[Congressional Record Volume 141, Number 64 (Thursday, April 6, 1995)]
[House]
[Page H4400]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


             THE PIECES OF THE CONTRACT DO NOT FIT TOGETHER

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from South Carolina [Mr. Spratt] is recognized for 5 minutes.
  Mr. SPRATT. Mr. Speaker, tomorrow the Republicans in the House will 
celebrate the completion or at least the passage through the House of 
their Contract With America.
  I do not like to rain on anybody's parade, but I have to predict, as 
the parts of this contract which were passed separately are pieced 
together, I am afraid we are going to find that all the pieces do not 
fit. Particularly I think there is going to be a misfit when it comes 
to fitting together revenues and expenditures, the budget, and 
fulfilling the prediction of a balanced budget by the year 2002.
  I say that because yesterday in the final act of this contract we 
adopted a bill called H.R. 1215, which will reduce the tax revenues 
that flow into the Government by $189 billion over the next 5 years and 
by $630 billion over the next 10 years.
  I think it is fair to ask here in the Congress, out in the country, 
how do we do that? How do we cut taxes by $630 billion and increase 
defense spending as the contract seems to promise or at least hold 
defense spending constant and at the same time bring the budget into 
balance by the year 2002?
  Well, one way the bill proposed yesterday and passed yesterday offers 
is to lower what we call the cap on discretionary spending, 
nonentitlement spending by $100 billion cumulatively over the next 5 
years. Before the vote yesterday, the chairman of the Committee on the 
Budget, Mr. Kasich, sent to us an illustrative list of domestic 
spending cuts that totaled $100 billion showing how we could get $100 
billion out of discretionary spending over the next 5 fiscal years. 
None of these cuts has been voted on yet, and it would be miraculous to 
me if half of them were ever approved.
  But let's take the list that Mr. Kasich proposed at face value and 
note this about it. It very conveniently ignored or failed to note 
anything at all. It was silent on the issue of defense spending, and 
yet defense spending constitutes fully half of discretionary spending. 
Discretionary spending is right now about $545 billion. Defense 
spending is about $270 billion.
  Mr. Kasich has said elsewhere that he would like
   to see defense spending frozen at its current level of about $270 
billion a year. What I would like to do tonight is just explore the 
consequences of that. Let's put the other sphere on the first sphere, 
defense spending and discretionary spending, domestic discretionary 
spending together and see what happens.

  If we combine the lower caps, that $100 billion lower cap, which are 
provided for by H.R. 1215 with a constant outlay stream of $270 billion 
for defense every year, an outlay freeze, we see from this first chart 
which I have here that we will need to make $41.4 billion in budgetary 
cuts, in nondefense discretionary programs in fiscal year 1996. And 
that begins, in effect, next month because that is when we begin the 
budget for fiscal 1996.
  As you can see on this chart, these cuts in nondefense programs would 
have to rise to $66 billion in fiscal year 1998, and that constitutes a 
23.5-percent cut below the current budget level of expenditure, 23.5 
percent of student loans, 23.5 percent of Head Start, 23.5 percent of 
ag programs, job training, the Drug Enforcement Agency, the FBI and the 
Federal court system. Over the course of this year we would have to 
take off 23.5 percent and over the course of 5 fiscal years the cuts in 
nondefense spending required by holding defense spending constant at 
this year's level would add up to $187 billion, which is $87 billion 
more than the chairman of the Committee on the Budget spelled out in 
the illustrative list that he sent out to us yesterday.
  There is a second chart I have here that depicts the same story, only 
in a different way. You can see from this chart, the blue line at the 
top is the proposed level of discretionary spending for domestic 
programs, nondefense programs, and President Clinton's budget. It runs 
from $260 to $280 billion, and it is roughly flat between $275 and $280 
for 5 fiscal years.
  But if we make these changes I am talking about it drops immediately 
from $260 to $220 and from $280 down to about $220, a $60 billion cut, 
very severe reductions.
  The term defense freeze sounds sort of noncontroversial, benign, 
uneventful, but the purpose of these charts is to show you that it will 
trigger deep nondefense spending cuts because of the linkage between 
something we call budget authority and outlays. Budget authority are 
what we budget, what we pass around here every year. Outlays are what 
the government actually spends. And there is a difference between the 
two because we have to put up lots of budget authority, particularly 
for defense programs, and yet it takes the Department of Defense years 
in building a carrier to spend out all of that budget authority.
                              {time}  1915

  There is a difference between the two. Because discretionary outlay 
is a cap, an increase in defense budget authority requires a 1-to-1 
decrease in the budget authority of nondispensed accounts. Anything you 
put in defense, you have to take out of nondefense.
  An outlay freeze seems to say, well, we just hold things like they 
are. But a defense outlay freeze means anything but the status quo for 
a nondefense program.
  The cuts I have just gone over assume a hard freeze, that is, a flat 
freeze on defense spending. It would not be adjusted up or down except 
for inflation.

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