[Congressional Record Volume 141, Number 96 (Tuesday, June 13, 1995)]
[House]
[Pages H5762-H5763]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                           CAPITAL BUDGETING

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from West Virginia [Mr. Wise] is recognized 
during morning business for 5 minutes.
  Mr. WISE. Mr. Speaker, what I want to do today is to announce that 
yesterday 36 of my colleagues and I sent to the President of the United 
States this letter. In this letter, what we do is to ask the President 
to consider capital budgeting as one approach to whatever budget 
eventually emerges from this Congress and in negotiations with Congress 
and the White House.
  What is capital budgeting? Capital budgeting is very simple. It is 
what every family in this country does, it is what every business in 
this country does, it is what every State and local government does. 
There is only one group that does not do it, and that is the Federal 
Government.
  Capital budgeting simply says that you show your long-term 
investments, those things that bring you back more than you actually 
spend on them over time, separately from your operating expenses.
  What we do in the Federal Government is a dollar spent for welfare is 
considered exactly the same as a dollar spent for bridges and 
infrastructure and research and development, for those things that are 
so important to make us grow.
  That makes no sense. What we do is to ask that for the first time, 
the Federal Government operate on a capital budget that deals with 
physical infrastructure, the roads, the bridges, the airports, the 
water and sewer systems, the telecommunications networks, those things 
that are physical and have tangible value.
  The reality is this country, for instance, spends far less in 
proportion to its budget than many of our industrial competitors. 
Japan, with half the population and about 60 percent of the economy 
that the United States has, spends more in real dollars on its 
infrastructure than the United States does. Then we wonder sometimes 
why we are having trouble competing.
  What we ask is that we have capital budgeting. This Congress has a 
precedent with that. Both 2 years ago and again just a few months ago 
on the floor of this House when the constitutional amendment to balance 
the budget was up, last time 139 Members of the House voted for my 
amendment that would have permitted capital budgeting. We had a large 
vote before and a significant number of Republican Members as well as 
Democrat Members supported it 2 years earlier.
  This offers to Republican leaders and to Democrat leaders a way to 
meet the balanced budget requirements, to introduce some appropriate 
accounting methods to bring the Federal Government into line with 
everyone else, and to encourage investment. Where do you get a win-win-
win-win situation like this? Capital budgeting, I think, is crucial to 
this.
  There is no doubt that our Nation's infrastructure is in need of 
replacement. I notice that one of the growth industries as I drive 
around the country seems to be orange barrels. Sometimes those orange 
barrels mean that construction is taking place. Other times those 
orange barrels mean there is simply a problem and we do not have the 
money to deal with it.
  Almost half the Nation's bridges are in some way substandard. Two 
hundred twenty some thousand miles of highway needs some kind of 
immediate work. Clearly our infrastructure needs work, needs rebuilding 
and needs building. Capital budgeting permits that to happen.
  There are going to have to be a lot of painful cuts in the balanced 
budget [[Page H5763]] proposal. Everyone understands that. There is 
going to be a legitimate debate about whether it takes 7 years to get 
to that goal or 8 years or 10 years. We all understand that.
  There is going to be a lot of partisanship on this floor. That is a 
given. But it does seem to me that where we can find bipartisan 
solutions to meet this challenge of balancing the budget, we ought to 
be about that business.
  Capital budgeting has been advanced very ably by Republican leaders 
such as the chairman of the Committee on Government Reform and 
Oversight, the gentleman from Pennsylvania [Mr. Clinger], the chairman 
of the Committee on Transportation and Infrastructure, the gentleman 
from Pennsylvania [Mr. Shuster], the ranking member, the gentleman from 
California [Mr. Mineta], myself, and others. Capital budgeting is truly 
a bipartisan solution to many of the problems that face this Federal 
Government and its budgeting concerns.
  Once again, Mr. Speaker, and the reason we have written the President 
is where else can you bring the
 Federal Government in line with every other accounting entity, bring 
the Federal Government in line with every business, with every family, 
with every State and local government? Where else can you get the 
Federal Government on an accounting system that is entirely 
appropriate? Where else can you get the Federal Government on a system 
that encourages investment, not discourages growth? Where else can you 
get the Federal Government actually moving faster toward a balanced 
budget and at the same time encouraging the growth that we think is so 
important?

  The reality is we are going to have to encourage growth in any 
balanced budget proposal. You cannot simply cut your way to fiscal 
nirvana. Capital budgeting offers that. It is appropriate. Every CPA 
can tell you that. I hope that the President will follow up on this 
suggestion.

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