House Report 104-120 - CONCURRENT RESOLUTION ON THE BUDGET--FISCAL YEAR 1996

[House Report 104-120]
[From the U.S. Government Publishing Office]

104th Congress 1st HOUSE OF REPRESENTATIVES Report
Session
104-120
_______________________________________________________________________

CONCURRENT RESOLUTION
ON THE BUDGET--FISCAL
YEAR 1996

__________

R E P O R T

of the

COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES

TO ACCOMPANY

H. Con. Res. 67

SETTING FORTH THE CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT
FOR THE FISCAL YEARS 1996, 1997, 1998, 1999, 2000, 2001, AND 2002

TOGETHER WITH

MINORITY, DISSENTING, AND ADDITIONAL VIEWS

May 15, 1995.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

COMMITTEE ON THE BUDGET

JOHN R. KASICH, Ohio, Chairman
DAVID L. HOBSON, Ohio
ROBERT S. WALKER, Pennsylvania,
Vice Chairman
JIM KOLBE, Arizona
CHRISTOPHER SHAYS, Connecticut
WALLY HERGER, California
JIM BUNNING, Kentucky
LAMAR S. SMITH, Texas
WAYNE ALLARD, Colorado
DAN MILLER, Florida
RICK LAZIO, New York
BOB FRANKS, New Jersey
NICK SMITH, Michigan
BOB INGLIS, South Carolina
MARTIN R. HOKE, Ohio
SUSAN MOLINARI, New York
JIM NUSSLE, Iowa
PETER HOEKSTRA, Michigan
STEVE LARGENT, Oklahoma
SUE MYRICK, North Carolina
SAM BROWNBACK, Kansas
JOHN SHADEGG, Arizona
GEORGE P. RADANOVICH, California
MARTIN OLAV SABO, Minnesota, CHARLES F. BASS, New Hampshire
Ranking Minority Member
CHARLES W. STENHOLM, Texas
LOUISE McINTOSH SLAUGHTER,
New York
MIKE PARKER, Mississippi
WILLIAM J. COYNE, Pennsylvania
ALAN B. MOLLOHAN, West Virginia
JERRY F. COSTELLO, Illinois
HARRY JOHNSTON, Florida
PATSY T. MINK, Hawaii
BILL ORTON, Utah
EARL POMEROY, North Dakota
GLEN BROWDER, Alabama
LYNN C. WOOLSEY, California
JOHN W. OLVER, Massachusetts
LUCILLE ROYBAL-ALLARD, California
CARRIE P. MEEK, Florida
LYNN N. RIVERS, Michigan
LLOYD DOGGETT, Texas

Professional Staff

Richard E. May, Staff Director
Eileen M. Baumgartner, Minority
Staff Director

104th Congress Report
HOUSE OF REPRESENTATIVES

1st Session 104-120
_______________________________________________________________________

CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 1996

_______

May 15, 1995.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______________________________________________________________________

Mr. Kasich, from the Committee on the Budget, submitted the following

R E P O R T

together with

MINORITY, DISSENTING, AND ADDITIONAL VIEWS

[To accompany H. Con. Res. 67]
SUMMARY AND OVERVIEW

This budget is not just about the Federal Government's
fiscal strategy for 1996 through 2002. It is about America's
future. It is about creating the potential for prosperity,
safety, and a better life for virtually every American. It is
about:

--Showing true compassion by lifting the yoke of dependency
fashioned by the welfare state and replacing it with an
opportunity society--one in which the exercise of personal
responsibility is assumed, and the achievement of an
individual's destiny is a product of his or her energy and
effort.

--Restoring freedom by ending centralized bureaucratic
micromanagement.

--Enhancing prosperity, economic growth, and take-home pay by
reducing taxes, litigation, and regulation.

--Creating opportunity for every American by leading the
transformation to a third-wave, information-age society.

--Ensuring a safe future for our children and our retirement
years by balancing the Federal budget and solving the
financial crisis in Medicare.

The majority party in American politics must lead the civic
discussion about these issues--about pursuing the American
idea. It is a moral responsibility. The debate over this fiscal
year 1996 budget should be a forum for that debate.

Components of a Free Society

To begin with, there is no question about the will of the
American people: They want Congress to cut spending and balance
the budget. They correctly perceive a balanced budget as a
fundamental means of controlling the outrageous and self-
promoted growth of the Federal Government. As long as the
government continues to borrow, to spend beyond its means, it
will continue to grow beyond the scope ratified by those who
pay the bills. There is no reason why the Federal Government
should not adhere to the same budgeting practices employed by
every responsible American family.
The philosophical framework for the strategy of this budget
can be found in Jefferson's four components of a free society.
In this model, a free society consists of the following:

1. Culture and society setting the rules by which
Americans live.

2. Civic responsibility, expressed through nonprofit,
private associations, as de Tocqueville described them.

3. The vast sector of private property, free markets,
entrepreneurship, and the creation of wealth.

4. Limited, effective government.

It is crucial to understand that when government grows, it
does so at the expense of the other three elements of society:
Government increasingly makes the rules; it absorbs civic
responsibility, thereby disempowering Americans' private
associations; it swallows ever-growing shares of the market.
This budget seeks to restore control over government's growth
so the rest of society can thrive.

Hearing From the People--Again

As a rule, Americans do not speak in such theoretical
terms, but they feel the results in their own experience. They
also can feel it in their bank accounts. Total government taxes
per household, measured in constant 1990 dollars, were $18,500
in 1994, nearly three times their level in 1950. Federal taxes
as a share of median household income have risen from 5 percent
in 1950 to 16 percent in 1970 to 24 percent in 1990. If taxes
today were at the same level as they were in 1970, the average
family would have $4,000 more in take-home pay.
Americans' response to this situation was clearly recorded
on November 8, 1994. It was repeated over and over during the
early months of this year, when Budget Committee members
conducted field hearings across the country to learn about the
public's attitude toward spending. The hearings packed meeting
halls. Residents in Columbus, OH, battled a snowstorm to attend
the hearing there, on January 21. In Montana, a 90-year-old
woman and her 80-year-old sister drove 2\1/2\ hours to attend
the February 18 session in Billings. Similar enthusiasm was
expressed by the hundreds of hearing attendees in Prescott, AZ,
January 28; Columbia, SC, February 4; and Manville, NJ,
February 11. Committee members heard from farmers who wanted
their subsidies cut; a small-business owner who wanted the
Small Business Administration abolished; and senior citizens
who offered whatever they could to help solve the debt problem.
Countless people who don't know what ``federalism'' means did
know that they want more of it. As one local official put it:

I would suggest that when we look at restructuring
our government, we get over the fear that Washington
knows best and that localities will not do the right
thing. We are the level of government people can reach
out and touch. We go to church with these people, we
work with them, we are the level of government that
will be responsible and accountable. Give us the
opportunity to do the right thing.

The Path to Balance and Government Reform

These people might not be prepared to cite the figures
associated with the government's debt, but they can sense it's
a problem of large proportions. As usual, the people are right.
The problem is fast becoming a crisis. Consider: The current
Federal debt is approximately $4.8 trillion. Interest on the
debt is $235 billion. If the growth of government spending is
not curtailed, the debt will reach $7.533 trillion by 2005,
with interest payments of $412 billion. Over the next 15
years--if current patterns are allowed to continue--accumulated
interest payments will total $5.2 trillion. As early as 1997,
Americans will pay as much interest on the debt each year--$270
billion--as they pay for national defense.
Even now, Americans are paying for this debt in another
way: in the form of interest rates that are about 2 percentage
points higher than they would be if the budget were balanced.
This adds as much as $37,000 over 30 years to the mortgage on a
$75,000 home.
A balanced budget likely will lower current interest rates
by about 2 percentage points. This, in turn, will boost
economic activity, leading to the following concrete benefits:

--It will lead to the creation of 4.25 million more jobs over
the next 10 years.

--It will increase per capita incomes 16.1 percent.

--It will generate $235 billion more revenue for the Federal
Government without a tax increase.

--It will generate $232 billion more revenue for State and
local governments without a tax increase.

To reach balance, this budget achieves $1.157 trillion in
deficit reduction over 7 years. By the time the task is
complete, in 2002, total Federal spending will be $1.814
trillion, compared with about $1.5 trillion today. Thus,
Federal spending will continue to grow, but at a slower rate
than under current policies.
But the determined pursuit of a balanced budget is much
more than a numbers game. It is a catalyst for reevaluating the
government down to its core. Getting government back to living
within its means will require fundamental, systemic reform,
including the following steps:

Accepting the Full Tax Cuts From the Tax Fairness and
Deficit Reduction Act of 1995 (H.R. 1215). These tax cuts,
passed by the House on April 5, 1995, force an assault on
government spending, because current enforcement rules--the
pay-as-you-go requirement--demand spending cuts commensurate
with any projected loss of revenue. In other words, the tax
cuts compel spending restraint.
The tax cuts--promised in the Republican Contract With
America--also are worthy policy on their own. The committee's
report accompanying H.R. 1219, the Discretionary Spending
Reduction and Control Act of 1995, amply justified these tax
cuts, but several points are worth repeating.
First, the $500-per-child family tax credit--the
cornerstone of the contract tax relief--will benefit,
overwhelmingly, working families: 74 percent of the
beneficiaries will be families with incomes below $75,000 a
year; 89 percent will be families making less than $100,000 a
year. The credit will reduce, by 10 percent, the tax burden of
a family of four with a $40,000-a-year income.
Two historical facts support the value of this relief. In
1948, the average American family with children paid 3 percent
of its income to the Federal Government in income and payroll
taxes. Today, such a family's Federal tax burden is 24.5
percent of its income. Second, recent census data show that
since 1989--the peak of the economic expansion that occurred
under President Reagan--the typical American household has lost
$2,344 in income, a decline of 7 percent. Clearly, the family
tax credit is a helpful way to begin correcting these trends.
The other major component of the contract tax package
comprises incentives for economic growth, principally the
capital gains tax exclusion. Here is an attempt at a plain-
spoken explanation of why it will work. This provision reduces
a disincentive for capital formation. More capital formation
will promote greater corporate expansion, which in turn
provides ever-improving opportunities for American families.

Incorporating House Passage of Welfare Reform. No one
questions that the current welfare system needs reform. The
system is harmful to the very people it is supposed to help. It
shackles them to a life of dependency rather than pushing them
toward self-sufficiency. It also shackles taxpayers. Here are
some of the facts of this failure:

--Welfare spending now exceeds $305 billion a year and has
totalled $5 trillion since 1965--more than the cost of
winning World War II.

--This $305 billion is about three times the amount needed to
raise all poor Americans above the poverty line.

--Since 1970, the number of children in poverty has increased
40 percent.

--Since 1965, the juvenile arrest rate for violent crimes has
tripled.

--Since 1960, the number of unmarried pregnant teens has nearly
doubled and teen suicide has more than tripled.

The House welfare reform plan (H.R. 4, the Personal
Responsibility Act of 1995), which passed the House on March
24, mantains a safety net that will not entangle its
beneficiaries. It renews the basic values of American
civilization, emphasizing work, family, and opportunity, and it
reestablishes property ownership and full citizenship for the
poor. In short, it replaces caretaking with caring.

Calling for Real Cuts in Discretionary Spending From the
Fiscal Year 1995 Level. The discretionary spending cuts in this
bill truly are cuts in the way normal Americans would
understand--they reduce spending $150 billion over 7 years from
current levels, not from some inflated, bureaucratic estimate
of projected spending.

Providing Sufficient Funds to Strengthen National Defense--
$1.35 Trillion Over the Next 5 Years. The Pentagon is not
exempt from the drive to balance the budget. But the defense
strategy reflected in this budget is responsible, sustainable,
and matched by the requisite number of dollars--in contrast to
the mismatch between spending and strategy reflected in the
Clinton budget.

Cutting Foreign Aid by $29 Billion. Many foreign aid
programs are wasteful and counterproductive. They need to be
reformed.

Keeping the Promise of Protecting Social Security. This
budget makes no changes whatsoever in Social Security benefits,
and it repeals the increased taxes on Social Security benefits
that were part of the 1993 Clinton/Democrat tax bill.

Block Granting Medicaid and Reducing Its Growth Rate to 4
Percent by 2002. This plan holds Medicaid spending growth to a
sustainable rate and shifts the operation of this program where
it belongs--to State governments. It is consistent with
proposals by the Nation's Republican Governors.

Block Granting Job Training. In a report to the Budget and
Economic and Educational Opportunities Committee, the General
Accounting Office identified 163 different Federal job training
programs. The Department of Labor in its fiscal year 1996
Budget proposed consolidating about 70 employment and training
programs explaining:

Existing [job training] programs have conflicting
rules and administrative structures, confuse the people
they are intended to help, add bureaucracy at every
level, and waste taxpayer money.

Combining these programs into block grants would eliminate
duplicative programs, increase management efficiency and
provide the states the flexibility to develop innovative
programs. This proposal assumes block granting would
consolidate 64 programs and would total approximately $7.5
billion a year. The Opportunities Committee may pursue an even
more ambitious plan.

Eliminating the Departments of Education, Commerce, and
Energy. These proposals are consistent with plans being drafted
by House Republican freshmen to discard needless and unwieldy
bureaucratic structures. This budget also terminates or
privatizes 284 programs, 13 agencies, and 69 commissions.

Reforming Veterans Programs, Student Loans, Agriculture,
Federal Retirement, and Publicly Assisted Housing. The task of
balancing the budget is a shared project, including the efforts
of these constituencies.

Privatizing the General Services Administration, Public
Broadcasting, and Power Marketing Administrations. Many speak
of the virtues of the competitive private sector. Privatizing
the public institutions above will give further proof.

Eliminating Unfair, Market-Distorting Federal Subsidies.
Many of the Nation's largest corporations receive Federal
grants for work the companies would pursue on their own. In
other cases, these funds only promote a cumbersome, backward-
looking industrial policy. This budget halts these outrages.

The Crisis in Medicare

Finally, there is Medicare. The political sensitivity of
this issue reflects, in part, the extent to which American
senior citizens are protective of this program. But the
program's popularity is precisely the reason to worry about its
financial prospects. In the past 7 years, the Federal
Government has spent $923 billion on Medicare. In the next 7
years, the program's spending will total $1.87 trillion, under
current policies. The government spent, on average, $4,684 for
each Medicare beneficiary in 1995. In 2002, the cost of
Medicare per beneficiary will be $8,415.
These trends cannot be sustained: They threaten Medicare's
long-term solvency. If no solution is found, the Medicare Part
A Trust Fund is projected to be broke by 2002. The Part B Trust
Funds already draw tens of billions of dollars from general
revenues each year just to stay afloat. Guy King, former chief
actuary at the Health Care Financing Administration, says
Congress must immediately reduce the growth in Medicare
spending by one-third or increase payroll taxes by more than 50
percent to keep Medicare Part A in balance over the next 25
years.
Medicare does not need to be cut; it needs to be
transformed in such a way as to adjust its growth to a rate
that can be sustained for the long term.
The Committees on Commerce and Ways and Means will address
this issue this summer and will seek to draft a long-term
solution. In the meantime, this budget describes three
potential strategies for reforming Medicare. As is true of
other proposals here, these strategies are offered for
illustrative purposes only. The Budget Committee hopes these
road maps can provide a starting point for the crucial Medicare
debate to come.

Critics are welcome to challenge this plan, in its scope or
its detail; that is part of the needed debate. But in fairness,
a principle set down by the President in 1993 ought to be
followed: Those who would criticize this plan should be
required to offer their own alternatives--with the same level
of comprehensiveness and specificity--to balance the Federal
budget by 2002.

Conclusion

America stands at a crossroads. Down one path lies more and
more debt and the continued degradation of the Federal
Government and the people it is intended to serve. Down the
other lies the restoration of the American dream--the romantic
vision in which families improve their lives through
responsibility and hard work; in which the sturdiest safety net
is fashioned by communities of neighbors helping neighbors; in
which the government operates within its means; and in which
every problem is a challenge and an opportunity. We choose the
second of these roads. We do it because it's right. We do it
because it's sensible. We do it because America's future does
not belong to the Congress, or the administration, or any
political party. It belongs to the American people themselves.
SUMMARY TABLES

HOUSE BUDGET COMMITTEE RECOMMENDATION
[In billions of dollars]
----------------------------------------------------------------------------------------------------------------
Committee recommendation--total budget
---------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Budget authority.......................... 1,592.1 1,643.1 1,685.2 1,732.8 1,775.4 1,803.2 1,841.0
Outlays................................... 1,586.4 1,624.0 1,650.0 1,700.7 1,749.6 1,777.7 1,814.6
Revenues.................................. 1,432.2 1,450.5 1,511.0 1,569.6 1,641.3 1,722.4 1,815.2
Deficit (-)/Surplus (+)................... -154.2 -173.5 -139.0 -131.1 -108.3 -55.3 +0.6
Debt subject to limit..................... 5,195.0 5,516.1 5,809.8 6,099.7 6,374.3 6,614.4 6,806.1
050 National defense:
Budget authority...................... 267.3 269.3 277.3 281.3 287.3 287.3 287.2
Outlays............................... 265.1 265.3 265.3 271.3 279.3 279.3 279.2
150 International affairs:
Budget authority...................... 15.8 13.7 11.3 9.7 10.5 12.0 12.0
Outlays............................... 17.0 15.1 13.3 11.5 10.0 11.1 10.7
250 General science, space and technology:
Budget authority...................... 16.7 16.3 15.7 15.3 14.9 14.9 14.9
Outlays............................... 16.9 16.6 16.0 15.4 15.0 14.9 14.9
270 Energy:
Budget authority...................... 4.4 3.9 3.6 3.9 3.6 3.6 3.5
Outlays............................... 4.3 3.2 2.9 3.1 2.7 2.5 2.3
300 Natural resources and environment:
Budget authority...................... 19.3 19.1 17.2 18.6 17.4 17.9 17.8
Outlays............................... 20.2 19.9 17.8 19.1 17.8 18.2 18.1
350 Agriculture:
Budget authority...................... 13.0 12.8 11.6 11.4 10.2 8.1 8.1
Outlays............................... 11.8 11.5 10.4 10.1 9.0 7.1 7.0
370 Commerce and housing credit:
Budget authority...................... 6.4 10.9 4.0 5.1 1.7 1.3 1.0
Outlays............................... -6.9 -3.4 -6.1 -3.1 -3.6 -2.5 -2.6
400 Transportation:
Budget authority...................... 40.5 42.7 43.5 43.7 44.3 43.8 43.3
Outlays............................... 38.8 37.5 36.6 35.6 34.9 34.2 33.7
450 Community and regional development:
Budget authority...................... 6.7 6.7 6.7 6.7 6.7 6.2 6.1
Outlays............................... 9.9 7.8 6.7 6.5 6.6 6.4 6.4
500 Education, training and social
services:
Budget authority...................... 45.7 45.0 44.9 45.4 45.9 45.0 44.6
Outlays............................... 52.3 46.4 44.6 44.7 45.2 44.2 43.7
550 Health:
Budget authority...................... 121.9 127.7 132.1 136.7 141.5 146.3 149.1
Outlays............................... 122.3 127.8 132.2 136.7 141.4 146.2 148.9
570 Medicare:
Budget authority...................... 177.6 186.6 195.9 206.3 214.8 224.4 234.6
Outlays............................... 175.2 185.0 194.2 203.7 212.9 222.4 232.4
600 Income security:
Budget authority...................... 222.7 231.8 248.4 255.4 265.9 267.6 277.6
Outlays............................... 225.0 235.3 243.9 254.3 267.6 269.0 279.1
650 Social Security:
Budget authority...................... 354.3 374.1 394.3 413.9 433.9 455.0 477.2
Outlays............................... 354.2 373.0 393.2 412.6 432.7 453.7 475.7
700 Veterans benefits and services:
Budget authority...................... 37.6 38.1 38.5 39.1 39.2 39.7 40.1
Outlays............................... 36.9 38.1 38.5 39.0 40.6 41.2 41.6
750 Administration of justice:
Budget authority...................... 17.8 16.9 16.6 16.4 16.4 16.0 15.9
Outlays............................... 17.8 17.1 16.9 16.7 16.6 16.2 16.1
800 General government:
Budget authority...................... 11.6 11.6 12.5 11.7 12.1 11.3 11.3
Outlays............................... 12.4 11.8 12.6 11.5 12.0 11.1 11.0
900 Net interest:
Budget authority...................... 256.3 259.6 258.7 259.2 258.5 252.8 248.6
Outlays............................... 256.3 259.6 258.7 259.2 258.5 252.8 248.6
920 Allowances:
Budget authority...................... -2.3 -2.4 -2.4 -2.5 -2.6 -2.6 -2.6
Outlays............................... -1.9 -2.3 -2.5 -2.7 -2.8 -2.9 -2.9
950 Offsetting receipts:
Budget authority...................... -41.2 -41.3 -45.2 -44.5 -46.8 -47.4 -49.3
Outlays............................... -41.2 -41.3 -45.2 -44.5 -46.8 -47.4 -49.3
----------------------------------------------------------------------------------------------------------------

HOUSE BUDGET COMMITTEE RECOMMENDATION
[In billions of dollars]
----------------------------------------------------------------------------------------------------------------
Committee recommendation--on budget
---------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Budget authority.......................... 1,285.9 1,321.9 1,355.8 1,388.8 1,421.8 1,436.0 1,459.8
Outlays................................... 1,287.0 1,313.9 1,326.8 1,363.5 1,400.8 1,414.2 1,437.3
Revenues.................................. 1,057.5 1,058.5 1,099.6 1,138.7 1,189.3 1,247.2 1,316.6
Deficit (-)/Surplus (+)................... -229.5 -255.4 -227.2 -224.8 -211.5 -167.0 -120.7
Debt subject to limit..................... 5,195.0 5,516.1 5,809.8 6,099.7 6,374.3 6,614.4 6,806.1
050 National defense:
Budget authority...................... 267.3 269.3 277.3 281.3 287.3 287.3 287.2
Outlays............................... 265.1 265.3 265.3 271.3 279.3 279.3 279.2
150 International affairs:
Budget authority...................... 15.8 13.7 11.3 9.7 10.5 12.0 12.0
Outlays............................... 17.0 15.1 13.3 11.5 10.0 11.1 10.7
250 General science, space and technology:
Budget authority...................... 16.7 16.3 15.7 15.3 14.9 14.9 14.9
Outlays............................... 16.9 16.6 16.0 15.4 15.0 14.9 14.9
270 Energy:
Budget authority...................... 4.4 3.9 3.6 3.9 3.6 3.6 3.5
Outlays............................... 4.3 3.2 2.9 3.1 2.7 2.5 2.3
300 Natural resources and environment:
Budget authority...................... 19.3 19.1 17.2 18.6 17.4 17.9 17.8
Outlays............................... 20.2 19.9 17.8 19.1 17.8 18.2 18.1
350 Agriculture:
Budget authority...................... 13.0 12.8 11.6 11.4 10.2 8.1 8.1
Outlays............................... 11.8 11.5 10.4 10.1 9.0 7.1 7.0
370 Commerce and housing credit:
Budget authority...................... 2.3 4.1 2.8 2.2 1.9 1.3 1.0
Outlays............................... -6.9 -2.6 -4.7 -3.0 -2.2 -2.5 -2.6
400 Transportation:
Budget authority...................... 40.5 42.7 43.5 43.7 44.3 43.8 43.3
Outlays............................... 38.8 37.5 36.6 35.6 34.9 34.2 33.7
450 Community and regional development:
Budget authority...................... 6.7 6.7 6.7 6.7 6.7 6.2 6.1
Outlays............................... 9.9 7.8 6.7 6.5 6.6 6.4 6.4
500 Education, training and social
services:
Budget authority...................... 45.7 45.0 44.9 45.4 45.9 45.0 44.6
Outlays............................... 52.3 46.4 44.6 44.7 45.2 44.2 43.7
550 Health:
Budget authority...................... 121.9 127.7 132.1 136.7 141.5 146.3 149.1
Outlays............................... 122.3 127.8 132.2 136.7 141.4 146.2 148.9
570 Medicare:
Budget authority...................... 177.6 186.6 195.9 206.3 214.8 224.4 234.6
Outlays............................... 175.2 185.0 194.2 203.7 212.9 222.4 232.4
600 Income security:
Budget authority...................... 222.7 231.8 248.4 255.4 265.9 267.6 277.6
Outlays............................... 225.0 235.3 243.9 254.3 267.6 269.0 279.1
650 Social Security:
Budget authority...................... 5.9 8.1 8.8 9.6 10.5 11.1 11.7
Outlays............................... 8.5 10.5 11.3 12.1 12.9 13.5 14.1
700 Veterans benefits and services:
Budget authority...................... 37.6 38.1 38.5 39.1 39.2 39.7 40.1
Outlays............................... 36.9 38.1 38.5 39.0 40.6 41.2 41.6
750 Administration of justice:
Budget authority...................... 17.8 16.9 16.6 16.4 16.4 16.0 15.9
Outlays............................... 17.8 17.1 16.9 16.7 16.6 16.2 16.1
800 General government:
Budget authority...................... 11.6 11.6 12.5 11.7 12.1 11.3 11.3
Outlays............................... 12.4 11.8 12.6 11.5 12.0 11.1 11.0
900 Net interest:
Budget authority...................... 295.8 304.1 308.4 314.3 319.4 320.0 322.6
Outlays............................... 295.8 304.1 308.4 314.3 319.4 320.0 322.6
920 Allowances:
Budget authority...................... -2.3 -2.4 -2.4 -2.5 -2.6 -2.6 -2.6
Outlays............................... -1.9 -2.3 -2.5 -2.7 -2.8 -2.9 -2.9
950 Offsetting receipts:
Budget authority...................... -34.4 -34.2 -37.6 -36.4 -38.1 -37.9 -39.0
Outlays............................... -34.4 -34.2 -37.6 -36.4 -38.1 -37.9 -39.0
----------------------------------------------------------------------------------------------------------------

HOUSE BUDGET COMMITTEE RECOMMENDATION
[In billions of dollars]
----------------------------------------------------------------------------------------------------------------
Committee recommendation--off-budget
---------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Budget authority.......................... 306.2 321.2 329.4 344.0 353.6 367.2 381.2
Outlays................................... 299.4 310.1 323.2 337.2 348.8 363.5 377.3
Revenues.................................. 374.7 392.0 411.4 430.9 452.0 475.2 498.6
Deficit (-)/Surplus (+)................... +75.3 +81.9 +88.2 +93.7 +103.2 +111.7 +121.3
Debt subject to limit..................... NA NA NA NA NA NA NA
050 National defense:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
150 International affairs:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
250 General science, space and technology:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
270 Energy:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
300 Natural resources and environment:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
350 Agriculture:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
370 Commerce and housing credit:
Budget authority...................... 4.1 6.8 1.2 2.9 -0.2 0.0 0.0
Outlays............................... 0.0 -0.8 -1.4 -0.1 -1.4 0.0 0.0
400 Transportation:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
450 Community and regional development:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
500 Education, training and social
services:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
550 Health:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
570 Medicare:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
600 Income security:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
650 Social Security:
Budget authority...................... 348.4 366.0 385.5 404.3 423.4 443.9 465.5
Outlays............................... 345.7 362.5 381.9 400.5 419.8 440.2 461.6
700 Veterans benefits and services:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
750 Administration of justice:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
800 General government:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
900 Net interest:
Budget authority...................... -39.5 -44.5 -49.7 -55.1 -60.9 -67.2 -74.0
Outlays............................... -39.5 -44.5 -49.7 -55.1 -60.9 -67.2 -74.0
920 Allowances:
Budget authority...................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Outlays............................... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
950 Offsetting receipts:
Budget authority...................... -6.8 -7.1 -7.6 -8.1 -8.7 -9.5 -10.3
Outlays............................... -6.8 -7.1 -7.6 -8.1 -8.7 -9.5 -10.3
----------------------------------------------------------------------------------------------------------------

FY 1996 Budget Resolution--Credit Budget
[In billions of dollars]
----------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 5 Yr 7 Yr
----------------------------------------------------------------------------------------------------------------
Direct Loans................... 37.6 40.2 42.3 45.7 45.8 45.8 46.1 211.6 303.5
Guaranteed Loans............... 193.4 187.9 185.3 183.3 184.7 186.1 187.6 934.6 1308.3
================================================================================

050 NATIONAL DEFENSE
Direct Loans........... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Guaranteed Loans....... 1.7 1.7 1.7 1.7 1.7 1.7 1.7 8.5 11.9
050 INTERNATIONAL AFFAIRS
Direct Loans........... 5.7 5.7 5.7 5.7 5.7 5.7 5.7 28.5 39.9
Guaranteed Loans....... 18.3 18.3 18.3 18.3 18.3 18.3 18.3 91.5 128.1
250 GENERAL SCIENCE, SPACE,
AND TECHNOLOGY
Direct Loans........... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Guaranteed Loans....... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
270 ENERGY
Direct Loans........... 1.2 1.2 1.2 1.2 1.2 1.2 1.2 6.0 8.4
Guaranteed Loans....... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
300 NATURAL RESOURCES AND
ENVIRONMENT
Direct Loans........... 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.5 0.7
Guaranteed Loans....... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
350 AGRICULTURE
Direct Loans........... 11.5 11.5 10.9 11.6 11.4 11.1 10.9 56.9 78.9
Guaranteed Loans....... 5.7 5.7 5.7 5.7 5.7 5.7 5.7 28.5 39.9
370 COMMERCE AND HOUSING
CREDIT
Direct Loans........... 1.4 1.4 1.4 1.4 1.4 1.4 1.4 7.0 9.8
Guaranteed Loans....... 123.1 123.1 123.1 123.1 123.1 123.1 123.1 615.5 861.7
400 TRANSPORTATION
Direct Loans........... 0.2 0.2 0.2 0.2 0.2 0.2 0.2 1.0 1.4
Guaranteed Loans....... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
450 COMMUNITY AND REGIONAL
DEVELOPMENT
Direct Loans........... 2.7 2.7 2.7 2.7 2.7 2.7 2.7 13.5 18.9
Guaranteed Loans....... 1.2 1.2 1.2 1.2 1.2 1.2 1.2 6.0 8.4
500 EDUCATION, TRAINING &
SOCIAL SERVICES
Direct Loans........... 13.6 16.3 19.1 21.8 21.9 22.0 22.2 92.7 136.9
Guaranteed Loans....... 16.3 15.9 15.2 14.3 15.0 15.8 16.6 76.7 109.1
550 HEALTH
Direct Loans........... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Guaranteed Loans....... 0.3 0.3 0.3 0.3 0.3 0.3 0.3 1.5 2.1
570 MEDICARE
Direct Loans........... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Guaranteed Loans....... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
600 INCOME SECURITY
Direct Loans........... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Guaranteed Loans....... 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.5 0.7
650 SOCIAL SECURITY
Direct Loans........... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Guaranteed Loans....... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
700 VETERANS BENEFITS AND
SERVICES
Direct Loans........... 1.2 1.1 1.0 1.0 1.2 1.4 1.7 5.5 8.6
Guaranteed Loans....... 26.7 21.6 19.7 18.6 19.3 19.9 20.6 105.9 146.4
750 ADMINISTRATION OF JUSTICE
Direct Loans........... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Guaranteed Loans....... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
800 GENERAL GOVERNMENT
Direct Loans........... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Guaranteed Loans....... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
900 NET INTEREST
Direct Loans........... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Guaranteed Loans....... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
920 ALLOWANCES
Direct Loans........... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Guaranteed Loans....... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
950 OFFSETTING RECEIPTS
Direct Loans........... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Guaranteed Loans....... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------------------------------------------------------------------

COMPARISON OF THE FY 1996 BUDGET WITH 1995 SPENDING LEVELS
[In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change from 1995 level
1995 actual ------------------------------------------------------------------------------------------- 5 YR 7 YR
1996 1997 1998 1999 2000 2001 2002
--------------------------------------------------------------------------------------------------------------------------------------------------------
Spending.............. 1,529.9 56.4 93.8 120.1 171.0 219.6 247.8 284.6 660.8 1,193.2
Percent............... NA 3.7 6.1 7.8 11.2 14.4 16.2 18.6 8.6 11.1
=================================================================================================================================

050 NATIONAL DEFENSE
Spending...... 269.6 -4.6 -4.4 -4.4 1.7 9.7 9.6 9.6 -1.9 17.3
Percent....... NA -1.7 -1.6 -1.6 0.6 3.6 3.6 3.6 -0.1 0.9
150 INTERNATIONAL
AFFAIRS
Spending...... 18.9 -1.8 -3.8 -5.6 -7.3 -8.9 -7.8 -8.2 -27.5 -43.5
Percent....... NA -9.7 -20.3 -29.5 -38.9 -47.2 -41.2 -43.4 -29.1 -32.9
250 GENERAL SCIENCE,
SPACE, AND TECHNOLOGY
Spending...... 17.5 -0.7 -1.0 -1.6 -2.1 -2.5 -2.6 -2.7 -7.8 -13.1
Percent....... NA -3.9 -5.5 -8.9 -12.0 -14.3 -15.0 -15.1 -8.9 -10.7
270 ENERGY
Spending...... 4.9 -0.6 -1.8 -2.1 -1.9 -2.3 -2.4 -2.7 -8.7 -13.8
Percent....... NA -13.1 -36.3 -42.0 -37.9 -45.8 -49.4 -54.0 -35.0 -39.8
300 NATURAL RESOURCES
AND ENVIRONMENT
Spending...... 21.7 -1.6 -1.9 -3.9 -2.6 -4.0 -3.5 -3.7 -13.9 -21.1
Percent....... NA -7.1 -8.5 -18.0 -12.1 -18.2 -16.3 -16.9 -12.8 -13.9
350 AGRICULTURE
Spending...... 12.7 -0.9 -1.3 -2.3 -2.6 -3.7 -5.7 -5.7 -10.7 -22.0
Percent....... NA -7.0 -9.9 -18.0 -20.2 -29.2 -44.5 -44.6 -16.9 -24.8
370 COMMERCE AND
HOUSING CREDIT
Spending...... -13.5 6.6 10.1 7.4 10.4 9.9 11.0 10.9 44.4 66.3
Percent....... NA 48.5 74.4 54.8 77.2 73.4 81.5 80.5 65.7 70.0
400 TRANSPORTATION
Spending...... 39.3 -0.5 -1.9 -2.7 -3.7 -4.4 -5.1 -5.6 -13.3 -24.0
Percent....... NA -1.3 -4.8 -6.9 -9.5 -11.2 -13.1 -14.3 -6.7 -8.7
450 COMMUNITY AND
REGIONAL DEVELOPMENT
Spending...... 11.6 -1.7 -3.8 -4.9 -5.1 -5.0 -5.1 -5.2 -20.4 -30.8
Percent....... NA -14.6 -32.5 -42.0 -43.9 -43.4 -44.4 -44.6 -35.3 -37.9
500 EDUCATION,
TRAINING & SOCIAL
SERVICES
Spending...... 54.7 -2.5 -8.3 -10.1 -10.0 -9.6 -10.5 -11.1 -40.4 -62.0
Percent....... NA -4.5 -15.1 -18.5 -18.3 -17.5 -19.2 -20.2 -14.8 -16.2
550 HEALTH
Spending...... 115.8 6.6 12.0 16.4 20.9 25.6 30.4 33.1 81.6 145.2
Percent....... NA 5.7 10.4 14.2 18.1 22.1 26.3 28.6 14.1 17.9
570 MEDICARE
Spending...... 161.1 14.2 24.0 33.2 42.7 51.9 61.3 71.3 165.9 298.6
Percent....... NA 8.8 14.9 20.6 26.5 32.2 38.1 44.3 20.6 26.5
600 INCOME SECURITY
Spending...... 222.2 2.7 13.1 21.7 32.1 45.4 46.8 56.8 114.9 218.5
Percent....... NA 1.2 5.9 9.7 14.4 20.4 21.0 25.6 10.3 14.0
650 SOCIAL SECURITY
Spending...... 336.2 17.9 36.8 56.9 76.3 96.5 117.4 139.5 284.5 541.4
Percent....... NA 5.3 11.0 16.9 22.7 28.7 34.9 41.5 16.9 23.0
700 VETERANS BENEFITS
AND SERVICES
Spending...... 37.4 -0.5 0.7 1.1 1.6 3.2 3.8 4.2 6.2 14.3
Percent....... NA -1.2 1.8 3.0 4.4 8.6 10.2 11.2 3.3 5.4
750 ADMINISTRATION OF
JUSTICE
Spending...... 17.1 0.7 -0.1 -0.2 -0.4 -0.6 -0.9 -1.0 -0.6 -2.6
Percent....... NA 4.1 -0.3 -1.4 -2.5 -3.3 -5.5 -6.0 -0.7 -2.2
800 GENERAL
GOVERNMENT
Spending...... 13.4 -1.0 -1.6 -0.8 -1.9 -1.4 -2.3 -2.4 -6.7 -11.4
Percent....... NA -7.6 -11.9 -6.0 -14.0 -10.6 -17.3 -17.8 -10.0 -12.2
900 NET INTEREST
Spending...... 235.4 21.0 24.2 23.4 23.8 23.1 17.5 13.2 115.5 146.2
Percent....... NA 8.9 10.3 9.9 10.1 9.8 7.4 5.6 9.8 8.9
920 ALLOWANCES
Spending...... 0.0 -1.9 -2.3 -2.5 -2.7 -2.8 -2.9 -2.9 -12.3 -18.1
Percent....... NA NA NA NA NA NA NA NA NA NA
950 OFFSETTING
RECEIPTS
Spending...... -46.2 5.0 4.9 1.0 1.7 -0.7 -1.1 -3.1 12.0 7.8
Percent....... NA 10.8 10.6 2.2 3.8 -1.4 -2.5 -6.6 5.2 2.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

FUNCTION 050: NATIONAL DEFENSE

This function is composed of programs for the Department of
Defense and defense-related activities of the Department of
Energy. Function 050 includes the pay allowances for active
duty military personnel and civilian personnel. Function 050
also includes the funding to develop, equip, operate, and
maintain the weapon systems for this force.

Summary of Policy Assumptions

[The items below are presented for illustrative purposes
only. The Appropriations Committee and the authorizing
committees with jurisdiction over the programs mentioned in
this function will make final determinations about the program
changes needed to meet the spending levels indicated. The
proposals below are intended simply to indicate the Budget
Committee's suggestions of one path toward reaching a balanced
budget by fiscal year 2002.]

COMMITTEE RECOMMENDATION
FUNCTION 050: NATIONAL DEFENSE
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
House Budget Committee 1995
Policy Assumptions level 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Function totals: House
Budget Committee
balanced budget path:
Budget authority.... 261,418 267,294 269,338 277,269 281,320 287,336 287,268 287,234
Outlays............. 269,626 265,057 265,266 265,269 271,317 279,329 279,260 279,226

---------------------------------------------------------------------------------------
DISCRETIONARY
(7)Changes from 1995
levels

---------------------------------------------------------------------------------------
Reduce the DOD civilian
work force:
Budget authority.... 41,730 -20 -165 -520 -1,055 -1,735 -2,155 -2,260
Outlays............. 40,061 -20 -160 -510 -1,040 -1,715 -2,145 -2,260
----------------------------------------------------------------------------------------------------------------

Discussion of Policy Assumptions

The Budget Committee recommends a National Defense
(Function 050) outlay total of $1,346 billion over five years,
an aggregate that the Congressional Budget Office [CBO]
estimates would exceed the administration's 5-year National
Defense budget by $46 billion. The committee believes its
recommended budget level, combined with a vigorous
reprioritization of resources and aggressive reform, will
support both near-term readiness and balanced modernization.
For fiscal year 1996, the Committee supports a National
Defense budget authority function total of $267.294 billion and
an estimated outlay function total of $265.057 billion. This
recommendation would equate to approximately $45 million in
budget authority for Procurement so as to reverse the long-term
decline in that account. The National Defense topline would
also assume an increase to $35 million for Research,
Development, Test, and Evaluation (RDT&E) to reflect the need
for advanced weaponry in the post-2000 time frame. The
Committee's budget recommendation assumes that budget authority
for Military Personnel, Operations and Maintenance, and
Military Construction will not deviate significantly from the
Administration request.
Since January 1993, the administration has pursued a
defense program driven by budgetary necessity rather than
national military strategy. In March 1993, then-Secretary of
Defense Aspin conceded that the administration had used a
budget plug of $127 billion in defense cuts over five years to
satisfy other priorities. He also pledged that the
administration would conduct a Bottom-Up Review to match the
cuts with the national military strategy. This review,
completed in October 1993, is the centerpiece of the Clinton
defense strategy. But the General Accounting Office has
concluded that there are serious flaws in both the Future Years
Defense Plan and the military strategy it is intended to
support. GAO found the FYDP to be underfunded by up to $150
billion. The main causes of the underfunding were optimistic
inflation assumptions, understated weapon system costs, and
inflated savings estimates from base closures and various
management initiatives.
GAO's analysis of the BUR found that the strategy may be
too ambitious for the forces programmed to execute it. In
particular, there may be insufficient airlift, sealift, army
support forces, and bombers to sustain a strategy of winning
two major regional conflicts nearly simultaneously without
allied support and with residual forces engaged in
peacekeeping. Critical firepower enhancements, such as
precision-guided munitions, are not likely to be available in
the numbers required by 1999, when the BUR is to be fully
implemented. It is therefore likely that the administration is
locked into an overly ambitious strategy funded by a budget
that understates the forces necessary to implement the
strategy.
The administration conceded this mismatch with its December
1994, decision to add $25 billion to the defense budget over
six years. With the bulk of these funds programmed for the out-
years, however, the addition does little to address the near-
term mismatch. The same month it decided to add the $25
billion, the administration announced a combination of program
terminations and stretch-outs intended to obtain $8 billion in
savings. This action, however, merely aggravates the
modernization shortfall in the Clinton defense program.
This shortfall has been exacerbated by the large increase
of spending in the defense budget that is unrelated to military
capabilities. The Congressional Research Service estimates that
between fiscal year 1990 and fiscal year 1994, spending in this
category grew from $3.0 billion to $12.7 billion. The increase
in non-defense spending occurred against a background of
substantial overall defense budget reductions. The largest
items in this area of spending are environmental spending,
defense conversion, spending for so-called nontraditional
missions (such as U.N. peacekeeping and the housing of migrants
at Guantanamo), and miscellaneous Congressional earmarks.
The strategy/funding mismatch, combined with the drain of
non-defense spending, have put the administration's defense
plan on a path toward strategic bankruptcy. The Committee
therefore strongly recommends an aggressive reform agenda for
the Pentagon. Although the budget resolution will establish a
higher funding level for National Defense relative to the
administration's budget, more resources cannot by themselves
correct the imbalances and inefficiencies that hamper the
execution of a sound defense program. Nor can the Department of
Defense escape the scrutiny that other departments of
government will receive.
Accordingly, the Committee believes it is necessary to
aggressively reduce non-defense spending in the defense
function. Although the Committee supports environmental
remediation where it is necessary to protect health or
safeguard the environment, it also believes a prudent, cost-
benefit methodology needs greater emphasis. The Department of
Defense should adopt a zero-based approach that ranks
environmental projects according to priority to ensure that
pressing requirements are met while remaining within budgetary
constraints. Closing bases should be cleaned up to a standard
that meets reasonably anticipated future land uses, rather than
the highest possible standard.
Defense conversion programs such as the Technology
Reinvestment Project could be eliminated. Defense research
funds should be restricted to traditional defense-oriented
projects that fulfil national defense needs.
The Committee also believes acquisition is an area in which
comprehensive reform is necessary to deliver weapon systems to
our troops in a more timely fashion and at a more acceptable
cost. Despite several attempts at acquisition reform in recent
years, results have been marginal. GAO estimates that a major
weapon system requires about 17 years on average from inception
to field deployment, roughly double the length of time required
to develop these systems in the 1950s. Meanwhile, development
time for commercial products has substantially decreased.
Piecemeal reform cannot redress the current situation, which
combines the worst aspects of overly complex statutes and
regulations with DOD's own, bureaucratically-driven acquisition
culture. Separate legislation, H.R. 1368, has been introduced
in an effort to deal with acquisition reform in a comprehensive
manner.
Active duty combat force structure has been cut
approximately one-third since the late 1980s. Therefore, the
Committee is disappointed that infrastructure, overhead, and
bureaucracy have not been reduced by a commensurate proportion.
If the 1995 recommendation to the Base Realignment and Closure
Commission [BRAC] is accepted, the four base closing actions
(1988, 1991, 1993, and 1995) will have reduced the base
infrastructure by only about 21 percent. Because 1995 is the
last Congressionally mandated year for base closings, the
Committee recommends that the BRAC process continue, albeit
with certain reforms to make BRAC more cost-effective. In
particular, DOD should have greater ability to generate
proceeds through land sales, as well as to reduce costs
associated with environmental cleanup.

Discretionary Spending

Reduce the DOD Civilian Acquisition Work Force. The
Department of Defense has reduced its civilian work force
substantially since the late 1980's. As part of this effort,
the Department reduced the number of civilian jobs allocated to
acquisition by about 23 percent. Total defense civilian
employment decreased from about 1.1 million employees in 1988
to about 873,000 in 1995, a reduction of about 20 percent.
Today, DOD acquisition agencies employ approximately 425,000
civilian workers. DOD plans to reduce the size of its total
civilian work force by an additional 14 percent during the next
5 years. Presumably, future reductions in the number of
acquisition jobs will continue to approximate those in the
overall civilian workforce. This proposal assumes a reduction
of 10 percent in civilian acquisition jobs beyond the
reductions in the administration's plan. According to the
Congressional Budget Office, the Department could reduce the
number of civilian acquisition personnel and achieve
significant savings through streamlining and consolidating the
existing military command structure that governs defense
acquisition. Since fiscal year 1986, DOD procurement funding
has declined 71 percent in real terms; the acquisition work
force has not declined to reflect the reduction in Pentagon
acquisition; and substantial overhead remains.
FUNCTION 150: INTERNATIONAL AFFAIRS

This function is composed of the international affairs
programs of the United States, including foreign economic and
security assistance programs, operations of the State
Department and other foreign affairs agencies, information and
educational exchange programs, and export promotion activities.

Summary of Policy Assumptions

COMMITTEE RECOMMENDATION
FUNCTION 150: INTERNATIONAL AFFAIRS
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
House Budget Committee Policy 1995
Assumptions level 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Function totals: HBC balanced
budget path:
Budget Authority............ 18,858 15,800 13,660 11,308 9,668 10,489 12,044 12,024
Outlays..................... 18,881 17,045 15,054 13,303 11,545 9,965 11,108 10,683
-------------------------------------------------------------------------------

DISCRETIONARY
(7) Changes from 1995 Levels
-------------------------------------------------------------------------------

Reduce Subsidies for
International Exports and
Investment, including Public
Law 480:
Budget Authority............ 2258 -282 -365 -508 -750 -933 -933 -933
Outlays..................... 2009 -140 -273 -383 -650 -788 -880 -924
Cease Supporting the
International Development
Association (IDA) and Reform
Multilateral Development Banks
(excluding the World Bank):
Budget Authority............ 1928 -1293 -1617 -1686 -1830 -1830 -1830 -1830
Outlays..................... 1572 -139 -434 -693 -980 -1361 -1472 -1632
Eliminate the United States
Information Agency (USIA)
Educational and Cultural
Exchanges, and Terminate
Overseas Non-Military
Broadcasting:
Budget Authority............ 866 -134 -301 -620 -824 -824 -824 -824
Outlays..................... 895 -103 -208 -495 -757 -812 -816 -816
Reform the Department of State:
Budget Authority............ 3830 -20 -391 -844 -966 -1071 -1071 -1071
Outlays..................... 3888 -17 -315 -750 -919 -1061 -1061 -1061
Restructure Development and
Humanitarian Assistance:
Budget Authority............ 6748 -681 -1117 -1960 -2262 -2728 -2728 -2728
Outlays..................... 7117 -96 -474 -1064 -1486 -2088 -2290 -2518
Reform the Remaining Elements of
U.S. Foreign Policy:
Budget Authority............ 5229 280 103 -90 -213 -517 897 897
Outlays..................... 5921 85 40 -60 -176 -490 803 847
----------------------------------------------------------------------------------------------------------------

Discussion of Policy Assumptions

Discretionary Spending

Reduce Subsidies for International Exports and Investment,
including Public Law 480. The proposal calls for major changes
in the Public Law 480 program. According to the Congressional
Budget Office, [c]hanges in the world over the past 40 years
may have rendered the program obsolete. * * * The market
development aspect of the Public Law 480 is relatively
insignificant for two reasons: exports under Titles I and III
are a small portion of total U.S. agricultural exports, and the
countries currently receiving Public Law 480 commodities are
unlikely to become commercial customers. President Clinton
proposed reductions in Public Law 480. This proposal accepts
the President's funding level through 1998. It then assumes
that Title I will be eliminated and that the Congress will take
steps to reduce transportation costs.

This function also contains three international export/
investment agencies: the Overseas Private Investment
Corporation [OPIC], the U.S. Trade and Development Agency, and
the Export-Import Bank. OPIC is a government corporation that
provides financing and political risk insurance to U.S.
companies investing in developing regions. OPIC's new insurance
and finance commitments have recently increased rapidly,
thereby representing [the Clinton] Administration's commitment
to supporting American business overseas. The House Committee
on the Budget believes that the functions of OPIC can, and
should, be performed through the private sector. In addition,
the Committee is extremely concerned about the highly
speculative nature of OPIC's recent activities. This proposal
assumes that OPIC's insurance activities will be privatized.
Likewise, the U.S. Trade and Development Agency [TDA] provides
grants for feasibility studies for major development projects
in the developing world. The House Committee on Appropriations
recently encouraged TDA to cooperate with the Congress in
developing a method of recouping a portion of its costs from
American companies that benefit from its financial support,
thereby reducing TDA's future appropriation requirements. This
proposal accepts this recommendation. Finally, the Export-
Import Bank promotes U.S. exports by providing subsidized
financing to foreign buyers of U.S. goods. The bank makes
direct loans with below-market interest rates and provides
guarantees of private lending without receiving full
compensation for the contingent liabilities. It is assumed that
the subsidy appropriation for the bank will be reduced by
either raising risk-related fees or rationing resources to
sales that would not go forward without government financing.

