[Congressional Record Volume 141, Number 4 (Monday, January 9, 1995)]
[Senate]
[Page S677]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ABRAHAM:
  S. 183. A bill to provide that pay for Members of Congress shall be 
reduced whenever total expenditures of the Federal Government exceed 
total receipts in any fiscal year, and for other purposes; to the 
Committee on Governmental Affairs.


              the congressional fiscal responsibility act

    
    
 Mr. ABRAHAM. Mr. President, I introduce S. 183, the 
Congressional Fiscal Responsibility Incentive Act, which provides that 
the salary of Members of Congress be reduced by 10 percent whenever the 
Federal Government is unable to balance the budget at the close of a 
fiscal year. If further provides that such a reduced salary level 
remain in effect until the Government is successful in achieving a 
balanced budget. The bill's requirements would ``sunset,'' however, 
upon passage of a balanced budget constitutional amendment by both 
Houses of the Congress.
  It is a fundamental responsibility of Government to live within its 
means. When it fails to do so, damaging economic consequences result--
either in terms of increased levels of inflation, higher interest 
rates, or diminished levels of capital for private investment. The 
principal reason for the Federal Government failing to balance its 
budget is that Members of Congress find it difficult to resist 
temptations to spend more money than they are willing to raise from 
taxpayers. There is strong political incentive for Members to engage in 
deficit spending. On the one hand, they reap the benefits of such 
spending by pleasing individuals who are its beneficiaries. On the 
other hand, they do not have to displease other individuals who would 
otherwise have to pay higher taxes to support the spending.
  This political incentive structure encourages deficit spending and 
the negative economic consequences which flow from such spending. In 
part, I support the balanced budget constitutional amendment because I 
believe that it would alter these incentives. However, until such time 
as the balanced budget amendment is passed by both Houses of the 
Congress I would propose a more limited restructuring of incentives. 
The proposed legislation would hold Members collectively responsible 
for year-end deficits by reducing their pay.
  Such a pay reduction is premised upon the fact that the Congress has 
failed in an essential responsibility when it has failed to legislate a 
balanced budget. By demonstrating an inability to contain its appetite 
for spending, the Congress has acted irresponsibly by imposing upon the 
present and future generations of the American people the burdens of 
deficit spending. As a result, the long-term fiscal stability of the 
country which Members of Congress have been selected to govern is 
eroded. The disincentive toward deficit spending contained in S. 183, 
while admittedly an imprecise counterweight to the political incentives 
which operate in favor of deficit spending, at least balances to some 
degree the calculus of forces confronting Members who are tempted by 
the lure of deficit spending.
  Section 1 of S. 183 sets forth in short title, the Congressional 
Fiscal Responsibility Incentive Act. Section 2(a) defines the essential 
procedures by which a determination is made at the end of each fiscal 
year whether or not a balanced budget has been achieved. If it has not 
been achieved, the 10 percent pay cut takes effect immediately. Such a 
reduction in pay is maintained until it is determined, by the same 
procedures, that a balanced budget has been achieved for a subsequent 
fiscal year. Section 2(b) sets forth procedures designed to ensure that 
the objectives of this legislation are not undermined in various ways. 
It would require that measures to increase congressional pay not be 
combined in bills laden with other subjects and it would require that a 
explicit rollcall vote be cast on pay increases. Finally, section 3 
would have the proposed legislation take effect in connection with the 
first fiscal year beginning after its enactment. It would also 
``sunset'' the legislation upon the passage of a balanced budget 
constitutional amendment by both Houses of the Congress. Under this 
amendment, a balanced budget would become the norm and further deficit 
spending would require the express support of a three-fifths super 
majority of each House of the Congress.
  Mr. President, S. 183 is not a panacea for our current fiscal 
problems. However, until such time as a balanced budget amendment is 
placed into the Constitution, it would effect a small but potentially 
important step toward more responsible Government.
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