[Congressional Record Volume 140, Number 67 (Wednesday, May 25, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: May 25, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
CBO REPORT SHOWS ADMINISTRATION'S DEFENSE BUDGET IS SMOKE, MIRRORS, AND 
                             ROSY SCENARIOS

  Mr. GRASSLEY. Mr. President, I want to visit for just a short period 
of time about the budget problems at the Department of Defense, and 
what they say they are going to be able to do with their being 
overprogrammed for the amount of money that they are going to receive 
from the Congress over the next several years. That amount of money is 
a large, what I call a ``negative,'' funding wedge that they have to 
make up. They say they can do it easily. But I do not think they are 
going to do it very easily.
  Earlier I gave a speech updating my colleagues about the budget. I 
did it as an after-action report on the budget issues that Senator Exon 
and I presented to this body, and we ended up in the process with 
saving the taxpayers $13 billion. It was not quite as much as we had 
hoped for when we got a $26 billion amendment through here. But since 
the House did not do anything on it, saving $13 billion is a pretty 
good move, and at least it is better than rubberstamping what the 
President proposed to do.
  Today, I want to provide my colleagues an after-action report on 
another budget issue. This is what I just described about the defense 
budget in the overprogramming in that defense budget. I want to focus 
on what I call a plans/reality mismatch in that defense budget.
  In brief, the issue is whether the Pentagon's projected funding in 
the future year defense program exceeds the administration's proposed 
budget, and it does. It is overprogrammed.
  It is just plain nonsense that we want the generals at the Pentagon 
and the accountants at OMB to be singing from the same sheet of music. 
Common sense seems to be an endangered species in this budget process 
because I do not think they are singing from the same song sheet.
  The administration's proposals for defense show a negative funding 
wedge, and they call it ``future adjustments.'' It is kind of like a 
magic asterisk that shows up that somehow somebody in the future will 
show up and figure how to cut spending, and it is really a smoke screen 
for the fact that you do not want to make the decisions now, and you 
figure you never have to make them. This negative funding wedge amounts 
to at least $20 billion over the next 5 years. This is a plans/reality 
mismatch. The plans are so much, and the reality of it is that less 
than $20 billion has to be cut, or $20 billion has to be cut, and it 
will not be cut. The reality is it will not be cut. But the plans at 
the Defense Department do not show that reality.
  At my request, the General Accounting Office is reviewing whether or 
not this $20 billion is really $20 billion, or a lot more than $20 
billion. But even a $20 billion problem is a very big problem to deal 
with. I think we are going to be able to show it is bigger, and I have 
asked GAO to review the actual magnitude of that. GAO has already 
identified an additional $6 billion in negative funding wedges. So that 
brings the real total of the funding wedge to $26 billion.
  During hearings in the Budget Committee, Senator Lott and I asked OMB 
Director Leon Panetta, and also CEA Chairwoman Laura Tyson, and also 
Defense Secretary William Perry about this issue. All of them said that 
the problem was simply due to inflation, and it will be very easy to 
take care of.
  Well, the Congressional Budget Office, in its 1994 report entitled 
``An Analysis of the President's Budgetary Proposals for Fiscal Year 
1995,'' directly contradicts the testimony of these three officials of 
the Clinton administration.
  The CBO states:

       Clearly, the future adjustments to budget authority (for 
     defense) indicate funding problems beyond the question of 
     inflation estimates.

  So there it is from CBO as plain as day. The administration is flat 
out wrong that inflation is the sole cause of the problem for future 
adjustments. My concern is that the administration officials may have 
knowingly misled the Senate Budget Committee--or perhaps were misled 
themselves by conniving bureaucrats.
  I have written to CBO today to ask them to provide further details on 
this matter. I have also asked CBO to review the administration's claim 
that it cannot estimate for inflation in defense programs, even though 
the administration estimates for inflation in every other program in 
the budget.
  In other words, why is it that this administration--not just this 
administration, but previous administrations as well--can estimate for 
inflation in every other program in the Federal budget, but they cannot 
estimate for inflation at the time of putting the budget together in 
defense? Well, I am going to ask CBO to clarify that for us. But that 
is what the administration is telling us.
  As I said, this problem of plans/reality mismatch is not unique to 
this administration, because we have had magic asterisks and rosy 
scenarios with us for many years under both Republicans and Democrats. 
However, this administration is falling into this business-as-usual 
approach of previous administrations. They are courting ``Miss Rosy 
Scenario'' as arduously and successfully as any previous 
administration. So let us not hear any more about how this 
administration's budget is the most honest ever, that there are no 
smoke and mirrors, because there is $20 to $26 billion of it right 
there in the defense budget. It is not going to be easily taken care 
of.
  Senators Thurmond, Nunn, and Dole also mentioned this plans/reality 
mismatch in defense spending in their speeches regarding the fiscal 
year 1995 budget resolution. They, as leaders, are right to recognize 
the seriousness of addressing this problem.
  I hope to have in the near future--and I will have to have the 
cooperation of Senator Sasser as chairman and Senator Domenici as the 
ranking Republican on this--but I hope to have Secretary Perry testify 
side by side with Pentagon analysts who have uncovered this plans/
reality mismatch and get everybody that deals with this. One person has 
one opinion, and another person has another opinion, and we will lay 
the facts out on the table.
  I think those facts are very clearly going to tell us that this is 
not a problem that is going to be simply taken care of. The sooner we 
bite the bullet on it, the sooner we are going to get the problem 
solved.
  The General Accounting Office will soon be coming out with its report 
on this matter. After that report is issued, it will be my intention to 
ask Chairman Sasser to hold hearings on the General Accounting Office 
findings.
  Let me add that I worked very closely with Chairman Sasser on this 
issue during previous administrations, and his leadership has been much 
appreciated. I look forward to working with him again on this very 
important matter.
  I yield the floor.
  Mr. EXON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.

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