Cease Supporting the International Development Association
[IDA] and Reform Multilateral Development Banks (excluding the
World Bank). IDA, an affiliate of the World Bank, is supposed
to make low-interest loans--known as soft loans--to the world's
poorest nations. Recently, two major recipients of IDA funds
have been the People's Republic of China and India. In 1946,
American authorities resolved that concessionary loans to
foreign governments had no place among the techniques of
American statecraft. Soft loans seemed to vitiate the need for
hard choices. Yet this naturally made these loans a magnet for
those proposals that were least justified and most likely to
waste resources. This proposal assumes that the U.S. will not
authorize the third year of the 10th replenishment of IDA and
will not participate in future replenishments.

The multilateral development banks [MDBs], including the
Inter-American Development Bank, the Asian Development Bank,
the African Development Bank, and the European Bank for
Reconstruction and Development finance development projects in
less developed countries. Recently, several of these
institutions have come under sharp attack as the success rate
of their projects has declined. Under this proposal, the United
States would continue to be a member and stockholder in the
banks but would stop supplying new capital to several of these
institutions. The banks would still be allowed to use their
reflows or loan repayments to make new loans.

Eliminate the United States Information Agency [USIA]
Educational and Cultural Exchanges, and Terminate Overseas Non-
Military Broadcasting. USIA was created in 1953 during the Cold
War to explain and advocate U.S. policies. The USIA oversees
television broadcasting services similar to the radio
broadcasts of Voice of America. Today, USIA also administers
educational and cultural exchange programs. Funding for these
exchange programs grew by about 35 percent in real terms
between 1991 and 1995. The Cold War is over, and countries such
as those in Eastern Europe and the former Soviet Union have
ready access to world news (e.g., CNN). This increased
communication and private travel has decreased the need for
exchange programs. This proposal eliminates funding for USIA
exchange programs by 1998.
Radio Free Europe [RFE] and Radio Liberty [RL] broadcast
country-specific news to Eastern Europe and the former Soviet
Union, respectively. The Voice of America [VOA] oversees radio
broadcasts that provide news and U.S.-related information to
audiences worldwide. This proposal would eliminate or privatize
VOA and RFE/RL by 1998, end all overseas construction of
broadcast facilities, and end most overseas broadcasting.
Overseas broadcasting played an important role during the Cold
War, but has become an expensive anachronism with the advent of
global satellite television broadcasting. Likewise, the
technology used by Voice of America and WorldNet limits their
potential audiences and makes those systems inefficient and
expensive. Funding, however, is available for Radio and TV
Marti. Finally, it is assumed that USIA will be consolidated
within the Department of State.

Reform the Department of State. The Department of State
promotes U.S. foreign policy interests abroad. Other, smaller
agencies also conduct research and activities relating to
foreign affairs. The Department of State budget grew from $1.7
billion in the early 1980s to $2.6 billion in 1995. The
increases in funding mainly reflect growth in salaries and
related expenses, and rent and acquisition costs of residences
and offices. President Clinton's budget proposes future
reductions for salaries and expenses, diplomatic and consular
programs, protection of foreign missions, emergencies, the
Inspector General, the American Institute in Taiwan, and
acquisition and maintenance of buildings abroad. Unfortunately,
these changes merely accept the status quo, albeit on a
slightly smaller scale. This proposal calls for a complete
restructuring of foreign policy. For example, it assumes that
the Department of State will absorb the Arms Control and
Disarmament Agency [ACDA], the United States Information
Agency, and the Agency for International Development.
Concerning ACDA, sufficient funding is transferred to the
Department of State to monitor existing conventions and
treaties. Likewise, small agencies, such as the United States
Institute of Peace, the Asia Foundation, the East-West Center,
and the North/South Center perform foreign affairs activities
that duplicate functions conducted by the Department of State.
This proposal assumes that these agencies will be eliminated
and that their elimination will result in a more coherent
foreign policy. This proposal also assumes a reduction and a
reallocation of funding for the National Endowment for
Democracy.

Restructure Development and Humanitarian Assistance. The
Agency for International Development administers development-
related projects and provides technical advice in 109
countries. In many cases, these programs have been wasteful and
ineffective. Presidentially appointed commissions have said AID
has too many objectives and supports projects in too many
countries. Former Secretary of State James A. Baker recently
stated that the two rationales for the existence of AID--to
stave off communist aggression and to implement government-to-
government transfers for large capital projects--no longer
exist. The first is obsolete with the end of the Cold War and
the second has been discredited as a development model. AID's
response has been inadequate. This proposal focuses on more
attainable goals in countries that are more likely to benefit
from U.S. development assistance by reducing funding by 50
percent of 1995 levels by 1998. In addition, the proposal would
eliminate the housing investment guarantee program, which
provides hard-currency loans to developing countries for
housing. According to CBO, a decade after the recognition of
the international debt crisis, that form of assistance ``is not
helping recipient countries, because housing is an activity
that does not generate the foreign exchange those countries
need to retire their debt.'' This proposal also recognizes that
the Inter-American Foundation and the African Development
Foundation duplicate other development activities. This
proposal assumes significant reduction of these foundations.
Funds are also provided to both Eastern Europe and the former
Soviet Union to assist their transition to democratic
societies. Assistance to Eastern Europe has always been viewed
as temporary in nature. This proposal recognizes this fact and
phases out funding. It is important, however, to provide a
degree of equity between Eastern Europe and the former Soviet
Union. As such, this proposal assumes that assistance to the
former Soviet Union will be phased out. This proposal also
assumes reductions in the Peace Corps. Finally, it recognizes
the Clinton Administration's proposed reductions in both
migration and refugee assistance, as well as the Economic
Support Fund.

Reform the Remaining Elements of U.S. Foreign Policy. This
proposal assumes that the United States will take additional
steps to support alliances and promote international military
cooperation. As such, an initiative is assumed that provides
military assistance to the three Central European democracies
that are most likely to become NATO members. Likewise, this
proposal provides additional funds to help limit the impact of
international crime and terrorism. It also provides headroom
for debt relief.

These initiatives are offset by spending reductions in
several areas. This proposal assumes, for example, that the
subsidy currently provided for foreign military financing [FMF]
loans to Greece and Turkey will be eliminated. The FMF program
enables friendly and allied countries to improve their ability
to defend themselves by refinancing their acquisition of U.S.
military articles, services, and training. The proposal merely
continues recent trends.

This proposal assumes reductions in several international
organizations. The Committee believes that the Clinton
Administration has subordinated U.S. interests in favor of ill-
defined goals and policies established by international civil
servants and foreign nations. This proposal reasserts the
primacy of U.S. interests in our dealings with all
international organizations. The Congress has already taken
steps to limit our funding for the United Nations and for U.N.
peacekeeping activities. This proposal assumes that much more
needs to be done. Historically, peacekeeping activities have
occurred after the fighting has ended and parties have agreed
to the presence of lightly-armed U.N. forces while negotiating
an enduring resolution to the conflict. Since 1990, the U.N.
has increasingly become involved in non-traditional peace
enforcement mission. While U.S. funding has surged with this
increased involvement, U.S. public support has declined for
these non-traditional U.N. missions. This proposal limits U.S.
contributions by the Department of State for international
peacekeeping by requiring the U.N. to more carefully evaluate
the need for its missions. As a member of the United Nations,
the U.S. also contributes to international organizations and
programs, such as the U.N. Development Program. This proposal
assumes that it is time for these international organizations
to deliver on their vague promise of reform. Finally, the
United States pays assessed contributions through the
Department of State for International Organizations and
Conferences, including the United Nations, the International
Labor Organization, the United Nations Industrial Development
Organization, the International Organization of Vine and Wine,
the International Seed Testing Association, and the Bureau of
International Expositions. It is assumed that these
contributions will be reduced after 1996 by withdrawing from
several organizations, since a year's lead time must be
provided in order for the U.S. to exercise its option to
withdraw. Finally, this proposal recognizes that programs that
are currently being funded through the Department of Defense
could be funded through the Department of State. When the
reorganization of the Department of State is completed, this
proposal provides the flexibility to fund these programs in
this manner. If, however, those funds are not required, the
funds would be available for additional deficit reduction.
FUNCTION 250: SCIENCE, SPACE, AND TECHNOLOGY

This function includes discretionary funding for activities
of the National Aeronautic and Space Administration [NASA] and
the National Science Foundation [NSF], and high energy and
nuclear physics programs of the Department of Energy [DOE].

Summary of Policy Assumptions

COMMITTEE RECOMMENDATION
FUNCTION 250: GENERAL SCIENCE, SPACE AND TECHNOLOGY
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
House Budget Committee policy 1995
assumptions level 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Function totals: House Budget
Committee balanced budget path:
Budget authority............ 17,151 16,701 16,275 15,696 15,259 14,882 14,878 14,878
Outlays..................... 17,529 16,852 16,570 15,965 15,423 15,028 14,891 14,874

-------------------------------------------------------------------------------

DISCRETIONARY
(7)Changes from 1995 levels
-------------------------------------------------------------------------------

Research and related activities:
\1\
Budget authority............ 2,182 -17 48 115 183 254 254 254
Outlays..................... 2,051 -8 15 64 122 185 224 240
Academic research
infrastructure: \1\
Budget authority............ 250 -150 -150 -150 -150 -150 -150 -150
Outlays..................... 94 -15 -68 -120 -150 -150 -150 -150
Major research equipment: \1\
Budget authority............ 126 -56 -71 -100 -126 -126 -126 -126
Outlays..................... 13 -6 -30 -61 -87 -110 -123 -126
Salaries and expenses: \1\
Budget authority............ 124 -4 -9 -14 -19 -24 -24 -24
Outlays..................... 123 -3 -8 -13 -18 -23 -24 -24
Headquarters relocation: \1\
Budget authority............ 5 0 0 0 0 -5 -5 -5
Outlays..................... 5 0 0 0 0 -5 -5 -5
Inspector general: \1\
Budget authority............ 4 0 1 1 1 1 1 1
Outlays..................... 4 0 1 1 1 1 1 1
Education and human resources:
\1\
Budget authority............ 606 -6 -6 -6 -6 -6 -6 -6
Outlays..................... 503 -1 -4 -5 -6 -6 -6 -6
Human space flight: \2\
Budget authority............ 5,515 -55 -281 -657 -855 -1,215 -1,215 -1,215
Outlays..................... 3,474 -35 -194 -502 -755 -1,068 -1,190 -1,215
Science, aeronautics and
technology (i): \2\
Budget authority............ 5,139 -343 -471 -610 -839 -871 -871 -871
Outlays..................... 2,723 -116 -377 -536 -722 -840 -869 -871
Mission Support (i): \2\
Budget authority............ 2,158 146 77 31 -16 -62 -62 -62
Outlays..................... 1,813 122 79 42 -5 -52 -59 -62
Inspector general: \2\
Budget authority............ 16 1 1 0 0 0 0 0
Outlays..................... 16 1 1 0 0 0 0 0
Allow private producers to build
and operate cogeneration
facilities at Federal civilian
installations for NASA
Budget authority............ NA 0 0 -15 -15 -15 -15 -15
Outlays..................... NA 0 0 -5 -13 -15 -15 -15
Prioritize general science and
research activities [DOE]:
Budget authority............ 984 16 -34 -84 -84 -84 -84 -84
Outlays..................... 1,388 12 -22 -72 -84 -84 -84 -84
----------------------------------------------------------------------------------------------------------------
\1\ National Science Foundation.
\2\ NASA.

Discussion of Policy Assumptions

For the technological revolution to continue, a strong
fundamental science base is needed. Therefore, the proposals in
Function 250 prioritize basic research policies. For example,
National Science Foundation civilian research and related
activities, with the exclusion of social, behavioral, and
economic studies and the critical technologies institute, can
be provided for at their current levels plus 3-percent annual
growth. There need to be no cuts to NSF basic research on the
physical sciences. Budget realities dictate that basic research
be re-emphasized. Much applied research can and should be
market-driven and conducted by the private sector.

In certain areas, such as fundamental scientific research
and collective risk endeavors, the government does play an
important role. Space exploration is one example, and agencies
such as the National Aeronautics and Space Administration have
been able to make significant technical strides with public
funds. Still, even in space, the Budget Committee advocates
policies that encourage faster private technology development
as risk becomes better understood and more controllable.
Finding ways to involve industries in space activities should
be a major priority.

Discretionary Spending

Emphasize Basic Science Within the National Science
Foundation [NSF]. This proposal assumes that while science and
technology must contribute to the immediate fiscal reality,
they must also provide for the opportunities that must be
developed in the future. In order for the technological
revolution to continue, a strong fundamental science is needed.
Therefore, this proposal assumes that basic research should be
prioritized. For instance, NSF civilian research and related
activities, with the exclusion of social, behavioral, and
economic studies and the critical technologies institute, can
be provided at their current levels plus 3 percent growth. No
reductions are assumed to NSF basic research on the physical
sciences. Education and Human Resources can be maintained and
Academic Research Infrastructure is assumed at President
Clinton's requested level.

Emphasize NASA's Core Missions. In certain areas, such as
fundamental scientific research and collective risk endeavors,
the government does play an important role. This proposal
assumes that space exploration is one example where the
collective risks are still high, and where agencies such as the
National Aeronautics and Space Administration have been able to
make great technical strides with public funds. Still, even in
outer space, policies are advocated that encourage faster
private technology development as risk becomes better
understood and more controllable. Finding ways to involve
industry in space activities should be a major priority.
Consequently, this proposal assumes a $1.5 billion savings by
privatizing the space shuttle. Savings on the order of $2.7
billion are also assumed by applying just such a policy to the
Mission to Planet Earth Program. This proposal also assumes the
overall NASA management and operational reforms referred to in
House Report 104-89, part 1. Finally, space is the last
frontier to be utilized and developed. In this regard, this
proposal provides for the full allocation of resources
necessary from the $13.2 billion required to complete the
construction and assembly of the international space station
basic research laboratory. [Note: The figures above reflect the
portion of this provision that occurs in Function 250. A second
portion appears in Function 400.]

Allow Private Producers to Build and Operate Cogeneration
Facilities at Federal Civilian Installations. The Department of
Defense has entered into agreements with private power
producers wherein the private investors provided the capital
needed to upgrade heating and power producing facilities on
Federal installations at no cost to the Federal Government in
return for the right to sell excess power and heat off the
installation commercially in the civilian market. That reduces
the government's cost of energy and the need for the government
to upgrade aging power and heating plants. The National
Aeronautics and Space Administration, the Department of
Veterans Affairs, and other civilian departments could make
similar cost-savings arrangements if an amendment were made to
Title VIII of the Shared Savings Amendment of the National
Energy Conservation Policy Act of 1978. That title currently
prohibits this activity at civilian agencies. The figures above
reflect only the portion of the savings in Function 250.
Another portion of this proposal appears in Function 270.

Prioritize General Science and Research Activities. This
account provides funds for high energy physics and nuclear
physics. This proposal assumes that basic science is maintained
with the inclusion of the Scientific Facilities Utilization
Initiative and appropriate decommissioning of outmoded,
antiquated facilities. Budget realities dictate that basic
research be reemphasized.
FUNCTION 270: ENERGY

This function funds Federal energy activities in four major
areas: energy research and supply; energy conservation;
emergency preparedness; and energy information policy and
regulation. Many Department of Energy [DOE] programs are funded
in the function, along with the Department of Agriculture's
Rural Electrification Administration, the power program of the
Tennessee Valley Authority, and the Nuclear Regulatory
Commission.

Summary of Policy Assumptions

COMMITTEE RECOMMENDATION
FUNCTION 270: ENERGY
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
House Budget Committee policy 1995
assumptions level 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Function totals: House Budget
Committee balanced budget path:
Budget authority............ 6,342 4,350 3,899 3,570 3,883 3,583 3,572 3,509
Outlays..................... 4,949 4,299 3,153 2,868 3,075 2,681 2,504 2,278

-------------------------------------------------------------------------------

DISCRETIONARY
(7)Changes from 1995 levels
-------------------------------------------------------------------------------

Allow private producers to build
and operate cogeneration
facilities at Federal civilian
installations for energy:
Budget authority............ NA 0 0 -15 -15 -15 -15 -15
Outlays..................... NA 0 0 -15 -15 -15 -15 -15
Reduce energy supply research
and development:
Budget authority............ 3,315 -630 -884 -875 -1,086 -1,168 -1,168 -1,168
Outlays..................... 3,315 -630 -884 -875 -1,086 -1,168 -1,168 -1,168
Departmental administration: \1\
Budget authority............ 282 -40 -40 -40 -40 -40 -40 -40
Outlays..................... 282 -40 -40 -40 -40 -40 -40 -40
Reduce energy information
administration: \1\
Budget authority............ 84 -44 -44 -44 -44 -44 -44 -44
Outlays..................... 84 -44 -44 -44 -44 -44 -44 -44
Reduce the Department of
Energy's fossil energy research
and development:
Budget authority............ 442 -292 -307 -322 -332 -342 -342 -342
Outlays..................... 442 -292 -307 -322 -332 -342 -342 -342
Reduce energy conservation
research:
Budget authority............ 771 -370 -385 -400 -415 -425 -425 -425
Outlays..................... 771 -370 -385 -400 -415 -425 -425 -425
Reduce uranium supply and
enrichment to the President's
level:
Budget authority............ 63 -21 -33 -33 -33 -33 -33 -33
Outlays..................... 63 -21 -33 -33 -33 -33 -33 -33
Reduce uranium enrichment
decontamination and
decommissioning to the
President's level:
Budget authority............ 301 -13 -9 -6 -3 0 0 0
Outlays..................... 301 -13 -9 -6 -3 0 0 0
Eliminate further funding for
the Clean Coal Technology
Program:
Budget authority............ NA 0 0 -288 -288 -288 -288 -288
Outlays..................... NA 0 0 -288 -288 -288 -288 -288
Sell Alaska Power: \2\
Budget authority............ 7 5 -7 -7 -7 -7 -7 -7
Outlays..................... 7 5 -7 -7 -7 -7 -7 -7
Sell the Naval Petroleum
Reserve: \2\
Budget authority............ 187 0 -187 -187 -187 -187 -187 -187
Outlays..................... 187 0 -187 -187 -187 -187 -187 -187
Privatize SEPA: \3\
Budget authority............ 22 0 0 -22 -22 -22 -22 -22
Outlays..................... 22 0 0 -22 -22 -22 -22 -22
Privatize WAPA: \3\
Budget authority............ 230 0 0 0 -230 -230 -230 -230
Outlays..................... 230 0 0 0 -230 -230 -230 -230
Privatize SWAPA: \3\
Budget authority............ 21 0 0 0 -21 -21 -21 -21
Outlays..................... 21 0 0 0 -21 -21 -21 -21
Reform commercial nuclear waste
storage policy:
Budget authority............ 522 -392 -377 -302 -282 -257 -242 -227
Outlays..................... 451 -392 -377 -302 -282 -257 -242 -227

MANDATORY

Sell Alaska Power: \4\
Budget authority............ NA 0 11 11 11 11 11 11
Outlays..................... NA 0 11 11 11 11 11 11
Sell the Naval Petroleum
Reserve: \4\
Budget authority............ NA 0 17 433 433 433 433 433
Outlays..................... NA 0 17 433 433 433 433 433
Privatize SEPA: \5\
Budget authority............ NA 0 -853 0 0 0 0 0
Outlays..................... NA 0 -853 0 0 0 0 0
Privatize WAPA: \5\
Budget authority............ NA 0 0 -2,687 0 0 0 0
Outlays..................... NA 0 0 -2,687 0 0 0 0
Privatize SWAPA: \5\
Budget authority............ NA 0 0 -574 0 0 0 0
Outlays..................... NA 0 0 -574 0 0 0 0
Privatize SEPA: \6\
Budget authority............ NA 0 0 -185 -190 -190 -190 -190
Outlays..................... NA 0 0 -185 -190 -190 -190 -190
Privatize WAPA: \6\
Budget authority............ NA 0 0 0 -340 -340 -340 -340
Outlays..................... NA 0 0 0 -340 -340 -340 -340
Privatize SWAPA: \6\
Budget authority............ NA 0 0 0 -105 -105 -105 -105
Outlays..................... NA 0 0 0 -105 -105 -105 -105
Sell U.S. Enrichment
Corporation: \7\
Budget authority............ NA -302 -255 -335 -335 -335 -335 -335
Outlays..................... NA -302 -255 -335 -335 -335 -335 -335
----------------------------------------------------------------------------------------------------------------
\1\ Bureaucracy in DOE.
\2\ Elimination of discretionary spending.
\3\ Elimination of discretionary spending, Federal dams.
\4\ Loss of mandatory receipts.
\5\ Asset sale proceeds, Federal dams.
\6\ Loss of mandatory receipts, Federal dams.
\7\ Elimination of direct spending.

Discussion of Policy Assumptions

For the purposes of determining what is good fundamental
science, and for prioritizing associated research and
development, the following six criteria are employed in
constructing the provisions below:

Federal Government efforts should focus on long-term,
non-commercial R&D with a potential for significant
scientific discovery, leaving economic feasibility and
commercialization to the marketplace.
Federal funding of R&D for specific processes and
technologies should not be carried out beyond the
demonstration of technical feasibility. Production
should be subject to private investment.
Revolutionary ideas and pioneering capabilities that
make possible the impossible should be pursued within
controlled, performance-based funding.
The Federal Government should avoid funding research
in areas that are receiving or should reasonably expect
to receive funding from the private sector, such as
evolutionary advances or incremental improvements.
Government-owned laboratories should confine their
in-house research to areas in which their technical
expertise and facilities have no peer. Other research
should be contracted out to industry, private research
foundations, and universities.

When specifically applied to the Department of Energy,
these guidelines suggest significant reductions in current
programs that, in turn, make much of the existing bureaucracy
unnecessary and suggest its elimination. As a result of the
many industrial product development projects currently funded
by the Department being subjected to the ``screen'' of the
criteria above, energy supply R&D could be reduced by $630
million in fiscal year 1996 and by $1.17 billion in fiscal year
2000. On the other hand, examples of research that ``pass'' the
six-point test include the human genome project; an expanding
hydrogen energy basic research program; long-term, fundamental
engineering of an advanced gas-cooled reactor; and ongoing
basic energy sciences research excluding new starts. Likewise,
application of the criteria to fossil technologies, the product
of mature industries, and conservation projects, predominantly
demonstrating cost-avoidance, suggest R&D budgets of about $150
million in fiscal year 1996, falling to $100 million by the
turn of the century. The clean coal technology program is
suggested for termination.

Discretionary Spending

Allow Private Producers to Build and Operate Cogeneration
Facilities at Federal Civilian Installations. The Department of
Defense has entered into agreements with private power
producers wherein the private investors provided the capital
needed to upgrade heating and power producing facilities on
Federal installations at no cost to the Federal Government in
return for the right to sell excess power and heat off the
installation commercially in the civilian market. That reduces
the government's cost of energy and the need for the government
to upgrade aging power and heating plants. The National
Aeronautics and Space Administration, the Department of
Veterans Affairs, and other civilian departments could make
similar cost-savings arrangement, if an amendment were made to
Title VIII of the Shared Savings Amendment of the National
Energy Conservation Policy Act of 1978. That title currently
prohibits this activity at civilian agencies. The figures above
reflect only the portion of the savings in Function 270.
Another portion of this proposal appears in Function 250.

Begin Termination of the Department of Energy. The
Department of Energy was supposedly created to deal with the
energy crisis the country experienced in the 1970's with
gasoline lines and natural gas shortages, for example, and the
prospect of inevitable energy shortages and ever-increasing
energy prices. The crisis, however, was in large part the
result of price and allocation controls imposed by the Federal
Government. As President Reagan observed, the country suffered
not from a shortage of energy but from a surplus of government.
Federal oil price and allocation controls made it illegal--
literally, a Federal offense--to move gasoline around the
country when supplies grew tight. Gasoline lines ended after
those controls were dismantled in 1981. Natural gas was in
short supply because price controls discouraged production from
1954 through the 1980's. Those shortages also disappeared as
price controls were phased out. Standby gasoline rationing
plans and mandatory Federal restrictions on hot water use and
air conditioning were drafted to mandate conservation. In the
1980's, when the Reagan administration was ``neglecting''
energy conservation, market-based energy conservation worked
quite well. The economy grew one-third and energy use stayed
flat. DOE spent more than $55 billion in constant dollars for
energy research alone--this is over and above the amounts the
Synfuels Corporation spent on fuels that cost several times
what conventional fuels cost. It is reasonable to ask whether
the country received a full and fair return on that investment.
This proposal would begin the orderly termination of the
Department of Energy.

--Reduce Energy Supply Research and Development.--This proposal
reduces near-term technology subsidies in the Department of
Energy for energy supply research and development in the
areas of solar and renewable energy, biological and
environmental research, environmental restoration and waste
management, the international fusion program, the neutron
source reactor, technology transfer activities, and the
Department's precollege education program.

--Eliminate Bureaucracy in the Department of Energy.--The
Department of Energy should begin critically evaluating its
general management activities to prepare itself for an
anticipated termination beginning in fiscal year 1996. The
Department obligated $448 million in fiscal year 1995 for
its departmental administration account. This proposal
reflects savings anticipated from timely initiation of
phaseout activities. A second component of this proposal
calls for reducing, by a significant amount, funding for
the Energy Information Aadministration. The EIA provides
information for use by the Administration, the Congress,
and the general public. Much of what the EIA does is the
responsibility of the private sector.

--Reduce the Department of Energy's Fossil Energy Research and
Development.--The Department of Energy has spent billions
of dollars on research and development since the oil crises
in 1973 triggered this activity. Returns on this investment
have not been cost-effective, particularly for applied R&D,
which industry has ample incentive to undertake. Some of
this activity is simply corporate welfare for the oil, gas,
and utility industries. Much of it duplicates what industry
is already doing. As the Congressional Budget Office [CBO]
notes, some has gone to fund technologies in which the
market has no interest, for example, hundreds of millions
of dollars invested in coal-powered magnetohydrodynamics,
without any subsequent interest in the product the
investment produced.

--Reduce Energy Conservation Research.--Energy conservation in
the United States has, of course, been a clear success. In
the 1980's, for example, the economy grew a third while
energy use remained flat due to market-driven energy
conservation. Government spending on energy conservation,
on the other hand, has been much less successful. Business
has incentives to market, and customers to buy,
conservation technologies that work well. DOE is left to
fund less reliable and less promising technologies.
According to the Congressional Budget Office, DOE may:

* * * be crowding out private-sector firms or,
alternatively, conducting R&D that those private
sectors are likely to ignore--a common fate of the
technologies generated within DOE's national
laboratories.

This proposal, however, does not assume reductions for
technical and financial assistance programs, such as the
Weatherization Assistance Program.
Finally, this proposal would merge the Institutional
Conservation grant program in the State Energy Conservation
program. It is assumed that individual States would be
given the flexibility to prioritize the available funds. In
exchange for this flexibility, it is assumed that the
resulting program is reduced by 10 percent in the first
year and an additional 10 percent in fiscal year 1999.

--Reduce Uranium Supply and Enrichment Activities and Uranium
Enrichment Decontamination and Decommissioning.--The
Uranium Supply and Enrichment Program has several
objectives. For example, it is intended to increase
confidence that the low-enriched uranium being purchased
from Russia has been derived from highly enriched uranium
removed from dismantled nuclear weapons. It is also
intended to transfer ``enrichment-related technologies and
form technology partnerships to bolster U.S. industrial
competitiveness.'' The Uranium Enrichment Decontamination
and Decommissioning Fund provides for R&D, remedial action,
and other costs associated with environmental cleanup
activities at sites leased and operated by the United
States Enrichment Corporation. President Clinton has
recommended small reductions in these accounts. This
proposal accepts the President's funding level while
reserving the prerogative of altering the policies.

--Eliminate Further Funding of the Clean Coal Technology
Program.--The Clean Coal Technology Program [CCTP] has been
overtaken by changes in the law and incentives in the
marketplace. The program was created 11 years ago to help
private industry develop commercial technologies to burn
coal in environmentally sound ways. Since that time,
enactment of the Clean Air Act Amendments of 1990 and the
Energy Policy Act of 1992 have given utilities and large
industrial coal users clear economic motives for selecting
the lowest cost options for reducing emissions from among
current practices and new technologies. President Clinton's
budget also calls for the termination of this program after
completion of the projects now under way.

--Sell the Alaska Power Administration. The administration's
National Performance Review stated that:

``[t]he Federal Government should divest its interest
in the Alaska Power Administration.''

There is no need for Federal involvement in this issue
since it deals solely with assets located within one State.
This provision accepts the administration's recommendation that
APA assets be transferred to the State of Alaska. [Note:
Receipts from the asset sale appear in Function 950.]

--Sell the Naval Petroleum Reserves. The Energy Department runs
a commercial oil field (Elk Hills, near Bakersfield, CA)
and a natural gas field (Naval Oil Shale Reserve No. 3 near
Rifle, CO). As President Clinton's budget notes:

``[p]roducing oil and gas is a commercial, not a
governmental activity, which is more appropriately
performed by the private sector.''

These assets would be sold competitively to private
industry, resulting in a net gain to the Federal budget and the
elimination of governmental activity that is likely to be done
more efficiently by private industry. This proposal also
assumes that domestic oil producers should be allowed to export
oil. Producers in both Alaska and California would receive more
money for the oil they produce. The Federal Government would
also receive more money for oil produced on Federal land.
[Note: Receipts from the asset sale appear in Function 950.]

Convert Government Agencies That Generate Electric Power at
Federal Dams Into Private Corporations. The Federal Government
generates electricity at Hoover Dam, Grand Coulee Dam, and 129
other smaller dams located throughout the country (except the
Northeast). Power produced at the dams is equivalent to what a
very large power company might generate, about 6 percent of the
economy's annual electricity production. The dams are currently
owned and operated by the U.S. Army Corps of Engineers and the
Bureau of Reclamation. The electricity is sold by power
marketing administrations, five agencies at the Department of
Energy, serving specific areas of the country: Alaska,
Southeastern, Southwestern, Western area, and Bonneville Power
(in the Pacific Northwest). This proposal would convert three
of these agencies--Southeastern, Southwestern, and Western--
into private, tax-paying corporations. (The assets of the
Alaska Power Administration are being sold to the State of
Alaska. See the separate entry on that proposal above.) The
three corporations would buy the powerhouses and related
generating equipment at Federal dams plus transmission and
other assets now owned by the agencies at the Department of
Energy. The corporations in turn would be owned by the
customers who, as of the sale date buy the Federal power. These
customers are primarily municipal utilities and rural electric
cooperatives. The proposal essentially recognizes the de facto
property rights current customers have in these assets. It is
also consistent with the fact that governments throughout the
world are getting out of commercial activities such as
generating and selling electric power. The proposal is similar
to one made in President Clinton's budget. As the
administration's budget documents note, ``the purpose for the
Federal Government developing and conducting these activities
has now been achieved.'' [Note: Receipts from the asset sale
appear in Function 950.]

Reform Nuclear Waste Storage. Congress passed the Nuclear
Waste Policy Act of 1982 to create a system for safely managing
high-level radioactive waste from the Nation's nuclear power
plants. The legislation provided for deep geological isolation
of spent nuclear fuel and crated the Nuclear Waste Fund to
cover the costs of the program. The fund receives a surcharge
of one-tenth of a cent per kilowatt-hour from utility customers
who use electricity at nuclear power plants. Congress amended
the Nuclear Waste Policy Act in 1987 and designated Yucca
Mountain, NV, as the only potential repository site for
scientific study. Although the Department of Energy has a
responsibility to begin accepting spent fuel in 1988, the
program is seriously behind schedule. This proposal assumes the
expedited construction of an above-ground, interim storage
facility at the Nevada Test Site to store spent fuel until a
permanent repository is ready. The NRC would have sole
licensing authority and currently licenses technology, such as
transportation and storage cask systems, are assumed. In
addition, it is assumed that the utilities will be responsible
for transporting the waste to the facility in accordance with
the requirements of the Department of Transportation.

Mandatory Spending

Privatize the United States Enrichment Corporation
[USEC].--The USEC is a government corporation that was created
in 1992. It produces and markets uranium enrichment services to
utilities in the United States and foreign nations. Prior to
1992, these activities were conducted by the Department of
Energy. To better compete in the competitive global uranium
enrichment market, Congress created USEC with the goal that it
be privatized. President Clinton also included this proposal in
his budget. This proposal was also included in H.R. 1215, the
Tax Fairness and Deficit Reduction Act.
FUNCTION 300: NATURAL RESOURCES AND ENVIRONMENT

Agencies with major programs in this function include the
following: the Army Corps of Engineers, the Bureau of
Reclamation, the Forest Service, the Bureau of Land Management,
the Fish and Wildlife Service, the Environmental Protection
Agency, the National Oceanic and Atmospheric Administration,
and the U.S. Geological Survey, the National Park Service, and
the Bureau of Mines.

Summary of Policy Assumptions

COMMITTEE RECOMMENDATION
FUNCTION 300: NATURAL RESOURCES AND ENVIRONMENT
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
House Budget Committee policy 1995
assumptions level 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Function totals: House Budget
Committee balanced budget path:
Budget authority............ 22,296 19,279 19,102 17,240 18,571 17,373 17,916 17,819
Outlays..................... 21,743 20,190 19,886 17,832 19,105 17,790 18,207 18,075

-------------------------------------------------------------------------------

DISCRETIONARY
(7)Changes from 1995 levels
-------------------------------------------------------------------------------

National Oceanic and Atmospheric
Administration--construction:
Budget authority............ 97 -67 -67 -67 -67 -67 -67 -67
Outlays..................... 71 -13 -27 -50 -64 -67 -67 -67
NOAA--operations, research, and
facilities:
Budget authority............ 1,883 -208 -234 -259 -309 -359 -359 -359
Outlays..................... 1,800 -125 -196 -233 -283 -331 -349 -356
Accept the House Committee on
Appropriations' recommendation
concerning funding for
wastewater treatment:
Budget authority............ 2,962 -650 -650 -650 -650 -650 -650 -650
Outlays..................... 2,137 -39 -185 -385 -535 -611 -611 -611
Reform the Bureau of
Reclamation:
Budget authority............ 718 -70 -70 -70 -70 -70 -70 -70
Outlays..................... 723 -55 -67 -70 -70 -70 -70 -70
Lower Colorado River Basin: \1\
Budget authority............ 143 -50 -53 -55 -57 -58 -58 -58
Outlays..................... 165 -42 -52 -54 -56 -58 -58 -58
Eliminate unneeded bureaucracy
in the Department of Interior:
Budget authority............ 64 -31 -31 -31 -31 -31 -31 -31
Outlays..................... 64 -20 -31 -31 -31 -31 -31 -31
Reduce the Bureau of Mines: \2\
Budget authority............ 152 -18 -36 -54 -73 -91 -91 -91
Outlays..................... 158 -12 -29 -47 -65 -84 -84 -84
Office of Surface Mining: \2\
Budget authority............ 110 -44 -58 -58 -58 -58 -58 -58
Outlays..................... 110 -44 -58 -58 -58 -58 -58 -58
U.S. Geological Survey: \2\
Budget authority............ 571 -114 -114 -114 -114 -114 -114 -114
Outlays..................... 572 -108 -114 -114 -114 -114 -114 -114
National Park Service, 10-
percent operation cut: \3\
Budget authority............ 1,078 -108 -108 -108 -108 -108 -108 -108
Outlays..................... 1,047 -84 -99 -107 -108 -108 -108 -108
National Park Service, national
recreation and preservation:
\3\
Budget authority............ 43 -4 -4 -4 -4 -4 -4 -4
Outlays..................... 49 -4 -4 -4 -4 -4 -4 -4
Reduce National Forest System:
\3\
Budget authority............ 1,328 -101 -134 -134 -134 -134 -134 -134
Outlays..................... 1,248 -84 -126 -133 -134 -134 -134 -134
Reduce forest resources and
management research [NFS]: \3\
Budget authority............ 71 -33 -37 -37 -37 -37 -37 -37
Outlays..................... 70 -26 -36 -37 -37 -37 -37 -37
Eliminate ecosystems research
[NFS]: \3\
Budget authority............ 8 -8 -8 -8 -8 -8 -8 -8
Outlays..................... 8 -6 -8 -8 -8 -8 -8 -8
Management of lands and
resources: \3\
Budget authority............ 597 -111 -111 -111 -111 -111 -111 -111
Outlays..................... 615 -99 -111 -111 -111 -111 -111 -111
Moratorium on land acqusition
for the Forest Service:
Budget authority............ 65 -65 -65 -65 -65 -65 -65 -65
Outlays..................... 56 -23 -46 -65 -65 -65 -65 -65
U.S. Fish and Wildlife Service,
5-year moratorium on land
acquisition:
Budget authority............ 67 -67 -67 -67 -67 -67 -67 -67
Outlays..................... 73 -27 -50 -64 -67 -67 -67 -67
National Park Service, 5-year
moratorium on land acquisition:
Budget authority............ 88 -88 -88 -88 -88 -88 -88 -88
Outlays..................... 115 -26 -57 -75 -88 -88 -88 -88
Bureau of Land Management, 5-
year moratorium on land
acquisition:
Budget authority............ 15 -15 -15 -15 -15 -15 -15 -15
Outlays..................... 12 -2 -10 -15 -15 -15 -15 -15
Forest Service, 50-percent
reduction on new facilities
construction:
Budget authority............ 72 -36 -36 -36 -36 -36 -36 -36
Outlays..................... 116 -20 -29 -36 -36 -36 -36 -36
U.S. Fish and Wildlife Service,
50-percent reduction in new
construction:
Budget authority............ 54 -27 -27 -27 -27 -27 -27 -27
Outlays..................... 83 -4 -15 -24 -26 -27 -27 -27
National Park Service, 50-
percent reduction in new
facilities construction:
Budget authority............ 185 -93 -93 -93 -93 -93 -93 -93
Outlays..................... 245 -14 -37 -60 -79 -93 -93 -93
BLM construction and access, 50-
percent reduction in new
construction:
Budget authority............ 71 -6 -6 -6 -6 -6 -6 -6
Outlays..................... 9 -2 -5 -6 -6 -6 -6 -6
Construction of trails [NFS]:
Budget authority............ 32 -32 -32 -32 -32 -32 -32 -32
Outlays..................... 35 -21 -27 -32 -32 -32 -32 -32
Dissolve the National Biological
Service:
Budget authority............ 167 -68 -71 -73 -75 -77 -77 -77
Outlays..................... 141 -44 -63 -69 -74 -76 -77 -77
Corps of Engineers, general
investigations:
Budget authority............ 910 -172 -215 -22 -42 -62 -62 -62
Outlays..................... 950 -95 -187 -106 -42 -52 -52 -52
Fund Agriculture Conservation
Program at President Clinton's
requested level:
Budget authority............ 100 -50 -52 -53 -54 -55 -55 -55
Outlays..................... 159 -23 -46 -48 -50 -52 -52 -52
Terminate resource conservation
and development:
Budget authority............ 33 -25 -33 -33 -33 -33 -33 -33
Outlays..................... 21 -12 -29 -33 -33 -33 -33 -33
Terminate river basin surveys
and investigations: \4\
Budget authority............ 13 -13 -13 -13 -13 -13 -13 -13
Outlays..................... 13 -12 -13 -13 -13 -13 -13 -13
Terminate Great Plains
Conservation Program: \4\
Budget authority............ 15 -11 -15 -15 -15 -15 -15 -15
Outlays..................... 21 -6 -10 -12 -12 -15 -15 -15
Reduce conservation operations
by 10 percent: \4\
Budget authority............ 591 -44 -59 -59 -59 -59 -59 -59
Outlays..................... 598 -41 -58 -59 -59 -59 -59 -59
Reduce watershed and flood
prevention planning by 10
percent: \4\
Budget authority............ 70 -7 -7 -7 -7 -7 -7 -7
Outlays..................... 70 -5 -6 -7 -7 -7 -7 -7
Terminate forestry incentives
plan: \4\
Budget authority............ 70 -5 -7 -6 -6 -6 -6 -6
Outlays..................... 70 -5 -6 -7 -7 -7 -7 -7
Terminate Colorado Basin
Salinity Control Program: \4\
Budget authority............ 5 -5 -5 -5 -5 -5 -5 -5
Outlays..................... 9 -2 -5 -5 -5 -5 -5 -5
Terminate the Environmental
Protection Agency's
environmental technology
initiative:
Budget authority............ 65 -65 -65 -65 -65 -65 -65 -65
Outlays..................... 65 -23 -55 -65 -65 -65 -65 -65
Fund research, development,
abatement, control, and
compliance at the levels
recommended by the House
Committee on Appropriations:
Budget authority............ 1,698 -20 -20 -20 -20 -20 -20 -20
Outlays..................... 1,716 -7 -16 -20 -20 -20 -20 -20
Apply a cost-benefit test to
Superfund projects:
Budget authority............ 1,431 -150 -150 -150 -150 -150 -150 -150
Outlays..................... 1,477 -38 -90 -120 -135 -143 -148 -149
NPS, eliminate funding for Urban
Park and Recreation Fund: \4\
Budget authority............ 8 -8 -8 -8 -8 -8 -8 -8
Outlays..................... 8 -2 -4 -6 -8 -8 -8 -8
Eliminate international forestry
[NFS]: \4\
Budget authority............ 7 -5 -7 -7 -7 -7 -7 -7
Outlays..................... 7 -4 -7 -7 -7 -7 -7 -7

MANDATORY

Terminate helium production: \2\
Budget authority............ 0 -4 -7 -8 -8 -8 -8 -8
Outlays..................... -8 -4 -7 -8 -8 -8 -8 -8
Reduce hardrock mining: \2\
Budget authority............ NA NA NA NA NA NA NA NA
Outlays..................... NA NA NA NA NA NA NA NA
Open Arctic National Wildlife
Refuge for Exploration:
Budget authority............ NA 0 0 -800 -1 -450 0 0
Outlays..................... NA 0 0 -800 -1 -450 0 0
----------------------------------------------------------------------------------------------------------------
\1\ Bureau of Reclamation Reform.
\2\ Mineral-related agencies.
\3\ Management agencies of Agriculture and Interior.
\4\ Conservation operation in Department of Agriculture.

Discussion of Policy Assumptions

Discretionary Spending

Refocus the National Oceanic and Atmospheric Administration
on its Core Mission as Part of Terminating the Department of
Commerce. NOAA, which is in the Department of Commerce,
consists of the National Ocean Service, the National Marine
Fisheries Service, the Office of Oceanic and Atmospheric
Research, National Environmental Satellite Data and Information
Service, and the National Weather Service. NOAA also has an
account that funds the construction, repair, and modification
of new facilities and additions to existing facilities. Over
the past several years, funding for NOAA has grown rapidly. In
part, this expansion has been fueled by congressional add-ons,
regional giant programs, and inefficient weather service office
restructuring. The administration's budget calls for
privatizing the portions of the National Weather Service that
support specific constituent groups. This proposal would
eliminate all unjustified Federal activities, like the NOAA
Corps, fund the Operations, Research and Facilities account at
less than the fiscal year 1992 level by fiscal year 2000, but
accept the funding level requested by the administration for
construction.

Accept the House Committee on Appropriations Recommendation
Concerning Funding for Wastewater Treatment. The Clean Water
Act [CWA] and the Safe Drinking Water Act prescribe performance
requirements for municipal wastewater and drinking water
systems. The Clean Water Act also provides financial assistance
so that communities can construct wastewater treatment plants
that comply with the provisions in the act. Construction grants
for wastewater treatment plants were first authorized in 1972
under the Title II Categorical Grant Program of the CWA. The
EPA administered the Construction Grant Program by providing
assistance directly to the municipalities for wastewater
treatment projects. Since 1972, the Congress has appropriated
about $65 billion to assist localities in complying with the
CWA. The Clean Water Act, as amended in 1987, phased out Title
II grants and authorized a new grant program under Title VI to
support State revolving funds [SRF's] for water pollution
control. For each dollar of Title VI grant money that a State
receives, it must contribute 20 cents to its SRF. States then
use the combined funds to make low-interest loans to
communities to construct or upgrade municipal treatment
facilities. Local agencies that borrow funds from the SRF must
repay them, thereby creating a revolving source of capital. The
House Committee on Appropriations recently rescinded $1.3
billion that had been appropriated for fiscal years 1994 and
1995. This proposal accepts their recommendation and funds
wastewater infrastructure/State revolving funds at $650 million
below the fiscal year 1995 level.

Reform the Bureau of Reclamation. The Bureau of Reclamation
is the largest supplier and manager of water in the 17 Western
States, delivering approximately 30 million acre/feet of water
annually to 28 million people for agricultural, municipal,
industrial, and domestic uses. It is also the sixth largest
producer of electrical power in the Western States, generating
more than $500 million in annual power revenues. President
Clinton has proposed reductions in many of the accounts
associated with the Bureau of Reclamation. This proposal
accepts the President's funding level for several of these
accounts, including the Lower Colorado River Basin Development
Fund. It also assumes that the Bureau of Reclamation should
seek opportunities to reduce its operation and maintenance
program by looking for opportunities to turn over more
responsibilities to the beneficiaries of its projects.

Eliminate Unneeded Bureaucracy in the Department of the
Interior. This proposal recommends significant changes in the
Office of the Secretary and construction management. For
example, it assumes that the layer of management associated
with the six Assistant Secretaries will be eliminated. It calls
for a 50-percent reduction in the Office of the Secretary; a
10-percent reduction in construction management; and a 15-
percent reduction in the Office of the Solicitor.

Restructure the Department of the Interior's Minerals-
Related Agencies. Last year the Republican Budget Initiative
proposed eliminating three entities in the Department of the
Interior: the Bureau of Mines, the U.S. Geological Survey, and
the Minerals Management Service. At this time, this proposal
calls for significant reforms within these agencies, but not
their outright elimination. The Bureau of Mines disseminates
information and conducts research and development relating to
mining activity and the use of minerals. This proposal would
reduce USBM funding for near-term development of specific
products and technologies. It also calls for the
discontinuation of helium production, and reforms the
collection of royalties associated with mining on public lands.
The U.S. Geological Survey conducts research and provides basic
scientific and information concerning natural hazards and
environmental issues, as well as water, land, and mineral
resources. The USGS has three main divisions: the National
Mapping Division [NMD], the Water Resources Division [WRD] and
the Geologic Division. This proposal assumes that the NMD will
aggressively price its products for additional revenue to the
Treasury. It also assumes greater contracting out to the
private sector, appropriate data gathering, and map and digital
data production. Finally, it calls for consolidation of
overlapping mapping efforts. Within the WRD, savings are first
assumed in the Federal program for such subprograms as global
change hydrology and core program hydrology research. Savings
could also be achieved by increasing the State and local
matching formula for the Federal/State Cooperative Program. For
the Geologic Division, this proposal assumes that geologic
hazards surveys (e.g., earthquakes and volcanos) and the
National Geologic Mapping Program will be funded at the fiscal
year 1995 level. Savings are achieved through reductions in the
Global Change and Climate History Program, the Marine and
Coastal Geologic Survey, and the Energy Resource Survey.
Finally, the Office of Surface Mining Reclamation and
Environment would be restructured consistent with a 66-percent
reduction in the Federal regulatory programs and a 30-percent
reduction in general administration.

Reform the Management Agencies in the Departments of
Agriculture and the Interior. The Department of the Interior is
the accumulation of 200 years of public land history. Many
features of the Department no longer make sense. Reforms are
being developed concerning public lands, BLM management, and
the operation of the national parks, which should produce
discretionary savings. In anticipation of these reforms, it is
assumed that the operating budgets for these Bureaus can be
reduced by reducing or eliminating low-priority items, such as
the automated lands and minerals record system, bureau-wide
fixed costs, information systems operations, the Adopt-a-Horse
Program, and administrative support. Similar reforms are
required at the Forest Service to improve forest management
efficiency. The Forest Service currently has about 21,000 full-
time equivalents. A study has shown that State-managed forests
adjacent to Federally managed forests are managed at a profit,
while Federal forests are not. This occurs because the Federal
Government's costs exceed those of the States'. In addition,
there is concern about their activities concerning ``ecosystem
management'' and ``ecosystem research.'' This proposal would
reduce the operating budget of the Forest System by reducing
low-priority management programs and general administration and
precluding funding for ecosystem planning. It also would
eliminate ecosystems research and reduce forest resources and
management research by 50 percent, but fully fund recycling and
wood uses. [Please note: A payment-in-lieu-of-taxes component
of this proposal is reflected in Function 800.]

Impose a Moratorium on Land Purchases. The Departments of
Agriculture and Interior currently spend about $200 million per
year for land that is generally used to create or expand
designated recreation and conservation areas. Most Federal
lands are managed by the National Park Service, the Forest
Service, or the Bureau of Land Management. In many instances,
those agencies find it difficult to maintain and finance
operations on their existing landholding. Land management
agencies should improve their stewardship of lands they already
own before facing added management responsibilities.

