[Congressional Record Volume 141, Number 191 (Monday, December 4, 1995)]
[Extensions of Remarks]
[Pages E2280-E2282]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      CONFERENCE REPORT ON H.R. 2491, SEVEN-YEAR BALANCED BUDGET 
                       RECONCILIATION ACT OF 1995

                                 ______


                               speech of

                          HON. STEVE GUNDERSON

                              of wisconsin

                    in the house of representatives

                       Friday, November 17, 1995

  Mr. GUNDERSON. Mr. Speaker, today as the House considers the 
conference report on the Seven-Year Balanced Budget Act of 1995, we 
move one step closer to a goal I have supported for a long while. The 
first bill I cosponsored as a freshman Representative in 1981 amended 
the U.S. Constitution to require a balanced Federal budget. At that 
time, I firmly believed it was time to get our fiscal house in order, 
when the deficit was $79 billion and the national debt stood at $994 
billion.
  Fifteen years later, the deficit has grown to $206 billion--nearly 
three times of what it was in 1981. The national debt has jumped to 
$4.9 trillion or nearly five times the 1981 level. Further, in fiscal 
year 1995, we spent $234 billion on interest on the national debt 
alone. That's 17 percent of the Federal budget. It also represents more 
than we spent on education, job training, child nutrition and public 
works projects combined.
  Unless we balance the budget, interest on the debt will continue to 
eat into spending on other worthwhile Federal programs. Just look at 
how interest on the debt dwarfs our spending on certain vital human 
resources programs: In fiscal year 1995, we spent 66 times more on 
interest on the national debt than we did on the Head Start Program. We 
spent 32 times more on interest on the national debt than we did on the 
title I program which benefits disadvantaged grade-school kids. We 
spent 149 times more on interest on the national debt than we spent on 
all elementary and secondary school improvement programs. We spent 158 
times more on interest on the national debt than we did on Federal aid 
to vocational education, 180 times more than on the JOBS program to get 
people off welfare, and 212 times more than on Jobs Corps. Clearly this 
is a distorted sense of priorities.
  If we continue our spending priorities for the next 7 years, the 
deficit would balloon from $210 billion in fiscal year 1996 to $349 
billion. That's a 66-percent increase. The national debt would increase 
by $1.7 trillion during that same period.
  Just as increased debt interest threatens programs, the lack of 
balance between our coveted entitlement programs and discretionary 
programs is alarming. Entitlement programs such as Social Security, 
Medicare, and Medicaid make up 64 percent of the Federal budget. 
Discretionary programs, such as defense, education, and job training 
make up only 36 percent. This disparity is growing and without 
significant changes in spending priorities, by 2012 entitlement 
spending will consume the entire budget.


               the seven-year balanced budget act of 1995

  I believe that we have made the right choices to put this country on 
a path toward a balanced budget. Back in June, the House approved the 
budget blueprint that laid the foundation for this change. Today, we 
actually implement the changes necessary to slow the rate of Federal 
spending over the next 7 years.
  Over the next 7 years we will reduce spending growth and reduce the 
Federal deficit by a total of $1.2 trillion. But it is important to 
note that slowing the rate of growth in spending is not a cut. The 
numbers amply demonstrate this assertion.
  Over the last 7 years, between 1989 and 1995, we spent a total of 
$9.5 trillion. Over the next 7 years, while balancing the budget, we 
will spend $13.3 trillion. That's $2.6 trillion more than in the past 7 
years. If we do nothing, we would spend $13.3 trillion over 7 years. We 
are not cutting the budget, but are finally putting our own house in 
order within a reasonable timeframe.
  A comparison between spending levels in fiscal year 1995 and levels 
in fiscal year 2002 shows the effect of imposing fiscal discipline. 
Under current assumptions, spending would increase by $600 billion or 
40 percent. Under the assumption of a balanced budget, spending would 
increase by $358 billion or 24 percent. Only in Washington would a $358 
billion increase be called a cut.


               a look at key areas for the third district

  A quick review of the provisions of the Seven-Year Balanced Budget 
Act reveals challenging but acceptable changes in Medicare, student 
loan funding, and tax policy. It also reveals a glaring deficiency--the 
failure to reform Federal dairy programs.


                                medicare

  The Medicare Program has continued to grow exceedingly fast in recent 
years. The Medicare trustees reported earlier this year that without 
strengthening the system, Medicare will go broke by 2002. I believe 
that the budget package maintains the vital commitment to health care 
for seniors while ensuring that the program will be around far into the 
future.
  Under the budget package, average per beneficiary spending would 
increase from $4,800 to $6,700 over the next 7 years, or a $1,900 
increase per retiree. Most importantly, premiums would remain at 31.5 
percent of part B costs. Just as they have since the program was 
started, premiums would increase slightly every year.


