[Congressional Record Volume 144, Number 21 (Thursday, March 5, 1998)]
[Senate]
[Pages S1381-S1385]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE PRESIDENT'S BUDGET
Mr. LOTT. Mr. President, yesterday the Congressional Budget Office
delivered its preliminary report on the President's budget proposal.
The news is both astonishing and disappointing. It raises the most
serious questions about the President's credibility when dealing with
the budget.
Five weeks ago, in his State of the Union address, the President made
a promise to the American people. I want to quote from his speech. The
President asked and answered a very important question. He said:
What should we do with this projected surplus? I have a
simple, four-word answer: Save Social Security first.
I thought to myself, that sounded like a pretty good idea. But that's
not what the President's budget does. The President's budget spends $43
billion of the projected future surpluses.
I invite my colleagues to look at the CBO report. It is right on page
1 of that report:
The policies outlined in the President's budget will
decrease the surplus in each year from 1999 through 2003.
While the President says he wants to save Social Security first,
instead, his budget spends the surplus first. Mr. President, what ever
happened to preserving 100 percent of the surplus for this purpose? To
me, 100 percent means reserving all of it, not all of it except $43
billion that you want to spend. What happened to saving ``every penny
of any surplus until we have taken all the necessary measures to
strengthen Social Security?'' Does every penny mean every penny except
$43 billion?
There is some other bad news in this report as well. I will let the
chairman of the Budget Committee provide more detail, but I want to
give just two highlights. The President's budget spends so much money
that it goes into the red in the year 2000. That's right, after all of
our hard work last year to balance the budget, and with a lot of help
from a growing, booming economy, the President now proposes to send us
back into deficits again that soon. If you are following along in the
CBO report, that, too, is on page 1 as well. We have not gotten into
the rest of it. That is really a depressing thought to me. It took us
almost 30 years to get big Government on the wagon, so to speak, and
now the President wants us to steer back to the saloon for one more
round of spending.
[[Page S1382]]
There is one more point that means a lot to people around here. A
critical part of last year's bipartisan budget agreement, which the
Speaker and I forged with the cooperation of Democrats and the
President, was the creation of caps on discretionary spending. CBO
tells us that the President's budget will break those caps by $68
billion over the next 5 years. What good is a budget agreement if the
President immediately proposes to violate it? What good is balancing
the budget if the President proposes to spend his way back into
deficit? And, most important, what good is it to promise that you are
going to save Social Security first, when the budget you propose
redirects $43 billion of that goal? The President sent us a budget 6
days after his promise to save Social Security first. It took only 6
days for that to fall by the wayside. I have to ask the question,
what's next, Mr. President?
I yield the floor and I yield 3 minutes of my leader time to the
chairman of the Budget Committee.
Mr. DOMENICI. I will not add much. I ask unanimous consent the
preliminary report in its entirety--it's not very long--be printed in
the Record.
There being no objection, the report was ordered to be printed in the
Record, as follows:
[From the Congressional Budget Office, Mar. 4, 1998]
An Analysis of the President's Budgetary Proposals for Fiscal Year
1999--Preliminary Report
As requested by the Senate Committee on Appropriations, the
Congressional Budget Office (CBO) has estimated the effects
of the President's budget proposals for fiscal year 1999
using its own economic and technical assumptions. CBO
estimates that the President's policies will reduce projected
baseline surpluses by $43 billion between 1999 and 2003--and
will temporarily dip the budget back into red ink by a small
amount in 2000. Nonetheless, the overall picture is one of
continuing surpluses through 2003.
Yet the good news embodied in the projections by both CBO
and the Office of Management and Budget could easily be
reversed. If revenue growth this year is just one-half of one
percent lower than expected the budget could remain in
deficit. Alternatively, continued robust economic growth
could push up estimated surpluses. In any case, deficits or
surpluses over the next several years that differ from
current projections by upwards of $100 billion are entirely
possible.
the president's budgetary policies
CBO estimates that, compared with its baseline projections,
the policies outlined in the President's budget will decrease
the surplus in each year from 1999 through 2003. CBO also
expects that surpluses under those policies will actually
turn out to be lower than projected by the Administration.
Nevertheless, the President's budget is estimated to produce
a $42 billion surplus in 2003.
