[Congressional Record Volume 143, Number 23 (Thursday, February 27, 1997)]
[Extensions of Remarks]
[Page E339]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


        INTRODUCING THE BALANCED BUDGET ENFORCEMENT ACT OF 1997

                                 ______
                                 

                        HON. PETER J. VISCLOSKY

                               of indiana

                    in the house of representatives

                      Thursday, February 27, 1997

  Mr. VISCLOSKY. Mr. Speaker, today, I am joined by our colleague, 
Representative Charlie Stenholm, in introducing the Balanced Budget 
Enforcement Act of 1997. This legislation, which was originally 
introduced by former chairman of the Budget Committee, Leon Panetta, 
would put in place tough, new measures to reform the budget process and 
eliminate the Federal budget deficit by the year 2002.
  It would do so by using a unique combination of an annual cap on 
appropriations, reconciliation, and sequestration, to pressure the 
President and the Congress to achieve annual deficit reduction goals, 
resulting in a balanced budget in 2002 and each year thereafter. Unlike 
similar pieces of legislation designed to produce a balanced budget, 
the Balanced Budget Enforcement Act contains no loopholes, and is 
designed to reward committees which meet their deficit-reduction 
responsibilities. A more detailed summary of the legislation appears 
after these remarks.
  Like many of my colleagues, I am extremely concerned that we have 
failed to plan for this Nation's future and that we are about to saddle 
our children and our grandchildren with debts that they cannot possibly 
hope to pay. While we have made some progress in bringing the deficit 
under control over the past several years, the fact remains that in 
fiscal year (FY) 1996, the Federal Government spent $107 billion more 
than it took in. What's more, the Congressional Budget Office estimates 
that under current law, the deficit will begin rising again this year, 
climbing back to $278 billion by Fiscal Year 2007. The Balanced Budget 
Enforcement Act of 1997 would stop this destructive trend, and set us 
on the path to a budget that is truly balanced by 2002.
  In closing, Mr. Speaker, I urge my colleagues to cosponsor this 
important legislation. The sooner we begin a serious effort to balance 
the budget, the better off our children and grandchildren will be.

                Balanced Budget Enforcement Act of 1997


                                summary

       (1) Deficit Reduction Targets (in addition to the amounts 
     required by current law) to reach balance in 2002.

                                                  [In billions]
----------------------------------------------------------------------------------------------------------------
                                                                   1998    1999    2000    2001    2002    Total
----------------------------------------------------------------------------------------------------------------
Discretionary caps..............................................    10.6    22.1    34.8    47.9    61.3   176.8
Entitlement/revenue scorecard...................................    19.9    40.5    55.6    69.7    85.2     271
Debt service....................................................      .9     3.6     7.7      13      20    45.4
                                                                 -----------------------------------------------
      Grand total...............................................    31.4    66.2    98.2   130.6   166.6   493.2
----------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office

       (2) Setting Sound Economic Estimates: The President 
     appoints a ``Board of Estimates,'' consisting of the Chairman 
     of the Federal Reserve and four private citizens nominated by 
     House and Senate party leaders. The Board must choose either 
     CBO's or OMB's estimates of how much deficit reduction is 
     needed in that Session. The Board's choice would be binding 
     on the President and Congress, so that the deficit reduction 
     requirement for each would be identical. Finally, the Board 
     would meet again after adjournment to pick either CBO's or 
     OMB's estimates of how much deficit reduction was actually 
     accomplished by Congress during the Session.
       (3) Requirement of President to Submit Balanced Budget: The 
     President must propose a budget that will reach balance by 
     2002. Further, the President's budget must use the 
     assumptions chosen by the Board of Estimates, meet all 
     discretionary caps and entitlement/revenue deficit reduction 
     targets, and achieve balance in 2002 and each year 
     thereafter, and be voted on by Congress.
       (4) Requirement of Budget Committees to Report Balanced 
     Budget: Likewise, the congressional budget resolution must 
     lay out a plan to reach balance by 2002. In addition, budget 
     resolutions must use the estimating assumptions chosen by the 
     Board of Estimates, meet all discretionary caps and 
     entitlement/revenue deficit reduction targets, and achieve 
     balance by 2002 and each year thereafter.
       (5) Enforcement: A. Discretionary savings--Appropriations. 
     The discretionary savings will be achieved by keeping 
     appropriations bills within an annual cap, and enforced by 
     across-the-board sequestrations of discretionary programs.
       B. Entitlement/revenue savings--Reconciliation. The 
     entitlement/revenue deficit reduction priorities will be set 
     through the annual budget process. The budget resolution 
     (conference agreement) will include a reconciliation 
     directive targeting by committee the dollar amount of deficit 
     reduction to be achieved from entitlements and/or revenue and 
     will generate a ``spin-off bill'' (to be sent to the 
     President) putting those targets into law.
       C. Sequestration--Overall reconciliation requirements will 
     be enforced by sequestration; the type of sequestration in 
     any year depends on whether a spin-off bill has been enacted.
       (1) Targeted sequestration to enforce reconciliation: 
     (applies if a spin-off bill has been enacted, either as a 
     result of a budget resolution or, later, as a title in a 
     reconciliation bill). If a committee misses its entitlement 
     target, entitlement programs within that committee's 
     jurisdiction will be sequestered by a uniform percentage to 
     meet the target. If revenues do not meet the revenue target, 
     a uniform personal and corporate surtax will be imposed to 
     meet the target.
       (2) Comprehensive sequestration: (applies if a spin-off 
     bill has not been enacted; this would generally occur if the 
     President first vetoes the spin-off bill, then vetoes a 
     reconciliation bill containing the committee targets). There 
     will be a comprehensive sequestration of entitlement spending 
     and some revenue provisions in the amount needed to hit the 
     overall target for entitlement/revenue deficit reduction. For 
     revenues, a surtax would be imposed upon personal annual 
     incomes greater than $250,000 and corporate incomes over $10 
     million. This formula will produce $4 in entitlement spending 
     cuts for every $1 in revenue increases.
       (6) Tax cuts/Investment: Tax cuts and/or investment 
     policies can be enacted if they are paid for.

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