[Congressional Record Volume 141, Number 15 (Wednesday, January 25, 1995)]
[Senate]
[Pages S1535-S1536]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                   HOW TO BALANCE THE FEDERAL BUDGET

  Mr. GRAMM. Mr. President, we have heard recently requests from a 
number of colleagues and the President for an explanation of exactly 
how those of us who support the balanced budget amendment to the 
Constitution propose to achieve that goal after the States have 
ratified the amendment.
  Frankly, the demand for details has come from some of the same 
individuals who opposed the balanced budget constitutional amendment 
when it was considered last year and it is my belief that no matter how 
detailed a plan was presented, they would find fault with it.
  However, I do believe it is worth demonstrating to my inquiring 
colleagues that there is a specific, legislative path that we can 
follow in order to balance the Federal budget--S. 149, the Balanced 
Budget Implementation Act, which I introduced on January 4 of this 
year, the first day of the 104th Congress and which I originally 
introduced on February 16, 1993, as S. 377.
  The legislation outlines the procedures necessary to bring the 
Federal 
[[Page S1536]] budget into balance, including such reforms as a 
requirement that the annual budget resolution be signed into law by the 
President, the implementation of zero-based budgeting which requires 
the reauthorization of most current Federal spending programs in order 
for them to remain eligible for funding; the application of the Social 
Security spending formula to other entitlement programs; and an 
extension to the year 2002 of the limits placed on discretionary 
spending. These requirements will be enforced with 60-vote points of 
order and other mechanisms.
  This is the path to a balanced budget. I hope those of my colleagues 
who have requested such guidance will join me in following it.
  I ask unanimous consent that a more detailed explanation of the 
legislation be printed at the conclusion of my remarks.
  There being no objection, the explanation was ordered to be printed 
in the Record, as follows:

              Balanced Budget Implementation Act--Outline

                        (By Senator Phil Gramm)

       A bill to require and implement a balanced budget by the 
     year 2002.


   title 1.--require a joint budget resolution to force joint action 
                   between congress and the president

       (A) Joint resolution on the Budget: To remedy the lack of 
     cooperation and coordination between the President and 
     Congress resulting from the Congressional Budget and 
     Impoundment Control Act of 1974 which created two budgets--
     one Executive and one Congressional--the Balanced Budget 
     Implementation Act converts the present concurrent resolution 
     on the budget into a joint resolution on the budget which 
     must be signed by the President, ensuring joint Congressional 
     and Executive branch consensus on and commitment to each 
     annual budget.


         title 2.--zero-based budgeting & decennial sunsetting

       (A) For FY 1996 and FY 1997, Congress must re-authorize all 
     discretionary programs and all unearned entitlements: The 
     Balanced Budget Implementation Act adopts President Carter's 
     zero-based budgeting concept, mandating that before FY 1996 
     begins, the spending authority for all unearned entitlements, 
     and the spending authority for the most expensive one-third 
     of discretionary programs will expire. Entitlements earned by 
     service or paid for in total or in part by assessments or 
     contributions shall be deemed as earned, and their 
     authorization shall not expire. Entitlements not sunsetted 
     include Social Security, veterans benefits, retirement 
     programs, Medicare and others. Before FY 1997, the spending 
     authority of the remaining discretionary programs will 
     expire.
     Specifics
       By the beginning of FY 1997, all unearned entitlements and 
     discretionary programs will be subject to re-authorization. 
     If a specific unearned entitlement or discretionary program 
     is not re-authorized in a non-appropriations bill, it cannot 
     be funded and will be terminated.
       (B) Unauthorized programs cannot receive appropriations: 
     The Balanced Budget Implementation Act creates a point of 
     order in both Houses against any bill or provision thereof 
     that appropriates funds to a program for which no 
     authorization exists.
     Specifics
       Such point of order can be waived only by the affirmative 
     vote of 3/5ths of the whole membership of each House. Appeals 
     of the ruling of the Chair on such points of order also 
     require a 3/5ths affirmative vote of the whole membership of 
     each House.
       A 3/5ths point of order shall lie against any authorization 
     that is contained in an appropriation bill.
       (C) All discretionary programs and unearned entitlements 
     must be reauthorized every ten years: In the first session of 
     the Congress which follows the decennial Census 
     reapportionment, the spending authority for all unearned 
     entitlements and the most expensive one-third of all 
     discretionary programs will expire for the fiscal year that 
     begins in that session. In the second session of that 
     Congress, the spending authority for the remaining 
     discretionary programs will expire for the fiscal year that 
     begins in that session. This provision will be enforced by 
     the points of order contained in Section B) above.