CBO's Estimates of the President's Policy Proposals
The President's plan would reduce the surpluses projected
by CBO under current policies by $43 billion over the 1999-
2003 period (see Table 1). In 1998, though, the President's
proposals would increase the surplus by nearly $1 billion.
The President's budget was designed to offset increases in
spending for some programs with increases in revenues and
decreases in spending for other programs. However, CBO
estimates that net increases in spending will exceed
additional revenues by between $5 billion and $16 billion a
year.
Under the President's proposals, total revenues would
exceed the CBO baseline by $12 billion in 1999 and $18
billion by 2003. The budget proposes about $24 billion in
cumulative tax reductions through 2003 (such as an increase
in the child and dependent care tax credit), which are offset
by revenue increases of $26 billion (for example, repealing
the ability of certain multinational firms to expand their
use of foreign tax credits and thereby decrease their federal
tax payments). The net boost in revenues stems mostly from
assumed new revenues from tobacco companies totaling $65
billion through 2003. The budget, however, does not
specify the policies that might be implemented to raise
that $65 billion. Because there are a number of ways to
achieve that end, the Joint Committee on Taxation, which
estimates the effects of proposed changes to the tax code,
simply accepted the Administration's totals.
CBO estimates that the increases in spending proposed in
the President's budget will outstrip the revenues intended to
covert the new programs. In particular, CBO estimates that
discretionary spending proposed by the President will
increase outlays above CBO's baseline by $90 billion from
1999 through 2003, and proposals related to mandatory
programs will boost outlays by $28 billion over the same
period. In total, the President's proposals would increase
spending by $118 billion over five years (not including
additional debt-service costs).
Under the President's policies, discretionary outlays would
rise from $558 billion in 1998 to $573 billion in 1999--$12
billion above the statutory caps on such spending (see Table
2). Such spending would continue to grow in the President's
budget, reaching $598 billion in 2003. Total revenues and
outlays would each be around $2 trillion by 2003,
representing about 19 percent of gross domestic product
(GDP).
Among the Administration's initiatives for mandatory
spending are proposals to allow certain groups of people who
do not currently have access to employer- or government-
sponsored health insurance to purchase Medicare coverage.
Although CBO makes somewhat different assumptions about
participation rates and costs per person than the
Administration does, it generally concurs with the
Administration's estimate that the provisions would have a
small net budgetary impact. Net costs to the federal
government would be held down by the high cost of the
specified premiums and the stringency of the eligibility
criteria, both of which severely limit the number of people
who are likely to take advantage of the proposals.
Although the hike in net spending resulting from the
President's proposals reduces projected baseline surpluses,
the budget is still expected to remain essentially in surplus
through 2003 under the President's policies. From an expected
level of $8 billion in 1998; the surplus is projected to rise
to $51 billion in 2002 before falling in 2003.
CBO's Estimate Compared with Those of the Administration
Although the pattern in the bottom line suggested by CBO's
analysis of the President's budget is roughly similar to that
estimated by the Administration, the surpluses that CBO
projects are smaller. In addition, CBO estimates a small
deficit in 2002. The Administration had projected that by
2003 the surplus would reach $83 billion, whereas CBO's
estimate of the surplus in that year is about half that size
(see Table 3).
Variations between CBO and the Administration in estimating
the deficit or surplus arise from baseline differences as
well as differences in estimates of the effect of the
President's policy proposals. In 1999 and 2000, variations in
policy estimates are larger; however, from 2001 through 2003,
baseline differences account for the major share of the
discrepancy in the two projections.
Baseline Differences. The greatest differences between the
two sets of current-policy projections are on the outlay
side. The largest of those differences is in estimates of
Medicare spending. The Administration expects that total
outlays for Medicare over the next six years (including
premiums paid to the government by Medicare beneficiaries)
will be $50 billion lower than CBO projects, largely because
the Administration believes that policies enacted in last
year's Balanced Budget Act will produce more savings than CBO
had estimated. Indeed, Medicare alone accounts for around
half of each year's difference in projected baseline outlays.
In addition, higher projections by CBO of inflation
compared with those of the Administration push up estimates
of spending for programs affected by cost-of-living increases
(such as Social Security and Civil Service Retirement).
