[Congressional Record Volume 141, Number 58 (Wednesday, March 29, 1995)]
[Extensions of Remarks]
[Pages E715-E716]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


            LEGISLATION TO CHANGE BUDGET SCOREKEEPING RULES

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                      HON. JAMES A. TRAFICANT, Jr.

                                of ohio

                    in the house of representatives

                         Tuesday, March 28, 1995
  Mr. TRAFICANT. Mr. Speaker, last week I introduced legislation, H.R. 
1325, to change the current budget scorekeeping rules as they relate to 
Federal real estate transactions. As chairman of the Public Works and 
Transportation Subcommittee on Public Buildings and Grounds in the last 
Congress, I held several hearings on the way in which the Office of 
Management and Budget scores Federal real estate transactions. The 
hearings underscored previous findings by the General Accounting Office 
that the Federal Government is wasting hundreds of millions dollars a 
year in unnecessary long-term leases. This waste is due primarily to 
the fact that current budget scorekeeping rules prevent the General 
Services Administration from pursuing a full range of financing options 
to meet the Federal Government's office space needs.
  In response to these findings, I moved in a bip-partisan fashion and 
introduced legislation to solve the problem. the bill I introduced in 
the last Congress, H.R. 2680, was co-sponsored by leaders from both 
parties on the Committee, including Norman Mineta, Bud Shuster, John 
Duncan and Eleanor Holmes Norton.
  In the summer of 1994, H.R. 2680 was approved by the Public Works and 
Transportation Committee and referred to the Government Operations 
Committee. Last August, the Government Operations Committee heard 
testimony from Norm Mineta and myself on behalf of the legislation as 
part of a series of hearings the committee held on the budget process. 
Unfortunately, the bill was never acted on by the House prior to 
adjournment. The bill I introduced last week, H.R. 1325, is identical 
to the bill I introduced in the last Congress.
  H.R. 1325 would change Federal budget accounting rules to allow GSA 
to utilize a full range of financing mechanisms in meeting Federal 
office space needs. Under current Federal budget scorekeeping rules, 
which were established in the 1990 Budget Act, the entire cost of a 
Federal construction project or building purchase, must be scored in 
the first year of the project, rather than amortized over the actual 
construction period, or over the expected life of a purchased building. 
For leases, the rules require that only the annual rent costs be 
scored. The end result is that operating leases have become the most 
attractive vehicle for GSA, the Federal Government's real estate arm, 
to meet the housing needs of Federal agencies--even through in the 
long-term it is the most costly.
  The bill amends the Public Buildings Act of 1959 to treat Federal 
real estate transactions in the same manner they were treated prior to 
the implementation of the 1990 Budget Act. The bill would allow GSA to 
utilize alternative financing mechanisms, such as lease-purchases or 
time financing.
  In 1975 GSA's leasing budget was $388 million. In 1994 GSA is slated 
to spend more than $2.5 billion on Federal leases. A December 1989 
report issued by GAO analyzed 43 projects that GSA might have 
undertaken if capital financing were available to replace space that 
GSA would otherwise lease. GAO estimated that, over a 30-year period, 
constructing the 43 projects instead of leasing, would have saved 
taxpayers $12 billion.
  Financing by lease purchase is inappropriately being compared by OMB 
to direct Federal construction, when the correct comparison should be 
with the cost long-term leasing. My goal is to ensure that GSA has all 
the financing tools available to the private sector. Currently GSA does 
not have the ability to get the 
[[Page E716]]  best possible deal for the taxpayer--because of the 
scoring rules. GSA should be able to, on a project by project basis, 
determine the most cost effective and efficient way to finance a 
particular Federal real estate transaction. My bill will give GSA this 
ability. In the long term, H.R. 1325 will save the taxpayer hundreds of 
millions of dollars. I urge my colleagues to support the bill.


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