title 3.--limit the growth of entitlements to the growth rate of social 
                                security

       (A) The Balanced Budget Implementation Act adopts President 
     Bush's proposal to limit the aggregate growth of all 
     entitlements other than Social Security to the growth rate 
     formula of Social Security for the period FY 1996 to FY 2002: 
     The aggregate growth of all entitlements other than Social 
     Security is limited to the growth rate formula of Social 
     Security, which is the consumer price index and the growth in 
     eligible population.
       (B) The Balanced Budget Implementation Act provides 
     flexibility in the growth rate of entitlement programs: An 
     individual entitlement program can grow faster than the 
     overall entitlement cap as long as the aggregate growth in 
     all entitlements (other than Social Security) does not exceed 
     the entitlement cap.
       (C) From FY 1996 to FY 2002, the aggregate spending growth 
     cap on entitlements will be enforced by an entitlement 
     sequester: The Balanced Budget Implementation Act provides 
     that if aggregate spending growth in entitlements exceeds the 
     total growth in consumer prices and eligible population, an 
     across-the-board sequester to eliminate excess spending 
     growth will occur on all entitlements other than Social 
     Security. A 3/5ths vote point of order lies against any 
     effort to exclude any entitlement from this sequester. This 
     sequester would be in effect until Congress passes 
     legislation which brings the entitlement program back within 
     the cap, and the President signs the bill.
   TITLE 4.--ESTABLISH FIXED DEFICIT TARGETS, RESTORE AND STRENGTHEN 
          GRAMM-RUDMAN, AND REQUIRE A BALANCED BUDGET BY 2002

       (A) Restore the fixed deficit targets of Gramm-Rudman (GR) 
     enacted by President Reagan: The Balanced Budget 
     Implementation Act modifies the existing GR maximum deficit 
     amounts and extends the GR sequester mechanism to balance the 
     budget by FY2002 and annually thereafter.
       The Fixed deficit targets established for the next seven 
     fiscal years will result in a balanced budget by the fiscal 
     year 2002:

Fiscal year:                                                   Billions
  1996.............................................................$145
  1997..............................................................120
  1998...............................................................97
  1999...............................................................72
  2000...............................................................48
  2001...............................................................24
  2002................................................................0

       The new maximum deficit amounts will be enforced by the 
     existing GR deficit sequester. After reaching a balanced 
     budget, the GR sequester mechanism will become permanent to 
     ensure the budget stays in balance.
       (B) Strengthen the GR points of order: The Balanced Budget 
     Implementation Act requires the strengthening of the existing 
     GR budget points of order.
     Specifics
       A point of order will lie against all actions that 1) 
     increase the deficit or 2) increase the limit on national 
     debt held by the public beyond the deficit levels required in 
     Section A & B (above). This point of order will lie in both 
     Houses, and may be waived only by a 3/5ths vote of the whole 
     membership of each House. An appeal of the point of order can 
     only be waived by a 3/5ths vote. No rule in either House can 
     permit waiver of such a point of order by less than 3/5ths 
     affirmative vote of the whole membership of such House nor 
     can such point of order be waived for more than one bill per 
     vote on such point of order.
       Once the budget is balanced, all points of order will 
     become permanent to ensure the budget stays in balance.
       (C) Protect Social Security: Social Security will be 
     protected fully by 1) preserving the existing points of order 
     to protect the Social Security trust fund; an 2) providing 
     expedited procedures in 2002 for consideration of additional 
     legislation to balance the budget excluding the Social 
     Security Trust Fund.
       (D) Extend the Discretionary Spending Caps: President 
     Clinton proposed extending the existing caps on total 
     discretionary budget authority and outlays to cover the 
     fiscal years 1999 and 2000. That cap will be extended to also 
     apply to the fiscal year 2001 and 2002, at the same level of 
     President Clinton's proposed extension.
                                Outlays

Fiscal year:                                                   Billions
  1998...........................................................$542.4
  1999............................................................542.4
  2000............................................................542.4
  2001............................................................542.4
  2002............................................................542.4

       (E) Look Back Sequester: In the last quarter of every 
     fiscal year, a ``look back'' sequestration is required to 
     eliminate any excess deficit for the current year. This look 
     back sequester will guarantee that the actual deficit target 
     set for that year is achieved.
     Specifics
       On July 1 of every fiscal year, the Office of Management 
     and Budget (OMB) will order an initial look back sequester 
     based on the most recent OMB deficit estimates. On July 15, 
     the OMB Mid-Session Review will update and finalize the 
     sequester order. The final order will stay in effect unless 
     offset by appropriate legislation to bring the deficit into 
     compliance with that year's target.
     

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