Reduce Funding for the Construction of Facilities and
Trails Within the Departments of Agriculture and Interior.
Construction funding has two budgetary effects. The first
involves the initial cost of the project; the second involves
the long-term maintenance of any new facility. In the case of a
new visitor center, for example, new construction sometimes
increases operational costs if the new facility must be
staffed. Under this proposal, construction of facilities within
the Departments of Interior and Agriculture would be reduced by
50 percent, and all new construction would be limited to life/
safety projects or protection of critical historical resources.
Also, no funding would be provided to the National Forest
Service for the construction of trails.

Dissolve the National Biological Service (NBS). This
proposal would abolish the NBS, which has not been authorized.
The essential funding and staffing for research and the
cooperative research units that were removed from the various
Department of the Interior land management agencies, would be
returned. Funding for inventory and monitoring, information
transfer, facility operation and maintenance, administration,
and construction would be eliminated.

Reduce Funding for the U.S. Army Corps of Engineers. The
Corps of Engineers currently carries out nine missions related
to civil works. This proposal recognizes the fact that a
continued Federal role in several of the functions related to
these missions may no longer be justified, and the termination,
transfer, privatization, or streamlining of certain functions
may be necessary.

Fund the Agricultural Conservation Program at President
Clinton's Requested Level. The Agricultural Conservation
Program's objective is to conserve soil and water resources.
The program is administered by county committees, with review
and approval by state committees and the Secretary. The
administration proposes reducing funds for this program by 50
percent in fiscal year 1996, with added reduction in the out-
years. This proposal accepts the administration's funding level
but reserves the prerogative of altering the policies.

Prioritize Conservation Operations Within the Department of
Agriculture. Conservation programs are conducted through a
number of accounts within the Natural Resources Conservation
Service. Technical assistance is provided for conservation
operations through 2,955 conservation districts to land users.
In addition, the Department of Agriculture cooperates with
other Federal, State, and local agencies to develop coordinated
water and land resources programs and in conducting surveys and
investigations of watersheds. Furthermore, cost-share
assistance is provided to participating landowners in the Great
Plains area in the development and installation of long-term
conservation plans.
Finally, assistance is provided to bring private,
nonindustrial forest land under intensified management and to
ensure an adequate supply of timber products. This proposal
terminates low-priority conservation programs. It notes that
President Clinton proposed reductions in River Basin Surveys
and Investigations, Watershed Planning, Resource Conservation
and Development, Great Plains Conservation Program, Forestry
Incentives Program, and the Colorado River Basin Salinity
Control Program. It also calls for achieving greater
efficiencies in higher-priority programs.

Terminate the Environmental Protection Agency's
Environmental Technology Initiative [ETI]. The objective of the
ETI is to develop and employ environmental technologies to
enhance the environmental security and the economic standing of
the United States in the world marketplace. This proposal would
terminate all funding for the ETI. Whereas the Federal
Government has a role in basic research, it should not be
engaged in applied research and product development.
Furthermore, considerable evidence exists that the Federal
Government is not capable of picking projects with the most
potential for technological and commercial success.

Fund Research and Development and Abatement, Control, and
Compliance at the Levels Recommended by the House Committee on
Appropriations. The Appropriations Committee has proposed to
rescind fiscal year 1995 funds from the Environmental
Protection Agency in these two accounts. The President also
proposed rescinding a portion of these funds. With regard to
abatement, control, and compliance, the savings result from the
termination of the Clean Lakes Program and procurement savings.
This proposal assumes that these accounts are funded through
fiscal year 2000 at their post-rescission funding level.

Apply a Cost-Benefit Test to Superfund Projects. One method
of reducing the huge costs of hazardous waste cleanup is to
change the mix of methods used to protect health and the
environment at Superfund sites. The present statutory
preference for permanent treatment technologies could be
dropped in favor of an emphasis on institutional controls--such
as deed and access restrictions, monitoring, and provision of
alternative water supplies--and containment methods (including
caps, slurry walls, and surface water diversion). A University
of Tennessee study estimated that a judicious shift toward
these interim measures could reduce remediation costs by 40
percent, without sacrificing health or environmental
protection. This proposal suggests that it is wasteful to spend
more on Superfund cleanups than is necessary to protect health
and the environment, and that use of more permanent remedies--
such as incineration, bioremediation, and vitrification--can be
deferred until land-use needs are clearer and treatment
methodologies are more developed.

Eliminate the Pennsylvania Avenue Development Corporation
and Other Low-Priority Programs in the Departments of
Agriculture and the Interior. This proposal would terminate
several programs, including the Urban Park and Recreation
[UPAR] Fund, international forestry, the Pennsylvania Avenue
Development Corporation, the Woodrow Wilson International
Center, the National Capital Arts and Cultural Affairs, the
Wildlife Conservation and Appreciation Fund, and the African
Elephant Conservation Fund. UPAR provides matching grants to
cities for the renovation of urban parks and recreation
facilities. Under international forestry, technical assistance
is provided outside the United States. The Woodrow Wilson
International Center for Scholars facilitates scholarship of
the highest quality in the social sciences and humanities. The
National Capital Arts and Cultural Affairs account is funded
under the Commission of Fine Arts; it makes payments for
general operating supports to Washington, DC, arts and other
cultural organizations. The Wildlife Conservation and
Appreciation Fund provides grants to States for conservation
and appreciation projects intended to conserve the entire array
of diverse fish and wildlife species. Rewards are paid for
information leading to a civil penalty or criminal conviction
under the African Elephant Conservation Act. Given the size of
the Federal deficit, it is important to eliminate or
substantially reduce low-priority programs. The figures above
reflect the savings from the UPAR Fund and International
Forestry in Function 300.

Mandatory Spending

Open ANWR for Exploration. This proposal assumes that a
small portion of the Arctic National Wildlife Refuge [ANWR] in
Alaska will be leased for oil and gas exploration, development,
and production. ANWR is the most prospective oil and gas
province in North America, and is adjacent to the hugely
successful Prudhoe Bay field, currently supplying 20 percent of
domestic oil. Leasing is overwhelmingly supported by residents
of the State of Alaska and the Native people who live in the
area proposed for leasing. Leasing could provide enormous
revenues to the Treasury, jobs to the U.S. economy, and a
valuable domestic energy resource to offset the current
transfer of U.S. wealth to other nations. This portion of the
provision reflects gross receipts. Half of those receipts are
to be paid to the State of Alaska. These payments appear in
Function 800.
FUNCTION 350: AGRICULTURE

This function is composed of the Federal agriculture
programs including farm price support programs and funding for
the Department of Agriculture.

Summary of Policy Assumptions

COMMITTEE RECOMMENDATION
FUNCTION 350: AGRICULTURE
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
House Budget Committee policy 1995
assumptions level 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Function totals: House Budget
Committee balanced budget path:
Budget authority............ 13,964 13,041 12,790 11,582 11,398 10,192 8,107 8,102
Outlays..................... 12,710 1,817 11,455 10,417 10,147 8,999 7,051 7,046

-------------------------------------------------------------------------------

DISCRETIONARY
(7)Changes from 1995 levels

-------------------------------------------------------------------------------

Reform Foreign Agriculture
Service:
Budget authority............ 109 -13 -13 -13 -13 -13 -13 -13
Outlays..................... 109 -10 -13 -13 -13 -13 -13 -13
Eliminate funds for USDA's
Strategic Space Plan:
Budget authority............ 28 -19 -26 -26 -26 -26 -26 -26
Outlays..................... 28 -7 -20 -25 -26 -26 -26 -26
Agricultural Research Service
[ARS]: \1\
Budget authority............ 712 -69 -69 -69 -69 -69 -69 -69
Outlays..................... 704 -54 -65 -69 -69 -69 -69 -69
ARS building and facilities: \1\
Budget authority............ 44 -15 -17 -20 -22 -24 -24 -24
Outlays..................... 54 -2 -10 -14 -19 -21 -23 -24
Extension Service: \1\
Budget authority............ 439 -74 -74 -74 -74 -74 -74 -74
Outlays..................... 436 -45 -74 -74 -74 -74 -74 -74
Cooperative State Research
Service: \1\
Budget authority............ 433 -76 -76 -76 -76 -76 -76 -76
Outlays..................... 438 -39 -61 -76 -76 -76 -76 -76
CSRS buildings and facilities:
\1\
Budget authority............ 63 -60 -63 -63 -63 -63 -63 -63
Outlays..................... 55 -3 -18 -34 -50 -62 -62 -62
Economic Research Service: \1\
Budget authority............ 54 -20 -27 -27 -27 -27 -27 -27
Outlays..................... 54 -16 -24 -26 -27 -27 -27 -27
Reform Farmers Home
Administration:
Budget authority............ 396 -57 -57 -57 -57 -57 -57 -57
Outlays..................... 394 -53 -57 -57 -57 -57 -57 -57
Terminate low-priority programs
in the Department of
Agriculture:
Budget authority............ 6 -6 -6 -6 -6 -6 -6 -6
Outlays..................... 7 -6 -6 -6 -6 -6 -6 -6
Reduce funding for the National
Agriculture Statistics Service:
Budget authority............ 81 -12 -16 -16 -16 -16 -16 -16
Outlays..................... 80 -11 -16 -16 -16 -16 -16 -16
Eliminate unnecessary
bureaucracy in the Department
of Agriculture:
Budget authority............ 55 -12 -16 -16 -16 -16 -16 -16
Outlays..................... 54 -11 -16 -16 -16 -16 -16 -16

MANDATORY

Reform agricultural production
programs:
Budget authority............ 7,944 -450 -548 -1,676 -1,888 -3,097 -4,256 -4,256
Outlays..................... 7,944 -450 -548 -1,676 -1,888 -3,097 -4,256 -4,256
----------------------------------------------------------------------------------------------------------------
\1\ Agriculture Research and Extension.

Discussion of Policy Assumptions

Discretionary Programs

Reform the Foreign Agricultural Service. This proposal
would involve changes to the Foreign Agricultural Service and
General Sales Manager Program. The Foreign Agricultural Service
maintains attaches at 63 foreign posts to assist overseas
development of markets for U.S. farm commodities. Annually, the
Service files about 5,000 reports. This proposal calls for a
30-percent reduction in such attaches and a 10-percent
reduction in all other activities, except the general sales
manager.

Eliminate Funds for USDA's Strategic Space Plan. The
Department of Agriculture is spending almost $29 million this
year to conduct a strategic space plan, and is requesting
almost that amount for fiscal year 1996. This proposal would
terminate all future funding for this plan.

Refocus Federal Support for Agricultural Research and
Extension Activities. The Department of Agriculture conducts
and supports agricultural research and education. According to
the Congressional Budget Office, research and grants provided
by the Agricultural Research Service [ARS], the Cooperative
State Research, Education, and Extension Service [CSREES], and
the Economic Research Service [ERS] may be replacing funding
from the private sector. Requiring the government to refocus
the research would permit the private sector to finance more of
its own research. This proposal would reduce funding by the ARS
by 10 percent; it would accept the administration's funding
request for ARS buildings and facilities; it would eliminate
all special research grants within the CSREES, thereby
requiring all grants to be awarded competitively; it would
accept the administration's recommendation to eliminate funding
for CSREES buildings and facilities--the CSREES buildings and
facilities account funds construction of buildings at
universities performing research in support of agriculture--and
it would greatly restructure the Extension Service. No cuts,
however, are assumed for the 4-H program. Finally, the proposal
would significantly reduce funding for the ERS, which produces
economic and other social science research and analysis for
public and private decisions on agriculture, food, natural
resources, and rural America.

Reform Farmers Home Administration. The Farmers Home
Administration lends money directly to new farmers or farmers
with limited means who cannot obtain loans elsewhere for
purchasing land or materials to operate a farm. Nearly 70
percent of the money spent on direct loans, however, is for
loans to so-called limited resource borrowers. This proposal
would convert all direct loans to loan guarantees through the
private sector and reduce personnel costs consistent with this
conversion. According to the Congressional Budget Office,
Congress and the FmHA:

* * * intended direct loans to be available only
temporarily--until those farmers could improve their
operations and qualify for commercial credit. But
evidence reported by the General Accounting Office
suggests that the ``graduation rate'' of current
borrowers from direct to guaranteed loans is low, in
part because incentives are lacking to encourage
borrowers of FmHA money to shift from below-cost loans
to guaranteed loans.

Terminate Low-Priority Programs in the Department of
Agriculture. The Department of Agriculture spends $6 million
annually funding State mediation grants and outreach for
socially disadvantaged farmers. State mediation grants are made
to States which have been certified by the Farm Service Agency
as having an agricultural loan mediation program. This proposal
would terminate future funding for these accounts. At a time
when government needs to be downsized, these are low
priorities.

Reduce Funding for the National Agricultural Statistics
Service. The service provides estimates of acreage, yield, and
production of crops, stocks, and value of farm commodities, and
numbers of inventory values of livestock items. Data on
approximately 120 crops and 45 livestock products are covered
in nearly 400 reports issued each year. This proposal would
reduce funding for the Service by 20 percent.

Eliminate Unnecessary Bureaucracy in the Department of
Agriculture. This proposal reduces funding to administer the
Department of Agriculture. Specifically, funding is reduced for
the Office of the Secretary, various programs in executive
operations, the Chief Financial Officer, departmental
administration, the Office of the General Counsel, and the
Office of Public Affairs.

Mandatory Spending

Reform Agricultural Production Programs. This proposal
assumes that mandatory agricultural spending, other than food
and nutrition programs, will be reduced by $9 billion relative
to currently anticipated levels from fiscal year 1996 through
fiscal year 2000, with $1 billion in reductions required in
fiscal year 1996. Farmers, however, will benefit greatly from
other provisions in this budget, including regulatory relief,
lower capital gains taxes, renewed attention to property
rights, and lower interest rates. These programmatic changes,
which reflect reforms in agriculture as it moves to a more
market-oriented economy, will reduce spending below what was
spent for fiscal year 1995. In fact, the agricultural program
is one of the few significant mandatory programs for which CBO
anticipates that spending will decline. Other mandatory
programs under the jurisdiction of the House Committee on
Agriculture include the Conservation Reserve Program [Function
302], the Wetlands Reserve Program [Function 302], export
support programs, and crop insurance.
FUNCTION 370: COMMERCE AND HOUSING CREDIT

This function is composed of the government commerce and
technology programs, including activities within the
Departments of Agriculture, Commerce, and Housing and Urban
Development. It also includes agencies such as the Federal
Deposit Insurance Corporation, the Resolution Trust
Corporation, the Securities and Exchange Commission, the U.S.
Postal Service, and the Small Business Administration.

Summary of Policy Assumptions

HOUSE BUDGET COMMITTEE POLICY ASSUMPTIONS

--------------------------------------------------------------------------------------------------------------------------------------------------------
370 COMMERCE AND HOUSING CREDIT:
Budget Authority........................ 8.9 6.4 10.9 4.0 5.1 1.7 1.3 1.0
Outlays................................. -13.5 -6.9 -3.4 -6.1 -3.1 -3.6 -2.5 -2.6

FISCAL YEAR 1996 BUDGET RESOLUTION
[In millions of dollars]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total FY 1995 Change from the FY 1995 level (except where otherwise noted)
spending level -------------------------------------------------------------------------------------------------------------------------------------------
Budget assumptions -------------------- 1996 1997 1998 1999 2000 2001 2002
-------------------------------------------------------------------------------------------------------------------------------------------
BA OL BA OL BA OL BA OL BA OL BA OL BA OL BA OL
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Reduce the Budget of the Export
Administration................. 41 38 -10 -8 -10 -9 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10
Scientific and Technical
Research....................... 259 265 13 10 21 19 30 28 38 36 47 45 56 54 66 63
Technical Industrial Technology
Services....................... 525 181 -525 -95 -525 -252 -525 -436 -525 -525 -525 -525 -525 -525 -525 -525
Construction of Research
Facilities..................... 65 12 2 0 4 0 6 2 9 3 11 5 13 8 15 10
NOAA--Fleet Modernization,
Shipbuilding and Conversion.... 23 30 -23 -3 -23 -8 -23 -14 -23 -18 -23 -21 -23 -23 -23 -23
NOAA--Promote and Develop
Fishery Products and Research
Pertaining to American
Fisheries...................... 9 -40 -12 -7 -13 -11 -14 -13 -15 -14 -16 -15 -17 -16 -18 -17
Eliminate the US Travel and
Tourism Administration (USTTA)
and the Trade Promotion
Activities of the International
Trade Administration (ITA) and
Transfer Remaining Critical
Trade Functions to More
Appropriate Agencies........... 283 259 -163 -163 -209 -209 -232 -232 -232 -232 -232 -232 -232 -232 -232 -232
Make Patent and Trademark Office
Self-Funding and Independent... 82 92 0 0 0 0 0 0 -82 -23 -82 -53 -82 -82 -82 -82
Eliminate Salaries and Expenses
for the Technology
Administration................. 10 9 -7 -6 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10
Eliminate the Small Business
Administration's Tree Planting
Program........................ 15 15 -15 -15 -15 -15 -15 -15 -15 -15 -15 -15 -15 -15 -15 -15
Make the Small Business
Administration's 7(a) Loan
Guarantee Program Self-
Financing...................... 247 238 -247 -160 -247 -234 -247 -246 -247 -246 -247 -246 -247 -246 -247 -246
Encourage Private Financing of
the Small Business Development
Centers........................ 78 78 -78 -57 -78 -74 -78 -78 -78 -78 -78 -78 -78 -78 -78 -78
Eliminate the Minority Business
Development Administration
within the Department of
Commerce....................... 43 42 -33 -16 -44 -36 -44 -43 -44 -44 -44 -44 -44 -44 -44 -44
GI/SRI Administrative Cost
Savings........................ 197 188 -65 -62 -65 -65 -65 -65 -65 -65 -65 -65 -65 -130 -130 -130
GI/SRI Subsidy Cost Savings..... 188 185 -97 -80 -102 -102 -100 -100 -100 -100 -100 -100 -100 -100 -100 -100
Rural Housing Insurance Fund.... 363 528 -116 -14 -116 -92 -116 -107 -116 -112 -116 -114 -116 -114 -116 -114
Patent and Trademark User Fees.. n/a n/a 0 0 0 0 0 0 119 119 119 119 119 119 119 119
Repeal Transitional Expenses of
the Post Office................ 38 38 0 0 -20 -20 -38 -38 -38 -38 -38 -38 -39 -39 -39 -39
Increase FCC User Fees.......... n/a n/a 72 72 75 75 78 78 81 81 84 84 87 87 90 90
Reform FHA Multifamily Property
Disposition.................... n/a n/a -210 -210 0 0 0 0 0 0 0 0 0 0 0 0
Revised ``Mark to Market''
Option to Prevent Future FHA
Costs Associated with Project-
Based Subsidy Program.......... 13 13 100 100 2,302 2,302 1,613 1,613 1,335 1,335 1,325 1,325 529 529 232 232
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Discussion of Policy Assumptions

Discretionary Spending

Reduce Fleet Modernization and Fishery Products Research in
NOAA. The first two provisions, applying to the National
Oceanic and Atmospheric Administration, are part of the NOAA
restructuring proposal described in Function 300.

Terminate the Department of Commerce. The Department of
Commerce is an unwieldy conglomeration of marginally related
programs, nearly all of which duplicate those performed
elsewhere in the Federal Government. According to the General
Accounting Office, Commerce shares its missions with at least
71 Federal departments, agencies, and offices. Its bureaucracy
is bloated, its infrastructure is in disrepair, and more than
60 percent of its resources are dedicated to activities
completely unrelated to its mission. Former Commerce Department
officials recently testified that the few unique functions
contained in Commerce suffer under the multiple tiers of
political appointees and bureaucracy. This proposal terminates
Commerce programs that are either unnecessary or redundant;
consolidates functions that belong elsewhere in the government;
and makes independent those programs that should function in a
more businesslike manner.

--Eliminate Industrial Technology Services and Programs in the
National Telecommunications and Information Administration
Engaged in Industrial Policy. Although the Federal
Government has a role in basic research, it should not be
engaged in applied research. Furthermore, considerable
evidence exists that the Federal Government is not capable
of picking projects with the greatest potential for
technological and commercial success. Therefore, this
proposal would terminate funding in the Department of
Commerce for Industrial Technology Services, including the
so-called Advanced Technology Program and phase out the
manufacturing extension partnership. It also terminates
funding for the following four accounts: information
infrastructure grants; public broadcasting facilities;
planning and construction; and the endowment for children's
educational television.

--Eliminate the U.S. Travel and Tourism Administration
[USTTA] and the Trade Promotion Activities of the International
Trade Administration [ITA] and Transfer Remaining Critical
Trade Functions to More Appropriate Agencies. The U.S. Travel
and Tourism Administration promotes the United States as a
tourist destination for foreign travelers. The International
Trade Administration investigates antidumping, develops
international economic policy, provides marketing services, and
counsels U.S. business on exporting. The USTTA's and ITA's
trade promotion activities effectively subsidize the industries
they attempt to promote. According to CBO: -

[a]ll increases in exports and tourist expenditures
resulting from the ITA's and USTTA's activities are
completely offset by some mix of reduced exports of
other industries and increased imports.

Hence, other U.S. firms are hurt by the export and tourism
promotion activities of these agencies.

Antidumping and countervailing duty investigations could
be transferred to the International Trade Commission which is
already responsible for determining whether industries are
harmed by antidumping and countervailing duties; all functions
of the Office of Textile and Apparel within the International
Trade Administration are duplicated in the International Trade
Commission, the Customs Service, USTR, State Department or the
Labor Department, and should be eliminated.

Reduce the Budget of the Export Administration and Transfer
Critical Functions. The Export Administration [EA] of the
Department of Commerce enforces U.S. export laws to promote
national security and foreign policy objectives. Export
enforcement functions could be transferred to the Customs
Service which already takes the lead in governmentwide export
enforcement; and export licensing could be transferred to the
Department of State, which--along with the Departments of
Energy and Defense--already shares export licensing functions.
In disputed licensing cases, USTR should advise as a
probusiness voice.

Consolidate the Bureau of the Census and the Bureau of
Economic Analysis Into an Independent U.S. Statistical
Administration. Make Patent and Trademark Office self-funding
and independent. U.S. Government statistics are collected and
analyzed by at least 25 Federal offices, departments, and
agencies; each constructs indices differently, uses different
time periods and different base years. There is no central
organization setting standards for quality or consistency.
Consequently, many statistics compiled by the U.S. Government
are suspect. This proposal calls for consolidating many of the
statistical organizations in the U.S. Government with the
Census Bureau to achieve qualitative improvements and
efficiencies. Because of the difficulty in scoring the sweeping
consolidation this proposal would require, no savings are
assumed.

Eliminate Salaries and Expenses for the Technology
Administration. The Technology Administration is a redundant
bureaucracy tasked with overseeing the National Institute of
Standards and Technology [NIST] and the National Technical
Information Service [NTIS]. Its ``leadership'' role also
duplicates the Office of Science and Technology Policy.

Eliminate SBA's Tree Planting Program. The tree planting
program in the Small Business Administration provides Federal
funds for contracts between States and small business to plant
trees on public lands controlled by State or local governments.
The Federal Government will fund up to 75 percent of the cost
of such contracts. Tree planting on State and locally owned
land serve local interests and should be funded by those
governments.

Make SBA 7(a) Loan Guarantee Program Self-Financing. This
provision requires charging lenders and borrowers fees to
reduce the Federal subsidy in guaranteeing loans to small
businesses. This will allow the SBA to provide more small
business with loan guarantees at a lower cost to the Federal
Government.

Encourage Private Financing of Small Business Development
Centers. Small Business Development Centers provide management
counseling to existing and prospective small business owners.
Current Federal funding accounts for 25 percent to 50 percent
of SBDC funding. By contracting out, tying funding to locally
funded economic development programs, leveraging all available
resources, and charging the clients a small fee, SBDC's can
thrive without Federal assistance. This proposal would phase-
out the Federal share of the program, but allow State and
private capital to fund existing SBDC's.

Eliminate Duplicative Small and Minority Business Programs
and Consolidate Functions Within the Small Business
Administration. This proposal calls for eliminating funding for
the Department of Transportation's Minority Business Resource
Center Program, and the Department of Commerce's Minority
Business Development Administration, and recommends that
clients of these services utilize Small Business Administration
programs. Both of these programs duplicate functions already
performed by the Small Business Administration. [Note: The
Department of Transportation portion of this proposal is
reflected in Function 400.]

End FHA Multifamily Project Mortgage Insurance. The Federal
Government has insured as much as $34 billion in multifamily
project mortgages. By ending oversubsidization, many if not
most of these projects will require partial or total claims
payment by the FHA. This amounts to many billions of dollars
over the next 7 years. In addition, multifamily projects that
have been insured by the FHA have not been self-financing as
has the single family portfolio. This program should be
eliminated due to the liability the government incurs and the
money it loses. Savings accrue from eliminating subsidy costs,
administrative streamlining, and section 8 property disposition
costs.

Mandatory Spending

Repeal Transitional Expenses of the Post Office. Congress
appropriated money for transitional expenses when Postal
Service reorganization occurred in 1971. This proposal would
discontinue the appropriations for transitional expenses: 24
years after reorganization, the Post Office no longer needs
transitional funds.

Make Permanent the Expiring Patent and Trademark Fee
Included in the Omnibus Budget Reconciliation Acts of 1990 and
1993. The proposal extends the patent and trademark fees
charged to applicants for copyright protection.

Reform FHA Multifamily Property Disposition. The Federal
Government can achieve savings by reforming the rules under
which HUD may sell the property that has come into its
possession through mortgage default. At present, a foreclosed
property may stay in the FHA inventory for years. During the
time it is vacant, the property may be vandalized, or used for
drug dealing or other criminal activities, or it may generally
contribute to the degradation of urban neighborhoods. By
reforming the disposition procedures, the Federal Government
can achieve budget savings and protect surrounding
neighborhoods from deleterious effects generated by
longstanding vacant houses. [A second component of this
proposal, concerning section 8 property, appears in Function
600.]

Revised ``Mark to Market'' Option to Prevent Future FHA
Costs Associated With Project Based Subsidy Program. Currently,
millions of low-income Americans live in 1.6 million federally
subsidized privately owned apartments. As long as they live in
the subsidized unit, their contribution to the rent is no more
than 30 percent of their income. The Federal Government pays
the rest. As many as 75 percent of these projects charge the
tenants and Federal Government more than the surrounding market
rents. In some cases the rent is twice what an unassisted unit
across the street might charge. In addition, 53 percent of
these projects have mortgages insured by the Federal Government
through the Federal Housing Administration. Many of these
projects have mortgages far higher than the real market value
of the property which contributes to the high rents. Some are
poorly run. Though most are in decent condition, some
properties are physically dilapidated and need substantial
rehabilitation before they will be viable on the open market.
According to the GAO and the HUD inspector general, maintaining
this policy of oversubsidy and mortgage insurance will cost the
U.S. Government as much as $64 billion. Substantial reforms are
necessary now in order to avert a crisis the HUD inspector
general warns will compare to the savings and loan debacle.
Over the next 7 years, most of these contracts will come up for
renewal. The present policy of contract renewal is untenable.
Substantial reform must be enacted if the enormous costs
associated with the present system are to be avoided. The
administration has proposed to bring the mortgage levels of
these projects down to the real market value of the property.
By doing so, the rents can be reduced to market rates without
triggering a mortgage default and thus avoiding a cost to the
FHA. This would be accomplished through selling the mortgage on
the open market, without the FHA insurance and only
transitional project-based assistance. The sale would entail a
loss to the Federal Government because it would have to cover
the value of the mortgage between the present level and the
market rate. But because the sale would be without insurance
and ultimately without project-based assistance, at the end of
the process, the housing assistance would be transformed into a
voucher-based program and the Federal Government's liability
would be extinguished.

Increase FCC User Fees. This proposal would increase the
fees charged by the Federal Communications Commission to
holders of FCC licenses. The Congress passed legislation in the
Omnibus Budget Reconciliation Act of 1993 that established new
fees for certain types of licenses and increased fees for
others. The fees, however, are earmarked for specific
regulatory costs and do not cover all regulatory activities or
agency overhead. This proposal assumes that the fees would
cover the full cost of the services that the FCC provides to
licenseholders, including regulation, enforcement, rulemaking,
and international and informational activities. It is assumed
that the fee requirement would be adjusted for such factors as
coverage of licenseholders' service areas and whether a license
provides for shared or exclusive use.
Fannie Mae and Freddie Mac. The Budget Committee intends to
appoint a special task force chaired by Representative Sue
Myrick to study the unique relationship that Fannie Mae and
Freddie Mac have with the Federal Government. Furthermore, the
committee requests that the House Committee on Banking and
Financial Services conduct a review to explore the possibility
of privatizing Fannie Mae and Freddie Mac. The Federal National
Mortgage Association and the Federal Home Loan Mortgage
Corporation--Fannie Mae and Freddie Mac--are chartered and
established by the Federal Government. In addition, they
benefit from exemptions from State and local taxes, certain
Federal regulations and they have access to the U.S. Treasury
under certain circumstances. The result is a greater ability on
the part of Fannie Mae and Freddie Mac to borrow money at more
favorable rates. The U.S. Government essentially provides
equity capital by bolstering their credit ratings. This Federal
affiliation benefits Fannie Mae and Freddie Mac, according to
CBO, by 30 cents on every $100 dollars of long-term debt they
have. Presently, they do not compensate the Federal Government
for this benefit even though they are fully private
corporations, wholly owned by private stockholders.
FUNCTION 400: TRANSPORTATION

This function includes Federal funding for highway,
railroad, transit, aviation, and water programs.

Summary of Policy Assumptions

COMMITTEE RECOMMENDATION
FUNCTION 400: TRANSPORTATION
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
House Budget Committee policy 1995
assumptions level 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Function totals: House Budget
Committee balanced budget path:
Budget authority............ 42,519 40,456 42,736 43,455 43,727 44,291 43,775 43,260
Outlays..................... 39,338 38,832 37,459 36,609 35,602 34,920 34,190 33,705

-------------------------------------------------------------------------------
DISCRETIONARY
(7)Changes from 1995 levels

-------------------------------------------------------------------------------
Eliminate DOT's minority
business programs:
Budget authority............ 7 -5 -7 -7 -7 -7 -7 -7
Outlays..................... 7 -4 -7 -7 -7 -7 -7 -7
Eliminate highway demonstration
projects:
Budget authority............ NA -352 -352 -352 -352 -352 -352 -352
Outlays..................... 352 -56 -295 -580 -828 -994 -1,126 -1,240
Eliminate funding for
intelligent vehicle
development:
Budget authority............ NA 0 0 0 0 0 0 0
Outlays..................... NA -43 -193 -239 -252 -260 -268 -274
Eliminate the Federal Maritime
Commission:
Budget authority............ 19 -19 -19 -19 -19 -19 -19 -19
Outlays..................... 19 -16 -18 -19 -19 -19 -19 -19
Eliminate the Maritime
Administration and transfer
defense-critical functions to
the Department of Defense:
Budget authority............ 91 -91 -91 -91 -91 -76 -91 -91
Outlays..................... 19 -81 -66 -69 -70 -72 -72 -72
Adopt Coast Guard streamlining
measures:
Budget authority............ 2,607 -65 -65 -65 -65 -65 -65 -65
Outlays..................... 2,481 -52 -57 -65 -65 -65 -65 -65
Eliminate the Interstate
Commerce Commission and
transfer remaining functions to
the Department of
Transportation:
Budget authority............ 33 -10 -20 -20 -20 -20 -20 -20
Outlays..................... 38 -8 -20 -20 -20 -20 -20 -20
Phase out Federal mass transit
operating subsidies, provide
regulatory relief and
flexibility:
Budget authority............ NA -193 -385 -578 -770 -770 -770 -770
Outlays..................... NA -107 -273 -461 -653 -738 -765 -769
Mass transit capital
expenditures: no new starts in
fixed guideway mass transit
capital grants:
Budget authority............ NA 0 0 0 0 0 0 0
Outlays..................... NA -12 -75 -202 -332 -461 -590 -645
Mass transit capital
expenditures: change Federal
matching rate for remaining
capital expenditures to 50
percent:
Budget authority............ NA -214 -214 -214 -214 -214 -214 -214
Outlays..................... NA -40 -217 -491 -701 -902 -1,014 -1,049
Terminate out-year funding for
interstate transfer grants:
Budget authority............ 48 -48 -48 -48 -48 -48 -48 -48
Outlays..................... 99 -1 -6 -15 -25 -35 -44 -48
Complete Washington Metro in
1999:
Budget authority............ 200 0 0 0 -150 -200 -200 -200
Outlays..................... 150 0 0 0 -3 -19 -54 -94
Eliminate transit planning and
research:
Budget authority............ 100 -100 -100 -100 -100 -100 -100 -100
Outlays..................... 73 -10 -54 -88 -98 -100 -100 -100
Terminate out-year funding for
Pennsylvania Stattion
Redevelopment Project:
Budget authority............ 40 -40 -40 -40 -40 -40 -40 -40
Outlays..................... 9 -3 -23 -33 -37 -40 -40 -40
Make Amtrak more businesslike:
provide regulatory relief,
phase out operating and capital
subsidies between 1999 and
2002:
Budget authority............ 772 0 0 0 -309 -463 -618 -772
Outlays..................... 752 0 0 0 -254 -412 -579 -733
Complete Northeast Corridor
Improvement Program in 1999:
Budget authority............ 200 0 0 0 0 -200 -200 -200
Outlays..................... 194 0 0 0 0 -40 -140 -200
Eliminate funding for high-speed
rail development:
Budget authority............ 20 -20 -20 -20 -20 -20 -20 -20
Outlays..................... 14 -10 -20 -25 -25 -25 -25 -25
Eliminate Federal funding for
the Essential Air Services
Program:
Budget authority............ 0 0 0 0 0 0 0 0
Outlays..................... 33 -27 -33 -33 -33 -33 -33 -33
Eliminate grants to reliever
airports:
Budget authority............ 0 0 0 0 0 0 0 0
Outlays..................... 63 -11 -38 -51 -57 -60 -63 -63
Eliminate funding for the Civil
Aeromedical and Training
Institutes:
Budget authority............ 22 -22 -22 -22 -22 -22 -22 -22
Outlays..................... 22 -18 -21 -22 -22 -22 -22 -22
Eliminate Air Traffic Control
Revitalization Act premium pay:
Budget authority............ 87 -87 -87 -87 -87 -87 -87 -87
Outlays..................... 87 -76 -87 -87 -87 -87 -87 -87
Reduce funds for the Office of
the Secretary of
Transportation:
Budget authority............ NA -6 -8 -8 -8 -8 -8 -8
Outlays..................... NA -4 -8 -8 -8 -8 -8 -8
Eliminate select unnecessary
transportation programs and
return responsibility to
States:
Budget authority............ NA -3 -3 -3 -3 -3 -3 -3
Outlays..................... NA -11 -55 -67 -71 -73 -75 -75
Eliminate select functions and
overhead for Department of
Transportation Research and
Special Programs Administration
[RSPA]:
Budget authority............ 26 -16 -26 -26 -26 -26 -26 -26
Outlays..................... 24 -7 -22 -26 -26 -26 -26 -26
Terminate Local Rail Freight
Assistance Program:
Budget authority............ 17 -17 -17 -17 -17 -17 -17 -17
Outlays..................... 26 -7 -14 -17 -17 -17 -17 -17
Science, Aeronautics and
Technology (ii) [NASA]:
Budget authority............ 882 -153 -181 -199 -217 -236 -236 -236
Outlays..................... 467 -81 -157 -188 -207 -226 -234 -236
Mission Support (ii) [NASA]:
Budget authority............ 414 9 -4 -13 -21 -30 -30 -30
Outlays..................... 348 7 -3 -10 -19 -28 -29 -30
Rescind funds for NASA wind
tunnel:
Budget authority............ 400 -400 0 0 0 0 0 0
Outlays..................... 0 -1 -300 -99 0 0 0 0

MANDATORY

Vessel tonnage: \1\
Budget authority............ NA 0 0 0 49 49 49 49
Outlays..................... NA 0 0 0 49 49 49 49
Rail safety: \1\
Budget authority............ NA 42 43 45 47 49 51 53
Outlays..................... NA 42 43 45 47 49 51 53
----------------------------------------------------------------------------------------------------------------
\1\ Permanent expiring user fees.

Discussion of Policy Assumptions

Discretionary Spending

Eliminate Duplicative Small and Minority Business Programs
and Consolidate Functions Within the Small Business
Administration. This proposal, also reflected in Function 370,
calls for eliminating funding for the Department of
Transportation's Minority Business Resource Center Program, and
the Department of Commerce's Minority Business Development
Administration, and recommends that clients of these services
utilize Small Business Administration programs. Both of these
programs duplicate functions already performed by the Small
Business Administration.

Eliminate Highway Demonstration Projects. Approximately 95
percent of highway funds are allocated to the States using
formulas which, are designed to reconcile the competing
transportation needs of States. The remainder of the funds are
allocated by earmarks, also known as demonstration projects, in
which Members of Congress designate specific highway projects
in authorizing and appropriations bills. Earmarking circumvents
the planning process by allocating funds on a political, not
economic basis.

Eliminate Funding for the Intelligent Vehicle Development.
The Intelligent Vehicle Highway System Act of 1991 established
a Federal program to research, develop, and operationally test
IVHS systems and to promote their implementation. IVHS
encompasses technologies, ranging from electronic toll
collection to fully automated futuristic highways. IVHS
America, the Federal advisory committee to DOT, estimates that
about $6 billion,--$4.7 from Federal, State and local
governments--will be needed through 2011 to complete all
research and development projects and operational tests and
develop a system architecture. This architecture is expected to
include a massive government-owned and operated
telecommunication infrastructure. Implementing the system once
developed is estimated to cost an additional $8.5 to $26
billion. In short, development costs are high and widespread
commercial success is uncertain: Federal involvement would be
long term and costly.

Eliminate the Federal Maritime Commission. The Federal
Maritime Commission is charged with regulating a system of
steamship conferences that establish and publish ocean
transportation rates. This proposal would deregulate Federal
maritime policy, terminate the Commission, and transfer
critical functions to the Department of Transportation.

Eliminate the Maritime Administration and Transfer Defense-
Critical Functions to the Department of Defense. The Maritime
Administration [MARAD] was established in 1950 to promote a
strong U.S. merchant marine. MARAD emphasizes promoting
maritime industries and ensuring seafaring manpower for
peacetime and national emergencies. But rather than bolstering
the U.S. shipping industry, these programs have undermined the
competitiveness of U.S. shipping and shipbuilding. Today, only
about 4 percent of waterborne cargoes imported and exported
from the United States are carried on U.S.-flag carriers.
According to GAO, between 1982 and 1992 the number of U.S.
privately owned ships decreased by 31 percent. In testimony on
January 11, the inspector general of the Department of
Transportation stated: ``Overall, most of MARAD's mission can
readily be transferred or eliminated with little, if any,
noticeable impact to the tax-paying public.'' This proposal
calls for transferring the Maritime Academy to the Department
of Defense and requiring DOD to charge tuition, eliminating
subsidy programs for operation of U.S.-flag operators, selling
off the National Defense Reserve Fleet, transferring the Ready
Reserve Fleet and other functions essential to national
security to the Department of Defense, and phasing out loan
guarantees.

Adopt Coast Guard Streamlining Measures. In its 1996 budget
request, the U.S. Coast Guard cited $385 million in reductions
that could be achieved by streamlining operations. This
represents a continuation of current streamlining efforts. This
proposal adopts $304 million of reductions, rejects requested
programmatic increases, but leaves flexibility in how the
reductions are achieved.

Eliminate the Interstate Commerce Commission and Transfer
Remaining Functions to the Department of Transportation.--The
ICC, created in 1887, is the oldest independent regulatory
agency. Since the Motor Carrier and the Staggers Rail Acts in
1980, most of the ICC's duties have been eliminated. But the
vestiges of regulation remain, including a large number of
routine applications for ICC approval of operating rights,
rates, and other business decisions. In its fiscal year 1996
request, the Clinton administration proposed eliminating the
ICC. On June 16, 1994, the House voted to eliminate funding for
the Interstate Commerce Commission as an amendment to the
fiscal year 1995 Transportation appropriations bill. In
conference, the House and Senate agreed to a 30-percent
reduction.

Eliminate the Federal Transit Administration. Federal
transit policy has been highly costly and counterproductive.
This proposal calls for a dramatic downsizing in the Federal
role in mass transit. The Federal Transit Administration itself
has been criticized as ineffective oversight and for allowing
misuse of millions of dollars of Federal funds. Remaining
functions not eliminated below should be transferred to the
Federal Highway Administration.

--Phase Out Federal Mass Transit Operating Subsidies, Provide
Regulatory Relief and Flexibility. The proposal includes
the following components: Since 1965, the Federal
Government has spent over $50 billion on urban mass
transit. Yet, during that time, the percentage of trips to
work taken on mass transit has declined by 30 percent.
Although, Federal operating subsidies are barely 5 percent
of total operating costs. But the Federal regulations raise
transit costs two or three times the amount received by
transit agencies from the Federal Government. This is
largely the result of expensive Federal mandates. For
example, Federal transit labor projections require transit
agencies to pay 6 years of severance payments for transit
employees dismissed because of efficiency gaining measures.
Phasing out operating subsidies and allowing States and
localities more flexibility in transportation spending
would encourage local authorities to lower operating costs,
privatize and contract out, and generally improve local
investment choices. In addition, providing relief from
Federal Regulations such as section 13(c) labor projections
of the 1964 Transit Act and select Clean Air Act
provisions, extending bus life requirements and extending
ADA compliance deadlines will enable local transit
authorities to do more with less.

--Mass Transit Capital Expenditures: No New Starts in Fixed
Guideway Mass Transit Capital Grants; Change Matching Rate
for Remaining Capital Expenditures to 50 Percent.--New
urban mass transit rail systems are not economically
justified for at least three reasons: First, urban areas
have ``suburbanized'' and sources of employment have spread
beyond the traditional downtown area. This limits the
market for traditional high-capacity transit rail services.
Second, transit has experienced cost escalation so extreme
that the same services can be provided by the competitive
market for savings of up to 50 percent. Finally, a DOT
study by Harvard economists indicated that bus-ways can be
built and operated for one-fifth the cost of new rail
systems.

According to Census Bureau statistics, no U.S. metropolitan
area that built or expanded urban rail systems in the 1980's
experienced an increase in transit's market share. For example,
transit's work trip market share decreased 33 percent in
Portland, OR, despite the opening of a new light rail line.
Transit work trip market share in Atlanta declined 36 percent
despite an expansion of the heavy rail system. Yet by
subsidizing 80 percent of transit construction projects, the
Federal Government has encouraged expansion of economically
unjustifiable mass transit rail systems. This proposal would
terminate funding for new mass transit systems and restrict the
Federal matching share of remaining capital expenditures to 50
percent. This would encourage local authorities to invest in
new transit systems which are likely to be economically viable
and could attract private capital.

--Terminate Out-Year Funding for the Interstate Transfer
Grants. Funding in 1995 fulfills the Federal commitment to
transit capital projects substituted for previously
withdrawn segments of the Interstate Highway System. This
proposal, also adopted by OMB, corrects future spending
projections.

--Complete Washington Metro in 1999. This proposal would fully
fund the Federal Government's current authorization for
development of the final 13.5 miles of the 103-mile system.

--Eliminate Transit Planning and Research. This program allows
the Federal Government to serve as a catalyst for research
and development of transit technologies. It is significant,
however, that Federal subsidization and participation in
transit planning and research have failed to stem the
decline in transit market share and lower transit per unit
operating costs.

Terminate Out-Year Funding for Pennsylvania Station
Redevelopment Project.--This earmarked project has never been
authorized, and funding for it has never been requested by
either the Department of Transportation or Amtrak. The House
Appropriations Committee report states ``it appears that funds
requested for fiscal year 1995 are only a lure to attract
commitment'' to make the project a reality, and in its
rescission package, the Appropriations Committee terminated
funding for the Pennsylvania Station Redevelopment. This
proposal would extend these savings through 2000.

Make Amtrak More Businesslike: Provide Labor Relief, Phase
Out Operating and Capital Subsidies Between 1999 and 2002.
Amtrak was established in 1970 as a for-profit corporation to
take over the Nation's ailing passenger rail system. But Amtrak
has been burdened by costly Federal laws and highly subsidized
to insulate it from market forces. The cumulative cost to the
taxpayer of this Amtrak experiment has been in excess of $17
billion.

Recently, Amtrak has undertaken an aggressive plan for
reducing expenses, adjusting routes, retiring its oldest cars
and setting itself on a more businesslike footing. Amtrak has
also been successful, preliminarily, in negotiating to obtain
subsidies from States where it operates routes at a loss. But
Amtrak's ability to operate like a commercial enterprise
remains hamstrung by a variety of labor protections. For
example, Appendix C-2 of the Rail Passenger Service Act
requires that Amtrak pay 6 years severance to any employee laid
off due to a termination of a route. Because of the ``30-mile
rule,'' an employee can invoke full severance benefits if
Amtrak seeks to move his work location 30 miles or more. Amtrak
is also prohibited from contracting out if contracting results
in the termination of any employees. With relief from these
provisions and others, Amtrak will be in a better position to
continue reducing costs, improving service, and become self-
financing. This proposal calls for Amtrak to continue its plan
of strategic downsizing and negotiating with States where it
operates at a loss. This proposal further calls for a
significant revision of the laws governing passenger rail labor
protection, and phasing out Federal subsidies between 1999 and
2002.

Complete Northeast Corridor Improvement Program in 1999.
According to the Northeast Corridor Transportation Plan, by the
Department of Transportation, the infrastructure will be ready
for 3-hour Boston to New York City service on selected trains
by 1999. This proposal would terminate funding for the
Northeast Corridor Improvement Program in 1999 to coincide with
this milestone.

Eliminate Funding for High-Speed Rail Development. The
high-speed rail program invests in the development of train
systems capable of traveling at 150 mph or faster. The program
is intended to ``focus on next generation rail service
compatible with existing infrastructure.'' But according to
GAO, existing U.S. rights-of-way have many curves and carry
slow traffic, precluding travel at speeds in excess of 150 mph.
To accommodate faster traffic and new tracks or magnetic
guideways would need to be installed, at an estimated cost of
at least $20 million per mile. In short, implementing high-
speed rail will require an extremely costly, long-term
investment by the Federal Government, while conventional
passenger rail service already requires exorbitant Federal,
State, and local subsidies. According to GAO, ``private
investors have avoided [high-speed rail] projects, considering
them unlikely to be profitable.'' This proposal would terminate
that program.

Eliminate Federal Funding for the Essential Air Service
Program. The Essential Air Service Program was created by the
Airline Deregulation Act of 1978 to continue air service to
communities that had received federally mandated air service
prior to deregulation. The program provides subsidies to air
carriers serving small communities that meet certain criteria.
Subsidies currently support air service to 82 communities, with
about 700,000 passengers served annually. The subsidy per
passenger ranges from $5 to nearly $320. This program was
established to provide a smooth phaseout of Federal subsidies
to airlines that service small airports. This proposal would
end the program.

Eliminate Grants to Reliever Airports. One set-aside
category in the Airport Improvement Program provides funds for
projects at general aviation airports called ``relievers.''
Relievers are defined as those airports that relieve congestion
at commercial airports, and provide additional general aviation
access to the community. This set-aside was created by Congress
to reduce congestion at commercial airports by improving
reliever airports and to provide general aviation with
additional access to airports. But according to GAO: ``FAA does
not consider general aviation to be a significant factor in
congestion at commercial airports today.'' During 1983 to 1991,
the proportion of general aviation traffic decreased by 38
percent at the Nation's congested commercial airports. This
decrease can be attributed to an overall decline in general
aviation activity, not the presence of reliever airports.
Further, FAA and aviation industry group officials consider
access to general aviation facilities to be sufficient--and
often more than sufficient--in most areas where relievers are
located.

Eliminate Funding for the Civil Aeromedical Institute and
the FAA Management Training Institute. These eliminations were
recommended by the Inspector General of the Department of
Transportation. These services could be obtained through
private providers.

Eliminate Air Traffic Control Revitalization Act Premium
Pay. The Federal Government provides a 5-percent pay premium to
more than 30,000 air traffic controllers, operators,
technicians, inspectors, and maintenance employees who did not
strike 14 years ago. This proposal would eliminate that pay
differential.

Reduce Funds for the Office of the Secretary of
Transportation. This reduction could be achieved by eliminating
Funding for transportation planning, research and development.
This account finances systems development and those research
activities and studies concerned with planning and analysis and
information development. This function is duplicated in the
modal agencies within the DOT.

Eliminate Select Unnecessary Transportation Programs and
Return Responsibility to States. This proposal would eliminate
the following programs and return their functional
responsibilities to the States: The International Highway
Transportation Outreach Program; the Congestion Pricing
Program; the Applied Research Program; the National Highway and
Transit Institutes; and the On-the-Job Training Program.

Eliminate Select Functions and Overhead for Department of
Transportation Research and Special Programs Administration
[RSPA].--RSPA serves as a research, analytical, and technical
development arm of the Department for multimodal research and
development, as well as special programs. According to the
inspector general of the Department of Transportation:

* * * collection of data [by RSPA] poses significant
cost to the airline industry and requires DOT staff
resources. In an unregulated environment, much of the
data collected is not needed and should be eliminated.
For the remaining data that meets essential Federal
needs * * * consolidation of the collection process in
the Bureau of Transportation statistics or by a private
contractor may be more efficient than the current RSPA
operations.

Safety and hazardous materials functions should be
transferred to the FHWA or elsewhere in DOT, the Volpe National
Transportation Systems Center should be privatized, and
remaining functions should be closed.

