swett for, with Mr. McCollum against.
Mr. WHITTEN changed his vote from ``nay'' to ``yea.''
So the conference report was agreed to.
The result of the vote was announced as above recorded.
____________________