Moreover, higher estimated unemployment and interest rates
boost spending on unemployment insurance and net interest
on the public debt, respectively. Overall, though, the
Administration's assumptions about the performance of the
economy over the next six years are not very different
from CBO's (see Table 4).
In 1998, CBO's estimate of revenues is significantly higher
than that of the Administration, mostly as a result of
technical estimating differences. From 1999 through 2003,
however, differences between CBO's and the Administration's
revenue estimates under current policies are relatively
small.
Differences in Policy Estimates. Almost all of the
differences in policy estimates relate to the outlay side of
the budget--and mostly to discretionary spending. CBO
estimates that annual outlays for defense spending and
subsidized housing, among other discretionary programs, will
be higher under the President's proposed levels of funding
than the Administration has estimated.
The major difference in mandatory outlays comes from the
savings produced by repealing the recent ruling of the
Department of Veterans Affairs that nicotine dependence can
be considered a service-related disease for purposes of
compensation. The Administration estimates that costs over
the 1999-2003 period will be $7 billion higher than CBO
projects under current policies and therefore claims $7
billion more in savings from repealing the decision.
cbo's revised baseline
In the course of preparing its annual analysis of the
President's budget, CBO typically updates its baseline
projections to take account of new information from the
President's budget and other sources. The revised March
projections then usually become the baseline for the budget
resolution.
CBO's new March projections are not materially different
from those issued in its January 1998 report, The Economic
and Budget Outlook: Fiscal Years 1999-2008. The only major
change since January is an increase in revenues from 1998
through 2000 to reflect more rapid inflows into the Treasury
than either CBO or the Administration had anticipated (see
Table 5). That change, however, is enough to shift CBO's
projections from small annual deficits to small annual
surpluses during those years. CBO expects that the budget
surplus for this year will be nearly $8 billion. Assuming
that current policies do
[[Page S1383]]
not change and that the economy stays on the anticipated
course, surpluses are projected to rise eventually to $138
billion in 2008.
Both federal spending and revenues are expected to total
around $1.7 trillion this year--or approximately 20 percent
of GDP. Under CBO's baseline assumptions, projected outlays
as a percentage of GDP fall gradually to 18.3 percent by
2008. Revenues decline to 19.3 percent of GDP by 2003 and
remain at that level through 2008 (see Table 6).
TABLE 1.--CBO ESTIMATES OF THE EFFECT ON THE SURPLUS OR DEFICIT OF THE PRESIDENT'S BUDGETARY POLICIES
[By fiscal year, in billions of dollars]
----------------------------------------------------------------------------------------------------------------
Total
1998 1999 2000 2001 2002 2003 1999-
2003
----------------------------------------------------------------------------------------------------------------
CBO Surplus Projections.......................... 8 9 1 13 67 53 NA
Effect on the Surplus of the President's
Budgetary Policies
Revenues:
Tobacco-related.............................. 0 10 12 13 15 16 65
Other........................................ (a) 2 3 3 3 2 14
--------------------------------------------------------------
Subtotal................................... (a) 12 15 17 18 18 80
==============================================================
Outlays:
Discretionary.................................. (a) -12 -15 -15 -27 -22 -90
==============================================================
Mandatory:
Tobacco-related activities................... 0 -3 -4 -5 -5 -5 -22
Reduce class size in schools................. 0 (a) -1 -1 -1 -2 -5
Repeal VA smoking decision................... 0 (a) 1 2 3 4 10
Other........................................ 1 -2 -2 -3 -2 -2 -10
--------------------------------------------------------------
Subtotal................................... 1 -5 -6 -6 -6 -5 -28
==============================================================
Total Outlays.............................. 1 -17 -20 -21 -32 -27 -118
==============================================================
Total Effect of Policies................... 1 -5 -5 -4 -14 -9 -38
Debt Service............................... (a) (a) (a) -1 -1 -2 -4
--------------------------------------------------------------
Total Effect on the Surplus................ 1 -5 -6 -5 -16 -11 -43
==============================================================
Surplus or Deficit (-) Under the President's
Budgetary Policies as Estimated by CBO.......... 8 4 -5 8 51 42 NA
----------------------------------------------------------------------------------------------------------------
a Less than $500 million.
