[Congressional Record Volume 141, Number 20 (Wednesday, February 1, 1995)]
[Extensions of Remarks]
[Pages E241-E242]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


        INTRODUCTION OF THE FEDERAL BUDGET STRUCTURE ACT OF 1995

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                      HON. WILLIAM F. CLINGER, JR.

                            of pennsylvania

                    in the house of representatives

                       Wednesday, February 1, 1995
  Mr. CLINGER. Mr. Speaker, today I introduced the Federal Budget 
Structure Act of 1995. I am joined by my good friend and colleague, 
Representative Bob Wise, one of Congress' most forceful advocates of 
capital budgeting. While maintaining a unified budget, this 
[[Page E242]] legislation seeks to identify, define, and present 
separate operating and capital components of the Federal budget, and to 
distinguish between Federal funds and trust funds.
  I want to emphasize that this legislation retains the unified budget. 
It does not attempt to reduce the appearance of the Federal budget 
deficit through smoke and mirrors by taking capital expenditures off-
budget. It seeks to provide what the existing budget presentation does 
not--adequate information on the revenues, expenditures, surplus/
deficit amounts, and financing requirements for capital activities of 
the Federal Government. It also attempts to provide a distinction 
between Federal funds and trust funds, and between capital and 
operating activities in a manner which does not hinder identifying the 
resources needed to meet the Government's capital infrastructure needs.
  As a concept, capital budgeting is very simple. It is nothing more 
than a planning device relied upon by business leaders and many State 
and local officials to help prioritize spending for the future. A 
capital budget, properly implemented, would improve the budget as a 
reporting, control, accounting, priority-setting, and
 fiscal policy tool. A capital budget assumes that capital is a limited 
resource, and for planning purposes, there is a need to develop the 
best possible strategy to insure that future demands can be met.

       The benefits of a capital budget are many. A capital 
     budget:
       Focuses attention to a greater degree on the deteriorating 
     physical infrastructure of the Nation and allows us to make 
     more rational investment decisions;
       Promotes intergenerational equity by burdening future 
     generations with debt service only for activities that 
     provide future tangible benefits;
       Provides more equitable budget treatment of capital 
     activities by avoiding the current front-end loading of the 
     full costs in the first year; and
       Shows that borrowing to finance capital investments is 
     accompanied by an increase in the Nation's assets.
       A capital budget that remains part of the unified budget 
     may also help us better define ``What is a balanced budget?'' 
     As we move in the direction of a balanced budget, we need to 
     more fully explore whether it makes sense for the Federal 
     Government to balance its annual budget under current 
     bookkeeping practices.

  I am always frustrated by the process by which we make our budget 
decisions and the lack of information at our disposal. Cuts are 
displayed either agency by agency, function by function, or program by 
program but generally there is no distinction about the substance of 
the cuts, whether they're reductions in investment spending such as new 
highways, or cuts in operational expenses of an agency.
  When the House is fashioning budget resolution, as we're doing now, 
there is a similar lack of information about the nature of our spending 
proposals; that is, to what degree are we investing in assets, 
consumables, operating expenses, and human enterprise programs. The 
current budget process makes no distinction.
  Capital budgeting can help all of us do a better job planning for 
future spending in a more informed manner. It is not a gimmick and does 
not attempt to gloss over one Federal activity at the expense of 
another. It simply seeks to identify two very fundamental and distinct 
economic activities--spending on assets, and spending on operations.
  I encourage all Members to cosponsor and support this worthwhile 
legislation.


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