                          student loan reform

  The student loan program has provided essential opportunities to 
those who wish to further their education. But in order to preserve 
those opportunities far into the future, the House and Senate agreed to 
reduce the costs of the student loan program by $4.9 billion over 7 
years.
  Perhaps what is most important about the House-Senate agreement is 
that it does not increase costs to students or parents. The plan does 
not eliminate the in-school interest subsidy for undergraduate or 
graduate students. It does not eliminate the 6-month grace period for 
students leaving school to begin repaying their loan. It does not 
modify eligibility or access to student loans, nor does it increase the 
origination loan fee paid for by students.
  Now, let's look at what the plan would do. The budget package would 
cap the administration's direct student loan program at its current 10 
percent level of the student loan volume. As many know, I do not 
believe the Government should become banker to students. At a time when 
Congress is trying to refocus the role of the Federal Government toward 
functions that it does well, the direct loan program heads in the wrong 
direction.

[[Page E 2281]]

  The budget package would also gain savings banks, secondary markets 
and guaranty agencies by lowering reimbursement fees for defaulted 
loans and other technical changes. Finally, the package would limit 
certain administrative expenses borne by the Department of Education. I 
am confident that the budget package does the most to help the budget 
at the least cost to students, parents and schools.


                         pro-growth tax policy

  The budget package agreement between the House and Senate provides 
for $245 billion in tax cuts over 7 years, just 2 percent of the 
Federal budget. Like many of us, I was genuinely leery of providing tax 
cuts at the very time we are trying to balance the budget. However, as 
we are limiting the growth in Federal programs, we still need to 
promote economic growth in the private sector. The tax package 
accomplishes this in a reasonable fashion.
  The conference agreement would impose a 50 percent capital gains tax 
cut for individuals and a 25 percent reduction for corporations 
retroactive to January 1, 1995. There is a misperception that a capital 
gains tax is important only to rich people, but actually most capital 
gains deductions are taken by middle class families. In 1993, the last 
year for which we have data, 60 percent of the tax returns claiming 
capital gains had adjusted gross incomes below $50,000, and 77 percent 
had adjusted gross incomes of below $75,000.
  Many in western Wisconsin will benefit from the reduction in the 
capital gains taxes. Most important among these is the retiring farmer 
that wants to sell his farm and rely on the proceeds for retirement 
income. At the present time, he must pay a 38 percent tax. Homeowners 
and small businesses--the businesses that create the most jobs--will 
also benefit from this middle-class initiative.
  The package before us will also benefit western Wisconsin because it 
includes expanded individual retirement account to spur savings. People 
would be able to contribute taxable amounts to the account, and then 
after 5 years would be able to withdraw money tax-free for certain 
purchases, including first-time home, long-term care expenses, post-
secondary education needs, and retirement income. This account is pro-
savings, pro-investment and pro-growth.
  The package also includes a tax credit of $500 per child under 18 
years for all individuals with income below $75,000 a year and all 
people filing joint returns with incomes below $110,000. Although 
uneasy with the House-passed version which allowed tax cuts for 
families with incomes of up to $200,000, I find the reduced income 
limit is much more acceptable.


                    reform of federal dairy program

  What is most troubling about the package brought to us today is that 
it is devoid of any reform whatsoever in Federal dairy programs. The 
Congressional Budget Office has consistently estimated that artificial 
incentives to produce fluid milk in Federal milk marketing orders, the 
so-called class I differentials, cost taxpayers over $100 million in 
additional spending on the dairy price support program and the Dairy 
Export Incentive Program [DEIP] annually.
  Obviously, class I differentials which are set by statute without 
regard to class I utilization also increase the cost of milk in grocery 
stores to consumers and the cost of the Federal WIC and special milk 
programs by millions of dollars annually. Their only purpose today is 
to provide additional revenue to dairy producers in a couple of areas 
of the country at the expense of producers in other areas as well as 
taxpayers and consumers around the country.
  Simply stated, there is no single Federal program more in need of 
substantial reform than Federal milk marketing orders. Even the most 
ardent advocates of the order system acknowledge that fact. That's why 
our country and our constituents cannot afford to let a small minority 
of Members forestall these reforms when the time comes to put a second 
balanced budget package together.
  In sum, today we are one step closer to our central goal of balancing 
the budget. A balanced budget will ensure sustained growth for the 
future, more opportunity for education, job growth and a better 
competitive position in the world market. I look forward to the day 
when we can say that we took the high road toward fiscal responsibility 
and put our national fiscal house in order.