Notes: Numbers in the table may not add to totals because of rounding. VA=Department of Veterans Affairs; NA=not
applicable.
Sources: Congressional Budget Office; Joint Committee on Taxation.
TABLE 2.--CBO ESTIMATES OF THE PRESIDENT'S BUDGETARY POLICIES
[By fiscal year]
----------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003
----------------------------------------------------------------------------------------------------------------
(5) In Billions of Dollars
Revenues............................................ 1,680 1,751 1,799 1,863 1,948 2,026
===========================================================
Outlays:
Discretionary:
Defense......................................... 269 270 273 272 280 290
Nondefense...................................... 288 303 306 307 307 308
-----------------------------------------------------------
Subtotal...................................... 558 573 580 579 587 598
===========================================================
Mandatory:
Social Security................................... 376 392 409 428 449 471
Medicare.......................................... 197 208 219 240 246 271
Medicaid.......................................... 101 108 115 122 131 141
Other............................................. 277 301 325 342 357 374
-----------------------------------------------------------
Subtotal........................................ 951 1,009 1,067 1,132 1,183 1,257
-----------------------------------------------------------
Offsetting Receipts................................. -82 -83 -87 -92 -105 -98
Net Interest........................................ 245 247 243 237 231 227
===========================================================
Total........................................... 1,671 1,747 1,803 1,855 1,897 1,983
===========================================================
Surplus or Deficit (-).............................. 8 4 -5 8 51 42
(5) As a Percentage of Gross Domestic Product
Revenues............................................ 20.1 20.1 19.8 19.6 19.6 19.5
===========================================================
Outlays:
Discretionary:
Defense......................................... 3.2 3.1 3.0 2.9 2.8 2.8
Nondefense...................................... 3.4 3.5 3.4 3.2 3.1 3.0
-----------------------------------------------------------
Subtotal...................................... 6.7 6.6 6.4 6.1 5.9 5.7
===========================================================
Mandatory:
Social Security................................... 4.5 4.5 4.5 4.5 4.5 4.5
Medicare.......................................... 2.4 2.4 2.4 2.5 2.5 2.6
Medicaid.......................................... 1.2 1.2 1.3 1.3 1.3 1.4
Other............................................. 3.3 3.5 3.6 3.6 3.6 3.6
-----------------------------------------------------------
Subtotal........................................ 11.4 11.6 11.7 11.9 11.9 12.1
-----------------------------------------------------------
Offsetting Receipts................................. -1.0 -1.0 -1.0 -1.0 -1.1 -0.9
Net Interest........................................ 2.9 2.8 2.7 2.5 2.3 2.3
===========================================================
Total........................................... 20.0 20.0 19.8 19.5 19.1 19.1
===========================================================
Surplus or Deficit (-).............................. 0.1 (a) (a) 0.1 0.5 0.4
===========================================================
Memorandum: Gross Domestic Product.................. 8,369 8,729 9.097 9,499 9,933 10,405
----------------------------------------------------------------------------------------------------------------
(a) Less than 0.05 percent.
Source: Congressional Budget Office.
Note: Numbers in the table may not add to totals because of rounding.
[[Page S1384]]
TABLE 3.--CBO REESTIMATES OF THE PRESIDENT'S BUDGETARY POLICIES
[By fiscal year, in billions of dollars]
----------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003
----------------------------------------------------------------------------------------------------------------
Deficit (-) or Surplus Under the President's
Budgetary Policies as Estimated by the
Administration..................................... -10 10 9 28 90 83
===========================================================
(5) Baseline Differences
Revenues............................................ 22 9 5 1 -1 -2
Outlays:
Discretionary..................................... 5 (a) -1 -1 -1 2
Mandatory......................................... -1 6 9 16 23 31
-----------------------------------------------------------
Subtotal........................................ 4 6 9 15 23 34
Total Baseline Differences...................... 18 3 -4 -15 -24 -36
(5) Differences in Estimates of Proposed Policies
Revenues............................................ (a) -1 (a) (a) -1 -1
Outlays:
Discretionary..................................... (a) 7 7 4 11 (a)
Mandatory......................................... -1 1 3 1 4 4
-----------------------------------------------------------
Subtotal........................................ -1 8 10 6 15 4
Total Policy Differences........................ 1 -9 -9 -6 -15 -5
(5) All Estimating Differences
Total Differences................................... 18 -6 -13 -20 -39 -41
Deficit (-) or Surplus Under the President's
Budgetary Policies as Estimated by CBO............. 8 4 -5 8 51 42
----------------------------------------------------------------------------------------------------------------
(a) Less than $500 million.