Terminate Local Rail Freight Assistance Program. This
program provides discretionary and flat rate grants to States
for planning and acquisition, track rehabilitation, and rail
facility construction for light density freight lines.
According to the Congressional Budget Office, opponents of the
program argue that it is a low priority because the lines in
question are not an important link in the national
transportation system. Because most of the benefits accrue at
the local or State level, any subsidies should come from State
or local governments, not the Federal Government. The Clinton
administration requests no funding for this program, and
funding for the program was rescinded by the Appropriations
Committee this year.

Emphasize NASA's Core Missions. In certain areas, such as
fundamental scientific research and collective risk endeavors,
the government does play an important role. This proposal
assumes that space exploration and aeronautical research and
development, including the Advanced Subsonic Technology and
High Speed Civil Transport Programs are examples where the
collective risks are still high, and where agencies such as the
National Aeronautics and Space Administration have been able to
make great technical strides with public funds that have not
only resulted in scientific advances, but in significant
economic benefits as well. Indeed, NASA's efforts in
aeronautical research have helped assure American pre-eminence
in the aerospace field and maintain a substantial balance-of-
trade surplus in that portion of the economy. Still, even in
outer space, policies are advocated that encourage faster
private technology development as risk becomes better
understood and more controllable. Finding ways to involve
industry in space activities should be a major priority.
Consequently, this proposal assumes a $1.5 billion savings by
privatizing the space shuttle. Savings on the order of $2.7
billion are also assumed by applying just such a policy to the
Mission to Planet Earth Program. This proposal also assumes the
overall NASA management and operational reforms referred to in
House Report 104-89, part 1. Finally, space is the last
frontier to be utilized and developed. In this regard, this
proposal provides for the full allocation of resources
necessary from the $13.2 billion required to complete the
construction and assembly of the international space station
basic research laboratory. [Note: The figures above reflect the
portion of this provision that occurs in Function 400. Another
portion appears in Function 250.]

Mandatory Spending

Make Permanent Various Expiring User Fees in the Omnibus
Budget Reconciliation Acts of 1990 and 1993. The proposal
extends vessel tonnage charges imposed on users of U.S. ports,
and rail safety fees imposed on rail carriers to fund railroad
safety activities. Recipients of government services such as
Coast Guard harbor maintenance should share the cost of
providing these services rather than the general public.
FUNCTION 450: COMMUNITY AND REGIONAL DEVELOPMENT

This function includes the Community Development Block
Grant, programs within the Federal Emergency Management Agency,
the Small Business Administration, and the Bureau of Indian
Affairs.

Summary of Policy Assumptions

COMMITTEE RECOMMENDATION
FUNCTION 450: COMMUNITY AND REGIONAL DEVELOPMENT
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
House Budget Committee policy 1995
assumptions level 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Function totals: House Budget
Committee balanced budget path:
Budget authority............ 9,175 6,746 6,718 6,709 6,725 6,661 6,192 6,074
Outlays..................... 11,591 9,897 7,824 6,720 6,497 6,566 6,445 6,042

-------------------------------------------------------------------------------
DISCRETIONARY
(7)Changes from 1995 levels

-------------------------------------------------------------------------------
Eliminate Federal support for
the Tennessee Valley Authority:
Budget authority............ 143 -143 -143 -143 -143 -143 -143 -143
Outlays..................... 141 -42 -117 -133 -143 -143 -143 -143
Eliminate the Economic
Development Administration:
Budget authority............ 450 -429 -441 -443 -445 -447 -450 -450
Outlays..................... 317 -23 -119 -239 -332 -426 -450 -450
Community Development Block
Grant:
Budget authority............ 4,622 -924 -924 -924 -924 -924 -924 -924
Outlays..................... 4,047 -37 -405 -773 -902 -924 -924 -924
End policy development and
research programs:
Budget authority............ 42 -42 -42 -42 -42 -42 -42 -42
Outlays..................... 37 -17 -38 -42 -42 -42 -42 -42
Eliminate Community Development
Financial Institutions:
Budget authority............ 125 -124 -124 -124 -124 -124 -124 -124
Outlays..................... 34 -5 -37 -81 -113 -124 -124 -124
Eliminate the Appalachian
Regional Commission:
Budget authority............ 282 -282 -282 -282 -282 -282 -282 -282
Outlays..................... 202 -14 -85 -169 -219 -254 -282 -282
Rural water and waste disposal
grants: \1\
Budget authority............ 630 -63 -63 -63 -63 -63 -63 -63
Outlays..................... 398 -2 -12 -28 -45 -55 -63 -63
Rural business enterprise
grants: \1\
Budget authority............ 48 -25 -25 -25 -25 -25 -25 -25
Outlays..................... 32 -3 -12 -25 -25 -25 -25 -25
Rural development loan fund: \1\
Budget authority............ 47 -24 -24 -24 -24 -24 -24 -24
Outlays..................... 21 -3 -7 -14 -18 -24 -24 -24
Rural business and industry
loans: \1\
Budget authority............ 20 -10 -10 -10 -10 -10 -10 -10
Outlays..................... 17 -1 -5 -10 -10 -10 -10 -10
Terminate local technical
assistance: \1\
Budget authority............ 2 2 2 2 2 2 2 2
Outlays..................... 0 0 0 2 2 2 2 2
BIA and construction:
Budget authority............ 1,000 -214 -214 -214 -214 -214 -214 -214
Outlays..................... 1,005 -135 -196 -201 -207 -209 -209 -209
Pennsylvania Avenue Development
Corporation:
Budget authority............ 7 0 -6 -7 -7 -7 -7 -7
Outlays..................... 177 0 -6 -6 -7 -7 -7 -7

MANDATORY

50-Percent reduction in flood
insurance subsidy on pre-firm
structures:
Budget authority............ NA -181 189 -98 -207 -216 -226 -236
Outlays..................... NA -181 -189 0 0 0 0 ?
----------------------------------------------------------------------------------------------------------------
\1\ Rural development block grant.

Discussion of Policy Assumptions

Discretionary Spending

Eliminate Federal Support for the Tennessee Valley
Authority. The Tennessee Valley Authority (TVA) is the nation's
largest electric utility. It also is responsible for a variety
of natural resource maintenance and development, recreational,
community development and environmental activities. In 1995
Congress appropriated $143 million for these activities. This
proposal would end this annual subsidy for TVA. Other, equally
deserving regions of the country fund these activities either
through higher rates for electric power, local tax revenues, or
user fees.
Eliminate the Economic Development Administration as Part
of Terminating the Department of Commerce. The Economic
Development Administration was established under the Public
Works and Economic Development Act of 1965 to stimulate
economic growth in economically distressed areas. EDA has long
been criticized for providing Federal assistance for activities
whose benefits are primarily local and should be the
responsibility of State and local governments. EDA programs
also have been criticized for substituting Federal credit for
private credit and for facilitating the relocation of
businesses from one distressed area to another. Furthermore,
its eligibility criteria is extremely broad, has resulted in
little proven effect compared with other programs having
similar goals.

Community Development Block Grant. This program is being
shifted into Function 600 as part of the block grants for
development, housing, and special populations.

End Housing Policy Development and Research Programs. The
PDR develops ideas for planning and implementing changes in
housing policy. It develops programmatic proposals to improve
delivery of services. Research and analysis of housing programs
is done by independent government agencies such as GAO, CBO,
and CRS, as well as private entities. In addition, the presence
of this analytical unit has not prevented massive problems
associated with HUD's coordination and planning policies, as
outlined in the HUD IG report and the National Academy of
Public Administration report.

Eliminate Community Development Financial Institutions.
This program was created in 1994 to provide financial support
for community development banks, credit unions, and microloan
funds. It duplicates what the Neighborhood Reinvestment
Corporation can already do. It was targeted for rescission by
the House Appropriations Committee.

Eliminate the Appalachian Regional Commission [ARC]. The
Federal Government provides annual funding to the ARC for
activities that promote economic growth in Appalachian
counties. Yet there is little evidence that the ARC can be
credited with improvements in the economic health of
Appalachia. The programs supported by the ARC duplicate
activities funded by other Federal agencies, such as the
Department of Transportation's Federal Highways Program and the
Department of Housing and Community Development Block Grant
Program. ARC resources go to poor rural communities that areas
are no worse off than many others outside the Appalachian
region and, therefore, no more deserving of special Federal
attention.

Create a Rural Development Block Grant. The administration
has recommended the creation of a Rural Development Performance
Partnership Program. Under their proposal, existing programs--
solid waste management grants, rural water and waste disposal
grants, rural water and waste disposal loans, rental assistance
program, rural community fire protection grants, rural
community facility loans, rural housing insurance fund,
salaries and expenses of the Rural Business and Cooperative
Development Service, rural technology and cooperative
development grants, local technical assistance and planning
grants, rural business enterprise grants, rural business and
industry loans, and rural development loans--would be merged
into a new block grant. This proposal generally accepts the
notion of a block grant, albeit with a different composition
and lower funding level. The proposal would freeze funding for
Rural Community Facility Loans, which are provided for the
construction and improvement of community facilities providing
essential services in rural areas, such as hospitals and fire
stations. It also recommends terminating several low-priority
programs--Rural Community Fire Protection Grants, Compensation
for Construction Defects, and Local Technical Assistance and
Planning Grants--it recognizes that the Section 515 Rural
Insurance Housing Program has not been authorized, and it
reduces waste-water programs. The proposal also recognizes that
the private sector is significantly more effective at producing
economic development than the government. Therefore, the
proposal calls for a 50-percent reduction in all business and
development accounts before the creation of the block grant.
Finally, the proposal accepts the Administration's funding
request for Very Low-Income Housing Repair Grants, but
incorporates the program into the new block grant. [Note: the
rental assistance portion of this proposal appears in Function
600.] and The Rural Housing Insurance Program occurs in
Function 370.

Create a New Native American Block Grant. This proposal
would accelerate the trend toward self-determination for native
Americans. The reinvented Bureau of Indian Affairs would
provide block grants, rather than engaging in the direct
provision of services or the direct supervision of tribal
activities. This proposal would reduce the central office
operations of the BIA by 50 percent and eliminate funding for
the Navaho and western Oklahoma area offices. It would
eliminate technical assistance of Indian enterprises, through
which technical assistance for economic enterprises is provided
by contracts with the private sector or with other Federal
agencies. As recommended by the Clinton administration, the
proposal eliminates funding for direct loans to the Indians,
and it reduces the guaranteed loans by 10 percent. Currently,
the government provides loan guarantees with an emphasis on
manufacturing, business services, and tourism. The block grant
incorporates 80 percent of the current budget for construction.
This proposal also assumes that the operating costs of the
National Indian Gaming Commission are financed through annual
assessments of gaming operations regulated by the Commission.
Finally, it assumes that the other major programs for native
Americans will be incorporated into this block grant when those
programs have achieved self-determination. [Note: Portions of
this proposal also are contained in Functions 550 and 800.]

Eliminate the Pennsylvania Avenue Development Corporation
and Other Low-Priority Programs in the Departments of
Agriculture and the Interior. This proposal would terminate
several programs, including the Urban Park and Recreation
[UPAR] Fund, international forestry, the Pennsylvania Avenue
Development Corporation, the Woodrow Wilson International
Center, the National Capital Arts and Cultural Affairs, the
Wildlife Conservation and Appreciation Fund, and the African
Elephant Conservation Fund. UPAR provides matching grants to
cities for the renovation of urban parks and recreation
facilities. Under international forestry, technical assistance
is provided outside the United States. The Woodrow Wilson
International Center for Scholars facilitates scholarship ``of
the highest quality in the social sciences and humanities.''
The National Capital Arts and Cultural Affairs account is
funded under the Commission of Fine Arts; it makes payments for
general operating supports to Washington, DC, arts and other
cultural organizations. The Wildlife Conservation and
Appreciation Fund provides grants to States for conservation
and appreciation projects intended to conserve ``the entire
array of diverse fish and wildlife species.'' Rewards are paid
for information leading to a civil penalty or criminal
conviction under the African Elephant Conservation Act. Given
the size of the Federal deficit, it is important to eliminate
or substantially reduce low-priority programs. The figures
above reflect the Pennsylvania Avenue Development Corporation
savings in Function 450.

Mandatory Spending

Reduce by 50 Percent the Flood Insurance Subsidy on Pre-
FIRM Structures. The National Flood Insurance Program [NFIP]
offers insurance at heavily subsidized rates for buildings
constructed before January 1, 1975, or the completion of a
participating community's ``Flood Insurance Rate Map'' [FIRM].
Owners of post-FIRM construction pay actuarial rates for their
insurance. Currently, 18 percent of total flood insurance
coverage is subsidized. The Federal Emergency Management Agency
[FEMA], which administers the flood insurance program, reported
in 1994 that 41 percent of policyholders were paying subsidized
rates for some or all of their coverage. The program subsidizes
only the first $45,000 of coverage for a single-family or two-
to four-family dwelling, and the first $130,000 of a larger
residential, nonresidential, or small business building.
Coverage in the subsidized tier is currently priced at about
one-third of its actuarial value. Under this proposal, the
subsidy would be reduced by 50 percent.
FUNCTION 500: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES

Programs within this function include aid to elementary and
secondary education, college student loans and grants, worker
training, foster care, aid to the disabled, and Head Start.

Summary of Policy Assumptions

COMMITTEE RECOMMENDATION
FUNCTION 500: EDUCATION, TRAINING, EMPLOYMENT AND SOCIAL SERVICES
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
House Budget Committee Policy 1995
Assumptions level 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Function totals: House Budget
Committee balanced budget path:
Budget Authority............ 58,300 45,737 45,016 44,874 45,401 45,898 44,959 44,562
Outlays..................... 54,730 52,266 46,438 44,627 44,711 45,168 44,207 43,671

----------------------------------------------------------------------------------------------------------------

DISCRETIONARY
(7) Changes from 1995 levels
-------------------------------------------------------------------------------

Eliminate Funding for Goals
2000:
Budget Authority............ 403 -403 -403 -403 -403 -403 -403 -403
Outlays..................... 133 -48 -323 -395 -403 -403 -403 -403
Eliminate Funding for Title 1
Concentration Grants and BIA
Set-Aside:
Budget Authority............ 703 -703 -703 -703 -703 -703 -703 -703
Outlays..................... 668 -88 -584 -715 -703 -703 -703 -703
Fund Impact Aid at the
President's Level:
Budget Authority............ 728 -109 -136 -178 -178 -178 -178 -178
Outlays..................... 1,088 -89 -129 -170 -177 -178 -178 -178
Eliminate Duplicative School
Improvement Programs:
Budget Authority............ 415 -415 -415 -415 -415 -415 -415 -415
Outlays..................... 311 -50 -332 -407 -415 -415 -415 -415
Consolidate School Improvement
Programs and Drug-Free Schools
into Governors' Block Grant:
Budget Authority............ 1,170 -351 -351 -351 -351 -351 -351 -351
Outlays..................... 1,120 -42 -281 -344 -351 -351 -351 -351
Discontinue Capital
Contributions:
Budget Authority............ 158 -158 -158 -158 -158 -158 -158 -158
Outlays..................... 158 -16 -153 -158 -158 -158 -158 -158
Eliminate State Incentive Grants
and State Post-Secondary Review
Entities:
Budget Authority............ 83 -83 -83 -83 -83 -83 -83 -83
Outlays..................... 91 -17 -83 -83 -83 -83 -83 -83
Eliminate Duplicative Higher
Education Grants:
Budget Authority............ 131 -131 -131 -131 -131 -131 -131 -131
Outlays..................... 128 -16 -105 -128 -131 -131 -131 -131
Phase Out Aid to Institutions
Over Two Years as proposed by
the President:
Budget Authority............ 230 -47 -87 -87 -87 -87 -87 -87
Outlays..................... 213 -6 -42 -78 -86 -87 -87 -87
Phase Out all Special Interest
Scholarships:
Budget Authority............ 111 -32 -69 -93 -112 -112 -112 -112
Outlays..................... 104 -4 -30 -64 -89 -108 -112 -112
Eliminate Funding for TRIO
Programs:
Budget Authority............ 466 -466 -466 -466 -466 -466 -466 -466
Outlays..................... 419 -56 -373 -457 -466 -466 -466 -466
Eliminate Federal Funding for
Howard University, Redirect
Half of the Savings to
Historically Black Colleges
Fund:
Budget Authority............ 206 -103 -103 -103 -103 -103 -103 -103
Outlays..................... 200 -177 -120 -104 -103 -103 -103 -103
Eliminate Wasteful Education
Research Programs:
Budget Authority............ 253 -253 -253 -253 -253 -253 -253 -253
Outlays..................... 217 -54 -202 -249 -253 -253 -253 -253
Eliminate Federal Funding for
Libraries:
Budget Authority............ 144 -143 -143 -143 -143 -143 -143 -143
Outlays..................... 155 -52 -106 -143 -143 -143 -143 -143
Reduce the Department of
Education Administration
Account by 30 Percent:
Budget Authority............ 356 -107 -107 -107 -107 -107 -107 -107
Outlays..................... 350 -102 -102 -102 -107 -107 -107 -107
Terminate Bilingual and
Immigrant Education:
Budget Authority............ 245 -245 -245 -245 -245 -245 -245 -245
Outlays..................... 251 -29 -196 -240 -245 -245 -245 -245
Terminate Funding for the
National Endowment for the Arts
and National Endowment for the
Humanities:
Budget Authority............ 344 -344 -344 -344 -344 -344 -344 -344
Outlays..................... 351 -129 -276 -321 -344 -344 -344 -344
Funding Head Start at the fiscal
year 1994 Level:
Budget Authority............ 3,534 -209 -209 -209 -209 -209 -209 -209
Outlays..................... 3,339 -79 -184 -209 -209 -209 -209 -209
Privatize the Corporation for
Public Broadcasting
Budget Authority............ 286 -26 -29 -315 -315 -315 -315 -315
Outlays..................... 286 -26 -29 -315 -315 -315 -315 -315
Eliminate the Corporation for
National and Community Service:
Budget Authority............ 804 -790 -790 -790 -790 -790 -790 -790
Outlays..................... 483 -199 -572 -732 -761 -768 -775 -783
Terminate three accounts in the
National Telecommunications and
Information Administration:
Budget Authority............ 96 -96 -96 -96 -96 -96 -96 -96
Outlays..................... 32 -5 -57 -80 -95 -96 -96 -96
End Federal Attempts to Teach
People How to Purchase Housing:
Budget Authority............ 50 -50 -50 -50 -50 -50 -50 -50
Outlays..................... 12 -3 -44 -49 -50 -50 -50 -50
Woodrow Wilson International
Center (PA Avenue Development
Corp.):
Budget Authority............ 10 -10 -10 -10 -10 -10 -10 -10
Outlays..................... 8 -5 -10 -10 -10 -10 -10 -10
National Capitol Arts and
National Affairs (PA Ave
Development Corp.):
Budget Authority............ 8 -8 -8 -8 -8 -8 -8 -8
Outlays..................... 8 -8 -8 -8 -8 -8 -8 -8
Create a Job Training Block
Grant:
Budget Authority............ 0 5,769 5,769 5,769 5,769 5,769 5,769 5,769
Outlays..................... 0 1,096 4,904 5,769 5,769 5,769 5,769 5,769
Vocational and Adult Education
(Perkins) (Job Training Block
Grant):
Budget Authority............ 1,464 -1,464 -1,464 -1,464 -1,464 -1,464 -1,464 -1,464
Outlays..................... 1,468 -177 -1,171 -1,435 -1,464 -1,464 -1,464 -1,464
Education for the Disadvantaged
(Job Training Block Grant):
Budget Authority............ 10 -10 -10 -10 -10 -10 -10 -10
Outlays..................... 10 -1 -8 -10 -10 -10 -10 -10
Vocational and Adult Education
(Homeless Adults) (Job Training
Block Grant):
Budget Authority............ 9 -9 -9 -9 -9 -9 -9 -9
Outlays..................... 10 -1 -8 -9 -9 -9 -9 -9
Community Service Employment for
Older Americans (Job Training
Block Grant):
Budget Authority............ 411 -411 -411 -411 -411 -411 -411 -411
Outlays..................... 409 -71 -375 -411 -411 -411 -411 -411
Training and Employment Services
(Job Training Block Grant):
Budget Authority............ 4,356 -4,358 -4,328 -4,298 -4,267 -4,267 -4,267 -4,267
Outlays..................... 3,936 -137 -3,404 -4,288 -4,299 -4,266 -4,266 -4,266
State Unemployment Insurance and
Employment Service Operations
(Job Training Block Grant):
Budget Authority............ 821 -821 -821 -821 -821 -821 -821 -821
Outlays..................... 810 -492 -821 -821 -821 -821 -821 -821
Employment and Training
Administration Unemployment
Trust Fund (Job Training Block
Grant):
Budget Authority............ 167 -167 -167 -167 -167 -167 -167 -167
Outlays..................... 166 -150 -167 -167 -167 -167 -167 -167
Eliminate Office of the American
Workplace:
Budget Authority............ 30 -30 -30 -30 -30 -30 -30 -30
Outlays..................... 30 0 0 -30 -30 -30 -30 -30
Reduce the Labor Department's
Management Account by Twenty
Percent:
Budget Authority............ 155 -35 -35 -35 -35 -35 -35 -35
Outlays..................... 147 -28 -33 -35 -35 -35 -35 -35
Creation of Discretionary part
of Child Protection Block
Grant:
Budget Authority............ n/a 503 503 503 503 503 503 503
Outlays..................... n/a 440 503 503 503 503 503 503
Cancellation of Ways and Means
Child Protection Programs:
Budget Authority............ 302 -302 -302 -302 -302 -302 -302 -302
Outlays..................... 303 -303 -303 -303 -303 -303 -303 -303
Cancellation of Opportunities
Committee Child Protection
Programs:
Budget Authority............ 103 -103 -103 -103 -103 -103 -103 -103
Outlays..................... 79 -10 -89 -103 -103 -103 -103 -103
Opportunities Committee Child
Care Program (Repeal for Block
Grant) (Narrative found in
Function 600):
Budget Authority............ 20 -20 -20 -20 -20 -20 -20 -20
Outlays..................... 19 -2 -17 -19 -20 -20 -20 -20

MANDATORY

AFDC JOBS, Title I:
Budget Authority............ 1,300 -1,300 -1,300 -1,300 -1,300 -1,300 -1,300 -1,300
Outlays..................... 980 -980 -980 -980 -980 -980 -980 -980
Subsidy Program for Student
Loans:
Budget Authority............ 5,778 -4,321 -5,329 -5,597 -5,433 -5,280 -5,279 -5,237
Outlays..................... 5,237 -3,124 -4,698 -5,293 -5,255 -5,087 -5,040 -5,044
Terminate Trade Adjustment
Assistance, (training part):
Budget Authority............ 93 -93 -93 -93 -93 -93 -93 -93
Outlays..................... 93 -93 -93 -93 -93 -93 -93 -93
Terminate Trade Adjustment
Assistance, (NAFTA part):
Budget Authority............ 33 -33 -33 -33 -33 -33 -33 -33
Outlays..................... 9 -9 -9 -9 -9 -9 -9 -9
Foster Care, Title II (Child
Protection Block Grant):
Budget Authority............ 3,609 327 592 904 1,164 1,468 1,671 1,747
Outlays..................... 3,457 81 718 1,025 1,290 1,590 1,750 1,714
Family Preservation & Support,
Title II (Child Protection
Block Grant):
Budget Authority............ 150 -150 -150 -150 -150 -150 -150 -150
Outlays..................... 83 -83 -83 -83 -83 -83 -83 -83
----------------------------------------------------------------------------------------------------------------

Discussion of Policy Assumptions

Discretionary Spending

Terminate the Department of Education.

Improving education will take bottom-up reform.
Presidential speeches and photo opportunities, national
testing and assessment, federally funded experimental
schools, even new grants spent in accordance with
Federal guidelines, can make only marginal
contributions to fixing the schools. Education in
America will not improve significantly until States and
communities decide they want better schools. Making
education more effective will take parents who care,
committed teachers, community support, and accountable
school officials. An ``Education President'' can help
focus media attention on schooling, but he risks
diluting State and local responsibility by implying
that Washington can actually produce change.--Alice M.
Rivlin, ``Reviving the American Dream.''

The freshman Members of the House majority will introduce
legislation to abolish the Department of Education on May 24.
The Budget Committee endorses their goal of returning education
to the States and local level. This proposal would eliminate
funding for approximately 150 programs in the Department of
Education. [Note: This department termination also calls for
ending the in-school interest subsidy for Stafford Loans, which
is described in the mandatory component of this function.]

--Eliminate Funding for Goals 2000. Education Reform will be
achieved by encouraging innovation and rewarding results.
Goals 2000 increases funding for bureaucracy and imposes
new regulations on States and localities--exactly the wrong
approach.

--Eliminate Funding for Title 1 Concentration Grants and BIA
Set-Aside. Funding for the title 1 program, which provides
supplemental funding to assist low-achieving students, has
doubled over the past 10 years. Unfortunately, studies have
shown limited positive effects for the students this
program was supposed to help. According to the Education
Department's Biennial Evaluation Report:

Comparisons of similar cohorts by grade and poverty
show that program participation does not reduce the
test score gap for disadvantaged students. Indeed,
Chapter 1 student scores (in all poverty cohorts)
declined between the third and fourth grades.

While the recent reauthorization bill included provisions
intended to reform the title 1 program, there is no
evidence yet to show that these changes have improved the
program. This proposal would leave the Basic Grants
unchanged and eliminate funding for Concentration Grants
and the BIA Set-Aside. These programs duplicate funds
already provided by the Basic Grants.

--Fund Impact Aid at President's Level. Impact Aid provides
funding to school districts that educate children of
families associated with Federal installations, especially
Indian reservations and military bases. The
administration's proposal would limit funding to military
and Indian ``a's,'' whose parents both live and work on
Federal property, and targets the assistance to more
accurately reflect the local education contribution.

--Eliminate Duplicative School Improvement Programs. This
proposal would eliminate funding for the following:
Education Infrastructure; Inexpensive Book Distribution;
Arts in Education; Instruction in Civics; Christa McAuliffe
Fellowships; Magnet Schools Assistance; Education for
Homeless Children and Youth; Women's Educational Equity;
Training and Advisory Services; Dropout Prevention
Demonstrations; Ellender Fellowships; Education for Native
Hawaiians; Foreign Language Assistance; Training in Early
Education and Violence; Charter Schools; Technical
Assistance for Improving ESEA Programs; and Family and
Community Endeavor Schools. Although many of these programs
have useful goals, they are generally too small to be
effective on a national scale. This proposal anticipates
that many of these activities will be eligible for funds
under a new Governors Education Reform Block Grant. The
administration's budget reduces categorical programs in the
Department of Education by 68.

--Consolidate School Improvement Programs and Drug-Free Schools
Into Governors' Block Grant. This proposal would
consolidate the Title 2 Program, the Eisenhower
Professional Development Grants and the Drug-Free Schools
Program into an $804-million Governors' Education Reform
Block Grant. This approach will achieve two general
principles articulated by the administration in their
proposal to restructure the Perkins Act:

* * * flexibility, allowing States and localities to
implement * * * systems that respond to local needs,
instead of Federal ``set-asides'' and other
requirements and ``consolidation,'' ending program
proliferation by merging separate formula and
discretionary programs into a more coherent, integrated
program.

--Discontinue Capital Contributions. The President's Fiscal
Year 1995 Budget recommended discontinuing funding for
Capital Contributions for Perkins Loans, saying:

Federal Direct Student Loans and Federal Family
Education Loans, together with new Perkins Loans funded
from $6 billion in existing institutional revolving
funds, will provide adequate sources of capital for new
student borrowing.

This proposal would not affect the two other campus-based
programs, the Work-Study Program, and Supplemental
Education Opportunity Grants. This proposal also would not
reduce the Perkins Loan cancellation payments, nor would it
eliminate the $6 billion loan revolving fund.

--Eliminate State Incentive Grants and State Post-Secondary
Review Entities. The State Incentive Grant Program was set
up in 1972 to encourage States to offer scholarships to
postsecondary students in financial need. Today, all 50
States and the District of Columbia offer this kind of
assistance. For this reason, the National Performance
Review recommended terminating this program. The SPRE
program reimburses States for activities that supplement
existing institutional licensing and review functions
conducted by States to enable institutions to participate
in the student loan program. Critics have argued that the
program is poorly focused and overly burdensome. This
proposal would eliminate funding for the program.

--Eliminate Duplicative Higher Education Grants. This proposal
would eliminate funding for the following: the Fund for the
Improvement of Postsecondary Education; Alaska/Hawaii
Native Culture and Arts; the Eisenhower Leadership Program;
Minority Teacher Recruitment; Minority Science Improvement;
Innovative Projects for Community Service; International
Education and Foreign Language Studies; Cooperative
Education; Law School Clinical Experience; Urban Community
Service; the student financial aid database and information
line; and the Mary McLeod Bethune Memorial Fine Arts
Center. Most of these programs have either largely achieved
their original purposes or could be supported more
efficiently by other funding sources. The administration's
own budget reduces the number of categorical programs in
the Department of Education by 68, including 6 of the
programs listed above.

--Phase Out Aid to Institutions Over 2 Years as Proposed by the
President. The purpose of these programs is to help
institutions of higher education with limited financial
resources become financially self-sufficient. Although the
goal is worthy, the committee agrees with the
administration that the best way to support these
institutions is through investing in student financial
assistance. According to the administration:

Tuition revenues from a student receiving financial
aid may be used for developmental purposes, such as
those currently supported by part A, as well as the
endowment-building activities currently supported by
part C.

--Phase Out All Special Interest Scholarships. The
administration proposed eliminating eight postsecondary
scholarship and fellowship programs. This proposal would
eliminate new awards from the three remaining scholarship
programs, including the Robert C. Byrd Scholarship Program.
The committee agrees with the administration's efforts to
``eliminate a number of smaller, categorical programs that
are administratively burdensome and duplicative of the
broader student financial aid programs.'' In addition, the
committee notes that numerous merit scholarships already
are provided by private groups, State governments, and
universities.

--Eliminate Funding for TRIO Programs. The purpose of these
five programs is to encourage individuals from
disadvantaged backgrounds to enter and complete college.
Although the programs have strong support, their
effectiveness has been questioned in a number of studies.
According to the Department of Education's Biennial
Evaluation Report:

Upward Bound participants were more likely to enter
college and earned more credits than nonparticipants,
but within 18 months after high school graduation,
differences in postsecondary persistence were no longer
significant * * *. There were no systematic differences
in rates of college graduation or credits earned.

--Eliminate Federal Funding for Howard, Redirect Half the
Savings to Historically Black and Hispanic Colleges Fund.
Howard University funds 55 percent of its education and
general expenses through its Federal appropriation. At the
same time, Howard's privately raised funds trail those of
its peer institutions. Howard's alumni response rate of 8
percent is far below that of other institutions. It is
difficult to justify continuing a Federal subsidy of more
than $15,000 per enrolled student. Howard University would
be able to compete with other institutions for its fair
share of the strengthening HBCU's Fund.

--Eliminate Wasteful Education Research Programs. This proposal
would eliminate funding for the following: Research;
Educational Technology; Star Schools; Ready to Learn
Television; Telecommunications Demo for Mathematics; Fund
for the Improvement of Education; Javits Gifted and
Talented Education; National Diffusion Network; Eisenhower
Regional Consortium; 21st Century Community Learning
Centers; the National Writing Project; Civics Education;
and the International Education Exchange. Most of these
programs have largely achieved their original purpose, were
created to benefit specific special interest groups, or
could be supported more efficiently by other funding
sources. The administration's own budget reduces the number
of categorical programs in the Department of Education by
68. Title I funds could be used for English immersion or
English as a second language instruction.

--Eliminate Federal Funding for Libraries. The President has
proposed no funding for six library programs. This proposal
would eliminate the two remaining programs because, while
these programs are popular, there is no clear Federal role
in funding local public libraries. Federal funding makes up
only 1 percent of public library income.

--Reduce Department of Education Administration Account by 30
Percent. As the size and scope of the Department of
Education is reduced over the coming year, the costs of
running the Department can be significantly decreased.

--Terminate Bilingual and Immigrant Education. The
instructional services program requires that schools spend
75 percent of their funding on transitional bilingual
education instructional methods, where students are taught
both in English and their native language. Unfortunately,
numerous studies have shown that heavy reliance on the
pupil's native language can delay English proficiency.
Eliminating Federal funding for bilingual education--a mere
3 percent of the total money spent on bilingual education--
could free local school districts to offer the most
effective programs for their students.

Terminate Funding for the National Endowment for the Arts
and the National Endowment for the Humanities. Under this
proposal, Federal funding for the National Endowment for the
Arts and the National Endowment for the Humanities would be
eliminated. Federal funding for the arts and humanities is not
affordable in a time of fiscal stringency, especially when
programs addressing central Federal concerns are not fully
funded. In addition, many arts and humanities programs benefit
predominantly higher-income people, who could pay higher
admission or ticket prices. Finally, there is serious
philosophical debate about whether financing artistic creation
is an appropriate government activity in the first place.

Freeze Head Start Funding at the Fiscal Year 1994 Level.
Before the 1990's, there was a major push to expand Head Start
to include more children. The program received its largest
budget increase in 1990. In 1991, Congress authorized a total
appropriation of $2.4 billion, with annual increases that would
quadruple the program's budget in 4 years. In 1993, the program
was funded at $2.8 billion, providing slots for 714,000
children. In 1994, funding was increased to $3.3 billion, with
places for 750,000 children. This reflects a 20-percent
increase in funding but only a 12-percent increase in the
number of children participating. The President's 1995 budget
request calls for an additional 54-percent increase in funding
but only a 12-percent increase in the number of places for
children. Most of the new money will go to increase the number
of social workers and salaries for teachers. There also are
concerns that funds are being poured into the program faster
than they can be used. Other Head Start proposals, which may
considerably alter the savings amount, are under consideration.

Privatize the Corporation for Public Broadcasting. The
original goal of the Public Broadcasting Act of 1967 was to
supply cultural and educational programming not available on
the three national networks. Today, a number of channels--Arts
and Entertainment, Bravo, the Learning Channel, the Discovery
Channel--offer programming similar to PBS without any taxpayer
assistance. Moreover, the annual Federal appropriation
represents only 14 percent of the Corporation's annual budget.
CPB could make up cuts in Federal funding by reducing waste and
increasing corporate sponsorship and viewer support, as well as
by being more aggressive in its licensing arrangements with
popular PBS programs such as ``Barney'' and ``Sesame Street.''
This proposal would freeze the fiscal year 1996 and fiscal year
1997 funding.

Eliminate the Corporation for National and Community
Service. AmeriCorps is an inefficient and expensive way of
assisting working families to pay for college. Each volunteer
is given a salary and an education benefit worth approximately
$7.27 per hour plus medical benefits and free child care. The
benefits equal more than $15,000 annually and at least $15,000
per participant goes for overhead and administration.
AmeriCorps is not means-tested. Hence, children of wealthy
people can edge out low-income children for participation.
About 5 million students benefit from the student loan program.
AmeriCorps has approximately 20,000 members, or less than one-
half of 1 percent of those students eligible for student aid.
Three students could attend the University of Iowa for 1 year
for the same amount of money that one AmeriCorps member costs.
Senator Byrd of West Virginia noted that instead of sending one
AmeriCorps participant--who may or may not need financial
assistance--to college, five needy students could qualify for
Pell grants. The concern that politics might undermine the
integrity of the AmeriCorps program is becoming a reality.
AmeriCorps awarded 42 volunteers to ACORN and 44 volunteers to
the Legal Services Corporation, the chief litigator for the
welfare state. The costs for these programs are $1,143,411 for
ACORN and $4,959,900 for Legal Services.
Since the Senior Companion Program, the Retired Senior
Volunteer Program and the Foster Grandparent Program were
established prior to the establishment of the AmeriCorps
program, the Budget Committee recommends that the Committee on
Economic and Educational Opportunties consider moving these
senior-related programs to the programs to the Administration
on Aging and authorize them as part of the Older American's
Act. The Committee further recommends that the Opportunties
Committee consider maintaining the current structure of these
programs, believing that they more appropriately belong under
the Administration on Aging which oversees a variety of
programs that benefit senior citizens.

Terminate Telecommunications and Information Administration
Activities. This provision is part of the Department of
Commerce Termination described in Function 370.

End Federal Attempts to Teach People How to Purchase
Housing. This program offers counseling grants to HUD-approved
housing counseling agencies. Grants provide housing counseling
services for single family home buying, home ownership,
mortgage default, rental, and rental delinquency. This program
is beyond the scope of HUD's function. It is duplicated by
presently existing State and local agency services. The House
Appropriations Committee recommended the elimination of this
program in its rescission package.

Eliminate the Pennsylvania Avenue Development Corporation
and Other Low-Priority Programs in the Departments of
Agriculture and the Interior. This proposal would terminate
several programs, including the Urban Park and Recreation
[UPAR] Fund, International Forestry, the Pennsylvania Avenue
Development Corporation, the Woodrow Wilson International
Center, the National Capital Arts and Cultural Affairs, the
Wildlife Conservation and Appreciation Fund, and the African
Elephant Conservation Fund. UPAR provides matching grants to
cities for the renovation of urban parks and recreation
facilities. Under international forestry, technical assistance
is provided outside the United States. The Woodrow Wilson
International Center for Scholars facilitates scholarship ``of
the highest quality in the social sciences and humanities.''
The National Capital Arts and Cultural Affairs account is
funded under the Commission of Fine Arts; it makes payments for
general operating supports to Washington, DC, arts and other
cultural organizations. The Wildlife Conservation and
Appreciation Fund provides grants to States for conservation
and appreciation projects intended to conserve ``the entire
array of diverse fish and wildlife species.'' Rewards are paid
for information leading to a civil penalty or criminal
conviction under the African Elephant Conservation Act. Given
the size of the Federal deficit, it is important to eliminate
or substantially reduce low-priority programs. The figures
above reflect the savings from the Woodrow Wilson Center and
the National Capital Arts and Cultural Affairs, in Function
500.

Streamline the Department of Labor.

This new Congress came to power energized by a common
goal: to scrutinize the Federal budget--issue by issue,
program by program--to determine what deserved
continued funding. If a program wasn't doing the job,
or wasn't doing it at a reasonable price, that program
would either be reformed or retired. That agenda
unsettled some people in this town. Change always does.
But let me say at the outset--in front of the committee
and the cameras--something that may startle you. I
agree.--Robert B. Reich, Secretary of Labor, testimony
before the House Appropriations Subcommittee on Labor/
HHS/Education.

--Block Grant Job Training Programs and Reduce Funding by 20
Percent. In a report to the Budget and Economic and
Educational Opportunities Committee, the General Accounting
Office identified 163 Federal job training programs. The
Opportunities Committee is drafting legislation to
consolidate more than 100 of these programs into four block
grants to the States. This estimate assumes the block grant
would consolidate discretionary programs and total
approximately $7.5 billion. The proposal also assumes
funding for vocational rehabilitation for the disabled
would not be reduced and that funding for the JOBS program
would remain part of welfare reform. The Department of
Labor in its fiscal year 1996 Budget proposed consolidating
about 70 employment and training programs explaining:

Existing [job training] programs have conflicting
rules and administrative structures, confuse the people
they are intended to help, add bureaucracy at every
level, and waste taxpayer money.

Combining these programs into block grants would eliminate
duplicative programs, increase management efficiency, and
provide the States the flexibility to develop innovative
programs. [Note: This block grant also contains a home
ownership provision reflected in Function 600, and a
substance abuse and mental health component reflected in
Function 550.]

--Eliminate the Office of the American Workplace. The primary
function of the Office of the American Workplace is to
promote ``progressive'' labor-management relationships.
Under current budgetary pressures, this is clearly a
service the Department of Labor can no longer afford to
provide. A second function of this office is to administer
and enforce provisions of the Labor-Management Reporting
and Disclosure Act. This duplicates activities already
conducted by the Employment Standards Administration.

--Reduce Department of Labor Management Account by 20 Percent.
As the size and scope of the Department of Labor is reduced
through consolidation and program elimination, the costs of
running the Department can be significantly decreased.
Within this account, several programs that duplicate
existing activities or are simply unneeded could be
eliminated. Possible targets for elimination include the
Bureau of International Affairs, the Women's Bureau, and
the National Commission for Employment Policy.

Establish a Child Protection Block Grant. This proposal,
which is title II of the House-passed welfare reform plan,
consolidates 23 current Federal programs targeted at abused
children into a single block grant to States. It eliminates 18
pounds of Federal regulations that currently constrain the
States' ability to innovate in this area. It allows States to
target funds to areas of greatest need, and requires States to
eliminate policies that prohibit cross-racial adoptions. Such
policies currently result in black children having to wait
twice as long as white children for adoption opportunities.

Mandatory Spending

Eliminate AFDC JOBS Program. The savings from this
termination are to be channeled to the Family Assistance Block
Grant in title I of the welfare reform plan.

Eliminate In-School Interest Subsidy for Stafford Loans.
Under the Federal student loan programs, the government
provides interest-free loans to low- and middle-income students
while they are in school. Free is a slightly misleading term,
because these subsidies will cost the taxpayer $12.4 billion
over the next 5 years. Although the administration is now
publicly opposed to this option, OMB Director Alice M. Rivlin
targeted this subsidy in her October ``Big Choices'' memo.
Elimination of the subsidy will not significantly increase a
student's debt. A student who borrows the maximum for 4 years
of college ($17,125) will see his or her monthly repayment go
up by $45, or about the price of a daily Super Big Gulp. A
student who borrows the maximum for 2 years ($11,000) will see
a monthly repayment increase of $21, or less than the cost of
two compact disks.

Terminate Trade Adjustment Training Programs. This
provision is a component of the elimination of the Trade
Adjustment Assistance Program, as described in Function 600.

REPORT LANGUAGE

Privatize Student Loan Marketing Association [Sallie Mae].
The Student Loan Marketing Association [Sallie Mae] was
established in 1972 as a government-sponsored corporation
dedicated to ensuring adequate private-sector funding for
federally guaranteed education loans. Since that time, student
loan volume has grown from $1 billion a year to $25 billion a
year. Sallie Mae has been instrumental in fostering this
expansion of the student loan program. With securitization and
42 secondary markets, there now exist numerous alternatives for
lenders wishing to sell or liquidate their portfolios of
student loans. Maintaining Sallie Mae as a government-sponsored
enterprise is no longer warranted and exposes taxpayers to an
unnecessary liability. The Budget Committee supports
legislation under consideration by the Economic and Educational
Opportunities Commission to restructure the Student Loan
Marketing Association as a private-sector corporation.
FUNCTION 550: HEALTH

This function is composed of the biomedical research
services, and health education activities of the United States,
including Medicaid, the National Institutes of Health,
substance abuse prevention and treatment, and women's health
programs.

Summary of Policy Assumptions

FUNCTION 550: HEALTH
----------------------------------------------------------------------------------------------------------------
1995
HBC Policy Assumptions level 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
FUNCTION TOTALS

House Budget Committee balanced
budget path:
Budget Authority............ 116,619 121,942 127,714 132,083 136,683 141,521 146,287 149,070
Outlays..................... 115,755 122,321 127,757 132,205 136,703 141,386 146,182 148,891

-------------------------------------------------------------------------------
DISCRETIONARY
(7) Changes from 1995 Levels

-------------------------------------------------------------------------------
Indian Health:
Budget Authority............ 1,710 0 0 0 0 0 -171 -171
Outlays..................... 1,681 0 0 0 0 0 -125 -171
Indian Health Facilities:
Budget Authority............ 258 0 0 0 0 0 -25 -25
Outlays..................... 322 0 0 0 0 0 -8 -18
Substance Abuse and Mental
Health Services:
Budget Authority............ 21 -21 -21 -21 -21 -21 -21 -21
Outlays..................... 21 -10 -19 -21 -21 -21 -21 -21
Eliminate Unauthorized Rural
Outreach Grants Duplicating
Other Federal Supported
Services:
Budget Authority............ 28 -28 -28 -28 -28 -28 -28 -28
Outlays..................... n/a -11 -23 -28 -28 -28 -28 -28
Eliminate Maintenance Funding
originally Intended for State
Offices of Rural Health:
Budget Authority............ 4 -4 -4 -4 -4 -4 -4 -4
Outlays..................... n/a -2 -3 -4 -4 -4 -4 -4
Eliminate Grants for
Administration of State Trauma
Care Systems:
Budget Authority............ 5 -5 -5 -5 -5 -5 -5 -5
Outlays..................... n/a -2 -4 -5 -5 -5 -5 -5
Eliminate Funding for Native
Hawaiian Health Care:
Budget Authority............ 5 -5 -5 -5 -5 -5 -5 -5
Outlays..................... n/a -2 -4 -5 -5 -5 -5 -5
Eliminate Funding for Pacific
Basin Initiative:
Budget Authority............ 1 -1 -1 -1 -1 -1 -1 -1
Outlays..................... n/a -1 -1 -1 -1 -1 -1 -1
Reduce Ineffective Funding for
the National Service Corps:
Budget Authority............ 125 -63 -63 -63 -63 -63 -63 -63
Outlays..................... n/a -30 -56 -63 -63 -63 -63 -63
Terminate Chiropractic
Demonstration Grants:
Budget Authority............ 1 -1 -1 -1 -1 -1 -1 -1
Outlays..................... n/a 0 -1 -1 -1 -1 -1 -1
Remove Duplicative Funding for
Centers of Excellence:
Budget Authority............ 23 -23 -23 -23 -23 -23 -23 -23
Outlays..................... n/a -11 -21 -23 -23 -23 -23 -23
End Department of Health and
Human Services' Funding for the
Office of Rural Health Policy:
Budget Authority............ 13 -13 -13 -13 -13 -13 -13 -13
Outlays..................... n/a -6 -12 -13 -13 -13 -13 -13
Eliminate Federal Funding for
Non-Essential Health Facilities
Construction:
Budget Authority............ 15 -15 -15 -15 -15 -15 -15 -15
Outlays..................... n/a -7 -13 -15 -15 -15 -15 -15
Eliminate Subsidies to
Institutions for Health
Professions Education:
Budget Authority............ 287 -287 -287 -287 -287 -287 -287 -287
Outlays..................... n/a -138 -255 -287 -287 -287 -287 -287
Streamline Administrative Costs
for Selected Offices in the
Department of Health and Human
Services:
Budget Authority............ 480 -24 -24 -24 -24 -24 -24 -24
Outlays..................... n/a -10 -18 -22 -23 -24 -24 -24
Phase Out Duplicative Funding
for Injury Control Research:
Budget Authority............ 44 -11 -22 -33 -44 -44 -44 -44
Outlays..................... n/a -4 -12 -22 -33 -40 -44 -44
Eliminate Redundant Functions of
the National Institute of
Occupational Safety and Health
(NIOSH):
Budget Authority............ 133 -33 -67 -100 -133 -133 -133 -133
Outlays..................... n/a -12 -37 -67 -101 -122 -133 -133
Reduce Federal Funding for
Community Support
Demonstrations:
Budget Authority............ 24 -5 -12 -18 -24 -24 -24 -24
Outlays..................... n/a -2 -7 -13 -20 -23 -24 -24
Terminate Federal Funding for
Physical Fitness and Sports:
Budget Authority............ 1 -1 -1 -1 -1 -1 -1 -1
Outlays..................... n/a -1 -1 -1 -1 -1 -1 -1
Eliminate Funding for Clinton
Health Security Act Data
Analysis:
Budget Authority............ 3 -3 -3 -3 -3 -3 -3 -3
Outlays..................... n/a -1 -2 -3 -3 -3 -3 -3
Eliminate Federal Funding for
the Agency for Health Care
policy Research:
Budget Authority............ 139 -139 -139 -139 -139 -139 -139 -139
Outlays..................... 125 -42 -119 -139 -139 -139 -139 -139
Encourage Prioritization of NIH-
Supported Research Funding by
Five (5) Percent:
Budget Authority............ 11,330 -566 -566 -566 -566 -566 -566 -566
Outlays..................... 11,040 -243 -521 -566 -566 -566 -566 -566
Reduce Maternal and Child Health
Care Block Grant and Preventive
Health Services Block Grant:
Budget Authority............ 684 -421 -421 -421 -421 -421 -421 -421
Outlays..................... 670 -193 -363 -415 -421 -421 -421 -421
Reform the Consumer Product
Safety Commission:
Budget Authority............ 43 -11 -11 -11 -11 -11 -11 -11
Outlays..................... 42 -9 -11 -11 -11 -11 -11 -11
Transfer Mine Safety and Health
Administration to OSHA, Cut
20%:
Budget Authority............ 515 -103 -103 -103 -103 -103 -103 -103
Outlays..................... 513 -90 -103 -103 -103 -103 -103 -103
Medicaid Block Grant:
Budget Authority............ 89,216 7,137 12,437 16,503 20,732 25,130 29,703 32,021
Outlays..................... 89,216 7,137 12,437 16,503 20,732 25,130 29,703 32,021
Increase User Fees on Products
Regulated by the FDA:
Budget Authority............ n/a -86 -93 -97 -101 -105 -108 -112
Outlays..................... n/a -86 -93 -97 -101 -105 -108 -112
Drug Treatment CEP Creation,
Title VI:
Budget Authority............ n/a 0 95 95 95 95 95 95
Outlays..................... n/a 0 43 76 95 95 95 95
Drug Treatment NIDA Creation,
Title VI:
Budget Authority............ n/a 0 5 5 5 5 5 5
Outlays..................... n/a 0 2 4 5 5 5 5
----------------------------------------------------------------------------------------------------------------

Discussion of Policy Assumptions

Discretionary Spending

Reduce Grants for Indian Health Facilities. Savings from
this provision are in conjunction with the Native American
Block Grant described in Function 450.