[[Page E 2282]]


                       SENATE COMMITTEE MEETINGS

  Title IV of Senate Resolution 4, agreed to by the Senate on February 
4, 1977, calls for establishment of a system for a computerized 
schedule of all meetings and hearings of Senate committees, 
subcommittees, joint committees, and committees of conference. This 
title requires all such committees to notify the Office of the Senate 
Daily Digest--designated by the Rules Committee--of the time, place, 
and purpose of the meetings, when scheduled, and any cancellations or 
changes in the meetings as they occur.
  As an additional procedure along with the computerization of this 
information, the Office of the Senate Daily Digest will prepare this 
information for printing in the Extensions of Remarks section of the 
Congressional Record on Monday and Wednesday of each week.
  Meetings scheduled for Tuesday, December 5, 1995, may be found in the 
Daily Digest of today's Record.

                           MEETINGS SCHEDULED

                               DECEMBER 6
     9:00 a.m.
       Conferees on S. 652, to provide for a pro-competitive, de-
           regulatory national policy framework designed to 
           accelerate rapidly private sector deployment of 
           advanced telecommunications and information 
           technologies and services to all Americans by opening 
           all telecommunications markets to competition.
                                                      S-5, Capitol
     9:30 a.m.
       Energy and Natural Resources
         Business meeting, to consider pending calendar business.
                                                            SD-366
       Governmental Affairs
         To hold hearings on S. 356, to amend title 4, United 
           States Code, to declare English as the official 
           language of the Government of the United States.
                                                            SD-342
       Labor and Human Resources
         To hold joint hearings with the Committee on Small 
           Business on certain issues relating to modifications to 
           the Occupational Safety and Health Act of 1970.
                                                            SD-106
       Small Business
         To hold joint hearings with the Committee on Labor and 
           Human Resources on certain issues relating to 
           modifications to the Occupational Safety and Health Act 
           of 1970.
                                                            SD-106
       Indian Affairs
         To hold oversight hearings on the implementation of the 
           Native American Graves Protection and Repatriation Act 
           (P.L. 101-601).
                                                            SR-485
     10:00 a.m.
       Special Committee To Investigate Whitewater Development 
           Corporation and Related Matters
         To continue hearings to examine certain issues relative 
           to the Whitewater Development Corporation.
                                                            SH-216
     10:15 a.m.
       Armed Services
         To hold hearings on the Bosnian Peace Agreement, the 
           North Atlantic Council military plan and the proposed 
           mission for U.S. military forces deployed with the 
           implementation Force (IFOR).
                                                            SD-G50
     2:00 p.m.
       Commission on Security and Cooperation in Europe
         To hold hearings to examine the documentation of crimes 
           against humanity in Bosnia-Herzegovina and Croatia this 
           year.
                                             2322 Rayburn Building

                               DECEMBER 7
     9:30 a.m.
       Governmental Affairs
         To hold hearings on S. 94, to amend the Congressional 
           Budget Act of 1974 to prohibit the consideration of 
           retroactive tax increases.
                                                            SD-342
       Rules and Administration
         To hold hearings to examine how to manage Senate 
           technology in the information age.
                                                            SR-301
     10:00 a.m.
       Judiciary
         Business meeting, to consider pending calendar business.
                                                            SD-226
       Special Committee To Investigate Whitewater Development 
           Corporation and Related Matters
         To continue hearings to examine certain issues relative 
           to the Whitewater Development Corporation.
                                                            SH-216

                              DECEMBER 12
     9:30 a.m.
       Energy and Natural Resources
       Parks, Historic Preservation and Recreation Subcommittee
         To hold hearings on S. 873, to establish the South 
           Carolina National Heritage Corridor, S. 944, to provide 
           for the establishment of the Ohio River Corridor Study 
           Commission, S. 945, to amend the Illinois and Michigan 
           Canal Heritage Corridor Act of 1984 to modify the 
           boundaries of the corridor, S. 1020, to establish the 
           Augusta Canal National Heritage Area in the State of 
           Georgia, S. 1110, to establish guidelines for the 
           designation of National Heritage Areas, S. 1127, to 
           establish the Vancouver National Historic Reserve, and 
           S. 1190, to establish the Ohio and Erie Canal National 
           Heritage Corridor in the State of Ohio.
                                                            SD-366
       Small Business
         To hold hearings on proposals to strengthen the Small 
           Business Investment Company program.
                                                           SR-428A
       Indian Affairs
         Business meeting, to mark up S. 814, to provide for the 
           reorganization of the Bureau of Indian Affairs, and S. 
           1159, to establish an American Indian Policy 
           Information Center.
                                                            SR-485

                              DECEMBER 14
     9:30 a.m.
       Energy and Natural Resources
         To hold hearings on S. 1271, to amend the Nuclear Waste 
           Policy Act of 1982.
                                                            SD-366