Note: Numbers in the table may not add to totals because of rounding.
Source: Congressional Budget Office.
TABLE 4.--COMPARISON OF CBO AND ADMINISTRATION ECONOMIC PROJECTIONS, CALENDAR YEARS 1998-2003
----------------------------------------------------------------------------------------------------------------
Forecast Projected
-----------------------------------------------------------------
1998 1999 2000 2001 2002 2003
----------------------------------------------------------------------------------------------------------------
Nominal GDP:
(5) In billions of dollars
CBO......................................... 8,461 8,818 9,195 9,605 10,046 10,529
Administration.............................. 8,430 8,772 9,142 9,547 9,993 10,454
Nominal GDP:
(5) Percentage change
CBO......................................... 4.7 4.2 4.3 4.5 4.6 4.8
Administration.............................. 4.3 4.1 4.2 4.4 4.7 4.6
Real GDP:
CBO......................................... 2.7 2.0 1.9 2.0 2.1 2.3
Administration.............................. 2.4 2.0 2.0 2.2 2.4 2.4
Implicit GDP Deflator: a
CBO......................................... 2.0 2.2 2.3 2.4 2.4 2.5
Administration.............................. 1.9 2.0 2.2 2.2 2.2 2.2
Consumer Price Index: b
CBO......................................... 2.2 2.5 2.7 2.8 2.8 2.8
Administration.............................. 2.1 2.2 2.3 2.3 2.3 2.3
Unemployment Rate:
(5) Percent
CBO......................................... 4.8 5.1 5.4 5.6 5.8 5.9
Administration.............................. 4.9 5.1 5.3 5.4 5.4 5.4
Three-Month Treasury:
(5) Bill Rate (Percent)
CBO......................................... 5.3 5.2 4.8 4.7 4.7 4.7
Administration.............................. 5.0 4.9 4.8 4.7 4.7 4.7
Ten-Year Treasury:
(5) Note Rate (Percent)
CBO......................................... 6.0 6.1 6.0 5.9 5.9 5.9
Administration.............................. 5.9 5.8 5.8 5.7 5.7 5.7
Taxable Income: c
(5) In billions of dollars
CBO......................................... 6,688 6,906 7,147 7,426 7,732 8,080
Administration.............................. 6,670 6,920 7,188 7,474 7,798 8,132
----------------------------------------------------------------------------------------------------------------
a The ratio of nominal GDP to real GDP.
b The consumer price index for all urban consumers.
c Taxable personal income plus corporate profits before tax.
Note: Percentage change is year over year.
Sources: Congressional Budget Office; Office of Management and Budget.
TABLE 5.--CHANGES IN CBO BASELINE DEFICITS OR SURPLUSES SINCE JANUARY 1998
[By fiscal year, in billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
--------------------------------------------------------------------------------------------------------------------------------------------------------
January 1998 Baseline Deficit (-) or Surplus......... -5 -2 -3 14 69 54 71 75 115 129 138
Technical Changes:
Revenues........................................... 15 10 5 (a) (a) (a) (a) (a) (a) (a) (a)
Outlays:
Discretionary.................................... (a) (a) (a) (a) (a) (a) (a) (a) (a) (a) (a)
Mandatory........................................ (a) (a) 1 2 4 1 2 1 (a) (a) (a)
Net interest..................................... 1 (a) -1 -1 -1 -1 -1 (a) (a) (a) (a)
--------------------------------------------------------------------------------------------------
Subtotal....................................... 2 -1 (a) 1 3 1 1 1 (a) (a) (a)
Total Technical Changes........................ 13 11 5 -1 -3 -1 -1 -1 (a) (a) (a)
March 1998 Baseline Surplus.......................... 8 9 1 13 67 53 70 75 115 130 138
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Less than $500 million.