Reduce Substance Abuse and Mental Health Services. The
savings from this provision are incorporated in the Job
Training Block Grant described in Function 500.

Eliminate Unauthorized Rural Outreach Grants Duplicating
Other Federally Supported Services. The Rural Outreach Grants
funded by the Health Resources and Services Administration fund
local consortia of rural health care providers to coordinate
and enhance the availability of health services. The program
has never been specifically authorized, and the funds were
terminated in the fiscal year 1995 rescission bill. Services
can be supported through community health centers, Maternal
Child Health Block Grant, Medicaid, and other programs.

Eliminate Maintenance Funding Originally Intended to
Establish State Offices of Rural Health. Funding for State
Offices of Rural Health was intended to help States establish,
not maintain, offices. None of the funding goes for the direct
provision of care to patients. All 50 States have received
grants and therefore States can continue these offices if they
believe they are useful. These funds were terminated in the
fiscal year 1995 rescission bill.

Eliminate Grants for Administration of State Trauma Care
Systems. This program provides grants to States to develop
statewide trauma care and emergency medical service systems,
but none of the funding goes for the direct care of patients;
rather it funds State bureaucracies. Services are duplicative
of those provided through the Preventive Health Services Block
Grant. These funds were terminated in the fiscal year 1995
rescission bill.

Eliminate Funding for Native Hawaiian Health Care. The
program was created to provide primary care services and
disease prevention services for native Hawaiians. Hawaii has a
highly developed employer-based health service system which
provides coverage to residents not insured through the employer
mandate. These funds were terminated in the fiscal year 1995
rescission bill.

Eliminate Funding for Pacific Basin Initiative. This
program provides funds to build health preventive services
capacity in Pacific territories and to train Health
professionals. The territories receive funding under the
Preventive Health Services Block Grant and residents can
participate in the regular health professions training program
funded by the Health Resources and Services Administration
[HRSA] of HHS. These funds were terminated in the fiscal year
1995 rescission bill.

Reprioritize Ineffective Funding for the National Health
Services Corps. The NHSC attempts to alleviate the shortage of
health care professionals by recruiting physicians and other
health care professionals to provide primary care services in
what are designated as ``Health Professional Shortage Areas.''
The NHSC is fraught with waste and abuse. The program spends
$41,290 per health professional recruited with no discernable
affect on staffing rural areas with physicians. GAO testified
that the Department of HHS has no long-term retention data to
judge the impact of the program. These funds were terminated in
the fiscal year 1995 rescission bill. This proposal would
reduce the funds by 50 percent.

Terminate Chiropractic Demonstration Grants. The
Chiropractic Demonstration Grants funds the Palmer Chiropractic
School to conduct chiropractic demonstrations. This is not a
national priority.

Remove Duplicative Funding for Centers of Excellence. This
program was established to fund institutions that train
minority health professionals. Institutional aid for
postsecondary study is available under several other programs
in HHS and the Department of Education, such as health careers
opportunity programs and Financial Assistance for Disadvantaged
Health Professionals Students Programs.

End Department of Health and Human Services Funding for the
Office of Rural Health Policy. HHS' Office of Rural Health
Policy serves to improve the delivery of health services to
rural communities and populations. The funds, terminated in the
fiscal year 1995 rescission bill, only support State
bureaucracies. Similar research is conducted at HCFA.

Eliminate Federal Funding for Nonessential Health
Facilities Construction. The 1995 appropriation provided
funding for two construction projects; one in Pennsylvania and
one in West Virginia. Given nationwide needs, it is not
appropriate to award special funding for these localities.
These funds were terminated in the fiscal year 1995 rescission
bill.

Eliminate Subsidies to Institutions for Health Professions
Education. This proposal eliminates subsidies for primary care
training, nursing education, and minority and economically
disadvantaged students. Market forces provide strong incentives
for individuals to seek training and jobs in health
professions, and incentives are continuing to rise per capita.
Also subsidies go mainly to institutions and do not go to
students.

Streamline Administrative Costs for Selected Offices in the
Department of Health and Human Services. Salaries and expense
accounts should be reduced as programs and functions are
consolidated and reformed. This proposal reduces S&E
expenditures 5 percent for the following HHS offices: Health
Resources and Services Administration [HRSA], Substance Abuse
and Mental Health Services Administration [SAMHSA], Centers for
Disease Control, the Office of the Director of the National
Institutes of Health, and the Office of the Assistant Secretary
for Health.

Phase Out Duplicative Funding for Injury Control Research.
This program supports research to identify risk factors to
prevent injuries, deaths, and disabilities resulting from
nonwork related environments. It is questionable whether this
activity is central to Center for Disease Control's mission.
The program received a 14-percent increase in fiscal year 1995.
Further, goals appear to duplicate existing efforts and
programs run by other agencies such as Department of
Transportation, Department of Commerce, or the Department of
Justice. The proposal would decrease funding 25 percent, 50
percent, and 75 percent, and eliminate funding over a 4-year
period. These funds were terminated in the fiscal year 1995
rescission bill.

Eliminate Redundant Functions of the National Institute of
Occupational Safety and Health [NIOSH]. NIOSH is responsible
for ``conducting research and making recommendations for the
prevention of work-related illnesses and injuries.'' It is
questionable whether this constitutes a ``disease'' and hence
its CDC location. Also, the program duplicates functions of the
Occupational Safety and Health Administration [OSHA]. Any
nonduplicative functions should be moved to OSHA. The proposal
would decrease funding 25, 50, and 75 percent over the 5 year
period. These funds were cut in the fiscal year 1995 rescission
bill.

Reduce Federal Funding for Community Support
Demonstrations. This program provides funding to demonstrations
seeking to determine appropriate community-based alternatives
for chronically mentally ill patients; increase the
effectiveness of services and statewide service systems of
care; and promote service system improvements. The community-
based alternative should stay in the community; it does not
require Federal funds. Further, the other functions should be
handled within the mental health block grant, which received
$275 million in fiscal year 1995. Funding would be decreased 20
percent, 50 percent, 75 percent, and 100 percent over 4 years.

Terminate Federal Funding for Physical Fitness and Sports.
The purpose of this program is to improve the public's health
and fitness through sports and athletic programs. The council
has demonstrated no notable impact on the Nation's health.

Eliminate Funding for Clinton Health Security Act Data
Analysis. These are funds appropriated to assist the President
with the National Health Security Act. Because the act was not
passed these funds are no longer needed. These funds were cut
in the fiscal year 1995 rescission bill.

Eliminate Federal Funding for the Agency for Health Care
Policy Research. The agency is supposed to support research and
information dissemination on health care services and
technology, medical effectiveness, and patient outcomes, but
performed an advocacy role in the health care debate the past 2
years while its funding increased from $125 million in 1992 to
$163 million in 1994. The administration requests $202.4
million for fiscal year 1996. Guidelines can be developed
elsewhere in the Health Resources and Services Administration
[HRSA]. Other legitimate functions duplicate of research in
other agencies.

Encourage Prioritization of NIH-Supported Research Reducing
Funding 5-Percent. Under this proposal, NIH would have
flexibility to prioritize this 5 percent reduction. CBO
included a 10-percent reduction from the 1995 funding level in
its spending and revenue options book. Between 1984 and 1994,
NIH expenditures more than doubled.

Reduce Maternal and Child Health Care Block Grant and
Preventive Health Services Block Grant. The 1995 appropriation
provides approximately $842 million in block grants for
programs in maternal and child health. The grants subsidize
programs providing services for preventive health care,
prenatal care, health assessments for children, rehabilitative
services for blind and disabled children, and community-based
services for children with special health care needs. Because
the Federal commitment to other programs directed toward
maternal and child health and preventive health services has
increased substantially in recent years, these block grants are
not essential.

Streamline Consumer Product Safety Commission [CPSC]. The
Consumer Product Safety Commission's role as a Federal agency
is to protect the public against ``unreasonable risks of injury
and death from consumer products.'' Streamlining the Commission
would have little or no affect on consumer product safety
because, in most cases, the market place is a more effective
means of monitoring the safety of consumer products. The
Commission is up for reauthorization this year. This proposal
assumes reduction in Commission staff consistent with a plan
being developed by the Committee on Commerce.

Transfer Mine Safety and Health Administration to the
Occupational Safety and Health Administration, and Reduce the
Combined Agency by 20 percent. The Mine Safety and Health
Administration protects the safety and health of miners. The
Occupational Safety and Health Administration performs much the
same role in promulgating health and safety standards for non-
mining industries. According to a recent report by the Heritage
Foundation, this separate treatment is unnecessary. ``Of the
6,271 job-related fatalities, only 80, or 1.3 percent, occurred
in the coal/metal-nonmetal mining industry,'' the report said.
``In contrast, 15 percent of the fatalities took place in
construction, 14 percent in agriculture, and 12 percent in
manufacturing.'' Yet none of these industries has a separate
agency to oversee safety and health.

Mandatory Spending

Transform Medicaid to a Program of Block Grants to States.
This proposal would convert the current Medicaid program into a
system of block grants to States. States then would add their
own funds to the Federal contribution to provide health care
for low-Pincome residents. The proposal also calls for
restraining the growth of Federal outlays for Medicaid, which
is more manageable under the block grant approach than under
the current Washington-run system. Under the block grant,
States will have the flexibility to create innovative health
care programs for their low-income citizens.

--Background on Medicaid. Medicaid is the Nation's health care
financing system for the poor. It is a joint Federal/State
program, with States matching Federal funds. The matching
rate is determined by the State's per capita income. States
pay from 21 cents (for poor States) to 50 cents (for
wealthy States) on each dollar spent. States administer the
program, subject to Federal guidelines. Medicaid spending
has been exploding, growing at an average annual rate of
19.1 percent between 1990 and 1994. During 1991 Federal
Medicaid outlays grew by 27.8 percent. They grew another
29.1 percent in 1992. For fiscal year 1995, CBO estimates
that Federal payments will be $89.2 billion and State
payments will be an additional $67.3 billion, for a total
of $156.5 billion. The fiscal year 1995 Federal payments
include disproportionate share hospital payments of $8.5
billion. These are supplemental payments to hospitals that
provide a disproportionate share of medical care to low-
income populations, such as Medicaid and indigent patients.
CBO projects Federal Medicaid payments rising by 11.3
percent in fiscal year 1996, moderating slightly to an
increase of 9.3 percent in fiscal year 2002.

--Illustrative Option. A Medicaid balanced budget growth path
has been developed. One option is that the increase in
Medicaid payments would be restrained to 8 percent in
fiscal year 1996, 5.5 percent in fiscal year 1997, and 4
percent a year thereafter. That is, using the fiscal year
1995 Federal payments as a base, the fiscal year 1996
Federal Medicaid block grant payment would be the fiscal
year 1995 level increased by 8 percent in fiscal year 1996,
5.5 percent in fiscal year 1997, and so on. The 8-5.5-4 et
cetera, option would still increase Federal Medicaid
grants. Over the 7 year period, fiscal year 1996 through
2002, a total of $770.6 billion would be spent by the
Federal Government. The Federal grant in fiscal year 2002
would be $123.7 billion, compared with a fiscal year 1995
outlay of $89.2 billion estimated by CBO. States would
continue to match the Federal block grant dollars. Federal
payments to the States would rise each year, but the growth
would be constrained. After several years, the states will
have had adequate time to phase in fully the various
efficiency measures they elect to implement under the block
grant, such as use of coordinated care and payment reform.
Therefore, the Budget Committee assumes Federal Medicaid
outlays are reduced by an additional $2.5 billion by 2002.
Some argue that the current distribution of funds among the
States is not fair. They note that some States receive much
higher payments per Medicaid recipient than others; that
some States receive a high level of disproportionate share
hospital funds while others do not; and that some States
can expect rapid growth in the number of Medicaid
recipients while other States expect declines. But block
granting is conceptually separate from the formula used to
distribute the block grant funds. An infinite number of
alternatives could be used to distribute funds among the
States. The Committee does not assume any particular
distribution of funds among the States within the total
Federal funding levels specified. This resolution is
compatible with using either the current distribution of
funds among the States or any alternative. To assist in
this effort the Committee has requested a GAO study of
alternative funding formulas.

--Rationale for a Medicaid Block Grant. Congress cannot balance
the budget unless spiraling Medicaid costs are brought
under control. Many are convinced that the problem cannot
be solved in Washington. A Medicaid block grant would allow
the Federal Government to establish budgetary control over
its share of Federal payments for Medicaid. In contrast,
currently Medicaid requires the Federal Government to pay
its preestablished share of whatever is spent. The more
that is spent the more the Federal Government pays. A block
grant strategy would encourage States to establish
efficient and effective programs; it will discourage them
from spending more to get more. By allowing the States to
design their own programs, the unique needs of the various
States, as they see them, will be served. Public policy in
this area will be made by States and localities. This
approach recognizes that no one knows which Medicaid
program will work best in all of the 50 States, the
District of Columbia, and the 5 territories. The only way
to find out is to avoid Federal preconditions that limit
the discretion of local authorities.

Increase User Fees on Products Regulated by the FDA. This
proposal would increase the level of fees charged by the Food
and Drug Administration [FDA]. The Prescription Drug User Act
of 1992 established application fees and set a projected
revenue schedule. The FDA charges a fee of $208,000 for each
new drug application. The fee is $104,000 for each generic drug
and supplemental application. In addition, pharmaceutical firms
that have a new drug application pending with the FDA at any
time since September 1992 must pay an annual fee of $126,000
per manufacturing establishment and $12,500 per product on the
market. In 1995, those fees are scheduled to raise $75 million,
covering about 20 percent of the FDA's expenditures on
regulating prescription drugs. The fees will increase slightly
through 1997, when they are scheduled to raise $94 million.
This proposal would increase fees by 40 percent. The Food,
Drug, and Cosmetic Act requires that firms register all new
medical devices before they are marketed and obtain FDA
approval for certain types of new medical devices (class III).
Currently, manufacturers of medical devices do not pay fees to
the FDA. Recent legislation proposed submission fees for the
approval and registration of new medical devices and products.
This proposal would charge fees of $60,000 for the application
of each new medical device and $6,000 for new products
registered, covering 20 percent of the costs of regulating the
medical device industry. Finally, the food industry would be
charged user fees to cover about 10 percent of the FDA's costs
of regulating the industry. The FDA inspects domestic food
processors, analyzes more than 17,000 domestic food samples a
year, and monitors the quality of seafood. This proposal
assumes that domestic food processors employing more than 250
people and processing all foods except meat and poultry would
pay an annual fee of $10,000. This proposal also assumes that
the FDA will charge each domestic establishment employing 100
to 249 people an annual fee of $5,000. In addition, it is
assumed that performance parameters will be implemented to
monitor the effectiveness of the FDA's operations.

Create Two Drug Treatment Programs Through the National
Institutes of Health. These two programs are created under
title VI of the welfare reform plan [Note: See Function 600].
FUNCTION 570: MEDICARE

FUNCTION 570: MEDICARE
----------------------------------------------------------------------------------------------------------------
House Budget Committee policy 1995
assumptions level 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
FUNCTION TOTALS

House Budget Committee balanced
budget path:
Budget Authority............ 162,636 177,555 186,598 195,875 206,299 214,773 224,421 234,635
Outlays..................... 161,055 175,237 185,047 194,210 203,735 212,925 222,389 232,399
-------------------------------------------------------------------------------

MANDATORY
(7) Changes from 1995 Levels

-------------------------------------------------------------------------------
Save Medicare from Bankruptcy:
Budget Authority............ 162,636 14,919 23,962 33,239 43,663 52,137 61,785 71,999
Outlays..................... 161,055 14,182 23,992 33,155 42,680 51,870 61,334 71,344
----------------------------------------------------------------------------------------------------------------

The Medicare Financing Crisis

Medicare is facing bankruptcy. On April 3, 1995, the Social
Security and Medicare Trustees reported that the Federal
Hospital Insurance Trust Fund (Medicare Part A)--which pays for
hospital and other institutional care for Medicare
beneficiaries and which is funded by the Medicare payroll tax
will run out of money in 7 years, or by 2002, under current
law. The report also stated:

The Trustees urge the Congress to take additional
actions designed to control hospital insurance [HI]
program costs and to address the projected financial
imbalance in both the short range and the long range
through specific program legislation as part of broad-
based health care reform. The Trustees believe that
prompt, effective, and decisive action is necessary.

Despite the urgency of this message, in the letter of
transmittal to the Speaker of the House of Representatives, the
trustees wrote: ``We are not making any specific
recommendations for improving the status of the fund at this
time.'' Rather, they recommended only the reestablishment of a
commission.
The Congressional majority recognizes the importance of
addressing Medicare's financial problems in a bipartisan manner
and with the Executive and Legislative branches working
together. But after repeated invitations from the Speaker
asking the President to join Congress in addressing this
crisis, the President has refused to offer any solutions to
rescue current--much less future--Medicare beneficiaries from
losing their health care insurance. Therefore, on May 10, the
Ways and Means Committee reported a bill, H.R. 1590, to require
the Board of Trustees for the Federal Hospital Insurance and
Supplementary Medical Insurance Trust Funds to submit specific
legislative recommendations to the Congress on how to resolve
the financial crisis facing Medicare. The Medicare trustees,
one of whom is the Secretary of Health and Human Services and
overseer of the Medicare program, are clearly in a strong
position to provide guidance to the Congress on alternatives to
preserve the program.
The Concurrent Resolution on the Budget for fiscal year
1996 includes 7-year spending amounts consistent with those
necessary to extend the solvency of the Medicare Part A Trust
Fund. These amounts would allow Medicare spending to grow from
$178 billion in 1995 to $259 billion in 2002. This represents
$337 billion of cumulative increases in Medicare funding.
In addition to their warning of the impending bankruptcy of
the Medicare Part A Trust Fund, the Trustees also noted with
great concern, the past and projected rapid growth in the cost
of the [Medicare Part B trust fund] program. The Medicare Part
B trust fund pays for Medicare physician bills and other
outpatient expenses and is funded in part through beneficiary
premiums and in larger part from general fund revenues.
Currently, the beneficiary contribution to the Part B trust
fund is 31 percent of total costs. But a provision in OBRA 1993
will reduce the beneficiary share in 1996 from 31 percent to 25
percent--leaving the taxpayers to pay the remaining 75 percent
less a small fraction the trust fund receives in interest. This
contribution to Medicare from the general revenue fund amounted
to $37 billion in 1994 and will increase to $59 billion in
1996. The Trustees warn that this amount is growing rapidly and
is scheduled to grow by 14.3 percent in 1995 and 13.4 percent
in 1996--an unsustainable growth rate and one unlike any other
major program in the Federal budget.
Modifying the Medicare Part A program to make the trust
fund solvent will necessarily result in modification to the
Part B program as well. Over the next 7 years, Medicare Part B
spending represents roughly 40 percent of total Medicare
spending. The budget resolution assumes that the changes
necessary to keep HI solvent will result in proportional
savings in the Medicare Part B program.

Medicare Payroll Tax, Generational Transfer

In the effort to save Medicare, an issue of fairness must
also be addressed. Increasing taxes on workers has been a
principle method of shoring up the Medicare program in the
past. The costs of this program must not simply be covered by
continual increases in rates of taxation on future generations.
This Congress will not consider a tax increase as a solution,
in part or in whole, for resolving the shortage of funding for
the Medicare program. Currently, a family with median income
already is paying $1,100 a year to the Medicare Part A Trust
Fund. An individual qualifying for Medicare this year is
projected to receive four times the amount in benefits than he
or she will ever have paid into the program in the form of
payroll taxes, premiums, deductibles and other beneficiary cost
sharing. Indeed, many beneficiaries are more financially secure
than those paying taxes to support the Medicare program.
Extending the life of the Medicare Part A trust fund beyond
2002 is only the first of two crises that must be confronted.
The government also must prepare for a major demographic shift
in the ratio of the number of workers who pay the payroll tax
to the number of retirees receiving Medicare benefits once the
baby boom generation begins retiring around 2010. Currently,
four workers support every Medicare beneficiary. By 2030, the
last of the baby boomers will have retired and the entire baby
boom generation will be ages 65 to 85--and dependent upon
Medicare for their health care insurance. By then, there will
be only about 2\1/2\ workers supporting each beneficiary.
It is clear that the financial status of Medicare is
unstable and that the course of this important program must be
changed if it is to be preserved. Although the President and
many Congressional Democrats have made no effort to address
this problem, later this year this Congress will present the
President a bill to save the Medicare program.

Three Illustrative Plans

The Congress is confident that Medicare can be preserved
for long-term viability and, at the same time, improved to
provide better health care for Medicare beneficiaries. Although
the 1960's-style Medicare program is growing at more than 11
percent a year and providing beneficiaries with limited options
or incentives to seek better health care, innovative health
delivery systems in the private sector effectively contained
costs at 4.4 percent growth last year while providing a high
level of recipient satisfaction. Clearly Medicare, too, can
provide good health care more cost effectively--and four Budget
Committee members have analyzed three possible strategies for
doing so.
Each of these approaches has been recognized by the
Congressional Budget Office as a viable way to extend the
solvency of the Medicare trust fund and to reduce the growth of
Medicare spending to a rate that is more consistent with that
of health care in the private sector. These three plans,
discussed briefly below, are only illustrative examples of ways
to preserve the Medicare program and have been offered as such
to the Committee on Ways and Means and the Committee on
Commerce which share jurisdiction for the Medicare program.
Three main principles were used as a guide during the
development of these plans: First and foremost, fee-for-service
Medicare must remain an option for those individuals who wish
to choose it. Second, the Medicare program should keep pace
with the private insurance system, and beneficiaries should be
able to maintain the same kinds of insurance arrangements in
Medicare that they had during their working years. Finally,
beneficiaries should have a greater choice of health care
plans, such as a variety of coordinated care and indemnity
options as well as medical savings accounts.
Under the three approaches below, spending on every
Medicare beneficiary would increase from an average of about
$4,800 today to an average of about $6,400 in 2002. Total
program spending would be allowed to grow from $178 billion in
1995 to $259 billion--a 7-year increase of 45 percent. These
options would open the way for the health care industry to
create a multitude of new choices for beneficiaries and would
empower beneficiaries to select health care that is tailored to
their precise needs.

Plan A. The first plan includes proposals that would
eliminate waste and overpayments to Medicare providers and
would motivate them to practice more cost effectively by
bringing market principles to Medicare. Currently there are few
incentives in the Medicare payment system to encourage
efficiency and to eliminate waste. Medicare beneficiaries
strongly, and correctly, perceive that Medicare has great room
for improvement in the area of waste and overspending. In a
letter to the Chairman of the Budget Committee, reproduced
below, Mr. Dale Wheelburger of North Carolina expressed his
concern about a hospital bill for almost $50,000 that Medicare
paid--without question--for services provided to his sister-in-
law during a 2-day hospital stay, the last 2 days of her life.
One of the proposals presented in this option would allow
Medicare beneficiaries the opportunity to share in the savings
if they detect on their bills that Medicare has been
overcharged or has paid for a service or product that was not
provided or not warranted.

Elizabeth City, NC, January 15, 1995.
Hon. John R. Kasich,
Chairman, House Committee on the Budget,
Washington, DC.
Dear Sir: Enclosed is a copy of a Medicare and Blue Cross
claim.
My sister-in-law was in Sentara Norfolk General Hospital 8/
4/94-8/5/94--less than two days. She died on 8/5/94 about 5
p.m. The hospital charged $49,435.67 and Medicare paid all
without question.
According to what I have read in our local newspaper, you
want to cut Medicare about 20 percent. In my opinion you, your
department and colleagues need to question hospitals like you
do doctors (approve amounts). I would like you to know what
services was performed for $50,000. This is just one-person
charges. I hate to see you people always looking for ways to
hurt senior citizens. Why don't you look at all the perks
Congress and Senate get. I would like for you to respond or
have someone do so.
Sincerely,
Dale Wheelberger.

Also included in this first approach are several proposals
to encourage beneficiaries to choose plans based on cost-
effectiveness and quality and to motivate coordinated care
organizations and other private health care plans to
participate in the Medicare program. One proposal under this
plan, would make it possible for beneficiaries to choose from a
variety of health care delivery systems, some of which will
eliminate much of the cost sharing beneficiaries are now paying
under fee-for-service Medicare. Beneficiaries would, however,
retain the option to remain in the traditional fee-for-service
Medicare. Another proposal would provide private plans
flexibility to offer Medicare beneficiaries more choices for
health care delivery than Medicare laws currently allow, such
as preferred provider organizations, point of service plans,
medical savings accounts, and indemnity plans that ``carve
out'' high cost services and deliver them in a more efficient
manner. These proposals would convert the Medicare program into
a system somewhat similar to the health care system now used by
Federal employees. Medicare will contribute to the plans
beneficiaries choose, and the beneficiary will receive a rebate
or pay an additional amount depending on the cost of the plan.
Another proposal included in this path would reduce the
Medicare subsidy for individual beneficiaries receiving over
$70,000 in annual income and couples receiving over $90,000 in
income.

Plan B. A second possible approach for achieving solvency
would immediately convert Medicare from an open-ended
entitlement to a system in which every Medicare beneficiary
would receive a contribution from Medicare to purchase the
health care plan of their choice. Choices would include a broad
range of plans with varying levels of coverage. Again,
beneficiaries would pay extra if the plan they chose was more
costly than the amount of the Medicare contribution, and would
receive a rebate if they chose a plan that cost less than the
amount of the Medicare contribution.
Private plans available for purchase by Medicare
beneficiaries would include indemnity plans, HMO's, preferred
provider organizations, point-of-service plans, and medical
savings accounts, as well as other innovative insurance
products. Any plan available in the market to be purchased with
a Medicare contribution would be required to include
catastrophic coverage for costs over $10,000. Plans also would
be required to meet a minimal set of other eligibility
requirements, including quality review, in order to prevent
marketing abuses. Medicare could continue to offer the
traditional fee-for-service Medicare program by determining the
individual actuarial value of the program and allowing
beneficiaries to purchase it with their Medicare contribution.
The value of the Medicare contribution would be determined
by setting total Medicare expenditures at a growth rate of 9
percent in 1996, and an average of 5.4 percent over 7 years.
The contribution would be adjusted based on the beneficiaries'
age, gender, geographic location, and disability status.

Plan C. Finally, a third approach for preserving the
Medicare program would rely on many of the proposals that are
included in the first path discussed above. Most of these
proposals to reduce growth would be phased in if--and only if--
anticipated savings were not achieved from increased enrollment
in private plans. Under this approach, an initial set of
provisions designed to reduce the growth in provider payments,
increase efficiency in provider services, and motivate
beneficiaries to choose private care plans would be immediately
implemented. Simultaneously, beneficiaries will be given the
opportunity to enroll in a broad variety of private plans while
still having the option to remain in fee-for-service Medicare.
Payment to these plans will be made through a Medicare
contribution based on today's per beneficiary rate set to grow
at an average of 5.4 percent per year over 7 years.
Beneficiaries would receive a rebate if the plan they chose
costs less than this contribution, or would pay a premium if
the plan they choose costs more than the amount of the Medicare
contribution.
Under this third plan, it is assumed that growth in
Medicare spending would be reduced through an initial set of
savings proposals and through increased enrollment in private
plans. If expected growth reductions are not achieved, an
additional set of provider and beneficiary savings provisions
will be automatically implemented each year to further reduce
growth in the program.
Clearly, there are many ways to preserve Medicare for
current beneficiaries and for future generations. Fraud and
abuse must be controlled. Incentives for beneficiaries to
choose cost effective, quality health coverage must be
implemented. The payment system that promotes wasteful spending
must be reformed. Although there are many paths to achieve
Medicare solvency, one point is certain: Medicare must be
preserved. This budget resolution reflects a commitment to
moving the process forward in this Congress, and demonstrates
that what needs to be done can be done.
FUNCTION 600: INCOME SECURITY

This function includes benefits to Federal retirees and
railroad retirees; unemployment benefits; low-income housing;
food-stamps; school lunch subsidies; and financial assistance
to low-income groups including families with children, the
disabled, the elderly, refugees, and households with high
energy costs.

Summary of Policy Assumptions

FUNCTION 600: INCOME SECURITY
----------------------------------------------------------------------------------------------------------------
House Budget Committee policy
assumptions 1995 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
FUNCTION TOTALS

House Budget Committee budget
path:
Budget Authority............ 219,939 222,655 231,777 248,398 255,418 265,935 267,624 277,575
Outlays..................... 222,221 224,952 235,273 243,883 254,304 267,631 268,978 279,052

-------------------------------------------------------------------------------

(7) Changes from 1995 Levels

-------------------------------------------------------------------------------
DISCRETIONARY
Reduce Rural Rental Assistance:
Budget Authority............ 523 -52 -52 -52 -52 -52 -52 -52
Outlays..................... 454 -3 -9 -16 -24 -31 -31 -31
Renew Section 8 Assisted Housing
Contracts:
Budget Authority............ 14,621 4,941 5,551 13,026 10,042 8,728 8,728 8,728
Outlays..................... 20,538 -901 366 2,659 4,335 5,564 5,605 6,063
Deregulate Public Housing
Authorities, Enabling Them to
More Efficiently Use Operating
Funds:
Budget Authority............ 2,900 -145 -290 -435 -580 -725 -870 -1,015
Outlays..................... 2,701 -67 -210 -355 -500 -645 -790 -935
Deregulate Public Housing
Authorities and Reduce
Modernization Funds:
Budget Authority............ n/a -541 -541 -541 -541 -541 -541 -541
Outlays..................... n/a 0 -54 -176 -268 -360 -447 -447
Housing for people with Aids
(HOPWA) (Focus funding for
development, housing and
special populations):
Budget Authority............ 186 -14 -28 -28 -28 -28 -28 -28
Outlays..................... 77 0 -5 -15 -23 -27 -28 -28
Innovative Homeless Initiative
(Focus funding for development,
housing and special
populations):
Budget Authority............ 0 -3 -5 -5 -5 -5 -5 -5
Outlays..................... 12 -1 -1 -3 -4 -5 -5 -5
Supportive Housing (Focus
funding for development,
housing and special
populations):
Budget Authority............ 34 -3 -7 -7 -7 -7 -7 -7
Outlays..................... 113 0 -1 -4 -6 -6 -7 -7
Homeless Assistance Grants
(Focus funding for development,
housing and special
populations):
Budget Authority............ 904 -90 -181 -181 -181 -181 -181 -181
Outlays..................... 18 -3 -33 -96 -150 -175 -181 -181
Emergency Shelter Grants (Focus
funding for development,
housing and special
populations):
Budget Authority............ 156 -16 -31 -31 -31 -31 -31 -31
Outlays..................... 88 0 -6 -17 -26 -30 -31 -31
Supplemental Assistance For
Facilities To Assist Homeless
(Focus funding for development,
housing and special
populations):
Budget Authority............ 0 0 0 0 0 0 0 0
Outlays..................... 7 0 0 0 0 0 0 0
Eliminate the Homeownership and
Opportunity for People
Everywhere (HOPE) Block Grants
(This proposal DOES NOT
interact with the Youthbuild
proposal.) (Focus funding for
development, housing and
special populations):
Budget Authority............ 1,450 140 -280 -280 -280 -280 -280 -280
Outlays..................... 909 -4 -50 -148 -232 -270 -280 -280
Housing for the Disabled (Focus
funding for development,
housing and special
populations):
Budget Authority............ 370 -37 -74 -74 -74 -74 -74 -74
Outlays..................... 121 -1 -13 -39 61 -71 -74 -74
Housing for the Elderly (Focus
funding for development,
housing and special
populations):
Budget Authority............ 1,223 -122 -245 -245 -245 -245 -245 -245
Outlays..................... 660 -4 -44 -130 -203 -236 -245 -245
HOPE Grants (Focus funding for
development, housing and
special populations):
Budget Authority............ 62 -5 -10 -10 -10 -10 -10 -10
Outlays..................... 90 -2 -5 -8 -10 -10 -10 -10
National Homeownership Trust
(Focus funding for development,
housing and special
populations):
Budget Authority............ 50 -5 -10 -10 -10 -10 -10 -10
Outlays..................... 0 0 -2 -5 -8 -10 -10 -10
Indian Housing Loan Guarantees
(Focus funding for development,
housing and special
populations):
Budget Authority............ 3 0 0 0 -1 -1 -1 -1
Outlays..................... 2 0 0 0 0 0 -1 -1
Section 8 Property Disposition
Savings:
Budget Authority............ 550 -531 -531 -531 -531 -531 -531 -531
Outlays..................... 1,503 -1 -17 -42 -66 -94 -113 -140
Transfer the Role of Encouraging
Low Income Homeownership from
the Federal Deposit Insurance
Corporation:
Budget Authority............ 15 -15 -15 -15 -15 -15 -15 -15
Outlays..................... 15 -9 -15 -15 -15 -15 -15 -15
Stop Extending Federal Subsidies
Through the Low-Income Housing
Preservation Program:
Budget Authority............ 168 -168 -168 -168 -168 -168 -168 -168
Outlays..................... 82 -2 -17 -40 -64 -87 -111 -134
Stop Subsidizing the Wasteful
and Costly Rehabilitation of
public Housing Units that Would
Be Better Off Demolished:
Budget Authority............ 500 -500 -500 -500 -500 -500 -500 500
Outlays..................... 30 0 -25 -150 -250 -350 -375 -400
Family Investment Centers
(Duplicative and Wasteful
Programs in HUD):
Budget Authority............ 25 -25 -25 -25 -25 -25 -25 -25
Outlays..................... 6 0 -6 -12 -24 -25 -25 -25
Congregate Services (Duplicative
and Wasteful Programs in HUD):
Budget Authority............ 25 -25 -25 -25 -25 -25 -25 -25
Outlays..................... 9 0 -3 -9 -15 -22 -25 -25
Special Purpose Grants
(Duplicative and Wasteful
Programs in HUD):
Budget Authority............ 277 -277 -277 -277 -277 -277 -277 -277
Outlays..................... 49 -14 -69 -153 -264 -277 -277 -277
Service Coordinators
(Duplicative and Wasteful
Programs in HUD):
Budget Authority............ 95 -95 -95 -95 -95 -95 -95 -95
Outlays..................... 16 0 -43 -95 -95 -95 -95 -95
Transfer Lead Based Paint
Abatement Responsibilities to
the Environmental Protection
Agency:
Budget Authority............ 96 -96 -96 -96 -96 -96 -96 -96
Outlays..................... 23 0 -3 -22 -42 -61 -78 -86
End the Youth Sports Program for
Public Housing and Reduce
Duplicative Law Enforcement
Funding by 5 Percent:
Budget Authority............ 290 -32 -32 -32 -32 -32 -32 -32
Outlays..................... 214 -18 -32 -32 -32 -32 -32 -32
End the Construction of New
Public Housing Units:
Budget Authority............ n/a -577 -577 -577 -577 -577 -577 -577
Outlays..................... n/a 0 -31 -125 -234 -368 -471 -568
Eliminate LIHEAP:
Budget Authority............ 1,919 -1,919 -1,919 -1,919 -1,919 -1,919 -1,919 -1,919
Outlays..................... 1,556 -1,351 -1,469 -1,469 -1,469 -1,469 -1,469 -1,469
Child Care and Development Block
Grant (Welfare Reform):
Budget Authority............ 935 -935 -935 -935 -935 -935 -935 -935
Outlays..................... 918 -280 -888 -1,122 -935 -935 -935 -935
Create Child Care Block Grant
(Welfare Reform):
Budget Authority............ 0 2,093 2,093 2,093 2,093 2,093 2,093 2,093
Outlays..................... 0 1,884 2,093 2,093 2.093 2,093 2,093 2,093
WIC (Welfare Reform):
Budget Authority............ 3,470 -3,470 -3,470 -3,470 -3,470 -3,470 -3,470 -3,470
Outlays..................... 3,447 -3,158 -3,470 -3,470 -3,470 -3,470 -3,470 -3,470
Child Nutrition Administration
(Welfare Reform):
Budget Authority............ 106 -106 -106 -106 -106 -106 -106 -106
Outlays..................... 107 -95 -106 -106 -106 -106 -106 -106
Create Family Nutrition Block
Grant (Welfare Reform):
Budget Authority............ n/a 4,701 4,883 5,046 5,235 5,427 5,616 5,813
Outlays..................... n/a 4,225 4,854 5,018 5,204 5,396 5,584 5,780
Family Unification (Welfare
Reform):
Budget Authority............ 76 -76 -76 -76 -76 -76 -76 -76
Outlays..................... 21 -1 -8 -19 -29 -41 -59 -76
Commondity Distribution Increase
(Welfare Reform):
Budget Authority............ n/a 111 111 111 111 111 111 111
Outlays..................... n/a 85 111 111 111 111 111 111
Eliminate the Youthbuild Program
(This proposal DOES NOT
interact with the HOPE block
grant proposals):
Budget Authority............ 50 -75 -50 -50 -50 -50 -50 -50
Outlays..................... 102 0 -15 -28 -37 -42 -48 -48

MANDATORY

Eliminate Extended Unemployment
Benefits:
Budget Authority............ 21,835 1,205 2,627 4,037 5,494 6,688 7,913 9,192
Outlays..................... 21,835 1,205 2,627 4,037 5,494 6,688 7,913 9,192
Family Support Payments to
States, Titles I & VII (Welfare
Reform):
Budget Authority............ 15,001 -962 -897 -895 -1,035 -1,085 -1,433 -3,267
Outlays..................... 15,001 -1,064 -893 -890 -1,030 -1,080 -1,426 -3,267
Child Nutrition, Title II
(Welfare Reform):
Budget Authority............ 8,093 -8,093 -8,093 -8,093 -8,093 -8,093 -8,093 -8,093
Outlays..................... 7,985 -7,985 -7,985 -7,985 -7,985 -7,985 -7,985 -7,985
Create School Nutrition Block
Grant (Welfare Reform):
Budget Authority............ n/a 6,681 6,956 7,237 7,538 7,849 8,170 8,505
Outlays..................... n/a 6,013 6,929 7,209 7,508 7,818 8,138 8,472
Food Stamps, Title IV & Title V
(Welfare Reform):
Budget Authority............ 25,120 974 1,840 1,224 528 -213 -565 -42
Outlays..................... 25,120 974 1,840 1,224 528 -213 -565 -42
Spending Increase for the Food
Stamp Program (Welfare Reform):
Budget Authority............ n/a 333 539 611 769 941 1,132 1,362
Outlays..................... n/a 333 539 611 769 941 1,132 1,362
Supplemental Security Income
(SSI), Titles IV & VI (Welfare
Reform) (This proposal DOES NOT
interact with the SSI-$20
Exclusion from Income proposal,
though they both effect the
same account):
Budget Authority............ 24,322 -1,264 1,478 4,164 6,905 12,610 17,315 22,340
Outlays..................... 24,322 -1,122 1,522 4,144 6,932 12,631 17,338 22,340
Change Computation of Annuities
for New Retirees From High 3 to
High 5 and Congressional
Pension Reform:
Budget Authority............ 37,849 1,275 3,257 5,094 7,050 9,136 11,063 12,790
Outlays..................... 37,849 1,275 3,257 5,094 7,050 9,136 11,063 12,790
Change Computation of Annuity
from High-3 to High-5 for New
Retirees of the Foreign
Service:
Budget Authority............ 462 31 65 101 140 183 228 276
Outlays..................... 462 31 65 101 140 183 228 276
Fees for Non-AFDC Child Support
Enforcement Services:
Budget Authority............ 1,985 -489 -55 360 889 1,470 2,074 2,691
Outlays..................... 1,985 -489 -55 360 889 1,470 2,074 2,691
Reduce the $20 Exclusion from
Income in Supplemental Security
Income (This proposal DOES NOT
interact with the SSI-Welfare
Reform proposal, though they
both effect the same account):
Budget Authority............ 24,322 0 5,187 8,455 11,587 18,217 14,944 22,265
Outlays..................... 24,322 0 5,187 8,455 11,587 18,217 14,944 22,265
Terminate Trade Adjustment
Assistance (benefits portion):
Budget Authority............ 212 -212 -212 -212 -212 -212 -212 -212
Outlays..................... 212 -212 -212 -212 -212 -212 -212 -212
----------------------------------------------------------------------------------------------------------------

Discussion of Policy Assumptions

Discretionary Spending

Reduce Rural Rental Assistance. The savings from this
provision help finance the Rural Development Block Grant
described in Function 450.

Renew Section 8 Assisted Housing Contracts. As part of its
mission to assist low-income Americans find affordable housing,
the Department of Housing and Urban Development contracts with
private owners to subsidize the rent for apartments. Budget
authority must be appropriated to cover the expenses for the
entire contract period. Over the past 30 years, Congress and
HUD have created a maze of programs associated with providing
such support. They basically fall into two categories: project-
based subsidies and tenant-based assistance. To draw down the
level of appropriated budget authority, Congress has gradually
shortened the length of the tenant-based contracts. At one
time, they were 20 years in duration. By 1995 the contract
periods had been reduced to 3 years. Hence budget authority
levels are far lower in comparison to the late 1970's and early
1980's, but the contract periods expire more quickly, and new
budget authority must be appropriated to maintain the apartment
for the low-income tenant. The project-based subsidies are
increasing as well, requiring ever more budget authority. The
primary problem with this form of assistance is that the rent
the Federal Government subsidizes is far in excess of the
market levels. The effect of this is skyrocketing budget
authority needs. In 1995, $3.3 billion was appropriated to
renew expiring contracts. By 2000, to maintain current
policies, nearly $20 billion in budget authority will be
required just to renew Section 8 contracts. In 1995, the
enacted level of funding for the entire department was just
over $26 billion of budget authority. Outlay levels do not rise
as quickly, but they, too, are rapidly escalating. In 1995,
$3.9 billion in outlays went to maintaining existing tenant
subsidies. To preserve current policies, more than $9 billion
in outlays will be required by 2000. It is not feasible to
renew expiring contracts at the 1995 budget authority level and
still maintain the three million assisted housing units.
Appropriating at the 1995 level would mean 83 percent of
assisted households would no longer be subsidized. As many as
50 percent of these units are occupied by tenants who are
disabled or elderly. To preserve those assisted households, the
program must be reformed. The following proposed reforms for
the private project and tenant-based assisted housing programs
are designed to lessen the magnitude of the costs associated
with these contract renewals.

--Restrain New Issue of Section 8 Vouchers and Certificates. In
1994, a total of 4.7 million households had some form of
Federal housing assistance. This is a dramatic rise from
the 2.4 million households assisted in 1977. Of the overall
1994 figure, 1.4 million housing units are tenant-based. By
not issuing new assistance, the rapid rise in costs
associated with the program can be reduced. Should the
present policy of issuing new assistance be continued, it
will cost the Government $9.4 billion over 7 years. By
enacting this reform, that cost can be averted.

--50-Percent Reissue of Vouchers/Certificates. A certain number
of vouchers and certificates are turned in each year by
tenants who no longer need the assistance. By reissuing
only half of these vouchers and certificates, the Federal
Government would achieve significant savings. Reissuing 50
percent would still allow new tenants to obtain assistance
and would provide vouchers for unforeseen situations. In
light of the rapid increase of assisted housing units over
the past 20 years and the magnitude of the spending on this
program, HUD should restrain the reissue of vouchers and
certificates. This proposal saves over $9 billion relative
to reissuing 100 percent of all vouchers returned.

--Reduce Fair Market Rent From the 45th Percentile to the 40th
Percentile of Median Local Rents. The fair market rent
[FMR] is the upper limit on the rent that can be charged in
the Section 8 subsidy program. This proposal would reduce
total FMRs nationally by about 3 percent. The new
calculation would affect residents when they join the
program and when they move from one unit to another. The
President proposed this reform in his budget.

--Increase Tenant Contribution From 30 Percent to 35 Percent of
Income in the Section 8 Programs. The Federal Government
pays the difference between 30 percent of an assisted
tenant's income and the fair market rent of the area. By
gradually increasing the amount tenants contribute to their
own rent, the Federal Government can reduce overall subsidy
levels. Though tenants would pay more of their own rent,
the 35 percent would still be far below the 50 percent to
80 percent paid by many unassisted low-income renters. By
raising tenant contributions, nearly $7 billion in present
policy costs can be avoided over 7 years.

Deregulate Public Housing Authorities, Enabling Them to
More Efficiently Use Operating Funds. In 1995, the Federal
Government provided public housing authorities with $3 billion
to cover operating expenses for public projects. These
subsidies are required because of extensive regulation that HUD
imposes. If the PHAs are deregulated, allowed to demolish units
without physically constructing replacements, allowed to set
their own rents, and run the projects in a more efficient
manner, these operating expenses can be gradually reduced.
Without Federally imposed regulations on rents, tenant
preferences, and micro-management of daily operation, low-
income Americans can be housed for lower costs. The savings
reflects a 5-percent reduction per year over 7 years.

Deregulate Public Housing Authorities and Reduce
Modernization Funds. More than $3.7 billion was budgeted for
the modernization needs for public housing authorities in 1995.
These funds are used for rehabilitation, demolition, or
upgrading in operation and management of public housing
projects. Again, with deregulation, substantial reductions can
be made to this fund. Although PHAs will need support for their
modernization needs, savings can be obtained through
deregulation. With deregulation, funding from this account can
be able to be used more effectively and more expansively. For
example, when operation requires supplemental funds, PHAs are
presently not allowed to draw on modernization funding. With
deregulation, these barriers will be removed. By breaking down
the walls between operating funds and modernization funds, PHAs
will be better able to use these resources to house low-income
tenants. The savings accrue from holding the level of
modernization at $3 billion over the 7-year budget period.

Focus Funding for Development, Housing and Special
Populations on Low-Income Communities by Creating One or More
Block Grants. By consolidating certain HUD programs, the
Federal Government can direct funding to States through one or
more block grants. This will allow States to concentrate
resources on areas and populations whose need is most acute.
Programs such as the Community Development Block Grants; HOME;
Housing for the Elderly; Housing for the Disabled; HOPE grants;
the McKinney programs; the Innovative Homeless Initiative; and
Housing for Persons With AIDS would be included. Some of these
programs already are administered through the States, but the
sheer number of programs, coupled with some that have
inefficient and cumbersome regulations and bureaucracy
associated with them, creates administrative burdens. Funding
would be channeled to States in one or more block grants to be
used for economic development, housing construction, or
programs for vulnerable populations such as senior Americans,
the disabled, and those with AIDS. States would be free to
structure programs and assign priorities within broad
guidelines set by Congress, but would have to focus the funding
on low-income communities. The number and parameters of these
block grants can be determined by the Banking Committee at a
later time. The funding level reflects an overall 20-percent
reduction in the $9 billion cumulative total for the
consolidated programs.

Federal Housing Administration.

--Reform Property Disposition Section 8 Component. The Federal
Government can achieve savings by reforming the rules under
which HUD may sell the property that has come into its
possession through mortgage default. At present, a
foreclosed property may stay in the FHA inventory for
years. During the time it is vacant, the property may be
vandalized, or used for drug dealing or other criminal
activities, or it may generally contribute to the
degradation of urban neighborhoods. By reforming the
disposition procedures, the Federal Government can achieve
budget savings and protect surrounding neighborhoods from
deleterious effects generated by longstanding vacant
houses. [A twin component of this proposal, concerning FHA
multifamily property dispositions, appears in Function
370.]

Other Housing Reforms.

--Transfer the Role of Encouraging Low-Income Homeownership
From the FDIC. The FDIC's affordable housing program is
designed to use housing units acquired by the FDIC through
bank defaults to enable low-income individuals and families
to purchase homes. The program should be terminated because
it is outside the scope of the Federal Deposit Insurance
Corporation. It is duplicated by a variety of existing HUD
programs and complicates the task of the FDIC to recapture
defaulted insurance payments. This program was targeted for
elimination by the House Appropriations Committee.

--Stop Extending Federal Subsidies to Corporations Through the
Low-Income Housing Preservation Program. In return for
Federal subsidies, certain property owners rent units to
individuals and families meeting specific income and
preference requirements. After 20 years, the owners'
mortgage notes and program regulations permit them to
prepay the remainder of their 40-year federally assisted
mortgages. If they prepay, HUD applications no longer apply
and the property reverts to any use the owner may wish to
apply. During the mid-1980's, large numbers of mortgages
became eligible for prepayment, causing concern that many
owners would exit the program and result in a shortage of
project-based housing stock. Under LIHPRA, these owners are
given incentives not to prepay their mortgages, and hence
keep their units available for low-income rental use. The
program should be eliminated due to the inefficiency of the
project-based assisted housing program overall.
Additionally, the incentives being offered are awarded to
owners who may have no intention of prepaying the
mortgages. In general, in today's real estate market, the
prospect of widespread prepayment of mortgages is unlikely.
Tenants displaced by those owners that do prepay could be
issued a voucher or certificate for use in the open market.
The Office of Management and Budget has also suggested the
repeal of this program.

--Stop Subsidizing the Wasteful and Costly Rehabilitation of
Public Housing Units That Would Be Better Off Demolished.
The Severely Distressed Public Housing Program provides
funds for public housing authorities to use to rehabilitate
units of housing at the most extreme level of dilapidation.
The funds are in addition to modernization funding and are
used to repair units which, should the one-for-one
replacement requirement be eliminated, would be better
razed rather than forcing expensive building of new units.
The lost unit is better replaced through vouchers or
certificates. The House Appropriations Committee included
this program in its list of rescissions recently passed.

