[Congressional Record Volume 140, Number 53 (Thursday, May 5, 1994)]
[House]
[Page H]
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[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.

                          ____________________