Note: Numbers in the table may not add to totals because of rounding.
Source: Congressional Budget Office.
TABLE 6.--CBO REVISED BASELINE PROJECTIONS
[By fiscal year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Actual
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
--------------------------------------------------------------------------------------------------------------------------------------------------------
Revenues:
(11)In Billions of Dollars
Individual income............. 737 783 792 810 840 886 922 974 1,027 1,083 1,143 1,207
Corporate income.............. 182 197 200 200 200 203 209 216 224 232 241 250
Social insurance.............. 539 573 600 625 651 679 710 743 781 817 856 892
Other......................... 120 127 147 149 155 161 167 173 177 181 187 191
-----------------------------------------------------------------------------------------------------------------------
Total....................... 1,579 1,680 1,738 1,784 1,847 1,930 2,008 2,105 2,208 2,314 2,426 2,540
=======================================================================================================================
Outlays:
Discretionary a............... 548 558 561 565 564 560 576 592 609 626 643 661
=======================================================================================================================
Mandatory:
Social Security............. 362 376 391 409 428 449 471 495 522 551 582 614
[[Page S1385]]
Medicare.................... 208 218 231 244 268 277 306 330 367 377 417 448
Medicaid.................... 96 101 108 115 123 131 141 152 165 179 194 210
Other....................... 231 257 273 293 305 319 332 344 362 370 378 399
-----------------------------------------------------------------------------------------------------------------------
Subtotal.................. 896 951 1,004 1,060 1,123 1,176 1,250 1,322 1,417 1,477 1,570 1,672
Net interest.................... 244 245 247 243 237 230 226 221 215 209 202 194
Offsetting receipts............. -87 -82 -82 -85 -91 -103 -97 -101 -107 -113 -119 -126
=======================================================================================================================
Total....................... 1,601 1,672 1,730 1,782 1,833 1,863 1,954 2,035 2,134 2,199 2,297 2,402
Deficit (-) or Surplus.......... -22 8 9 1 13 67 53 70 75 115 130 138
Memorandum:
On-budget Deficit (-) or Surplus -103 -92 -104 -121 -117 -72 -94 -88 -96 -64 -59 -59
Debt Held by the Public......... 3,771 3,774 3,781 3,793 3,795 3,743 3,706 3,651 3,591 3,491 3,375 3,251
Revenues:
(11)As a Percentage of Gross
Domestic Product
Individual income............. 9.3 9.4 9.1 8.9 8.8 8.9 8.9 8.9 9.0 9.0 9.1 9.2
Corporate income.............. 2.3 2.4 2.3 2.2 2.1 2.0 2.0 2.0 2.0 1.9 1.9 1.9
Social insurance.............. 6.8 6.8 6.9 6.9 6.9 6.8 6.8 6.8 6.8 6.8 6.8 6.8
Other......................... 1.5 1.5 1.7 1.6 1.6 1.6 1.6 1.6 1.5 1.5 1.5 1.5
-----------------------------------------------------------------------------------------------------------------------
Total....................... 19.8 20.1 19.9 19.6 19.4 19.4 19.3 19.3 19.3 19.3 19.3 19.3
=======================================================================================================================
Outlays:
Discretionary a............... 6.9 6.7 6.4 6.2 5.9 5.6 5.5 5.4 5.3 5.2 5.1 5.0
=======================================================================================================================
Mandatory:
Social Security............. 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.6 4.6 4.6 4.7
Medicare.................... 2.6 2.6 2.6 2.7 2.8 2.8 2.9 3.0 3.2 3.1 3.3 3.4
Medicaid.................... 1.2 1.2 1.2 1.3 1.3 1.3 1.4 1.4 1.4 1.5 1.5 1.6
Other....................... 2.9 3.1 3.1 3.2 3.2 3.2 3.2 3.2 3.2 3.1 3.0 3.0
-----------------------------------------------------------------------------------------------------------------------
Subtotal.................. 11.2 11.4 11.5 11.7 11.8 11.8 12.0 12.1 12.4 12.3 12.5 12.7
Net interest.................... 3.1 2.9 2.8 2.7 2.5 2.3 2.2 2.0 1.9 1.7 1.6 1.5
Offsetting receipts............. -1.1 -1.0 -0.9 -0.9 -1.0 -1.0 -0.9 -0.9 -0.9 -0.9 -0.9 -1.0
=======================================================================================================================
Total....................... 20.1 20.0 19.8 19.6 19.3 18.8 18.8 18.7 18.7 18.4 18.3 18.3
Deficit (-) or Surplus.......... -0.3 0.1 0.1 (b) 0.1 0.7 0.5 0.6 0.7 1.0 1.0 1.1
Memorandum:
On-budget Deficit (-) or Surplus -1.3 -1.1 -1.2 -1.3 -1.2 -0.7 -0.9 -0.8 -0.8 -0.5 -0.5 -0.5
Debt Held by the Public......... 47.3 45.1 43.3 41.7 39.9 37.7 35.6 33.5 31.4 29.2 26.9 24.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
a The baseline assumes that discretionary spending will equal the statutory caps on discretionary spending in 1999 through 2002 and will increase at the
rate of inflation in succeeding years.