--Remove Duplicative and Wasteful Social and Special Purpose
Programs Falling Beyond the Scope of HUD's Mission. Though
HUD's mission is to provide assistance in economic
development and housing for low-income areas, social
programs and special purpose funding having little or
nothing to do with these responsibilities have been layered
onto its already bloated bureaucracy. Social programs
include Investment Centers to provide job training,
education access centers, and other services generally
duplicating what a broad range of welfare services are
already supposed to provide. Congregate service for the
elderly has become a HUD function, though a variety of
elderly programs already exist. Special purpose grants can
be used for just about any local purpose conceivable and
end up wasting taxpayer dollars for projects better funded
at the local level.

--Transfer Duplicative Lead-Based Paint Responsibilities to the
Environmental Protection Agency. HUD has three lead paint
abatement programs: Lead-Based Paint Abatement Assistance
Program, the Lead-Based Paint Abatement Technical
Assistance and Capacity Building Set-Aside Program, and the
Lead-Based Paint Research and Development Program. These
programs exceed HUD's ability, expertise, and function. The
Office of the Inspector General at HUD has indicated this
as a program that should be considered for termination.
State and local agencies are better able to identify risks
and apply solutions. In addition, at the Federal level
numerous agencies have lead-based paint programs. The
responsibility for enforcing lead-based paint standards is
best suited to the Environmental Protection Agency. Both
the President and the House Appropriations Committee
included large rescissions of these funds in their recent
proposals.

--End the Youth Sports Program for Public Housing and Reduce
Duplicative Law Enforcement Funding by 5 Percent. Through
the Drug Elimination program, HUD disperses grants to
public housing authorities to fund efforts to minimize
crime in the housing projects through, among other things,
the youth sports program. HUD's mission is not to provide
security or police services, nor to provide sports services
to children. It has been unable to increase levels of
safety in public housing projects through these grants.
Greater coordination with Federal, State and local law
enforcement agencies is a more effective method to control
crime in public housing. The savings reflect the amount the
House Appropriations Committee rescinded from the 1995
budget level.

--End the Construction of New Public Housing Units. The
Development program involves the use of Federal funds by
Public Housing Authorities to either demolish units in
severely dilapidated condition to build new units for use
by the PHA. New units of public housing owned and operated
by PHAs and subsidized by the Federal Government should not
be considered until the disposition of HUD is ultimately
determined. The House Appropriations Committee included
this elimination in the House-passed rescission bill.

Eliminate LIHEAP. LIHEAP (the Low-Income Home Energy
Assistance Program) was created in 1981 as a temporary means of
assisting low-income households in meeting increased home
heating costs resulting from dramatic energy price increases in
the late 1970's. Since 1981, however, real prices of household
fuels have declined by 22 percent. Electricity prices are at
pre-1974 levels, natural gas prices have fallen to pre-1980
levels, and fuel oil prices have declined to pre-1975 levels.
Thus the emergency that led to LIHEAP has abated. It should be
noted that LIHEAP payments go to utility companies, not to
individuals.

Mandatory Spending

Eliminate Extended Unemployment Benefits. Federal extended
unemployment benefits provide 13 weeks of additional
unemployment insurance benefits over and above the standard
State unemployment insurance period of eligibility, based on
the insured unemployment rate within a State. Currently, only
two States and Puerto Rico are eligible for the extended
benefits. The Extended Benefits program often becomes
politicized during recessions, with the benefits often being
extended far beyond the initial 13 weeks provided for by law.
Beyond serving as a disincentive to finding or accepting new
employment, extended benefits also contributes to Federal
overspending, thus feeding the Federal deficit. Rather than
simply trying to remedy the problem of unemployment through
enhanced Federal benefits, a better approach is to eliminate
Federal overspending and the deficit which diverts capital away
from job-creating investment in the private sector. By
balancing the budget and freeing up more capital for private
sector investment, more job opportunities will be available in
the economy, and the need for such income support programs will
be diminished.

Enhance Home Ownership Opportunities. This proposal
reflects home ownership provisions that are part of the job
training block grant described in Function 500.

Welfare Reform. This budget proposal assumes the provisions
of H.R. 4, the Personal Responsibility Act of 1995, as passed
by the House of Representatives on March 24, 1995. Title II of
the package, the Child Protection Block Grant, is reflected in
Function 500. Three other small portions of the plan--
concerning the AFDC JOBS program, drug treatment provisions,
and child protection programs--are reflected in Functions 500,
550 and 750, respectively. The bulk of the welfare reform
provisions remain in Function 600, and may be summarized as
follows:

--Temporary Family Assistance Block Grant (Title I). This title
consolidates five Federal cash welfare assistance programs
into a single block grant to the States, and freezes
funding for these programs at the fiscal year 1995 level.
States will be empowered to design their own basic cash
assistance programs to encourage work and self-sufficiency.
The plan discourages illegitimacy by requiring
beneficiaries to establish paternity, and by prohibiting
States from using Federal dollars to provide cash
assistance to unwed teenage mothers or to provide
additional benefits to families who have additional
children while on welfare. By 2003, States must have at
least 50 percent of their single parent welfare caseload
working at least 35 hours per week. The plan establishes a
lifetime limit on welfare eligibility per individual of 5
years.

--Block Grants for Child Care and for Child Nutrition
Assistance (Title III). This title consolidates eight
Federal child care programs into a single block grant to
States. It eliminates current requirements that siphon more
than 30 percent of Federal child care funding for
centralized government planning and program administration.
It enhances parental freedom to choose the child care
providers they prefer. The School and Family Nutrition
block grants consolidate seven child nutrition programs
into two block grants to States. Funding for child
nutrition is increased 4.5 percent annually. The plan
allows each school district to submit a single application
to provide school lunches, breakfasts, and summer feeding.
It also eliminates meddlesome Federal regulations, such as
the current ban on serving yogurt within the school lunch
program.

--Restrictions on Welfare Eligibility for Noncitizens (Title
IV). This title makes non-citizens categorically ineligible
to receive benefits from major welfare programs such as
Supplemental Security Income [SSI], Food Stamps, Medicaid,
Cash Welfare, and Title XX Social Services. Exceptions
include aliens who are over 75 and who have lived in the
U.S. for 5 years, and persons who are veterans of the U.S.
military. The availability of public benefits should not be
a factor influencing people to emigrate to the United
States. Under current immigration laws, becoming a public
charge is a deportable offense. This title strengthens that
basic policy by making alien sponsorship agreements
enforceable contracts, thus requiring an alien's family or
charitable agency sponsor to provide for the economic well-
being of aliens they bring into the United States.

--Food Stamp Reforms (Title V). This title allows States to
eliminate parallel bureaucracies for cash welfare and food
stamps and merge eligibility requirements and benefit
levels for the 40 percent of current Food Stamp recipients
who also receive cash welfare. The plan requires able-
bodied Food Stamp recipients aged 18-50 with no dependents
to work. It increases penalties for committing Food Stamp
fraud, estimated at $2 billion annually. It freezes
provisions in current law that are causing rapid expansions
in the program. Repeated expansions of the Food Stamp
program over the past decade have caused the number of
people on the Food Stamp rolls to jump from 19.8 million in
1985 to 27.4 million this year. That represents a 38-
percent increase in just 10 years.

--Supplemental Security Income Reforms (Title VI). This title
eliminates cash benefits under the SSI Disability program
for those people whose only disability is drug abuse or
alcoholism. It provides $400 million over the next 5 years
for treatment of drug and alcohol abusers. The number of
drug addicts and alcoholics receiving benefits under the
current program has risen almost 700 percent since 1988,
according to the General Accounting Office. The plan
reforms rules governing the eligibility or children to
receive SSI Disability benefits. Current lax program rules
allow children to qualify for disability benefits based on
individual functional assessments [IFA's] which permit
benefits of $450 per month to children who display age
inappropriate behavior or other disciplinary problems that
do not represent genuine disabilities. Numerous examples
have come to light of parents coaching children to
misbehave in order to qualify for benefits. The reforms
would enhance benefits for severely disabled children (43
percent of the current child caseload), and allow families
of less severely disabled children to qualify for Medicaid
and other support services rather than cash assistance.

--Child Support (Title VII). This title improves collection and
dissemination of information on court ordered child support
to increase compliance with support orders. It also
requires States to adopt policies to restrict drivers or
professional licenses for persons delinquent in paying
child support.

--Miscellaneous Provisions (Title VIII). This title describes
budget scoring methods on the PAYGO scorecard related to
programs that become discretionary under the bill. It
encourages the adoption of electronic benefit transfer
systems for delivering low-income benefits to individuals.

Federal Retirement Reforms.

--Eliminate More Generous Pension Treatment for Members of
Congress and Congressional Staff. Currently, Members of
Congress and their staff receive more generous Federal
pension benefits than most other Federal employees. When
Congress created the Congressional pension system in 1946,
it established a 2.5-percent benefit accrual rate for
Members and Congressional employees. That means that after
20 years of service, member and staff pensions would equal
50 percent of the base salary, and after 30 years service,
benefits would be 75 percent of base pay. The benefit
formula for most other Federal employees equals 36 percent
of base salary after 20 years and 56 percent of base pay
after 30 years. The proposal conforms the Member and staff
accrual rate for those covered by the Civil Service
Retirement System to the accrual rate of most other Federal
employees, currently 2 percent. The Civil Service
Retirement System includes all Federal employees who began
service before January 1, 1984. The proposal also
eliminates a similar favorable accrual rate for Members and
Congressional Staff under FERS. Currently, Members and
Staff have an accrual rate of 1.7 percent, while all other
Federal employees have an accrual rate of 1 percent if they
retire before age 62, and 1.1 percent if they retire after
62. The proposed legislation conforms Members and
Congressional Staff to the same accrual rate most other
Federal employees earn.

--Change Computation of Annuities for New Retirees From High
Three to High Five. The budget resolution assumes the same
provision that passed the House in H.R. 1215 earlier this
year.

Other Individual and Community Assistance.

--Charging Fees for Non-AFDC Child Support Enforcement
Services. Since 1992, the General Accounting Office has
reported on opportunities to defray some of the costs of
child support programs. These opportunities include
locating absent parents, establishing paternity, and
collecting ongoing and delinquent child support. The law
authorizes the State to charge a fee of up to $25. Most
States, however, charge a minimum fee of $1 and simply
absorb the cost, even though they have the option of
recovery. Meanwhile, private companies are jumping into the
business. GAO's research suggests that mandatory fees be
dropped and that States charge a minimum percentage service
fee on successful collections for non-AFDC families. The
application fees are administrative nightmares, and the
service fee would ensure that families are only charged
when a service has been successfully performed. To fully
recover the administrative costs, a 15-percent service
charge would be necessary for non-AFDC families. The
savings indicated in this proposal assume States would be
able to implement this option beginning October 1, 1995.

--Reduce the $20 Exclusion From Income in Supplemental Security
Income. Reducing the $20 exclusion to $15 would save $175
million in 1996 and almost $1 billion over the 5-year
period. A program that ensures a minimum living standard
for recipients need not provide a higher standard of living
for people who happen to have earned income, as illustrated
by the absence of any standard exclusions for unearned
income (other than child support) in the AFDC program.

--Eliminate Trade Adjustment Assistance. Trade Adjustment
Assistance provides additional unemployment benefits and
training assistance to workers who lose their jobs as a
result of foreign competition, including workers affected
by NAFTA. There is no justification, however, for providing
more assistance to an unemployed worker who lost a job
because of foreign competition than for a worker whose
unemployment resulted from domestic competition. Trade
Adjustment Assistance provides 78 weeks of unemployment
benefits while the majority of other Americans qualify for
only 26 weeks of unemployment benefits. Moreover, a 1993
evaluation of the training components of the program by the
Department of Labor Inspector General determined that
neither the Department nor the States could demonstrate
that the program was effective in helping unemployed
workers find suitable employment. The Inspector General's
audit found that only one in ten of former program
participants surveyed found new training-related employment
that paid suitable wages. The IG also noted that although
the program requires participants to enroll in approved
training courses, participants who did not wish to attend
training were almost always granted waivers to continue
receiving the income support allowance. [Please note: Two
other components of this proposal appear in Function 500.]
FUNCTION 650: SOCIAL SECURITY

This function consists of the Social Security Program.

Summary of Policy Assumptions

FUNCTION 650
----------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
650 Social Security:
Budget Authority.......................... 336.9 354.3 374.1 394.3 413.9 433.9 455.0 477.2
Outlays................................... 336.2 354.2 373.0 393.2 412.6 432.7 453.7 475.7
----------------------------------------------------------------------------------------------------------------

Discussion of Policy Assumptions

mandatory spending

This budget assumes no programmatic changes in Social
Security.
FUNCTION 700: VETERANS BENEFITS AND SERVICES

This function includes veterans benefits and services
including discretionary programs for veterans health care and
medical research, construction activities, and housing loan
programs. Also included are mandatory veterans programs such as
veterans compensation and pension payments and educational
benefits.

Summary of Policy Assumptions

FUNCTION 700: VETERANS BENEFITS AND SERVICES
----------------------------------------------------------------------------------------------------------------
House Budget Committee policy 1995
assumptions Level 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
FUNCTION TOTALS

House Budget Committee balanced budget
path:
Budget authority.................... 37,654 37,588 38,081 38,453 39,050 39,249 39,736 40,149
Outlays............................. 37,392 36,935 38,079 38,526 39,037 40,624 41,218 41,588

-----------------------------------------------------------------------
DISCRETIONARY
(7) Changes from 1995 Levels

-----------------------------------------------------------------------
Limit VA Major Construction:
Budget Authority.................... 354 -272 -259 -246 -232 -218 -203 -188
Outlays............................. 541 -76 -137 -183 -321 -369 -417 -410

-----------------------------------------------------------------------
MANDATORY

Increase the Prescription Drug
Copayments to $5 in 1996 and 1997; by
$8 Thereafter:
Budget Authority.................... -579 -141 -234 -348 32 18 4 -11
Outlays............................. -579 -141 -234 -348 32 18 4 -11
Withhold Compensation Benefits for
Certain Incompetent Veterans with Large
Estates:
Budget Authority.................... 14,176 488 1,041 1,616 2,228 2,645 2,832 3,686
Outlays............................. 14,422 -906 712 1,321 1,929 3,606 1,429 3,349
Permanently Extend Pension Limit to
Persons in Medicaid Nursing Home:
Budget Authority.................... 2,955 0 0 0 -199 -206 -213 -214
Outlays............................. 2,958 0 0 0 -198 -242 -174 -214
Permanently Extend Income Verification
through IRS and SSA:
Budget Authority.................... 2,955 -134 -251 -360 -168 -178 -190 -201
Outalys............................. 2,958 -359 -244 -354 -187 41 -414 -204
Recover Certain Costs from Health
Insurers of Veterans for Non-Service
Related Conditions:
Budget Authority.................... -579 -62 -152 -179 -4 -23 -43 -64
Outlays............................. -579 -62 -152 -179 -4 -23 -43 -64
Collect Per Diems and Copayments from
Certain Veterans:
Budget Authority.................... -579 -62 -152 -179 161 151 141 131
Outlays............................. -579 -62 -152 -179 161 151 141 131
Verify Veteran Income for Medical Care
Cost Recovery:
Budget Authority.................... -579 -62 -152 -179 205 197 189 181
Outlays............................. -579 -62 -152 -179 205 197 189 181
Extend 0.75-Percent Loan Fee for Housing
Loans and Extend Authority for Higher
No-Bid Rate in Housing Programs:
Budget Authority.................... -107 12 47 70 85 97 114 116
Outalys............................. -106 11 46 69 84 96 113 115
Round Down Compensation COLA and Provide
Half COLA for Old Law DIC Recipients:
Budget Authority.................... 14,176 634 1,157 1,704 2,286 2,661 2,837 3,636
Outlays............................. 14,422 772 828 1,410 1,989 3,683 1,418 3,299
Maintain the GI Bill COLA at 50 Percent:
Budget Authority.................... 1,580 59 135 208 250 302 340 376
Outlays............................. 1,300 159 235 298 330 382 410 446
----------------------------------------------------------------------------------------------------------------

Discussion of Policy Assumptions

Through the Department of Veterans Affairs [VA], veterans
who meet various complex eligibility rules receive benefits
ranging from medical care, to compensation, pensions,
education, housing, insurance, and burial benefits. There are
26 million veterans and about 44 million members of their
families. The Congressional Budget Office estimates that total
VA outlays for fiscal year 1995 will be $37.392 billion. This
includes discretionary (largely medical care) spending of
$18.035 billion; entitlement and other mandatory spending
(compensation, pension, education, etc) of $20.542 billion; and
receipts (-) of $1.185 billion. The VA administers a vast
health care system for veterans who meet certain eligibility
criteria. Care is provided largely in facilities owned and
operated by the VA. For fiscal year 1994, the VA-operated
facilities included 172 hospitals, 130 nursing homes, 357
outpatient clinics, and 39 domiciliaries. Eligibility rules for
veterans health care services are complex. In general,
eligibility is based on characteristics of the veteran (such as
having a health condition related to service in the Armed
Forces, or level of income) and the kind of health care service
being provided (inpatient, outpatient, etc.). The VA is
required to provide free hospital care to veterans with
service-connected disabilities (and to certain other veterans,
including those with incomes below about $20,000). The VA may
provide hospital care to all other veterans but only on a space
available basis and if they pay required deductibles and
copayments. In fiscal year 1993, about 2.8 million veterans
used the VA health care system, representing just over 10
percent of the total veteran population. The VA pays monthly
cash benefits to veterans who have service-connected
disabilities. The basic amounts of compensation paid are based
on percentage-of-disability rating (multiples of 10 percentage
points) assigned to the veteran. In 1996 about 2.5 million
veterans will receive disability compensation totaling about
$14.5 billion. The VA pays monthly cash pension benefits to
about 744 thousand veterans or their survivors. These pensions
will total $3.0 billion in fiscal year 1996.
Over the 7-year budget period, the House Budget Committee
recommendation is to achieve savings of about $7 billion
($1.031 billion from discretionary spending and $6.076 billion
from mandatory spending). From discretionary accounts, the plan
calls for limiting VA major construction to achieve $1.031
billion in deficit reduction. From mandatory spending, the plan
would increase the prescription copayment amount from the
current $2 to $5 in fiscal year 1996 and 1997, $8 in fiscal
year 1998 and beyond for a savings of $1.066 billion over 7
years. The plan also calls for limiting compensation benefits
for certain incompetent veterans for a savings of $1.326
billion over 7 years. Last, the plan recommends permanently
extending expiring current law which would save $4.019 billion
over 7 years. (These extensions of current law were also
recommended by President Clinton in his fiscal year 1996 budget
proposal.)

Discretionary Spending

Limit Major Construction. The Construction, Major Projects
appropriation provides for constructing, altering, extending,
and improving VA facilities, including planning, architectural
and engineering services, and site acquisition, where estimated
cost of a project is over $3 million. The proposed deficit
reduction savings of $1.031 billion over 7 years would apply
only to the medical program--not to the national cemetery or
other accounts in major construction. The fiscal year 1996
budget request for VA major construction is $514 million.

Mandatory Spending

Increase the Prescription Drug Copayment. The VA is
currently authorized to collect a $2 copayment for each 30-day
supply of outpatient prescription drugs prescribed for
conditions which are not related to the treatment of a service-
connected disability. (Veterans with a service-connected
condition rated 50 percent or more are exempted.) This proposal
would increase the copayment to $5 in fiscal year 1996 and 1997
and to $8 in fiscal year 1998 and beyond.

Reenact the OBRA 1990 Provision Limiting Compensation
Benefits for Certain Incompetent Veterans. In the case of an
incompetent veteran who has neither spouse, child, nor
dependent parent and whose estate exceeds $25,000, compensation
payments would be suspended until the estate is reduced to
$10,000. This provision was in effect from October 1990 through
September 30, 1992.

Permanently Extend Pension Limit to Persons in Medicaid
Nursing Home. OBRA 1990 placed a $90 monthly limit on VA needs-
based pension benefits paid to veterans or survivors without
dependents receiving care in a Medicaid-approved nursing home.
This limit of $90 is effective through fiscal year 1998. This
proposal would permanently extend the limit.

Permanently Extend Income Verification through IRS and SSA.
The VA currently is able to access IRS data to verify incomes
reported by beneficiaries for establishing eligibility for
pensions. This OBRA-1990 provision, extended through fiscal
year 1998 by OBRA 1993, would be made permanent under this
proposal.

Extend Authority to Recover Costs from Health Insurers of
Veterans for Non-Service Related Conditions. The VA has
permanent authority to collect payment from private health
insurance companies for medical care given to veterans with no
service-related disabilities. The VA also has temporary
authority, through fiscal year 1998, to recover from private
health insurance companies the medical costs of veterans who do
have service-related disabilities, when such veterans receive
care for conditions not related to their service-related
disabilities. This OBRA-1993 provision would be made permanent
under this proposal.

Extend Authority to Collect Copayments for Prescription
Medications. The VA is currently authorized to collect a $2
copayment for each 30-day supply of outpatient prescription
drugs prescribed for conditions which are not related to the
treatment of a service-connected disability. (Veterans with a
service-connected condition rated 50 percent or more are
exempted.) This proposal would permanently extend this
authority, which has already been approved by Congress on a
temporary basis on three separate times.

Verify Veteran Income for Medical Care Cost Recovery. This
would extend permanently VA's authority to check the income of
veterans using Social Security numbers/internal revenue service
records to determine eligibility of veterans for means-tested
medical care.

Extend 0.75-Percent Loan Fee for Housing Loans and Extend
Authority for Higher No-Bid Rate in Housing Programs. The VA's
mortgage guarantee program makes it possible for veterans to
buy homes with little or no downpayment, and at favorable
rates. The primary cost of the program comes from defaults and
subsequent property foreclosures. The VA charges veterans who
do not have a service-connected disability a basic fee to use
the VA Home Loan Guarantee program. Basic fees are 1.25 percent
of the loan amount for a veteran and 2 percent for a reservist
when the downpayment is less than 5 percent; 0.75 percent for a
veteran and 1.5 percent for a reservist with a down payment of
5 but less than 10 percent; and 0.5 percent for a veteran and
1.25 percent with a downpayment of 10 percent or more. OBRA
1993 increased these fees by 0.75 percent of the loan amount
for loans closed between October 1, 1993 and September 30,
1998. This proposal would permanently extend this .75 percent
addition to the basic fees. The VA uses a ``no-bid'' formula to
determine the least expensive alternative to dispose of
foreclosed property. This proposal would make permanent a
modification to the no-bid formula which requires VA to
consider its losses sustained on the resale of the property
when establishing the rate. OBRA 1993 established a fee of 3
percent of the amount of the loan, with less than 5-percent
downpayment, for a veteran who previously obtained a VA-
guaranteed home loan. The increased fee applies in the case of
second and subsequent loans closed between October 1, 1993 and
September 30, 1998. This provision would make this higher rate
permanent.

Round Down Fiscal Year 1996 Compensation COLA and Provide
One-Half COLA for Certain DIC Recipients. The VA pays monthly
cash benefits to veterans who have service-connected
disabilities. The basic amounts of compensation paid are based
on percentage-of-disability ratings (multiples of 10 percentage
points) assigned to the veteran. A veteran whose disability is
rated 30 percent or more disability also receives additional
compensation for a spouse, children, and dependents. The VA
also pays dependency and indemnity compensation [DIC] to the
survivors of service members or veterans who died from a
disease or injury incurred or aggravated during military
service. OBRA 1993 provided that the COLA would be rounded down
to the next lower whole percentage point. This proposal would
permanently extend this provision. For deaths on or after
January 1, 1993, surviving spouses are paid $750 per month and,
if the deceased veteran was totally disabled for a continuous
period of at least 8 years immediately prior to death, and
additional $165 per month. For deaths prior to January 1, 1993,
surviving spouses may receive the higher of DIC under the new
system or the old system determined by the pay grade of the
deceased veteran. OBRA 1993 limited the fiscal year 1994 COLA
for DIC paid under the older determination process to one-half
the COLA applying to DIC paid for deaths after January 1, 1993.

Permanently Maintain the GI Bill COLA at 50 Percent. OBRA
1993 eliminated the COLA for the Montgomery GI Bill benefits
for fiscal year 1994. It also specified that the COLA for 1995
would be one-half of the amount otherwise calculated. This
provision would maintain the GI Bill COLA at 50 percent
permanently.
FUNCTION 750: ADMINISTRATION OF JUSTICE

This function is composed of the justice programs of the
United States, including Federal law enforcement, Federal
court, Federal prison and judicial branch activities.

Summary of Policy Assumptions

HOUSE BUDGET COMMITTEE POLICY ASSUMPTIONS
----------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
750 Administration of Justice
Budget Authority........................ 18.5 17.8 16.9 16.6 16.4 16.4 16.0 15.9
Outlays................................. 17.1 17.8 17.1 16.9 16.7 16.6 16.2 16.1
----------------------------------------------------------------------------------------------------------------

BUDGET ASSUMPTIONS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total FY 1995 Change from the FY 1995 Level (Except where otherwise noted)
spending level -------------------------------------------------------------------------------------------------------------------------------------------
-------------------- 1995 1997 1998 1999 2000 2001 2002
-------------------------------------------------------------------------------------------------------------------------------------------
BA OL BA OL BA OL BA OL BA OL BA OL BA OL BA OL
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Block Grant Funding for Justice
Assistance Program............. 315 69 -53 -12 -53 -31 -53 -50 -53 -53 -53 -53 -53 -53 -53 -53
Eliminate Administrative
Conference of the United States 2 2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2
Eliminate Associate Attorney
General Position and Office.... 2 2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2
Eliminate Funding for Death
Penalty Resource Centers....... 20 20 -20 -4 -20 -12 -20 -19 -20 -20 -20 -20 -20 -20 -20 -20
Phase Out Federal Funding for
the Legal Services Corporation. 415 413 -137 -121 -274 -257 -415 -398 -415 -415 -415 -415 -415 -415 -415 -415
Rescind Immigration Emergency
Fund........................... 75 0 -75 0 -75 0 -75 0 -75 0 -75 0 -75 0 -75 0
Reduce the Violent Crime Trust
Fund (Reduction in the Violent
Crime Trust Fund is from each
Authorized Year, not from the
1995 Level).................... n/a n/a -389 -212 -1,057 -840 -1,366 -1,154 -1,583 -1,314 -1,583 -1,441 -1,583 -1,441 -1,583 -1,441
Reform the U.S. Marshals Service 397 392 -5 -5 -5 -5 -5 -5 -5 -5 -5 -5 -5 -5 -5 -5
Eliminate Community Relations
Service........................ 20 21 -7 -6 -13 -12 -20 -19 -20 -20 -20 -20 -20 -20 -20 -20
Terminate the State Justice
Institute...................... 14 14 -14 -4 -14 -9 -14 -13 -14 -14 -14 -14 -14 -14 -14 -14
Terminate the U.S. Parole
Commission..................... 7 8 -7 -6 -7 -7 -7 -7 -7 -7 -7 -7 -7 -7 -7 -7
Child Protection form Crime
Bills.......................... 11 10 -11 -2 -11 -7 -10 -11 -10 -11 -10 -11 -10 -11 -10 -11
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
This account is affected by two or more distinct policy changes, each of which are listed as separate lines in this budget function.

Discussion of Policy Assumptions

Discretionary Spending

Block Grant Funding for Justice Assistance Programs.
Currently, financial assistance is spread among many Justice
Assistance Programs, each earmarking funds for a specific
purpose. These categorical grants encourage units of government
to spend money on programs that may not be a high priority but
to direct much of its funding toward problems that are of low
priority to recipient governments or that are not Federal
responsibilities, in which applicants take grants because they
are available rather than because of pressing needs.
Consolidating existing grants into one large formula grant
dedicated to a broad category, reducing the total funding, and
changing the method by which funds are allocated allows
recipients to direct resources toward programs where the need
is greatest in their jurisdictions. Shifting the method of
distributing funds exclusively to block grants will have no
detrimental effects on the Nation's law enforcement
capabilities. In contrast, it will enhance the ability of
localities to handle their law enforcement problems, even with
fewer total resources. Furthermore, savings will result from
lower administrative costs. Currently, each grant program
requires that applicants file a proposal detailing how the
grant will be used and what oversight will be conducted; in
addition, recipients must submit followup reports on the
program's achievements. Those administrative expenses absorb a
good portion of the total grant that could be used to carry out
program activities. By administering the entire program as a
single formula grant, significantly fewer people will sit
behind desks and more will work in communities where the needs
exist. This plan is also consistent with recommendations in the
National Performance Review for reducing overhead and enhancing
flexibility.

Eliminate the Administrative Conference of the United
States. The Administrative Conference of the United States
conducts studies of the administrative procedures that agencies
and executive departments use. The purpose of the commission is
to arrange for interchange among administrative agencies of
information ``potentially'' useful in improving administrative
procedure.

Eliminate the Associate Attorney General Position and
Office. The presidentially appointed Associate Attorney General
position is an unneeded level of bureaucracy, which should be
eliminated. This position is not part of the formal Department
of Justice structure and is unnecessary to implement
Departmental policies. Instead, this position has been used to
reward politically connected friends of the President.

Eliminate Funding for Death Penalty Resource Centers.--The
Capital Resource Centers provide grants and funds for convicted
murderers to file appeals of their convictions and fight
pending Federal habeas corpus petitions. These grants and funds
are unnecessary for these felons to protect their basic
constitutional rights or to provide for their defense. Court-
appointed, taxpayer funded, and pro-bono attorneys are already
available for this purpose.

Phase Out Federal Funding for the Legal Services
Corporation.--The Legal Services Corporation (LSC) is one of
several organizations intended to provide the poor with access
to free legal aid in civil matters. Too often, however, lawyers
funded through Federal LSC grants have focussed on political
causes and class action lawsuits rather than helping poor
Americans solve their legal problems. In fact, the poor have
often been its chief victims. Lawyers have used the LSC grants
to file lawsuits against welfare reform and to support the
right of prisoners to certain benefits, such as cable
television. These lawyers also are used to defend drug dealers
from being evicted from housing projects. The LSC has sued for
frivolous benefits at taxpayers' expense. A phaseout of Federal
funding for the LSC will not eliminate free legal aid to the
poor. State and local governments, bar associations, and other
organizations already provide substantial legal aid to the
poor. The phaseout of Federal funding would just end the most
controversial and counterproductive legal representations.

Rescind Immigration Emergency Fund. The one-time
immigration emergencies due to events in Haiti and Cuba
prompted the 103rd Congress to appropriate $75 million in
Public Law 103-317 for the Immigration Emergency Fund, compared
to an appropriation of $6 million in fiscal year 1994 and no
appropriation in fiscal year 1996.

Reduce the Violent Crime Trust Fund. This proposal reduces
the Violent Crime Trust Fund by $5 billion over 5 years to
achieve the reduction from last year's crime bill promised in
the Contract with America.

Reform the U.S. Marshals Service. This provision eliminates
the political appointment process for U.S. marshals and
promotes the professionally trained deputy marshals to the U.S.
marshal positions. The total number of employees in the
Marshals Service is reduced by 70. This concept to reform the
Marshals Service has been discussed since the Truman
administration, and was proposed in Vice President Gore's
National Performance Review.

Eliminate the Community Relations Service. The Community
Relations Service provides assistance to communities in
preventing and resolving disputes and difficulties between
ethnic and racial groups. Although the Service's goal may be
laudable, it is not appropriately addressed at the Federal
level by a one-size-fits-all approach. Instead, the Service's
goals can more appropriately be met by local, State, and
nongovernmental institutions ``on the ground'' where potential
problems exist.

Terminate the State Justice Institute.--The State Justice
Institute funds research and demonstration projects and
distributes information about ways to administer justice. The
Institute provides no actual services and has not improved the
administration of justice at the Federal or State level, and
should be eliminated.

Terminate the U.S. Parole Commission. The Comprehensive
Crime Control Act of 1984 abolished the U.S. Parole Commission
and instituted mandatory sentencing for all offenders whose
crimes were committed after November 1, 1987. The Commission
will be abolished on November 1, 1997, 10 years after the
implementation of the U.S. Sentencing Guidelines. Abolishing
the Commission in fiscal year 1996 and distributing its current
workload to other offices will have no or little effect on
pending cases.

Replace Three Child Protection Programs. Under the House-
passed welfare reform plan, three existing child protection
programs are to be replaced by the Child Protection Block Grant
in Title II of the Personal Responsibility Act of 1995. [Note:
See Function 500].
FUNCTION 800: GENERAL GOVERNMENT

This function covers the general overhead cost of the
Federal Government; provision of central, fiscal property, and
personnel activities; and provision of services that cannot be
reasonably classified in any other major function. Overhead
costs include the legislative branch and Executive Office of
the President. Central fiscal costs consist of the general tax
collection and fiscal operations of the Department of Treasury.
Property and personnel costs include the operating costs of the
General Services Administration and Office of Personnel
Management. Federal aid to State and territorial government
that is available for general fiscal support is also placed in
this function. Funding for the Internal Revenue Service
accounts for slightly more than half of the total.

Summary of Policy Assumptions

FUNCTION 800: GENERAL GOVERNMENT
----------------------------------------------------------------------------------------------------------------
House Budget Committee policy 1995
assumptions Level 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
FUNCTION TOTALS

House Budget Committee balanced
budget path:
Budget Authority............ 13,265 11,624 11,633 12,457 11,684 12,109 11,319 11,263
Outlays..................... 13,395 12,380 11,799 12,594 11,514 11,970 11,075 11,012

-------------------------------------------------------------------------------
DISCRETIONARY
(7) Changes from 1995 Levels

-------------------------------------------------------------------------------
Eliminate GSA's Federal Supply,
Information Resource Management
and Federal Property Resource
Service:
Budget Authority............ 97 -97 -97 -97 -97 -97 -97 -97
Outlays..................... 70 -70 -97 -97 -97 -97 -97 -97
Impose a Five-Year/Seven-Year
Moratorium on Construction and
Acquisition of New Federal
Buildings:
Budget Authority............ 627 -627 -627 -627 -627 -627 -627 -627
Outlays..................... 19 -19 -81 -213 -407 -564 -627 -627
End the Government Monopoly on
Fleet Management by Opening
Management of the Government's
Fleet to Competitive Private-
Sector Bidding:
Budget Authority............ 2,000 -67 -167 -200 -200 -200 -200 -200
Outlays..................... 150 -50 -167 -200 -200 -200 -200 -200
Eliminate All Territorial
Assistance (Territorial and
International Affairs):
Budget Authority............ 52 -51 -51 -51 -51 -51 -51 -51
Outlays..................... 50 -45 -52 -52 -52 -51 -50 -50
Eliminate Trust Territory of the
Pacific Islands (Territorial
and International Affairs):
Budget Authority............ 20 -20 -20 -20 -20 -20 -20 -20
Outlays..................... 21 -14 -20 -20 -20 -20 -20 -20
Accept President's Proposal
Compact of Free Association
(Territorial and International
Affairs):
Budget Authority............ 20 -10 -10 -10 -10 -11 -11 -11
Outlays..................... 21 -9 -9 -10 -10 -11 -11 -11
Eliminate Joint Committees on
Printing and Library:
Budget Authority............ 2 -2 -2 -2 -2 -2 -2 -2
Outlays..................... 2 -2 -2 -2 -2 -2 -2 -2
End the Government's Monopoly on
Printing:
Budget Authority............ 145 -48 -145 -145 -145 -145 -145 -145
Outlays..................... 130 -43 -135 -145 -145 -145 -145 -145
Payment in lieu of Taxes:
Budget Authority............ 104 21 21 21 21 21 21 21
Outlays..................... 104 21 21 21 21 21 21 21
Eliminate the Advisory
Commission on Intergovernmental
Relations:
Budget Authority............ 1 -1 -1 -1 -1 -1 -1 -1
Outlays..................... 1 -1 -1 -1 -1 -1 -1 -1
Eliminate the Office of
Technology Assessment:
Budget Authority............ 22 -16 -22 -22 -22 -22 -22 -22
Outlays..................... 22 -14 -22 -22 -22 -22 -22 -22
Lock-In Savings from One-Third
Reduction In House Committee
Staffs:
Budget Authority............ 729 -33 -34 -34 -34 -34 -34 -34
Outlays..................... 676 -32 -34 -34 -34 -34 -34 -34
Reduce Funding for the Executive
Office of the President by
Fifteen (15) Percent:
Budget Authority............ 200 -30 -30 -30 -30 -30 -30 -30
Outlays..................... 160 -24 -30 -30 -30 -30 -30 -30
Reduce General Accounting Office
Funding by 15 Percent:
Budget Authority............ 443 -67 -67 -67 -67 -67 -67 -67
Outlays..................... 442 -60 -67 -67 -67 -67 -67 -67
Reform the Office of Personnel
Management (OPM): Transfer
Certain OPM Responsibilities:
to Other Agencies
Budget Authority............ 115 -90 -90 -90 -90 -90 -90 -90
Outlays..................... 109 -81 -90 -90 -90 -90 -90 -90
Indian Gaming--Salaries and
Expenses (Authorization):
Budget Authority............ 1 -1 -1 -1 -1 -1 -1 -1
Outlays..................... 3 -1 -1 -1 -1 -1 -1 -1

MANDATORY

Increase Funding for American
Samoa:
Budget Authority............ n/a 34 34 34 34 34 34 34
Outlays..................... n/a 34 34 34 34 34 34 34
Reduce Grants for the Northern
Mariana Islands:
Budget Authority............ 28 -28 -28 -28 -28 -28 -28 -28
Outlays..................... 5 -28 -28 -28 -28 -28 -28 -28
Indian Gaming--Salaries and
Expenses (Fees):
Budget Authority............ 1 1 1 1 1 1 1 1
Outlays..................... 3 1 1 1 1 1 1 1
Indian Gaming--Salaries and
Expenses (Direct Spending):
Budget Authority............ 1 -1 -1 -1 -1 -1 -1 -1
Outlays..................... 3 -1 -1 -1 -1 -1 -1 -1
----------------------------------------------------------------------------------------------------------------

Discussion of Policy Assumptions

Discretionary Spending

Cost Savings at the General Services Administration [GSA].
The GSA was established in 1946 to provide goods and services
across the government in the most effective and cost-efficient
manner. Now 50 years later, however, the monopoly status of GSA
is causing government agencies to in fact pay excessive costs
for various goods and services which can be easily provided by
the private sector at a much lower cost. Given the scale of the
government's purchases through GSA, there is great opportunity
for significant savings system wide as competition is
introduced. GSA's current budget is approximately $200 million;
it controls over $45 billion in annual purchases by government
agencies. As the National Performance Review has argued:

It is not enough that GSA try to become a better
monopoly; true change will not occur until agencies are
free to choose where and how they spend their money.

--Eliminate the GSA's Federal Supply Service, Information
Resources Management Service and the Federal Property
Resources Service. This proposal calls for selling three
major elements of GSA to the current employees--through an
Employee Stock Ownership Plan/ESOP--or to private
companies. The Federal Property Resources Service handles
the sale, auctioning, or outleasing of valuable
underutilized Federal property. The Federal Supply Service
has approximately 5,000 employees and enjoys gross sales in
fiscal 1993 close to $2 billion and over $500 million in
fleet management. One significant failure of this office
has been the management of government purchases of
computers. Currently, the IRS suffers from a backlog of $70
billion in uncollected taxes due to inappropriate and
antiquated computers. Last fall, Senator Cohen issued a
report urging a complete halt in computer purchases until
the introduction of major improvements in the system.
Information Resources Management Service is responsible for
providing local telephone services and software services
through private vendors. It employs slightly more than
2,000 people.

--Impose a 5-Year/7-Year Moratorium on Construction and
Acquisition of New Federal Buildings. At present, the GSA
has 31 new construction projects proposed in this year's
budget, in direct contradiction to the recommendation of
the National Performance Review that GSA temporarily
suspend the acquisition of all net new office space and
courthouses. This proposal places a hold on General
Services Administration's acquisitions and proposes that
all government agencies begin aggressive negotiations to
reduce costs in existing and new leases. This provision
allows an exemption in the cases of Federal buildings
destroyed by unforeseen disasters or acts of God.

End the Government Monopoly on Fleet Management by Opening
Management of the Government's Fleet to Competitive Private-
Sector Bidding. This proposal would open to competitive bidding
by private-sector agencies the purchase and management of
government vehicles to private companies by ending the GSA
monopoly. In addition, to ensure over time that the most
competitive contracts were being awarded, all costs associated
with agencies' fleet management would have to be fully
documented.

Restructure the Department of the Interior's Territorial
and International Affairs. The Department of the Interior is
responsible for promoting the economic and political
development of insular areas under the jurisdiction of the
United States. The Secretary originates and implements Federal
policy for the territories; coordinates certain operating and
construction projects; and provides information services and
technical assistance. This proposal would eliminate the Office
of Territorial and International Affairs and all territorial
assistance and funding, except funding for the brown tree
snake. It would terminate covenant grants to the Northern
Mariana Islands, but fund American Samoa at $34 million.
Following the recommendations of President Clinton, it would
eliminate funding for the Trust Territory of the Pacific
Islands and fund the Compact of Free Association at a reduced
level.

Eliminate the Joint Committees on Printing and Library.--
With reduced responsibilities for Government Printing Office
[GPO], we can eliminate the Joint Committee on Printing and the
Joint Committee on the Library of Congress. Oversight of a
smaller GPO would be performed by the Senate Committee on Rules
and Administration and the House Committee on Oversight.

Payment in Lieu of Taxes. This item funds the PILT change
referred to in Function 300.

End the Government's Monopoly on Printing. This provision
requires that, by 9 months after enactment, all government
work--approximately 20 percent is currently not sent out to
private contractors--be offered for competitive bidding. GPO's
labor costs are 50 percent greater than comparable private
printers' costs; GPO's paper waste averages 40 percent more
than the most lax industry standard. Although significant
employee reductions will become possible through this
procedure--reductions that should be identified by the
appropriate committees of jurisdiction--this proposal assumes
only those savings that would result from contracting out to
the private sector. It is expected that employing the
competitive market for government printing would save about 30
percent of printing costs annually.

Eliminate the Advisory Commission on Intergovernmental
Relations. This Commission was created in 1959 to examine
Federal, state, and local trends, events, and programs that may
affect intergovernmental relations. Based on these trends, the
Advisory Commission prepares and issues reports. Given the need
to reduce Federal spending, this Commission is no longer a
critical priority. Local, state, and Federal bureaucrats do not
need a multimillion dollar commission to help them talk to one
another.

Eliminate Office of Technology Assessment. The
Congressional Office of Technology Assessment [OTA] was created
in the 1970's to provide Congress scientific and technical
assistance, particularly where the Federal Government may be
called upon to support technological applications. The proposal
would eliminate OTA as a separate organization, consistent with
the need to consolidate staff and avoid duplication. Its
functions would be absorbed by other groups advising Congress
and its staff, including the Congressional Research Service and
the General Accounting Office.

Lock In Savings From One-Third Reduction in House Committee
Staffs. As pledged by the Republican House Members and
candidates on September 27, 1994, prior to the 1994 election,
Members of the Republican majority in the 104th Congress have
reduced House committee staffs by one-third. This proposal
locks in the savings.

Reduce Funding for the Executive Office of the President by
15 Percent. When he took office, Bill Clinton promised major
reductions in executive branch staff, especially in the White
House. This proposal would carry out the President's pledge.

Reduce General Accounting Office Funding by 15 Percent. The
General Accounting Office is undergoing a 25-percent staff
reduction that started in 1992. This reduction would absorb
savings that should result from these reductions.

Reform the Office of Personnel Management [OPM]: Transfer
Certain OPM Responsibilities to Other Agencies. Under this
proposal, OPM's Retirement and Insurance Service would move to
the Social Security Administration; the Human Resources Systems
Service would move to the Office of Management and Budget.

Mandatory Spending

Open ANWR for Exploration. This proposal assumes that a
small portion of the Arctic National Wildlife Refuge [ANWR] in
Alaska will be leased for oil and gas exploration, development,
and production. ANWR is the most prospective oil and gas
province in North America, and is adjacent to the hugely
successful Prudhoe Bay field, currently supplying 20 percent of
domestic oil. Leasing is overwhelmingly supported by residents
of the State of Alaska and the Native people who live in the
area proposed for leasing. Leasing could provide enormous
revenues to the Treasury, jobs to the U.S. economy, and a
valuable domestic energy resource to offset the current
transfer of U.S. wealth to other nations. This portion of the
proposal reflects a payment to Alaska that will come from lease
payments rather than taxpayers. Alaska will receive half the
receipts collected from leasing.

Reduction in Costs for the Indian Gaming Commission. This
proposal, which is part of the Native American Block Grant
described in Function 450, assumes that the operating costs of
the National Indian Gaming Commission are financed through
annual assessments of gaming operations regulated by the
Commission.
FUNCTION 900: NET INTEREST

This function is composed principally of interest on the
public debt and other interest paid by the Federal Government,
such as interest on income tax refunds. Offsetting interest
receipts, such as interest received by trust funds and interest
paid by the Federal Financing Bank on borrowings from the
Treasury, are deducted from the function.

Summary of Policy Assumptions

FUNCTION 900
----------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
900 NET INTEREST
BUDGET AUTHORITY............ 270.0 256.3 259.6 258.7 259.2 258.5 252.8 248.6
OUTLAYS..................... 270.0 256.3 259.6 258.7 259.2 258.5 252.8 248.6
----------------------------------------------------------------------------------------------------------------

Discussion of Policy Assumptions

The Budget Committee anticipates a reduction in net
interest payments of about $150 billion over 7 years, compared
with current projections. These interest reductions are
expected to result from the deficit reduction called for in
this budget.
FUNCTION 920: ALLOWANCES

This function traditionally includes funding contingencies,
initiatives, and other proposals where either the savings or
costs cannot be distributed by function.

Summary of Policy Assumptions

FUNCTION 920: ALLOWANCES
----------------------------------------------------------------------------------------------------------------
House Budget Committee policy 1995
assumptions level 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
FUNCTION TOTALS

House Budget Committee balanced
budget path:
Budget Authority............ 0 -2324 -2384 -2449 -2523 -2564 -2599 -2635
Outlays..................... 0 -1948 -2312 -2543 -2712 -2823 -2868 -2912

Savings Related to Using the
VISA IMPAC Credit Card for
Government Printing Orders of
less than $1,000:
Budget Authority............ 58 0 -53 -54 -56 -58 -58 -58
Outlays..................... 54 0 -48 -54 -56 -58 -58 -58
Reduce Federal Agency Overhead:
Budget Authority............ 79,525 -1,258 -1,258 -1,258 -1,258 -1,258 -1,258 -1,258
Outlays..................... 75,542 -1,195 -1,195 -1,195 -1,195 -1,195 -1,195 -1,195
Reduce the Number of Political
Appointees:
Budget Authority............ 254 -32 -6 -37 -77 -80 -80 -80
Outlays..................... 253 -31 -7 -36 -76 -79 -80 -80
Repeal the Davis-Bacon Act:
Budget Authority............ n/a -432 -445 -458 -470 -486 -501 -517
Outlays..................... n/a -150 -440 -616 -723 -809 -833 -857
Repeal Service Contracts Act:
Budget Authority............ n/a -600 -620 -640 -660 -680 -700 -720
Outlays..................... n/a -570 -620 -640 -660 -680 -700 -720
Terminate 63 Unneeded Boards and
Commissions:
Budget Authority............ 2 -2 -2 -2 -2 -2 -2 -2
Outlays..................... 2 -2 -2 -2 -2 -2 -2 -2
----------------------------------------------------------------------------------------------------------------

Discussion of Policy Assumptions

Discretionary Spending

Savings Related to Using the VISA IMPAC Credit Card for
Government Printing Orders of Less Than $1,000. This proposal
calls for savings government-wide by contracting out printing
services and requiring that all Federal agencies use a credit
card to purchase small printing jobs of less than $1,000.

Reduce Federal Agency Overhead. This proposal calls for
efficiency savings in indirect overhead expenses, such as
spending on travel, shipping, printing and reproduction. These
savings will result from improved agency performance, not from
any changes to the programmatic activities of the agencies.
This proposal was arrived at by careful review of each agency's
overhead spending in indirect categories. Reductions have not
been assumed in those indirect costs which are closely related
to the agency's central function. In addition, reductions would
occur in Federal agencies not already targeted for specific
administrative reductions indicated elsewhere in this report.
This proposal assumes approximately a 2-percent annual
reduction in overhead costs, a figure consistent with those of
private-sector companies, which typically pursue administrative
efficiency savings of approximately 3 percent a year.

Reduce the Number of Political Appointees. This proposal
would cap the number of political appointees at 2,300. The term
``political appointee'' refers to employees of the Federal
Government who are appointed by the president and certain
policy advisers. Some political appointees must have Senate
confirmation. This proposal would not only eliminate about 500
positions, but it would also save time in the Senate used for
confirmation.

Repeal the Davis-Bacon Act. The Davis-Bacon Act requires
that an inflated ``prevailing wage'' be paid on all Federally
funded or Federally assisted construction projects. This
government regulation represents a hidden tax on construction
jobs, inflates the costs of Federal construction, and destroys
opportunities for employment for minorities, small firms, and
less skilled workers.

Repeal the Service Contracts Act. The McNamara-O'Hara
Service Contract Act of 1965 is a tax on jobs similar to Davis-
Bacon except that it applies to service, rather than
construction, contracts. The Act requires covered contractors
and their successors to provide inflated wages and benefits at
least equal to the locality's prevailing standards or those in
a collective bargaining agreement of the previous contractor.

Terminate 63 Unneeded Boards and Commissions. This proposal
terminates certain boards and commissions that have outlived
their purpose and are now only embarrassing examples of
government programs that never end.

Federal Employee Compensation. This budget makes no
assumptions about Federal employee pay. If the Appropriations
Committee can identify additional savings, the Budget Committee
would have no objection to pay raises being given to Federal
employees.

Report Language

Fannie Mae and Freddie Mac. The Budget Committee requests
that the House Committee on Banking conduct a review to explore
the possibility of privatizing Fannie Mae and Freddie. The
Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation [Fannie Mae and Freddie Mac] are chartered
and established by the Federal Government. In addition, they
benefit from exemptions from State and local taxes, certain
Federal regulations and they have access to the U.S. Treasury
under certain circumstances. The result is a greater ability on
the part of Fannie Mae and Freddie Mac to borrow money at more
favorable rates. The U.S. government essentially provides
equity capital by bolstering their credit ratings. This Federal
affiliation benefits Fannie Mae and Freddie Mac, according to
CBO, by 30 cents on every $100 dollars of long-term debt they
have. Presently, they do not compensate the Federal Government
for this benefit even though they are fully private
corporations, wholly owned by private stockholders.
FUNCTION 950: UNDISTRIBUTED OFFSETTING RECEIPTS

Undistributed offsetting receipts involve financial
transactions that are deducted from budget authority and
outlays of the Government as a whole. The four major items in
this function are the following: the employer's share of
employee retirement programs, composed of the Federal
Government's contribution to its employee retirement plans;
receipts from the sale of leases on Outer continental shelf
[OCS] lands, from annual rental fees, and from royalties on oil
and gas production from leased Federal lands; receipts from the
sale of major physical or loan assets; and charges for the use
of assets owned or controlled by the Federal Government.

Summary of Policy Assumptions

FUNCTION 950: UNDISTRIBUTED OFFSETTING RECEIPTS
----------------------------------------------------------------------------------------------------------------
House Budget
Committee policy 1995 1996 1997 1998 1999 2000 2001 2002
assumptions level
----------------------------------------------------------------------------------------------------------------
Function totals

House Budget
Committee balanced
budget path:
Budget
Authority..... -46,215 -41,224 -41,336 -45,185 -44,467 -46,866 -47,362 -49,267
Outlays........ -46,215 -41,224 -41,336 -45,185 -44,467 -46,866 -47,362 -49,267

--------------------------------------------------------------------------------------------
MANDATORY
(7)Changes from
1995 Levels

--------------------------------------------------------------------------------------------
Increase Agency
CSRS Contributions
by 3 percent,
Decrease FERS by
2.5 percent:
Budget
Authority..... n/a 0 0 0 0 0 0 0
Outlays........ 9,682 -1,104 -1,570 -1,692 -1,978 -2,297 -2,883 -3,497
Increase Agency
Contributions For
Foreign Service
CSR 3 percent,
Decrease FERS by
2.5 percent:
Budget
Authority..... n/a 0 0 0 0 0 0 0
Outlays........ 142 -8 -7 -3 -2 -1 0 1
Extend the
Authority to
Auction Spectrum:
Budget
Authority..... n/a 0 -600 -2300 -3650 -3750 -2350 -2350
Outlays........ n/a 0 -600 -2300 -3650 -3750 -2350 -2350
Privatize United
States Enrichment
Corporation (Asset
Sale Proceeds):
Budget
Authority..... n/a -400 -1,100 0 0 0 0 0
Outlays........ n/a -400 -1,100 0 0 0 0 0
Sell Alaska Power
(Asset Sale
Proceeds):
Budget
Authority..... n/a -77 0 0 0 0 0 0
Outlays........ n/a -77 0 0 0 0 0 0
Sell the Naval
Petroleum Reserve
(Asset Sale
Proceeds):
Budget
Authority..... n/a -2,000 0 0 0 0 0 0
Outlays........ n/a -2,000 0 0 0 0 0 0
Privatize SEPA
(Asset Sale
Proceeds) (Federal
Dams):
Budget
Authority..... n/a 0 -853 0 0 0 0 0
Outlays........ n/a 0 -853 0 0 0 0 0
Privatize WAPA
(Asset Sale
Proceeds) (Federal
Dams)
Budget
Authority..... n/a 0 0 -2,687 0 0 0 0
Outlays........ n/a 0 0 -2,687 0 0 0 0
Privatize SWAPA
(Asset Sale
Proceeds) (Federal
Dams):
Budget
Authority..... n/a 0 0 -574 0 0 0 0
Outlays........ n/a 0 0 -574 0 0 0 0
----------------------------------------------------------------------------------------------------------------

Discussion of Policy Assumptions

Mandatory Spending

Increase Civilian Federal Employee Contributions to
Retirement Trust Fund by 2.5 Percent. The budget resolution
assumes the same provision that passed the House in H.R. 1215
earlier this year.

Extend the Authority to Auction Spectrum. The Omnibus
Budget Reconciliation Act of 1993 granted the Federal
Communications Commission [FCC] limited authority to auction
new licenses to use the radio spectrum. After four auctions,
Federal receipts in excess of $9 billion have been raised and
receipts in excess of $13 billion--including those already in
hand--are anticipated through 1998. Equally important, the
problems and impossibilities raised by many opponents of
assigning licenses by auction have failed to materialize. The
authority, however, was limited to a 5-year period ending on
September 30, 1998 and did not extend to many classes of new
licenses. The law excluded licenses issued to profit-making
businesses that did not charge a subscription fee for
telecommunications services. Most prominent among those
excluded were licenses allowing the permit holder to offer
broadcast television and radio supported by advertising. Also
exempted were licenses permitting the holders to use spectrum
for such private networks as intracorporate wireless
communications systems. Exemptions also included permits for
intermediary links in the delivery of communications service,
such as frequencies used for microwave relays by long-distance
telephone companies. Finally, the law did not explicitly permit
the FCC to auction other valuable rights that it allocates,
such as telephone dial codes and commercially attractive call
letters for radio and television stations.

Privatize the United States Enrichment Corporation [USEC].
The USEC is a government corporation that was created in 1992.
It produces and markets uranium enrichment services to
utilities in the United States and foreign nations. Prior to
1992, these activities were conducted by the Department of
Energy. To better compete in the competitive global uranium
enrichment market, Congress created USEC with the goal that it
be privatized. President Clinton also included this proposal in
his budget. This proposal was also included in H.R. 1215, the
Tax Fairness and Deficit Reduction Act. [Note: Another part of
this provision appears in Function 270. This portion represents
proceeds from the asset sale.]

Sell the Alaska Power Administration. These figures
represent proceeds from the asset sale in this provision. Other
fiscal effects appear in Function 270.

Sell the Naval Petroleum Reserves. These figures represent
proceeds from the asset sale in this provision. Other fiscal
effects appear in Function 270.

Convert Government Agencies that Generate Electric Power at
Federal Dams into Private Corporations. These figures represent
receipts from the asset sale in this provision. Other fiscal
effects appear in Function 270.
THE CONGRESSIONAL BUDGET PROCESS

The spending and revenue levels set forth in the budget
resolution are executed through two parallel but separate
mechanisms: allocations to the appropriations and authorization
committees and reconciliation directives to the authorizing
committees. The budget resolution includes instructions
directing the authorizing committees to report legislation
complying with the entitlement, revenue, and deficit reduction
targets. The report allocates to the Appropriations Committee a
lump sum of discretionary spending authority.

Allocations

As required under Section 602 of the Congressional Budget
Act, the spending levels set forth in the resolution are
implemented through an allocation of a single lump sum to the
Committee on Appropriations and separate allocations to each of
the authorizing committees.
The allocations establish the spending and revenue
parameters for considering legislation with budgetary
ramifications. These allocations will be operative for purposes
of ensuring that legislation considered on the House floor is
within the budgetary levels assumed in the budget resolution.
That is, the as an aid in determining allocations will be used
to determine whether legislation conforms to the requirements
set forth in Sections 302, 303, 311 and 401 of the
Congressional Budget Act.

Current Law versus Discretionary Action. A single lump sum
is allocated the Appropriations Committee. Section 602 of the
Budget Act requires that this amount be divided into two
categories: amounts provided under current law and amounts
subject to discretionary action. Amounts under current law
encompass programs that provide direct spending--entitlement
and other programs which have permanent new budget authority of
offsetting receipts. Amounts subject to discretionary action
refers to all legislative changes that would affect current
law. For discretionary program discretionary action refers to
the total amount of new budget authority and outlay subject to
the approval appropriations process.
The authorizing committees' allocations are for two kinds
of in direct budget authority: new entitlement authority and
new budget authority. New budget authority is generally defined
as authority provided by law to enter into financial
obligations that will result in immediate or future outlays
involving Federal Government funds.

Types of Spending Authority. New entitlement authority is
defined as the authority to make payments, the budget authority
for which is not provided by appropriations Acts, to any person
or government if, under the provisions of the law containing
such authority the United States is obligated to make such
payments to persons or governments who meet the requirements
established by such law.

602(b) Allocations. Upon receiving their 602(a)
allocations, the appropriations committees are required to
divide their respective 602(a) allocation among the 13
subcommittees. The subcommittees divide their respective
602(b)'s when they mark up individual appropriation bills.

Reconciliation

As provided in Section 310 of the Budget Act, the budget
resolution includes reconciliation instructions to 12
authorizing committees to report changes in law necessary to
achieve the direct spending and revenue levels in the budget
resolution. Each of these committees is directed to achieve
aggregate direct spending, and revenue levels or deficit
reduction amount. It is these directives that trigger the
appropriations legislation necessary to comply with the direct
spending and revenue assumptions in the budget resolution.

Reporting Deadlines. The budget resolution directs these 12
authorizing committees to report out the necessary legislation
by July 14, 1995. In addition, the Committees on Ways and Means
and Commerce are requested to report out a second set of
recommendations by September 14, 1995, related to restoring the
solvency of the Medicare trust funds.

Directives. The budget resolution actually includes three
kinds of directives. Each of the authorizing committees are
instructed to achieve a specified direct spending level. The
Committee on Ways and Means is reconciled to achieve a revenue
floor. Four committees were also directed to achieve deficit
reduction levels. The deficit reduction levels can be met
through any combination of revenues and direct spending
changes.
Direct spending is defined in the Balanced Budget and
Emergency Deficit Control Act as the combination of budget
authority provided by law other than appropriations Acts,
entitlement authority, and the Food Stamp program. The most
significant difference between direct spending and new
entitlement authority, the term used in previous years, is that
direct spending encompasses the Food Stamp program. As a
consequence, spending the Food Stamp program will now be
reconciled as part of the Committee on Agriculture's direct
spending level rather than a separate directive for program
changes.
The Committees on Banking, Housing, and Urban Affairs,
International Affairs, and Government Reform and Oversight also
is directed to achieve a specified level of deficit reduction.
These targets may be met through any combination of changes in
laws that affect direct spending or revenues. Any savings
necessary to comply with these instructions are in addition to
the savings they must achieve to meet their respective direct
spending targets.
In addition to its reconciliation instructions for direct
spending, the Committee on Economic and Educational
Opportunities is directed to achieve a specified amount of
savings through changes in authorizing laws for discretionary
programs. These authorization changes need not actually reduce
spending, but are necessary to achieve a certain amount of
savings in discretionary spending that is reflected in the
allocation to the Appropriations Committee. Although the
Committee is expected to make these changes in authorizing law,
the savings will not count toward meeting their direct spending
target.

Assumptions. The committee targets assume the aggregate
spending authority for programs that are under their primary
jurisdiction as well as any savings from programs over which
they exercise secondary jurisdiction. The exception is for
Medicare--Part A and B are allocated to the Committees on Ways
and Means and Commerce even though Commerce has no jurisdiction
over Part A. This is done to provide the committees with
maximum flexibility to design a program that will assure the
solvency of the Medicare Trust Fund while protecting and
preserving the benefits of the Medicare system. Committees that
report changes in laws in which they have secondary
jurisdiction will still get full credit for those changes.
In the case of reconciliation instructions for direct
spending targets, the reconciliation instructions direct the
authorizing committees to report changes in law such that the
spending limits are not exceeded. Previous budget resolutions
have directed the authorizing committees to make cuts from an
inflated projection of future spending. To determine the
magnitude of required changes, committees should compare the
amounts programs would spend under current law with the amounts
set forth in the budget resolution.

Term. The reconciliation targets are for fiscal year 1996,
the 5-year total (1996-2000) and the 7-year total (1996-2002).
As long as the committees meet each of these targets, they may
determine how much is saved in years 1997, 1998, 1999 and 2000
and 2001 and 2002. These instructions are not inconsistent with
those included in previous budget resolutions which reconciled
for each year, but required compliance only for the first year
and the 5 year total.

Flexibility. The authorizing committees are free to
substitute their own policies as long as they meet their
reconciliation target. If the authorization committees fail to
report legislation achieving their reconciliation directives,
then the Budget Act provides the Rules Committee, in concert
with the Budget Committee, authority to make in order a
substitute that would achieve the necessary savings.
The Committee on Ways and Means has additional flexibility
in choosing between changes in tax and entitlement law. Under
Section 310 of the Budget Act, provides that as long the net
savings from changes in tax and entitlement law are met, the
Committee may substitute up to 20 percent of the assumed
changes in taxes with changes in entitlement spending.

Enforcing the Budget Resolution

The budget resolution for fiscal year 1996 will be enforced
through points of order that may be raised under the
Congressional Budget Act of 1974. The Budget Act generally
limits legislation to the aggregate and committee levels in the
budget resolution. The budget resolution is not self-
enforcing--a Member must raise a point of order at the
appropriate point during the consideration of a bill or
measure. The requirements under the Congressional Budget Act
may be summarized as follows:

Points of Order

Section 302.--Prohibits consideration of legislation that
exceeds a committees allocation of new budget authority or new
entitlement authority.

Section 303.--Prohibits consideration of legislation with a
budgetary impact before the House has passed a budget
resolution.

Section 311.--Prohibits consideration of legislation that
exceeds the ceiling on budget authority and outlays or is less
than the floor on revenues.

Section 401.--Prohibits consideration of legislation
creating new entitlement authority in the year preceding the
budget year.

Enforcing a Balanced Budget

The challenge of balancing does not end with passing a
concurrent budget resolution that is in balance. After agreeing
to a conference report on the budget resolution, the House will
be confronted with the task of enforcing its spending and
budget priorities against legislation that would breach the
budget. The Budget Committee is committed to enforcing that
budget to ensure that the spending and revenue levels set forth
in the budget resolution are met.
To this end, Committee rules were revised to reinstate the
authority of the Chairman to poll committee members on
recommendations to the Rules Committee to enforce the budget
resolution by not waiving the Congressional Budget Act. In the
first 5 months of the 104th Congress, the Chairman successfully
pressed for bill changes that saved more than $3 billion over 5
years.

Statutory Controls Over the Budget

Since 1985, the ultimate enforcement over the budget is not
procedural enforcement of the budget resolution, but the
statutory controls designed to balance the budget or control
spending. The latest generation of these controls, which were
adopted as part of the Budget Enforcement Act in 1990, include
caps on appropriations and a PAY-AS-YOU-GO requirement on tax
and entitlement legislation. Both the caps and PAYGO are
enforced through sequestration--automatic spending reductions.
The Committee intends to report legislation modifying these
statutory provisions to enforce the spending and revenue levels
set forth in the revised budget resolution. The discretionary
spending limits will be reduced and extended through fiscal
year 2002. Similarly , PAYGO requirements will be modified and
extended through fiscal year 2002.

Discretionary Spending Limits

To fully enforce the reduction in discretionary spending
levels assumed in the revised budget resolution and the
allocations, the Committee will exercise its newly acquired
legislative jurisdiction to report legislation reducing the
discretionary spending limits below their current levels and
extending these limits through fiscal year 2002.
The budget resolution assumes a reduction in the
discretionary spending limits by $30,451,000,000 in fiscal year
1996 and $115,475,000,000 in budget authority and
$80,925,000,000 in outlays over 3 years. The resolution further
assumes that the caps, which are currently scheduled to expire
at the end of fiscal year 1998, will be extended at least
through fiscal year 2002.
These limits were initially imposed as part of the Budget
Enforcement Act of 1990, which established statutory limits on
defense, international affairs, and domestic discretionary
spending through fiscal year 1993 and then a single cap on all
discretionary spending through 1995. The Omnibus Budget
Resolution of 1993 extended these limits through fiscal year
1998.

PAY-AS-YOU-GO

The Budget Committee will also report legislation extending
the PAYGO requirement that legislation increasing the deficit
through increases in direct spending or reductions in revenue
must be offset during the course of any session. PAYGO is
enforceable on a session-by-session, not bill-by-bill basis.
Like the discretionary spending limits, PAYGO is enforced by
sequestration. Any increase in the deficit for the fiscal year
is offset with across-the-board cuts, subject to certain
limitations, of all non-exempt entitlement programs.
PAYGO will also be extended through fiscal year 2002, the
first year in which the budget is projected to be in balance.
This requirement was initially set to expire in fiscal year
1995, but was extended through fiscal year 2000 in the Omnibus
Budget Reconciliation Act of 1993. Consequently, any bill
increasing entitlement spending or reducing revenues will have
to be offset on a year by year basis.
The Committee will consider legislation relaxing the
barrier between entitlement and taxes on one hand and
discretionary appropriations on the other. The Committee will
consider legislation that scores any reduction in the
discretionary spending limits on the PAYGO scorecard. Under
existing law, PAYGO does not allow the revenue ``loss'' from
tax cuts to be offset by reductions in the discretionary caps.
The committee reported similar legislation when it adopted H.R.
1219, the Discretionary Spending Reduction and Control Act of
1995 (later incorporated into H.R. 1215, the Tax Fairness and
Deficit Reduction Act).
The purpose of these changes is to preserve the modest
discipline inherent in PAYGO while providing the flexibility
necessary for the present Congress to set its priorities, as it
embarks upon a glidepath to a balanced budget.

ALLOCATION OF SPENDING RESPONSIBILITY TO HOUSE COMMITTEES PURSUANT TO
SEC. 602(a) OF THE CONGRESSIONAL BUDGET ACT--FISCAL YEAR: 1996
[In millions of dollars]
------------------------------------------------------------------------
Budget Entitlement
authority Outlays authority
------------------------------------------------------------------------
APPROPRIATIONS COMMITTEE

Current level (enacted law):
050 National defense........ 214 214 0
150 International affairs... 169 169 0
300 Natural resources and
environment................. 2,094 1,947 0
350 Agriculture............. 11,967 1,530 0
370 Commerce and housing
credit...................... 38 138 0
400 Transportation.......... 584 581 0
500 Education, training,
employment, and social
services.................... 10,568 10,799 0
550 Health.................. 103,457 103,461 0
570 Medicare................ 54,785 54,785 0
600 Income security......... 53,673 54,192 0
650 Social Security......... 23 23 0
700 Veterans benefits and
services.................... 19,344 17,783 0
750 Administration of
Justice..................... 411 409 0
800 General government...... 7,902 7,890 0
900 Net interest............ 15 15 0
--------------------------------------
Subtotal................... 265,246 253,937 0
======================================
Discretionary appropriations
action (assumed legislation):
050 National defense........ 268,000 266,000 0
150 International affairs... 18,293 20,718 0
250 General science, space,
and technology.............. 16,662 16,813 0
270 Energy.................. 5,181 6,177 0
300 Natural resources and
environment................. 18,867 20,043 0
350 Agriculture............. 3,568 3,786 0
370 Commerce and housing
credit...................... 1,980 2,480 0
400 Transportation.......... 13,486 38,374 0
450 Community and regional
development................. 6,653 10,125 0
500 Education, training,
employment, and social
services.................... 35,129 40,080 0
550 Health.................. 21,050 21,504 0
570 Medicare................ 2,992 2,992 0
600 Income security......... 35,423 39,526 0
650 Social Security......... 0 2,574 0
700 Veterans benefits and
services.................... 18,063 18,954 0
750 Administration of
Justice..................... 13,506 15,392 0
800 General government...... 10,751 11,441 0
920 Allowances.............. -2,324 -1,948 0
--------------------------------------
Subtotal................... 487,326 535,082 0
======================================
750 Violent Crime Reduction
Trust Fund.................. 3,887 2,120 0
======================================
Discretionary action by other
committees (assumed entitlement
legislation):
270 Energy.................. 150 150 0
300 Natural resources and
environment................. -4 -4 0
350 Agriculture............. -1,000 -1,000 0
370 Commerce and housing
credit...................... -72 -72 0
400 Transportation.......... 4,292 0 0
450 Community and regional
development................. -181 -181 0
500 Education, training,
employment, and social
services.................... -2,111 -1,221 0
550 Health.................. -2,938 -2,938 0
600 Income security......... 19,831 19,834 0
700 Veterans benefits and
services.................... -276 -263 0
800 General government...... -28 -28 0
--------------------------------------
Subtotal................... 17,663 14,277 0
--------------------------------------
Committee total............ 774,074 805,364 0
======================================
AGRICULTURE COMMITTEE

Current level (enacted law):
150 International affairs... -474 -474 0
270 Energy.................. 0 -645 0
300 Natural resources and
environment................. 471 483 0
350 Agriculture............. 9,041 7,636 8,896
400 Transportation.......... 40 40 0
450 Community and regional
development................. 257 237 0
600 Income security......... 0 0 11
800 General government...... 251 250 0
900 Net interest............ 0 0 15
--------------------------------------
Subtotal................... 9,585 7,527 8,922
======================================
Discretionary action (assumed
Legislation):
600 Income security......... 0 0 1,169
--------------------------------------
Subtotal................... 0 0 1,169
--------------------------------------
Committee total............ 9,585 7,527 10,091
======================================
BANKING, FINANCE, AND FINANCIAL
SERVICES COMMITTEE

Current level (enacted law):
150 International affairs... -585 -1,930 0
370 Commerce and housing
credit...................... 364 -9,258 0
450 Community and regional
development................. 5 -79 0
600 Income security......... 50 100 0
800 General government...... 6 -27 0
900 Net interest............ 3,118 3,118 0
--------------------------------------
Subtotal................... 2,959 -8,074 0
======================================
Discretionary action (assumed
Legislation):
370 Commerce and housing
credit...................... -110 -110 0
--------------------------------------
Subtotal................... -110 -110 0
--------------------------------------
Committee total............ 2,849 -8,184 0
======================================
COMMERCE COMMITTEE

Current level (enacted law):
300 National resources and
environment................. 0 3 0
500 Education, training,
employment, and social
services.................... 1 1 0
550 Health.................. 496 489 99,517
800 General government...... 8 8 0
--------------------------------------
Subtotal................... 506 501 99,517
======================================
Discretionary action (assumed
Legislation):
400 Transportation.......... -42 -42 0
550 Health.................. 0 0 -2,938
950 Undistributed offsetting
receipts.................... -500 -500 0
--------------------------------------
Subtotal................... -542 -542 -2,938
--------------------------------------
Committee total............ -36 -41 96,579
======================================
ECONOMIC AND EDUCATIONAL
OPPORTUNITIES COMMITTEE

Current level (enacted law):
500 Education, training,
employment, and social
services.................... 3,891 3,726 4,389
600 Income security......... 153 143 9,575
--------------------------------------
Subtotal................... 4,044 3,870 13,965
======================================
Discretionary action (assumed
Legislation):
500 Education, training,
employment, and social
services.................... -1,340 -915 -1,620
600 Income security......... 0 0 -1,292
--------------------------------------
Subtotal................... -1,340 -915 -2,912
--------------------------------------
Committee total............ 2,704 2,955 11,053
======================================
GOVERNMENT REFORM AND OVERSIGHT
COMMITTEE

Current level (enacted law):
550 Health.................. 0 -44 3,818
600 Income security......... 39,209 38,140 -381
750 Administration of
justice..................... 40 40 40
800 General government...... 12,870 12,870 0
900 Net interest............ 93 93 0
--------------------------------------
Subtotal................... 52,212 51,099 3,477
======================================
Discretionary action (assumed
Legislation):
950 Undistributed offsetting
receipts.................... -7 -7 0
--------------------------------------
Subtotal................... -7 -7 0
--------------------------------------
Committee total............ 107 107 0
======================================
HOUSE OVERSIGHT COMMITTEE

Current level (enacted law):
500 Education, training,
employment, and social
services.................... 21 18 0
800 General government...... 72 186 275
--------------------------------------
Subtotal................... 93 204 275
--------------------------------------
Committee total............ 93 204 275
======================================
INTERNATIONAL RELATIONS COMMITTEE

Current level (enacted law):
150 International affairs... 13,416 13,580 0
400 Transportation.......... 7 10 0
600 Income security......... 506 506 0
800 General government...... 5 5 0
--------------------------------------
Subtotal................... 13,933 14,100 0
--------------------------------------
Committee total............ 13,933 14,100 0
======================================
JUDICIARY COMMITTEE

Current level (enacted law):
370 Commerce and housing
credit...................... 197 197 0
600 Income security......... 62 18 9
750 Administration of
justice..................... 1,451 1,439 233
800 General government...... 517 517 0
--------------------------------------
Subtotal................... 2,227 2,170 242
--------------------------------------
Committee total............ 2,227 2,170 242
======================================
NATIONAL SECURITY COMMITTEE

Current level (enacted law):
050 National defense........ 12,592 12,355 0
300 Natural resources and
environment................. 3 2 0
400 Transportation.......... 0 -5 0
500 Education, training,
employment, and social
services.................... 4 3 0
600 Income security......... 28,534 28,427 0
700 Veterans benefits and
services.................... 197 190 190
--------------------------------------
Subtotal................... 41,330 40,971 190
--------------------------------------
Committee total............ 41,330 40,971 190
======================================
RESOURCES COMMITTEE

Current level (enacted law):
270 Energy.................. -93 -377 0
300 Natural resources and
environment................. 772 700 0
370 Commerce and housing
credit...................... 67 11 0
450 Community and regional
development................. 405 373 0
550 Health.................. 5 5 0
800 General government...... 863 865 165
--------------------------------------
Subtotal................... 2,018 1,577 165
======================================
Discretionary action (assumed
Legislation):
950 Undistributed offsetting
receipts.................... -77 -77 0
--------------------------------------
Subtotal................... -77 -77 0
--------------------------------------
Committee total............ 1,941 1,500 165
======================================
TRANSPORTATION AND INFRASTRUCTURE
COMMITTEE

Current level (enacted law):
270 Energy.................. 943 820 0
300 Natural resources and
environment................. 417 361 0
400 Transportation.......... 22,227 12 581
450 Community and regional
development................. 5 105 0
600 Income security......... 14,795 14,774 0
800 General government...... 16 16 0
--------------------------------------
Subtotal................... 38,403 16,088 581
======================================
Discretionary action (assumed
Legislation):
950 Undistributed offsetting
receipts.................... -2000 -2000 0
--------------------------------------
Subtotal................... -2,000 -2,000 0
--------------------------------------
Committee total............ 36,403 14,088 581
======================================
SCIENCE COMMITTEE

Current level (enacted law):
250 General science, space,
and technology.............. 39 39 0
500 Education, training,
employment, and social
services.................... 1 1 0
--------------------------------------
Subtotal................... 40 40 0
--------------------------------------
Committee total............ 40 40 0
======================================
SMALL BUSINESS COMMITTEE

Current level (enacted law):
370 Commerce and housing
credit...................... 3 -164 0
450 Community and regional
development................. 0 -286 0
--------------------------------------
Subtotal................... 3 -450 0
--------------------------------------
Committee total............ 3 -450 0
======================================
VETERANS' AFFAIRS COMMITTEE

Current level (enacted law):
700 Veterans benefits and
services.................... 1,519 1,532 19,303
--------------------------------------
Subtotal................... 1,519 1,532 19,303
======================================
Discretionary action (assumed
legislation):
700 Veterans benefits and
services.................... -11 -11 -195
--------------------------------------
Subtotal................... -11 -11 -195
--------------------------------------
Committee totals........... 1,508 1,521 19,108
======================================
WAYS AND MEANS COMMITTEE

Current level (enacted law):
500 Education, training,
employment, and social
services.................... 0 0 8,152
550 Health.................. 0 -28 0
570 Medicare................ 206,253 203,935 199,066
600 Income security......... 43,629 42,502 36,934
650 Social security......... 7,371 7,371 0
750 Administration of
justice..................... 405 370 0
800 General government...... 540 534 0
900 Net interest............ 371,695 371,695 371,695
--------------------------------------
Subtotal................... 629,892 626,380 615,847
======================================
Discretionary action (assumed
Legislation):
500 Education, training,
employment, and social
services.................... -354 -152 -555
570 Medicare................ -4,980 -4,980 0
600 Income security......... -18 -18 -2,398
--------------------------------------
Subtotal................... -5,352 -5,150 -2,953
--------------------------------------
Committee total............ 624,540 621,230 612,894
======================================
UNASSIGNED TO COMMITTEES

Current level (enacted law):
050 National defense........ -13,512 -13,512 0
150 International affairs... -15,019 -15,019 0
270 Energy.................. -1,824 -1,824 0
300 Natural resources and
environment................. -3,341 -3,344 0
350 Agriculture............. -10,535 -135 0
370 Commerce and housing
credit...................... -154 -154 0
400 Transportation.......... -138 -138 0
450 Community and regional
development................. -397 -397 0
500 Education, training,
employment, and social
services.................... -75 -75 0
550 Health.................. -127 -127 0
570 Medicare................ -79,975 -79,975 0
600 Income security......... -13,191 -13,191 0
650 Social security......... -1,514 -1,514 0
700 Veterans benefits and
services.................... -1,249 -1,249 0
750 Administration of
justice..................... -1,947 -1,947 0
800 General government...... -22,453 -22,453 0
900 Net interest............ -79,094 -79,094 -64,907
950 Undistributed offsetting
receipts.................... -31,290 -31,290 0
--------------------------------------
Subtotal................... -275,836 -265,440 -64,907
======================================
Discretionary action (assumed
Legislation):
800 General government...... 306 306 0
950 Undistributed offsetting
receipts.................... -543 -543 0
--------------------------------------
Subtotal................... -237 -237 0
--------------------------------------
Committee total............ -276,073 -265,677 -64,907
======================================
Total--current level....... 788,174 746,030 697,578
======================================
Total--discretionary action 499,153 542,379 -7,829
======================================
Grand total.................. 1,287,327 1,288,409 689,749
------------------------------------------------------------------------

ALLOCATION OF SPENDING RESPONSIBILITY TO HOUSE COMMITTEES PURSUANT TO SECTIONS 302(a)/602(a) OF THE
CONGRESSIONAL BUDGET ACT
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 1996-2000
----------------------------------------------------------------------------------------------------------------
Appropriations Committee:
Current level:
Budget authority.............. 265,246 289,938 311,611 338,978 373,980 1,579,753
Outlays....................... 253,937 281,099 303,836 331,886 369,129 1,539,887
Discretionary action:
Defense:
Budget authority.......... 268,000 270,000 278,000 282,000 288,000 1,386,000
Outlays................... 266,000 266,000 266,000 272,000 280,000 1,350,000
International:
Budget authority.......... 18,293 16,761 14,721 13,615 15,529 75,919
Outlays................... 20,718 19,188 17,126 15,434 13,705 86,171
Domestic:
Budget authority.......... 201,033 199,345 204,584 199,152 196,824 1,000,938
Outlays................... 248,363 237,474 230,895 227,509 225,969 1,170,210
Violent Crime Reduction Trust
Fund:
Budget authority.......... 3,887 3,932 4,123 4,906 4,906 21,754
Outlays................... 2,120 3,089 3,740 4,315 4,774 18,038
Subtotal:
Budget authority.............. 491,213 490,038 501,428 499,673 505,259 2,484,611
Outlays....................... 537,201 525,751 517,761 519,258 524,448 2,624,419
Discretionary action by other
committees:
Budget authority.............. 15,476 5,936 -146 -9,743 -19,347 -7,824
Outlays....................... 16,149 6,136 -643 -9,725 -19,364 -7,447
Committee total:
Budget authority.............. 771,934 785,912 812,894 828,907 856,892 4,056,539
Outlays....................... 807,287 812,986 820,953 841,420 874,213 4,156,859
Agriculture Committee:
Current level (enacted law):
Budget authority.............. 9,585 9,448 9,331 9,125 8,877 46,366
Outlays....................... 7,527 7,121 7,092 6,747 6,504 34,991
Discretionary action:
Budget authority.............. -1,000 -1,000 -2,000 -2,000 -3,000 9,000
Outlays....................... -1,000 -1,000 -2,000 -2,000 -3,000 -9,000
Committee total:
Budget authority.............. 8,585 8,448 7,331 7,125 5,877 37,366
Outlays....................... -6,527 6,121 5,092 4,747 3,504 25,991
New entitlement authority......... 169 220 -736 -693 -1,647 -2,687
Banking and Financial Services
Committee:
Current level (enacted law):
Budget authority.............. 2,959 2,345 1,767 1,265 1,447 9,783
Outlays....................... -8,074 -6,105 -7,441 -5,484 -4,782 -31,886
Discretionary action:
Budget authority.............. -291 2,111 1,402 1,093 983 5,298
Outlays....................... -291 2,111 1,402 1,093 983 5,298
Committee total:
Budget authority.............. 2,668 4,456 3,159 2,358 2,430 15,081
Outlays....................... -8,365 -3,994 -6,039 -4,391 -3,799 -26,588
Commerce Committee:
Current level (enacted law):
Budget authority.............. 506 499 487 442 423 2,357
Outlays....................... 501 495 484 441 422 2,343
Discretionary action:
Budget authority.............. -508 -1,860 -2,485 -3,920 -4,098 -12,871
Outlays....................... -508 -1,860 -2,485 -3,920 -4,098 -12,871
Committee total:
Budget authority.............. -36 -1,244 -1,858 -3,150 -3,271 -9,559
Outlays....................... -41 -1,248 -1,861 -3,151 -3,272 -9,573
New entitlement authority......... -2,938 -8,368 -16,341 -24,892 -33,795 -86,334
Economic Opportunity Committee:
Current level (enacted law):
Budget authority.............. 4,044 3,224 3,084 3,377 3,617 17,346
Outlays....................... 3,870 3,067 2,726 2,898 3,133 15,694
Discretionary action:
Budget authority.............. -2,390 -2,565 -2,685 -2,805 -2,940 -13,385
Outlays....................... -1,620 -2,490 -2,645 -2,770 -2,900 -12,425
Committee total:
Budget authority.............. 1,654 659 399 572 677 3,961
Outlays....................... 2,250 577 81 128 233 3,269
New entitlement authority......... -2,912 -4,626 -3,363 -3,327 -3,188 -17,416
Government Reform and Oversight
Committee:
Current level (enacted law):
Budget authority.............. 52,212 54,388 56,472 58,527 60,676 282,275
Outlays....................... 51,099 53,381 55,541 57,523 59,495 277,039
Discretionary action:
Budget authority.............. -550 -463 -91 126 369 -609
Outlays....................... -550 -463 -91 126 369 -609
Committee total:
Budget authority.............. 51,662 53,925 56,381 58,653 61,045 281,666
Outlays....................... 50,549 52,918 55,450 57,649 59,864 276,430
New entitlement authority......... -7 -43 -113 -200 -299 -662
House Oversight Committee:
Current level (enacted law):
Budget authority.............. 93 93 93 94 95 468
Outlays....................... 204 28 26 54 242 554
International Relations Committee:
Current level (enacted law):
Budget authority.............. 13,933 12,778 11,140 9,371 10,060 57,282
Outlays....................... 14,100 13,440 12,359 10,920 10,376 61,195
Discretionary action:
Budget authority.............. 0 -1 -2 -3 -3 -9
Outlays....................... 0 -1 -2 -3 -3 -9
Committee total:
Budget authority.............. 13,933 12,777 11,138 9,368 10,057 57,273
Outlays....................... 14,100 13,439 12,357 10,917 10,373 61,186
New entitlement authority......... 0 -1 -2 -3 -3 -9
Judiciary Committee:
Current level (enacted law):
Budget authority.............. 2,227 2,320 2,330 2,425 2,529 11,831
Outlays....................... 2,170 2,264 2,273 2,367 2,469 11,543
Discretionary action:
Budget authority.............. 0 0 0 -119 -119 -238
Outlays....................... 0 0 0 -119 -119 -238
Committee total:
Budget authority.............. 2,227 2,320 2,330 2,306 2,410 11,593
Outlays....................... 2,170 2,264 2,273 2,248 2,350 11,305
National Security Committee:
Current level (enacted law):
Budget authority.............. 41,330 43,031 44,997 47,715 49,782 226,855
Outlays....................... 40,971 42,825 44,864 47,543 49,605 225,808
Discretionary action:
Budget authority.............. -2,000 477 470 445 424 -184
Outlays....................... -2,000 477 470 445 424 -184
Committee total:
Budget authority.............. 39,330 43,508 45,467 48,160 50,206 226,671
Outlays....................... 38,971 43,302 45,334 47,988 50,029 225,624
Public Lands and Resources Committee:
Current level (enacted law):
Budget authority.............. 2,018 2,172 2,254 2,221 2,231 10,896
Outlays....................... 1,577 1,765 2,230 2,296 2,282 10,150
Discretionary action:
Budget authority.............. -81 -849 -3,872 637 188 3,977
Outlays....................... -81 -849 -3,872 637 188 -3,977
Committee total:
Budget authority.............. 1,937 1,323 -1,618 2,858 2,419 6,919
Outlays....................... 1,496 916 -1,642 2,933 2,470 6,173
Science Committee:
Current level (enacted law):
Budget authority.............. 40 41 41 41 41 204
Outlays....................... 40 41 41 41 41 204
Small Business Committee:
Current level (enacted law):
Budget authority.............. 3 3 2 2 2 12
Outlays....................... -450 -170 -526 -452 -147 -1,745
Transportation and Infrastructure
Committee:
Current level (enacted law):
Budget authority.............. 38,403 42,369 16,419 16,640 16,708 130,539
Outlays....................... 16,088 15,858 15,906 16,091 16,247 80,190
Discretionary action:
Budget authority.............. -4,250 2,246 29,323 30,243 31,207 97,269
Outlays....................... -42 -43 -45 -96 -98 -324
Committee total:
Budget authority.............. 42,653 44,616 45,742 46,883 47,915 227,809
Outlays....................... 16,046 15,815 15,861 15,995 16,149 79,866
New entitlement authority......... 0 0 0 -3 -6 -9
Veterans' Affairs Committee:
Current level (enacted law):
Budget authority.............. 1,519 1,450 1,389 1,315 1,241 6,914
Outlays....................... 1,532 1,538 1,559 1,568 1,473 7,670
Discretionary action:
Budget authority.............. -90 -107 -211 -494 -531 -1,433
Outlays....................... -90 -107 -211 -494 -531 -1,433
Committee total:
Budget authority.............. 1,429 1,343 1,178 821 710 5,481
Outlays....................... 1,442 1,431 1,348 1,074 942 6,237
New entitlement authority......... -195 -265 -323 -729 -885 -2,397
Ways and Means Committee:
Current level (enacted law):
Budget authority.............. 629,836 665,374 700,416 742,659 783,904 3,522,189
Outlays....................... 626,324 662,403 697,467 738,809 781,126 3,506,129
Discretionary action:
Budget authority.............. -6,707 -15,844 -25,213 -37,218 -51,646 -136,628
Outlays....................... -6,617 -15,883 -25,229 -37,240 -51,653 -136,622
Committee total:
Budget authority.............. 623,129 649,530 675,203 705,441 732,258 3,385,561
Outlays....................... 619,707 646,520 672,238 701,569 729,473 3,369,507
New entitlement authority......... -9,453 -19,522 -29,464 -42,302 -57,516 -158,257
Unassigned to Committee:
Current level (enacted law):
Budget authority.............. -275,376 -285,694 -301,952 -321,311 -347,558 -1,531,891
Outlays....................... -264,966 -276,932 -294,048 -314,942 -341,462 -1,492,350
Discretionary action:
Budget authority.............. -237 103 846 1,431 2,054 4,197
Outlays....................... -237 103 846 1,431 2,054 4,197
Committee total:
Budget authority.............. -276,073 -286,062 -302,251 -321,380 -347,227 -1,532,993
Outlays....................... -265,677 -277,662 -294,250 -314,680 -341,227 -1,493,496
Total current level:
Budget authority.............. 788,578 843,780 859,882 912,885 968,055 4,373,180
Outlays....................... 746,449 802,122 844,391 898,307 956,154 4,247,423
Total discretionary action:
Budget authority.............. 497,321 478,119 495,918 475,915 453,745 2,401,018
Outlays....................... 540,552 511,779 482,410 465,193 444,646 2,444,580
Grand total:
Budget authority.............. 1,285,900 1,321,900 1,355,800 1,388,800 1,421,800 6,774,200
Outlays....................... 1,287,000 1,313,900 1,326,800 1,363,500 1,400,800 6,692,000
Total new entitlement authority... -15,336 -32,605 -50,342 -72,136 -97,309 -267,728
----------------------------------------------------------------------------------------------------------------

RECONCILIATION BY HOUSE COMMITTEE
(In millions of dollars)
Recommendations Due July 14, 1995
------------------------------------------------------------------------
1996 to 1996 to
Committee 1995 Base 1996 2000 2002
------------------------------------------------------------------------
Agriculture: Direct
Spending........... 37,413 35,824 171,886 263,102
Banking and
Financial Services:
Direct Spending. -17,750 -12,897 -43,065 -57,184
Deficit
Reduction...... ........... 0 -100 -260
Commerce: Direct
Spending........... 268,120 293,665 1,726,600 2,625,094
Economic &
Educational
Opportunities:
Direct spending. 17,510 13,727 61,570 95,520
Authorization... ........... -720 -5,908 -9,018
Government Reform
and Oversight:
Direct Spending. 56,686 57,725 313,647 455,328
Deficit
Reduction...... ........... 988 9,618 14,740
International
Relations:
Direct Spending. 14,463 14,239 62,066 83,207
Deficit
Reduction...... ........... -19 -95 -123
Judiciary: Direct
Spending........... 2,985 2,580 14,043 20,029
National Security:
Direct Spending.... 39,479 38,769 224,682 328,334
Resources: Direct
Spending........... 1,816 1,558 6,532 12,512
Transportation and
Infrastructure:
Direct Spending.... 16,794 16,636 83,227 117,079
Veterans' Affairs:
Direct Spending.... 20,363 19,041 105,965 154,054
Ways and Means:
Direct Spending. 315,424 356,336 2,152,905 3,297,987
Revenues........ 972,288 1,027,612 5,371,087 7,836,405
Offset to Multiple
Jurisdictions:
Direct Spending. ........... 2,190 3,681 1,505
Deficit
Reduction...... ........... 19 95 123
Total:
Direct spending. 773,303 839,393 4,883,739 7,396,567
Deficit
Reduction...... ........... 988 9,518 14,480
Revenues........ ........... 1,027,612 5,371,087 7,836,405
Authorization... ........... -720 -5,908 -9,018
------------------------------------------------------------------------

RECONCILIATION BY HOUSE COMMITTEE
(In millions of dollars)
Recommendations Due September 14
------------------------------------------------------------------------
1996 to 1996 to
Committee 1995 Base 1996 2000 2002
------------------------------------------------------------------------
Commerce: Direct
Spending........... 268,120 287,165 1,592,200 2,338,694
Ways and Means:
Direct Spending.... 315,424 349,836 2,018,505 3,009,587
Offset to Multiple
Jurisdictions:
Direct Spending.... ........... 6,500 134,400 286,400
---------------------------------------------------
Total: Direct
Spending..... 583,544 643,501 3,745,105 5,634,681
------------------------------------------------------------------------

1995 CURRENT LAW PROJECTIONS (AS PROVIDED BY THE CONGRESSIONAL BUDGET
OFFICE)
(In millions of dollars)
------------------------------------------------------------------------
1996 to 1996 to
Committee 1995 1996 2000 2002
------------------------------------------------------------------------
Agriculture: Direct
Spending........... 37,413 38,608 204,289 295,505
Banking and
Financial Services:
Direct Spending.... -17,750 -12,608 -48,363 -62,721
Commerce: Direct
Spending........... 268,120 299,188 1,828,648 2,830,804
Economic and
Educational
Opportunities:
Direct Spending.... 17,510 16,752 86,847 127,032
Government Reform
and Oversight:
Direct Spending.... 56,686 58,282 315,053 457,472
International
Relations: Direct
Spending........... 14,463 14,246 62,085 83,224
Judiciary: Direct
Spending........... 2,985 2,580 13,972 20,006
National Security:
Direct Spending.... 39,479 40,769 224,866 327,751
Resources: Direct
Spending........... 1,816 1,633 10,479 15,171
Transportation and
Infrastructure:
Direct Spending.... 16,794 16,678 83,551 117,605
Veterans' Affairs:
Direct Spending.... 20,363 19,315 109,579 160,445
Ways and Means:
Direct Spending.... 315,424 360,601 2,196,238 3,345,623
---------------------------------------------------
Total: Direct
Spending..... 773,303 856,044 5,087,244 7,717,917
------------------------------------------------------------------------

ECONOMIC BACKGROUND AND ASSUMPTIONS

State of the Economy in 1994: Fed Acts to Forestall Inflation

The economy grew at above its potential rate in 1994,
prompting the Federal Reserve Board to raise interest rates
repeatedly to avert inflationary pressures. The Federal
Reserve, reacting to credit markets, shifted to an anticipatory
tight monetary policy in early 1994, raising short-term
interest rates several times during the year. Because
increasing interest rates only affect the economy with a lag,
much of the effect of these increases will occur in 1995. By
raising interest rates, the objective of the Federal Reserve is
to slow the economy and avoid inflation without precipitating a
recession. Hence, a slower economy is expected in 1995.
Real gross domestic product [GDP] grew by 3.7 percent,
continuing the momentum started in 1993. This rate is above the
potential 2.4 percent trend GDP growth rate at which the
economy should grow if all resources were fully employed. The
unemployment rate fell to an unsustainably low 5.4 percent at
the end of 1994, as the capacity utilization level reached very
high levels. Continuation of such trends typically leads to
increased inflation from supply constraints, even though
inflation remained low during the year, averaging 2.6 percent.
The two key factors in explaining the growth of GDP during
1994 were growth in consumer spending and business investment,
especially in equipment and structures. Both factors were
fueled by the low interest rates that reached a trough during
1993. Despite increases in interest rates in 1994, their strong
growth continued.
Consumer spending was affected by improved consumer
confidence, strong growth in consumer installment credit, and
rising real disposable incomes. Rising real disposable incomes,
which resulted from increases in both employment and hours
worked, had a pronounced effect on spending on durable goods,
especially autos, furniture, and appliances. Business
investment grew because of growth in corporate profits.
Investment in business equipment--producer's durables--grew at
a rate of about 18 percent both in 1993 and 1994.

Benefits of Balancing the Budget

The committee's budget plan seeks to eliminate the Federal
deficit by 2002. Economists generally believe that economic
benefits of balancing the budget include lower interest rates,
a faster rate of economic growth, increased national wealth,
increased rate of saving and investment, faster growth in the
capital stock, higher productivity, and improved trade
balances.
Federal Reserve Chairman Greenspan has testified on the
benefits from balancing the budget before the House Budget
Committee on March 8, 1995. In response to two questions: What
would you tell the American people the reasons would be for
making some tough choices up front? What are the gains that
comes to this country and to the next generation? Chairman
Greenspan said the following:

The effects, I think, would be rather startling. I do
not think we have seen * * * how [the] economy would
function * * * without pressures that tend to push * *
* interest rates to levels which do impede long-term
economic growth. I think that productivity would
accelerate * * * the inflation rate would be subdued *
* * the general state of financial markets would be far
more solid than we have seen in a particularly long
period of time * * * the underlying outlook would be
significantly improved for long-term economic growth.
Real incomes, the purchasing power of their real
incomes would significantly improve * * * they [most
Americans] would look forward to their children doing
better than they * * * long-term interest rates will
fall significantly as I have indicated to this
committee many times in the past.

In its assessment of the President's budget, ``An Analysis
of the President's Budgetary Proposals for Fiscal Year 1996,''
the Congressional Budget Office [CBO] estimated that a credible
illustrative balance budget path of spending cuts can generate
roughly $170 billion over 7 years in additional deficit
reduction. CBO estimated the macroeconomic effects on savings
and investment of balancing the budget given a favorable
monetary policy. The estimates of economic gains results from
two main factors: lower interest rates and a slightly higher
rate of economic growth. CBO believes that balancing the budget
will decrease long-term interest rates by 1 percent to 2
percent. In its illustrative path, interest rates are assumed
to decline an average of 1.5 percent by 2002. The rate at which
interest rates may fall is highly uncertain. Based on
historical patterns of positive real interest rates, however,
large and rapid declines in interest rates can be rejected.
Similarly, based on the U.S. position in global capital
markets, the case of low or no response in interest rates also
can be rejected.
Furthermore, the CBO estimates that reductions in interest
rates will increase investment spending enough to generate a
small amount of productivity increase. This small increase in
productivity will increase the rate of economic growth by 0.1
percent more per year, resulting in a level of GDP that is 0.8
percent higher than current policy by 2002. Balancing the
budget will redirect resources from consumption toward
investment, thereby increasing the Nation's capital stock and
national wealth by about 60 to 80 percent of the deficit
reduction.