b Less than 0.05 percent.
Note: Numbers in the table may not add to totals because of rounding.
Source: Congressional Budget Office.
Mr. DOMENICI. Mr. President, yesterday, the Congressional Budget
Office released its preliminary analysis of the President's fiscal year
1999 Budget.
Very briefly, according to the CBO analysis, the President's budget
proposal would spend $43 billion of the federal surplus rather than
save the money for social security as the President admonished us in
his State of the Union Address.
This results from the fact that the CBO analysts found that his new
proposed spending of nearly $120 billion over the next 5 years exceeds
his proposed spending cuts and tax increases of $43 billion.
In other words, if Congress did nothing but abide by the agreement we
reached last year, the surpluses projected by CBO would be $43 billion
higher than if we adopted the President's budget proposal.
But that won't even be possible, because under the Budget Act, the
President's budget could not even be considered on the floor of the
Senate, because it would be out of order.
The President's budget violates the agreement reached last year by
proposing to break the statutory spending caps by $68 billion, making
it out of order in the U.S. Senate.
Further, CBO found that the President's budget dips us back into
deficit in the year 2000.
This is disappointing. But even if the administration proposes to
break our agreement from last year, I do not.
It is my intent to have the Senate Budget Committee report within the
next two weeks a budget for fiscal year 1999 that will: (1) abide by
the spending caps set in law last year, (2) balance the budget and keep
it in balance, (3) hold any budget surpluses in reserve to protect
Social Security and provide for any future transition to a modernized
system.
Mr. President, let me make it very simple in this regard. If we did
nothing, in other words if the President had not submitted a budget and
we just said let's continue with the policies that we have that were
established in this bipartisan agreement, the Congressional Budget
Office says the surplus would be $43 billion bigger than it is. That is
the simple fact which causes them to conclude, and us to concur, that
in fact the President has spent $43 billion of the surplus in his
budget. It would be $43 billion higher had he not put a budget before
the people, which leads you to that one simple conclusion.
Some may recall when the President announced his budget, there was a
lot less noise made about it, excepting some profound questions were
asked. How can you have $120 billion in new programs and not break the
agreed-upon caps--that is the total amount you can spend for domestic
discretionary spending--when that cap is a fixed dollar number? It has
nothing to do with inflation; it is just a fixed dollar number. How can
you say we will spend $120 billion, more or less, more than we had
planned yet we will not exceed those agreed-upon totals?
So, what we have now, in my opinion, is a President's budget that, if
it were submitted on the floor or in the Budget Committee, would be out
of order because it breaches the agreed-upon caps by $68 billion. So it
seems to me that we have to go into our mark-up here with that in mind.
I am sure the President and his people will explain that they thought
certain things could be handled differently than CBO handled them, and
they are entitled to that position. But that is what we have to follow,
and their rules have to be followed by us. We cannot adopt rules that
the President establishes. So I believe it is important that the
Senators understand the situation we are confronted with as we move in
the Budget Committee and on the floor of the Senate.
I yield the floor.
Several Senators addressed the Chair.
The PRESIDING OFFICER. The Chair recognizes the Senator from Rhode
Island.
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