The Recommended Economic Assumptions

The Short-term Outlook for 1995 and 1996

The Budget Resolution recommended by the committee is based
on CBO's January economic forecast and projections. The January
forecast has been modified to include CBO's estimate of the
potential economic impacts of balancing the budget by 2002. The
table below lists and compares the committee's assumptions with
those released by the administration [OMB], the Blue Chip
consensus of private forecasts and CBO. In general, the
recommended assumptions are relatively close to these
alternative forecasts. The committee believes that these
assumptions are reasonable and conservative estimates of the
outlook for the economy.
The key forces that drove economic growth in 1994 all
moderated during the first quarter of 1995. By the beginning of
the second quarter, definite and significant signs of a slowing
economy appeared. Employment growth slowed, raising the
unemployment rate for April to 5.8 percent. The Composite Index
of Leading Indicators decreased by 0.5 percent in March, after
falling by 0.2 percent in February. Because of lower orders and
accumulating inventories, investment slowed from the rapid pace
established earlier. New orders for manufactured goods
decreased in March by 0.1 percent. This followed a 0.3 percent
decline in February. Capacity utilization declined to 84.9
percent in March after registering 85.4 percent in February.
Inflation remained stable at 2.9 percent in March. Because of
the slowdown in the economy, the Federal Reserve is expected to
pursue a neutral monetary policy in the foreseeable future.
CBO's January forecast and the committee's recommendation
are nearly identical in the first 2 years, the only difference
being in slightly lower interest rates. However, both sets of
assumptions are significantly less optimistic than OMB and the
Blue Chip forecasts. In particular, GDP growth in 1996 is much
lower, reflecting CBO's expectation of the effects of Fed
tightening. The current slowdown is sharper than originally
forecasted; a continuation of such a trend may be a prelude to
a recession or a long period of below-trend growth. These
scenarios are unlikely, however, given the underlying strength
of the economy. A more accurate characterization of this
slowdown is that it is a ``pause that refreshes'' which will
result in sustained growth with low inflation as captured in
all four forecasts.

The 7-year Economic Projections

The committee assumptions for the subsequent 1998-2002
period reflects balancing of the budget and the assumption that
the Federal Reserve will be successful in its effort to slow
the growth in the economy to its long-term trend. Both the CBO
projection and the committee recommendation are similar, except
for substantially lower interest rates and slightly higher
growth, due to balancing the budget, and lower inflation. As
before, these growth assumptions are still less optimistic than
the OMB and Blue Chip forecasts.
The Consumer Price Index [CPI] is a biased measure of the
change in the cost of living. Federal Reserve Chairman Alan
Greenspan has testified before this committee that the bias in
the CPI is between 0.4 percent and 1.5 percent annually. CBO,
in its report, ``Is the Growth of the CPI a Biased Measure of
Changes in the Cost of Living,'' estimated a range of 0.2
percent to 0.8 percent annually. Other leading authorities have
estimated the bias to center about 1 percent annually. The
committee also believes that the CPI is biased and assumes that
technical corrections can be made to reduce the index. These
corrections are based on fully funding current Bureau of Labor
Statistics [BLS] proposals that are estimated to reduce the CPI
bias by 0.6 percent annually, starting in 1999. The GDP
deflator has been revised accordingly, since approximately 70
percent of it is based on the CPI.
First, the BLS is scheduled to finish its periodic
``rebenchmark'' the CPI in 1998, to reflect consumption
patterns for the 1993-95 period, along with other changes. The
CPI is a fixed-weight index that does not reflect changed
consumption patterns when prices change. This substitution bias
is temporarily corrected by periodic updating of weights--
rebenchmarking--every decade or more; after rebenchmarking,
this bias begins anew. Rebenchmarking by 1998 will reduce the
bias in the CPI by 0.2 percent annually beginning in 1999.
Second, the BLS should ``reweigh'' the CPI more frequently
as other countries do. If the BLS were to reweigh the CPI in
1998 using consumption patterns established in 1997, the bias
in the CPI would be reduced, beginning in 1999, by an
additional 0.2 percent annually.
Finally, the BLS should develop methods to separate out
price changes due to quality changes from cost-of-living
changes. Price increases that result from quality improvements
should not increase the cost of living, as they do currently.
Proposed BLS efforts will attempt to apply ``hedonic indexing''
techniques more widely, starting with home electronics and
appliances. More general use of hedonic methods, for all
consumer durables, is being studied. The use of such methods
will likely reduce the bias in the CPI by 0.2 percent annually
starting in 1999. In addition, the committee recommends the
creation of a Technical Advisory Commission to advise the BLS
on technical issues and thereby accelerate its research and
development program. The BLS estimates the cost of the above
research, including the commission of technical experts, to be
less than $4 million per year.

COMPARISON OF ECONOMIC ASSUMPTIONS
[Calendar year]
----------------------------------------------------------------------------------------------------------------
Year 1994 1995 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Real GDP (percent year over year):
OMB.......................................... 4.0 2.8 2.5 2.5 2.5 2.5 2.5 2.5 2.5
Blue Chip.................................... ..... 3.2 2.2 2.0 2.3 2.9 2.8 2.4 n.a.
CBO.......................................... ..... 3.1 1.8 2.4 2.3 2.3 2.3 2.3 2.3
Committee.................................... ..... 3.1 1.8 2.5 2.4 2.4 2.4 2.4 2.4
GDP Deflator (percent year over year):
OMB.......................................... 2.1 2.8 3.0 3.0 3.0 3.0 3.0 3.0 3.0
Blue Chip.................................... ..... 2.6 3.2 3.3 3.1 3.0 3.0 3.1 n.a.
CBO.......................................... ..... 2.6 2.8 2.8 2.8 2.8 2.8 2.8 2.8
Committee.................................... ..... 2.6 2.8 2.8 2.8 2.4 2.4 2.4 2.4
Inflation, CPI (percent year over year):
OMB.......................................... 2.6 3.1 3.2 3.2 3.2 3.1 3.1 3.1 3.1
Blue Chip.................................... ..... 3.2 3.6 3.6 3.4 3.4 3.4 3.4 n.a.
CBO.......................................... ..... 3.1 3.4 3.4 3.4 3.4 3.4 3.4 3.4
Committee.................................... ..... 3.1 3.4 3.4 3.4 2.8 2.8 2.8 2.8
Unemployment Rate (annual rate):
OMB.......................................... 6.1 5.8 5.9 5.8 5.8 5.8 5.8 5.8 5.8
Blue Chip.................................... ..... 5.5 5.7 6.0 6.2 6.0 5.8 5.8 n.a.
CBO.......................................... ..... 5.5 5.7 5.8 5.9 6.0 6.0 6.0 6.0
Committee.................................... ..... 5.5 5.7 5.8 5.9 6.0 6.0 6.0 6.0
3-month Treasury Bills rate (annual rate):
OMB.......................................... 4.2 5.9 5.5 5.5 5.5 5.5 5.5 5.5 5.5
Blue Chip.................................... ..... 6.1 6.1 5.5 5.3 5.2 5.4 5.5 n.a.
CBO.......................................... ..... 6.2 5.7 5.3 5.1 5.1 5.1 5.1 5.1
Committee.................................... ..... 6.2 5.5 4.9 4.5 4.2 4.0 4.0 4.0
10-year Treasury Note rates (annual rate):
OMB.......................................... 7.1 7.9 7.2 7.0 7.0 7.0 7.0 7.0 7.0
Blue Chip.................................... ..... 7.6 7.4 7.2 7.2 7.2 7.2 n.a. n.a.
CBO.......................................... ..... 7.7 7.0 6.7 6.7 6.7 6.7 6.7 6.7
Committee.................................... ..... 7.7 6.8 6.2 5.9 5.6 5.3 5.1 5.1
----------------------------------------------------------------------------------------------------------------
Note. OMB and CBO (April baseline) extended for years 2001 and 2002 from year 2000.
Source. CBO an Analysis of the President's Budgetary Proposal for Fiscal Year 1996 (April, 1995). Table 4. OMB.
Analytical Perspectives Budget of the US Government FY 1996 (Feb 7, 1995). Table 1-1. Blue Chip Economic
Indicators (March 10, 1995). 10 year note rate as adjusted by CBO in January.

REVENUES

H.R. 1215, the Tax Fairness and Deficit Reduction Act of
1995, includes provisions that would provide tax relief to
families with a $500 per child tax credit, reduce the tax
penalty on two-earner married couples, encourage savings
through a new American Dream savings account, repeal the 1993
tax increase on Social Security benefits, reduce the cost of
capital and increase incentives for risk-taking by indexing and
reducing the effective tax rate on capital gain income. H.R.
831, enacted earlier this year, restores the 25-percent
deduction for health insurance costs of self-employed
individuals for 1994, and increases it permanently to 30
percent thereafter. Revenues also contain the effect of
shifting from dollar bills to dollar coins and the employee
share of retirement trust contributions..
The payroll taxes for social insurance--Social Security,
Medicare, and unemployment compensation--have risen to over
one-third of total revenues and are now more than three times
as large as corporate income tax revenues. This change, rooted
in expansion of the Social Security System and diminished
domestic corporate profits as a percent of GDP, was magnified
by Social Security legislation in 1977 and 1993.
The committee anticipates that the Committee on Ways and
Means will explore restoration or continuation of certain tax
and trade provisions that have expired or will soon expire as
well as certain other tax measures. The committee expects that
the Committee on Ways and Means--in seeking to offset the cost
of these measures--will look to changes reducing inappropriate
corporate tax benefits, other appropriate revenue offsets, and
spending reductions within the committee's jurisdiction.
Three illustrative examples of inappropriate tax benefits
that may be considered by the Committee on Ways and Means are
the following:

--Corporate Tax Shelter Reporting. In recent years, investment
bankers and others have marketed to corporations aggressive
tax planning transaction structures. These structures are
typically revealed to potential users under conditions that
the user maintain as confidential, even after completion of
the transaction, the way in which the tax-planning device
works. The confidentiality agreements serve both to insure
that the investment banker can generate multiple fees from
the transaction structure and that the Internal Revenue
Service not become aware of the tax planning device. This
proposal would require that those marketing to corporations
tax shelters involving proprietary tax planning techniques
register those tax shelters with the Internal Revenue
Service. This is an expansion of existing tax shelter
registration rules.

--Corporate Options Reporting: Require Brokers to Report Sales
of Corporate Options as They Do for Sales of Stocks and
Bonds. Section 6045 of the Internal Revenue Code gives the
Treasury authority to require a broker to file an
information return (i.e., a form 1099) with the IRS
whenever a customer transacts business with the broker.
Current regulations require broker reporting when customers
buy or sell securities (i.e., stocks and bonds), but not
when they trade several other types of corporate financial
assets, such as options. In recent years, the value and
volume of trading of these other types of corporate
financial assets has greatly increased. Thus, greater
compliance would result if brokers were required to file
for options trading the same kind of information returns
that they are required to file for stock trading.

--Corporate Redemption Legislation (H.R. 1551). Some
corporations have recently structured redemptions of stock
(taxable to the redeemed party as a sale of the stock) to
look like dividend payments (only partially taxable because
of the corporate dividends received deduction). This
legislation would treat such transactions as redemptions.

The committee also is greatly concerned about the growing
phenomenon of millionaire and billionaire Americans renouncing
U.S. citizenship in order to avoid paying their fair share of
our society's tax burden. The committee strongly believes that
the Congress should take steps to stem the revenue loss from
expatriation for tax avoidance.

REVENUE COMPARISONS

Table 1.--Comparison of Total Budget Revenues

Fiscal year: [In billions of dollars]
Amount
1990 actual............................................... 1,031.3
1991 actual............................................... 1,054.3
1992 actual............................................... 1,091.6
1993 actual............................................... 1,153.2
1994 actual............................................... 1,257.7
1995 estimated (CBO)...................................... 1,355.2
Fiscal year 1996:
Administration's request (February 1995).................. 1,415.5
Committee level........................................... 1,432.2
Fiscal year 1997:
Administration's request (February 1995).................. 1,471.6
Committee level........................................... 1,450.5
Fiscal year 1998:
Administration's request (February 1995).................. 1,548.8
Committee level........................................... 1,511.0
Fiscal year 1999:
Administration's request (February 1995).................. 1,624.7
Committee level........................................... 1,569.6
Fiscal year 2000:
Administration's request (February 1995).................. 1,710.9
Committee level........................................... 1,641.3

Table 2.--Comparison of On-Budget Revenues

Fiscal year: [In billions of dollars]
Amount
1990 actual............................................... 749.7
1991 actual............................................... 760.4
1992 actual............................................... 789.2
1993 actual............................................... 841.6
1994 actual............................................... 922.0
1995 estimated (CBO)...................................... 997.8
Fiscal year 1996:
Administration's request (February 1995).................. 1,045.1
Committee level........................................... 1,057.6
Fiscal year 1997:
Administration's request (February 1995).................. 1,083.6
Committee level........................................... 1,058.5
Fiscal year 1998:
Administration's request (February 1995).................. 1,140.8
Committee level........................................... 1,099.6
Fiscal year 1999:
Administration's request (February 1995).................. 1,195.8
Committee level........................................... 1,138.6
Fiscal year 2000:
Administration's request (February 1995).................. 1,260.0
Committee level........................................... 1,189.4

TABLE 3.--REVENUES BY SOURCE UNDER PAST AND CURRENT LAW
[Includes on- and off-budget revenues, fiscal years, billions of
dollars]
------------------------------------------------------------------------
Historical
--------------------------------------------- Projected
1950 1960 1970 1980 1990 1996
------------------------------------------------------------------------
Individual
income tax..... 15.8 40.7 90.4 244.1 466.9 627.9
Corporate income
tax............ 10.4 21.5 32.8 64.6 93.5 151.1
Social insurance
tax and
contributions.. 4.3 14.7 44.4 157.8 380 516.8
Excises......... 7.6 11.7 15.7 24.3 35.3 55.7
Estate and gift
taxes.......... 0.7 1.6 3.6 6.4 11.5 16.8
Customs duties.. 0.4 1.1 2.4 7.2 16.7 21.4
Miscellaneous
receipts....... 0.2 1.2 3.4 12.7 27.3 27.9
-------------------------------------------------------
Total \1\. 39.4 92.5 192.8 517.1 1,031.3 1,417.7
On-
budge
t
reven
ues.. 37.3 81.9 159.3 403.9 749.7 1043.0
Off-
budge
t
reven
ues \
2\... 2.1 10.6 33.5 113.2 281.7 374.7
------------------------------------------------------------------------
\1\ Details may not add to totals due to rounding.
\2\ Social Security (OASDI) revenues.

Source: CBO baseline revenues.

TABLE 4.--REVENUES SOURCE AS A PERCENT OF GDP UNDER PAST AND CURRENT LAW
[Includes on- and off-budget revenues, fiscal years]
------------------------------------------------------------------------
Historical
--------------------------------------------- Projected
1950 1960 1970 1980 1990 1996
------------------------------------------------------------------------
Individual
income tax..... 5.9 8.0 9.2 9.2 8.6 8.5
Corporate income
tax............ 3.9 4.2 3.3 2.4 1.7 2.1
Social insurance
tax and
contributions.. 1.6 2.9 4.5 6.0 7.0 7.0
Excises......... 2.8 2.3 1.6 0.9 0.6 0.8
Estate and gift
taxes.......... 0.3 0.3 0.4 0.2 0.2 0.2
Customs duties.. 0.1 0.2 0.3 0.5 0.5 0.4
Miscellaneous
receipts....... 0.1 0.2 0.3 0.5 0.5 0.4
-------------------------------------------------------
Total \1\. 14.9 18.3 19.6 19.6 18.9 19.2
On-
budge
t
reven
ues.. 14.1 16.2 16.2 15.3 13.7 14.2
Off-
budge
t
reven
ues \
2\... 0.8 2.1 3.4 4.3 5.2 5.1
------------------------------------------------------------------------
\1\ Details may not add to totals due to rounding.
\2\ Social Security (OASDI) revenues.

Source: CBO baseline revenues.

SPECIAL TAX PROVISIONS

The Congressional Budget Act of 1974 requires a listing of
items called tax expenditures in the President's budget
submission and in reports accompanying congressional budget
resolutions. These items are defined in the act as ``revenue
losses attributable to provisions of the Federal tax law which
allow a special exclusion, exemption, or deduction from gross
income or which provides a special credit, a preferential rate
of tax, or a deferral of tax liability.'' Under this
definition, the concept of tax expenditures refers to revenue
losses attributable exclusively to provisions in the
corporation and individual income taxes.
This terminology should be changed because its line of
reasoning is faulty. It assumes, first, that the government can
``lose'' money that did not belong to the government in the
first place. The funds in fact belong to taxpayers; the
government cannot lose what it never had. Second, in the
transaction involved, no money really changes hands. Taxpayers
simply keep more of their own funds.
Nearly all these tax provisions are intended either to
encourage certain economic activities or to reduce income tax
liabilities for taxpayers in special circumstances. The use of
a tax provision, rather than a direct expenditure, often is
more efficient. The use of a tax provision also keeps the
behavior voluntary. Estimates of individual tax benefits are
prepared by the Treasury Department and the Joint Committee on
Taxation. The estimates normally presented here are those of
the Joint Committee on Taxation and in this case are based on
that committee's most recent report of November 9, 1994. The
Joint Committee on Taxation has estimated the revenue
``losses'' rather than outlay equivalent amounts of tax
expenditures.
Table 1 shows the revenues involved in targeted tax
benefits for fiscal years 1995 through 1999. The economic
assumptions upon which these calculations are based were the
most recent Congressional Budget Office assumptions available
to the Joint Committee in August 1994. Because of the
interaction among the provisions, the revenue effect from two
or more repeals would not necessarily equal the exact sum of
the revenue losses for each item. Furthermore, because tax
legislation seldom applies retroactively to taxpayer decisions
made earlier, the added revenues available for the initial
years from legislation to eliminate such a tax provision may be
substantially less than shown in the following table.

TABLE 1.--SPECIAL TAX PROVISION ESTIMATES BY BUDGET FUNCTION, FISCAL YEARS 1995-1999
[Billions of dollars]
----------------------------------------------------------------------------------------------------------------
Corporations Individuals
Function ---------------------------------------------------------------------------------- Total
1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 1995-1999
----------------------------------------------------------------------------------------------------------------
National defense:
Exclusion of
benefits and
allowances to
Armed Forces
personnel..... ...... ...... ...... ...... ...... 2.1 2.1 2.1 2.2 2.3 10.8
Exclusion of
military
disability
benefits...... ...... ...... ...... ...... ...... 0.1 0.1 0.1 0.1 0.1 0.5
International
affairs:
Exclusion of
income earned
abroad by U.S.
citizens...... ...... ...... ...... ...... ...... 1.6 1.6 1.7 1.8 1.9 8.6
Exclusion of
certain
allowances for
Federal
employees
abroad........ ...... ...... ...... ...... ...... 0.2 0.2 0.2 0.2 0.2 1.0
Exclusion of
income of
foreign sales
corporations
(FSCs)........ 1.4 1.5 1.5 1.5 1.6 ...... ...... ...... ...... ........ 7.5
Deferral of
income of
controlled
foreign
corporations.. 1.1 1.1 1.1 1.2 1.2 ...... ...... ...... ...... ........ 5.7
Inventory
property sales
source rule
exception..... 3.5 3.6 3.7 3.7 3.8 ...... ...... ...... ...... ........ 18.3
Interest
allocation
rules
exception for
certain
nonfinancial
institutions.. 0.2 0.2 0.2 0.2 0.2 ...... ...... ...... ...... ........ 1.0
General science,
space, and
technology:
Expensing of
research and
development
expenditures.. 1.0 0.5 0.2 0.1 0.1 (\1\) (\1\) (\1\) (\1\) (\1\) 2.1
Energy:
Expensing of
exploration
and
development
costs:
Oil and gas 0.5 0.5 0.5 0.5 0.5 (\1\) (\1\) (\1\) (\1\) (\1\) 2.5
Other fuels (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.3
Excess of
percentage
over cost
depletion:
Oil and gas 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 2.0
Other fuels 0.2 0.2 0.2 0.2 0.2 (\1\) (\1\) 0.1 0.1 0.1 1.4
Credit for
enhanced oil
recovery costs (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.4
Nonconventional
fuels
production
credit........ 0.8 0.9 0.9 0.9 0.9 0.3 0.3 0.3 0.3 0.3 5.8
Alcohol fuel
credits \2\... (\1\) (\1\) (\1\) (\1\) (\1\) ...... ...... ...... ...... ........ 0.2
Exclusion of
interest on
State and
local
government
industrial
development
bonds for
energy
production
facilities.... (\1\) (\1\) (\1\) (\1\) (\1\) 0.1 0.1 0.1 0.1 0.1 0.9
Expensing of
tertiary
injectants.... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.1
Exclusion of
energy
conservation
subsidies
provided by
public
utilities..... ...... 0.1 0.2 0.3 0.3 (\1\) (\1\) (\1\) (\1\) (\1\) 1.0
Credit for
investments in
solar and
geothermal
energy
facilities.... 0.0 0.1 0.1 0.1 0.1 (\1\) (\1\) (\1\) (\1\) (\1\) 0.4
Credits for
electricity
production
from wind and
biomass....... (\1\) (\1\) (\1\) 0.1 0.1 (\1\) (\1\) (\1\) (\1\) (\1\) 0.3
Deductions and
credits for
clean-fuel
vehicles and
refueling
property...... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.3
Natural resources
and environment:
Expensing of
exploration
and
development
costs, nonfuel
minerals...... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.3
Excess of
percentage
over cost
depletion,
nonfuel
minerals...... 0.2 0.2 0.2 0.2 0.2 (\1\) (\1\) 0.1 0.1 0.1 1.4
Investment
credit and 7-
year
amortization
for
reforestation
expenditures.. (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.1
Expensing of
multiperiod
timber-growing
costs......... 0.4 0.4 0.5 0.5 0.5 (\1\) (\1\) (\1\) 0.1 0.1 2.6
Exclusion of
interest on
State and
local
government
sewage, water,
and hazardous
waste
facilities
bonds......... 0.2 0.2 0.2 0.2 0.2 0.5 0.5 0.5 0.5 0.5 3.2
Investment tax
credit for
rehabilitation
of historic
structures.... 0.1 0.1 0.1 0.1 0.1 (\1\) (\1\) (\1\) (\1\) (\1\) 0.5
Special rules
for mining
reclamation
reserves...... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.2
Agriculture:
Expensing of
soil and water
conservation
expenditures.. (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.2
Expensing of
fertilizer and
soil
conditioner
costs......... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.1 0.3
Expensing of
the costs of
raising dairy
and breeding
cattle........ (\1\) (\1\) (\1\) (\1\) (\1\) 0.1 0.1 0.1 0.1 0.1 0.7
Exclusion of
cost-sharing
payments...... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.1
Exclusion of
cancellation
of
indebtedness
income of
farmers....... ...... ...... ...... ...... ...... 0.1 0.1 0.1 0.1 0.1 0.3
Cash accounting
for
agriculture... 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 1.3
Commerce and
housing:
Financial
institutions:
Bad-debt
reserves
of
financial
institutio
ns........ 0.1 0.1 0.1 0.1 0.1 ...... ...... ...... ...... ........ 0.5
Exemption
of credit
union
income.... 0.7 0.7 0.7 0.8 0.8 ...... ...... ...... ...... ........ 3.7
Insurance
companies:
Exclusion
of
investment
income on
life
insurance
and
annuity
contracts. 0.8 0.9 1.0 1.1 1.2 10.3 11.5 12.4 13.3 14.3 66.8
Exclusion
of
investment
income
from
structured
settlement
amounts... (\1\) (\1\) (\1\) (\1\) (\1\) ...... ...... ...... ...... ........ (\1\)
Small life
insurance
company
taxable
income
adjustment 0.1 0.1 0.1 0.1 0.1 ...... ...... ...... ...... ........ 0.5
Special
treatment
of life
insurance
company
reserves.. 2.1 2.3 2.5 2.7 2.9 ...... ...... ...... ...... ........ 12.5
Deduction
of unpaid
property
loss
reserves
for
property
and
casualty
insurance
companies. 1.6 1.8 1.9 2.1 2.3 ...... ...... ...... ...... ........ 9.7
Special
alternativ
e tax on
small
property
and
casualty
insurance
companies. (\1\) (\1\) (\1\) (\1\) (\1\) ...... ...... ...... ...... ........ (\1\)
Tax
exemption
for
certain
insurance
companies. (\1\) (\1\) (\1\) (\1\) (\1\) ...... ...... ...... ...... ........ (\1\)
Special
deduction
for Blue
Cross and
Blue
Shield
companies. 0.3 0.3 0.1 0.1 0.1 ...... ...... ...... ...... ........ 0.9
Housing:
Deductibili
ty of
mortgage
interest
on owner-
occupied
residences ...... ...... ...... ...... ...... 53.5 56.8 60.2 63.9 67.8 302.1
Deductibili
ty of
property
tax on
owner-
occupied
homes..... ...... ...... ...... ...... ...... 13.7 14.5 15.3 16.2 17.1 76.8
Deferral of
capital
gains on
sales of
principal
residence. ...... ...... ...... ...... ...... 14.8 15.3 15.9 16.4 17.0 79.4
Exclusion
of capital
gains on
sales of
principal
residences
for
persons
age 55 and
over
($125,000
exclusion) ...... ...... ...... ...... ...... 4.9 5.1 5.3 5.5 5.7 26.5
Exclusion
of
interest
on State
and local
government
bonds for
owner-
occupied
housing... 0.5 0.5 0.5 0.4 0.4 1.4 1.4 1.4 1.3 1.3 9.0
Exclusion
of
interest
on State
and local
government
bonds for
rental
housing... 0.2 0.2 0.2 0.2 0.2 0.7 0.7 0.7 0.6 0.6 4.3
Depreciatio
n of
rental
housing in
excess of
alternativ
e
depreciati
on system. 1.0 1.0 0.9 0.8 0.7 0.7 0.6 0.6 0.5 0.5 7.3
Low-income
housing
tax credit 0.8 0.9 1.0 1.2 1.3 1.4 1.7 1.9 2.2 2.4 14.8
Other business
and commerce:
Maximum 28%
tax rate
on long-
term
capital
gains..... ...... ...... ...... ...... ...... 9.1 10.5 11.3 12.6 13.9 57.4
Depreciatio
n of
buildings
other than
rental
housing in
excess of
alternativ
e
depreciati
on system. 3.5 3.2 2.7 2.1 1.5 1.4 1.3 1.1 0.9 0.6 18.5
Depreciatio
n of
equipment
in excess
of
alternativ
e
depreciati
on system. 19.9 19.9 19.6 19.1 19.2 5.7 5.7 5.6 5.4 5.5 125.4
Expending
of up to
$17,500 of
depreciabl
e business
property.. 0.9 0.7 0.5 0.3 0.1 0.6 0.4 0.3 0.1 (\1\) 4.0
Exclusion
of capital
gains at
death..... ...... ...... ...... ...... ...... 12.7 14.0 15.4 17.1 18.3 77.5
Carryover
basis of
capital
gains on
gifts..... ...... ...... ...... ...... ...... 1.4 1.5 1.5 1.6 1.7 7.7
Amortizatio
n of
business
startup
costs..... (\1\) (\1\) (\1\) (\1\) (\1\) 0.2 0.2 0.2 0.2 0.2 1.1
Reduced
rates for
first
$10,000,00
0 of
corporate
taxable
income.... 3.9 4.1 4.3 4.5 4.7 ...... ...... ...... ...... ........ 21.7
Permanent
exemption
from
imputed
interest
rules..... (\1\) (\1\) (\1\) (\1\) (\1\) 0.2 0.2 0.2 0.2 0.2 1.1
Expensing
of
magazine
circulatio
n
expenditur
es........ (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.2
Special
rules for
magazine,
paperback
book, and
record
returns... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.1
Deferral of
gain on
non-dealer
installmen
t sales... 0.4 0.4 0.4 0.5 0.5 0.3 0.3 0.3 0.4 0.4 3.9
Completed
contract
rules..... 0.2 0.2 0.2 0.2 0.2 (\1\) (\1\) (\1\) (\1\) (\1\) 1.0
Cash
accounting
, other
than
agricultur
e......... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.1 0.1 0.5
Exclusion
of
interest
on State
and local
government
small-
issue
industrial
developmen
t bonds... 0.1 0.1 0.1 0.1 0.1 0.4 0.3 0.3 0.3 0.2 1.9
Deferral of
gain on
like-kind
exchanges. 0.4 0.5 0.5 0.5 0.6 0.2 0.3 0.3 0.3 0.4 4.1
Exception
from net
operating
loss
limitation
s for
corporatio
ns in
bankruptcy
proceeding
s......... 0.4 0.4 0.5 0.5 0.5 ...... ...... ...... ...... ........ 2.2
Deferral of
gains from
sale of
broadcasti
ng
facilities
to
minority-
owned
businesses 0.1 0.1 0.1 0.1 0.1 ...... ...... ...... ...... ........ 0.5
Transportation:
Deferral of tax
on capital
construction
funds of
shipping
companies..... 0.1 0.1 0.1 0.1 0.1 ...... ...... ...... ...... ........ 0.4
Employer-paid
transportation
benefits...... ...... ...... ...... ...... ...... 1.9 2.1 2.2 2.3 2.4 10.9
Exclusion of
interest on
State and
local
government
bonds for high-
speed rail.... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.1
Community and
regional
development:
Investment
credit for
rehabilitation
of structures,
other than
historic
structures.... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.3
Exclusion of
interest on
State and
local
government
bonds for
private
airports,
docks, and
mass-commuting
facilities.... 0.2 0.2 0.2 0.3 0.3 0.6 0.7 0.7 0.8 0.8 4.9
Regional
economic
development
tax
incentives:
empowerment
zones,
enterprise
communities,
and Indian
investment
incentives.... 0.2 0.2 0.2 0.3 0.3 0.1 0.2 0.3 0.3 0.3 2.5
Education,
training,
employment, and
social services:
Education and
training:
Exclusion
of
scholarshi
p and
fellowship
income.... ...... ...... ...... ...... ...... 0.7 0.7 0.8 0.8 0.8 3.8
Parental
personal
exemption
for
students
age 19 to
23........ ...... ...... ...... ...... ...... 0.9 0.9 0.9 0.9 0.9 4.6
Exclusion
of
interest
on State
and local
government
student
loan bonds 0.1 0.1 (\1\) (\1\) (\1\) 0.2 0.2 0.1 0.1 0.1 1.0
Exclusion
of
interest
on State
and local
government
bonds for
private
nonprofit
educationa
l
facilities 0.2 0.2 0.2 0.2 0.2 0.6 0.6 0.6 0.7 0.7 4.2
Deductibili
ty of
charitable
contributi
ons for
educationa
l
institutio
ns........ 0.5 0.5 0.5 0.5 0.5 2.0 2.1 2.2 2.3 2.4 13.2
Exclusion
of
interest
on
educationa
l savings
bonds..... ...... ...... ...... ...... ...... 0.1 0.1 0.2 0.2 0.3 0.9
Exclusion
for
employer-
provided
education
assistance
benefits.. 0.3 ...... ...... ...... ...... ...... ...... ...... ...... ........ 0.3
Employment:
Exclusion
of
employee
meals and
lodging
(other
than
military). ...... ...... ...... ...... ...... 0.6 0.7 0.7 0.7 0.8 3.5
Special tax
provisions
for
employee
stock
ownership
plans
(ESOPs)... 0.9 1.0 1.1 1.2 1.2 (\1\) (\1\) (\1\) (\1\) (\1\) 5.4
Exclusion
of
benefits
provided
under
cafeteria
plans \3\. ...... ...... ...... ...... ...... 3.8 4.4 5.0 5.7 6.5 25.4
Exclusion
of rental
allowances
for
minister's
homes..... ...... ...... ...... ...... ...... 0.3 0.3 0.3 0.3 0.3 1.5
Exclusion
of
miscellane
ous fringe
benefits.. ...... ...... ...... ...... ...... 4.9 5.2 5.5 5.8 6.2 27.5
Exclusion
of
employee
awards.... ...... ...... ...... ...... ...... 0.1 0.1 0.1 0.1 0.1 0.6
Exclusion
of income
earned by
voluntary
employees'
beneficiar
y
associatio
ns........ ...... ...... ...... ...... ...... 0.5 0.5 0.5 0.6 0.6 2.7
Targeted
jobs tax
credit.... 0.2 0.1 (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.4
Social
services:
Deductibili
ty of
charitable
contributi
ons, other
than for
education
and health 0.4 0.4 0.4 0.4 0.4 13.9 14.7 15.4 16.1 16.9 79.0
Credit for
child and
dependent
care
expenses.. ...... ...... ...... ...... ...... 2.7 2.8 2.8 2.9 3.0 14.2
Exclusion
for
employer-
provided
child care
\4\....... ...... ...... ...... ...... ...... 0.6 0.7 0.8 0.9 1.0 4.0
Exclusion
for
certain
foster
care
payments.. ...... ...... ...... ...... ...... (\1\) (\1\) (\1\) (\1\) (\1\) 0.1
Expensing
of costs
for
removing
architectu
ral
barriers.. (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.1
Credit for
disabled
access
expenditur
es........ (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 0.1
Health:
Exclusion of
employer
contributions
for medical
insurance
premiums and
medical care
\5\........... ...... ...... ...... ...... ...... 45.8 49.9 53.8 57.9 62.3 269.7
Exclusion of
medical care
and CHAMPUS
health
insurance for
military
dependents.... ...... ...... ...... ...... ...... 0.4 0.5 0.5 0.5 0.5 2.4
Deductibility
of medical
expenses...... ...... ...... ...... ...... ...... 4.1 4.5 5.0 5.5 6.0 25.0
Exclusion of
interest on
State and
local
government
bonds for
private
nonprofit
hospital
facilities.... 0.4 0.4 0.5 0.5 0.5 1.2 1.3 1.4 1.4 1.5 9.2
Deductibility
of charitable
contributions
to health
organizations. 0.3 0.3 0.3 0.4 0.4 1.4 1.5 1.6 1.6 1.7 9.6
Medicare:
Exclusion of
untaxed
medicare
benefits:
Hospital
insurance. ...... ...... ...... ...... ...... 8.0 9.2 10.8 12.6 14.8 55.3
Supplementa
ry medical
insurance. ...... ...... ...... ...... ...... 5.1 6.1 7.3 8.7 10.4 37.6
Income security:
Exclusion of
workers'
compensation
benefits...... ...... ...... ...... ...... ...... 3.9 4.0 4.2 4.4 4.6 21.0
Exclusion of
special
benefits for
disabled coal
miners........ ...... ...... ...... ...... ...... 0.1 0.1 0.1 0.1 0.1 0.4
Exclusion of
cash public
assistance
benefits...... ...... ...... ...... ...... ...... 0.5 0.5 0.6 0.6 0.7 2.8
Net exclusion
of pension
contributions
and earnings:
Employer
plans..... ...... ...... ...... ...... ...... 69.4 73.5 78.0 82.8 87.9 391.6
Individual
retirement
plans..... ...... ...... ...... ...... ...... 8.4 8.7 9.2 9.7 10.2 46.2
Keogh plans ...... ...... ...... ...... ...... 3.1 3.3 3.5 3.7 3.9 17.8
Exclusion of
other employee
benefits:
Premiums on
group term
life
insurance. ...... ...... ...... ...... ...... 2.0 2.0 2.1 2.2 2.2 10.5
Premiums on
accident
and
disability
insurance. ...... ...... ...... ...... ...... 0.2 0.2 0.2 0.2 0.2 1.0
Exclusion of
employer-
provided death
benefits...... ...... ...... ...... ...... ...... (\1\) (\1\) (\1\) (\1\) (\1\) 0.2
Additional
standard
deduction for
the blind and
the elderly... ...... ...... ...... ...... ...... 1.9 2.0 2.1 2.2 2.4 10.6
Tax credit for
the elderly
and disabled.. ...... ...... ...... ...... ...... (\1\) (\1\) (\1\) (\1\) (\1\) 0.1
Deductibility
of casualty
and theft
losses........ ...... ...... ...... ...... ...... 0.1 0.1 0.1 0.1 0.1 0.5
Earned income
tax credit
(EITC) \6\.... ...... ...... ...... ...... ...... 3.5 3.9 4.2 4.4 4.6 20.5
Social Security and
railroad
retirement:
Exclusion of
untaxed Social
Security and
railroad
retirement
benefits...... ...... ...... ...... ...... ...... 23.1 24.1 25.1 26.1 27.1 125.5
Veterans' benefits
and services:
Exclusion of
veterans'
disability
compensation.. ...... ...... ...... ...... ...... 1.6 1.6 1.7 1.7 1.8 8.4
Exclusion of
veterans'
pensions...... ...... ...... ...... ...... ...... 0.1 0.1 0.1 0.1 0.1 0.5
Exclusion of GI
bill benefits. ...... ...... ...... ...... ...... 0.1 0.1 0.1 0.1 0.1 0.5
Exclusion of
interest on
State and
local
government
bonds for
veterans'
housing....... (\1\) (\1\) (\1\) (\1\) (\1\) 0.1 0.1 0.1 0.1 0.1 0.4
General purpose
fiscal assistance:
Exclusion of
interest on
public purpose
State and
local
government
debt.......... 3.2 3.3 3.5 3.7 3.8 9.5 10.0 10.5 11.0 11.5 70.1
Deduction of
nonbusiness
State and
local
government
income and
personal
property taxes ...... ...... ...... ...... ...... 24.7 26.2 27.7 29.3 31.0 139.0
Tax credit for
section 936
income........ 3.7 3.8 4.0 4.1 4.2 ...... ...... ...... ...... ........ 19.7
Interest:
Deferral of
interest on
savings bonds. ...... ...... ...... ...... ...... 1.3 1.4 1.5 1.6 1.7 7.3
----------------------------------------------------------------------------------------------------------------
\1\ Positive tax expenditure of less than $50 million.
\2\ In addition, the 5.4-cents-per-gallon exemption from excise tax for alcohol fuels results in a reduction in
excise tax receipts, net of income tax effect, of $0.6 billion per year in fiscal year 1995, and $0.7 billion
per year in fiscal years 1996 through 1999.
\3\ Estimate includes amounts of employer-provided health insurance purchased through cafeteria plans and
employer-provided child care purchased dependent care flexible spending accounts. These amounts are also
included in other line items in this table.
\4\ Estimate includes employer-provided child care purchased through dependent care flexible spending accounts.
\5\ Estimate includes employer-provided health insurance purchased through cafeteria plans.
\6\ The figures in the table show the effect of the EITC on receipts. The increase in outlays is: $18.6 billion
in 1995, $20.6 billion in 1996, $21.6 billion in 1997, $22.2 billion in 1998, and $22.9 billion in 1999.

Note.--Details may not add to totals due to rounding.

Source: Joint Committee on Taxation.

ADDITIONAL REPORT LANGUAGE

Regulatory Budgeting

The fiscal budget reflects only one part of the Federal
Government's impact on the Nation and the economy. The
government also exercises influence through its power to issue
regulations on private businesses and families and promulgate
mandates on State and local governments. The costs of these
regulations and mandates should be reflected in the Federal
budget, reduced as a percentage of Gross Domestic Product
[GDP], and voted on each year by Congress.
Federal regulations and mandates represent indirect
government spending. They divert moneys away from private
families, businesses, neighborhoods, and communities, and
toward governmentally mandated objectives. Regulations and
mandates transfer power and decisionmaking from families,
neighborhoods, local communities, and States to Washington, DC.
In short, regulations and mandates represent hidden taxing and
spending.
Federal regulations have skyrocketed over the past 25
years, exploding at the same unsustainable rate as government
spending. An estimated 10 to 20 percent of national output is
consumed and controlled by government regulation. Conservative
estimates of annual regulatory costs exceed $600 billion, or
about $6,600 to $8,800 per family. When the costs of
regulations and mandates are added to the costs of taxes, the
average American must work until July 13 each year to pay the
costs of government.
Other indicators of regulatory costs confirm the explosion
in Federal regulations. The Federal Register, the annual
compilation of new regulations, climbed from 12,000 pages in
1950 to 70,000 pages in 1993 and may reach 90,000 in 1995. The
number of Federal regulators--government officials paid to
enforce regulations--increased from 70,000 in 1970 to 130,000
in 1995. The budgets of Federal regulatory agencies has
ballooned by nearly 200 percent over this same period.
Just as Federal spending raises taxes and deficits, which
slow economic growth and limit opportunity, government
regulations and mandates lower living standards. Regulations
harm consumers, adding an estimated 33 percent to the cost of
building an airplane engine, 95 percent to the cost of a new
vaccine, and $3,000 to the cost of a new car. Regulations
impede job creation. Private-sector job growth has been
inversely proportional to the proliferation of Federal
regulators. Job creation grew during the 1980's, when the
number of regulators and regulations were reduced, and it
shrank during the regulatory explosions of the 1970's, the late
1980's, and the Clinton years.
If the budget is to reflect an accurate and complete
blueprint of the costs and expenses of the Federal Government,
it must also include the costs imposed by government
regulations and mandates. A full and complete accounting of the
government's size and scope requires a statement of the costs
of government regulations and mandates. The costs of
regulations and mandates should be determined as part of--and
should be reflected in--the Federal budget process.
One method of reflecting the costs of regulation within the
budget process would be a Federal regulatory budget proposal.
One such proposal was introduced in the 103d Congress by Budget
Committee members Lamar S. Smith, John R. Kasich, Bob Franks,
and Christopher Cox. This proposal would allocate to
Congressional authorizing committees fixed amounts of
``regulatory authority.'' The allocations would be capped so
that the total regulatory costs on the economy would be reduced
from their current level of 9 percent of Gross Domestic Product
to 5 percent of GDP over 7 years. Such discipline could reduce
the regulatory burden on the economy, while simultaneously
permitting important health, safety, and environmental
objectives to be met.
A regulatory budget also would make government regulations
and mandates accountable to the American people through the
democratic process. Just as the President is required to
submit, and the Congress is required to vote on, the level of
taxes and Federal spending, Congress should vote on the level
of regulations and mandates, which have the same effect as
taxes and spending. The American people should be told--and
their elected officials should be held accountable for--the
level of hidden taxing and spending which regulations
represent.
The Budget Committee will work over the coming months to
develop and refine these proposals so as to improve the budget
process, reduce the burden of government regulation on American
families and businesses, restore democratic accountability, and
increase opportunity for all Americans.

Suggested List of Federal Regulations and Federal Mandates That Warrant
Elimination or Reform

The following list of Federal regulations, quasi-
regulations, and Federal statutory mandates are among the most
expensive and onerous and appear ripe for termination or
reform. Some of these reforms may lead to Federal budget
savings. More important, however, they are likely to encourage
economic growth, which in turn would help reduce the Federal
deficit. The Budget Committee encourages House authorizing and
appropriating committees to consider this list as the 104th
Congress works to reform Washington's regulatory practices.

Transportation

Problem Drivers Pointer System [PDPS] Mandate. This system
creates a national registry for records on all problem drivers.
States must check this system before issuing licenses. Under a
threat of losing 10 percent of their Federal highway funds,
States are required to complete a link to the System by April
30, 1995. The Federal Government does cover implementation
costs. But the System may be unnecessary as long as States
require drivers to be insured, which clearly would require
insurers to do background checks. If a national system is
warranted, it could be handled by a private-sector agency.

Unfunded Compliance with the Anti-Theft Act of 1992. This
act establishes a set of uniform titles, uniform salvage
titles, and a national data base for title information. States
are required to comply by January 1, 1996. Some Federal money
is supposed to be available, but the amounts are not certain.
Compliance should be waived until Federal funds are available
to cover compliance entirely.

Metric Conversion Mandate. The Omnibus Trade and
Competitiveness Act of 1988 required conversion to the metric
system. The Federal Highway Administration requires that all
construction plans be designated in metric. After September 30,
1996, no plans that are not in metric are to be let if the
Federal Government is helping finance the project.

The Crumb Rubber Mandate, Section 1038(b) [ISTEA]. The
Intermodel Surface Transportation Efficiency Act of 1991
[ISTEA] included a government-imposed mandate on States by
requiring crumb rubber from scrap tires be used in an annual
fixed percentage of asphalt. This unprecedented mandate is
opposed by State transportation departments, county officials,
and the highway construction industry due to its added cost,
mixed performance, and unanswered questions regarding the
environmental and health consequences and recyclability. By
1997, the additional costs due to the crumb rubber mandate
could be as high as $1 billion according to the U.S. Department
of Transportation. Section 1038(b) should be repealed and
highway engineers, and the marketplace, determine highway
pavement design and materials.

National Maximum Speed Limit Mandate. Title 23 U.S. Code,
section 154 prohibits States from establishing a speed limit
beyond 55 miles per hour on specified highways, even though
higher speed limits may be appropriate and safe. Some routes
that fit certain population and other criteria can post maximum
limits of 65 miles per hour. States with a maximum limit that
is higher than allowed, or that do not certify, are subject to
termination of Federal highway funding. Because of the lower
speed limits, States must divert significant resources that
could otherwise be used for crime prevention and law
enforcement, additional motorist services, DUI enforcement, and
a variety of other public services.

The International Fuel Tax Agreement Mandate. States are
required to become members of the International Fuel Tax
Agreement by no later than October 1996. Failure to comply
could cost them some of their Federal highway funds. States
should not be required, at their own cost, to participate in
such international agreements.

Federal Outdoor Advertising Mandate. ISTEA prohibits
erection of new signs on designated scenic highways. If States
fail to prohibit such signs, 10 percent of major highway
apportionments would be withheld.

Highway Program Administrative Costs Mandate. Title 23 of
the U.S. Code requires State transportation departments to
maintain administrative staff beyond the minimum level
necessary to deliver highway projects.

Motorcycle Helmets Mandate. States that did not have
mandatory front seat belt and motorcycle helmet laws in place
by October 1, 1993, were notified by the Federal Highway
Administration that 1.5 percent of their highway construction
funds would be transferred to their highway safety program.
Transfers will continue until complying legislation is passed
or the Federal law is changed.

Recreational Trails Mandate. States are required to
develop, establish, and implement a program for funding
recreational trails.

Minimum Reflectivity for Traffic Signs and Pavement
Markings Mandate. The FHWA is currently developing minimum
standards for the retroreflectivity of pavement markings--
striping--and signs, which all States will need to follow after
October 1, 1995. The implementation schedule has not yet been
decided, but it is already clear that the cost impact of the
new requirements will be substantial.

Environment

Reform Clean Air Act Mandates.
--Eliminate the requirement for centralized motor vehicle
inspection and maintenance emissions testing and Federal
oversight and monitoring of inspection and maintenance
testing.

--Repeal the Employee Commute Option Program which requires
private companies to undertake aggressive, affirmative
efforts to encourage carpooling.

--Eliminate Corporate Average Fuel Efficiency [CAFE] mandated
standards, which encourage automobile manufacturers to
produce smaller, less safe, vehicles.

--Stop Development of the Enhanced Monitoring Rule. EPA is
currently developing regulations to establish uniform
pollution monitoring, recordkeeping, and reporting
requirements for ``major sources'' of air pollution.
Existing regulations have been more than effective in
controlling air pollution. EPA's own studies have
documented the likely massive costs of this new regulation.

Endangered Species Act Mandates.

--No new listings of endangered or threatened species or
designation of critical habitat until the end of this
Congress or re-authorization of the law. The law's
authorization has expired, and its implementation is now
heavily regulatory, imposing burdens on landowners and
creating disincentives for private stewardship. A ``time
out'' is needed until Congress has the opportunity to
balance the rights of landowners with the need to protect
species. There are currently 4,000 plant and animal species
that are candidates for listing on the endangered species
list, including: ragweed; Eastern wood rat; Lake Huron
locust; and the pea clam.

--Once reauthorized, limit coverage of the act to include only
actual harm to an endangered or threatened species, rather
than indirect modification of species habitat, unless a
specific designation of critical habitat is made prior to
the action.

Wetlands Mandates.

--Eliminate funding for enforcement of Section 404 of the Clean
Water Act, the Wetlands Program. It is the requirement that
developers of coastal wetlands obtain a Federal permit to
dredge, fill, or in any other way use the wetlands.

--Repeal similar requirement, in Title XII of the Food Security
Act of 1985, applying to agricultural wetlands.

California Clean Air Federal Implementation Plan [FIP]. The
EPA is required to put three areas in California--Los Angeles,
Sacramento, and Ventura--in compliance with the air quality
requirements in the 1977 Clean Air Act. The 1,700-page draft
plan would impose draconian limits on emissions, ranging from
factories to automobiles and trucks and even to lawnmowers. The
EPA estimates that the FIP could cost Californians between $4
billion and $6 billion annually. According to the State of
California, when the FIP is fully implemented in 2010 the
``losses will total at least $8.4 billion in direct costs,
$17.2 billion in output, and 165,000 jobs.'' This estimate does
not include the impact on transportation firms in the rest of
the State that are affected by the rule.

Reform Waste Disposal Rules to Allow for Environmentally
Sound Practices. Current regulations on the transportation,
storage, and disposal of hazardous wastes define these
substances too broadly and discourage environmentally
beneficial recycling.

Industrial Energy Efficiency Training Mandate. The 1992
Energy Policy Act [EPACT] directs States to establish programs
and training for universities, nonprofit organizations, State
and local governments, technical centers, utilities, and trade
organizations on industrial energy efficiency programs and
technologies.

Radon Action Program. The Radon Action Program currently
consumes over $5 million per year in taxpayer funds, and the
Federal Government administers radon State grants of an
additional $8 million. This funding should be zeroed out and
the offices closed. For nearly 8 years the EPA has been running
a scare campaign on the American public at taxpayers' expense.
The radon campaign has encouraged homeowners to spend hundreds
and sometimes thousands of dollars to remediate for an
infinitesimal, if not nonexistent, risk.

The Great Lakes Clean Water Quality Guidance. The EPA's
Great Lakes Initiative would impose uniform standards for water
quality on eight different States in the Midwest--Illinois,
Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania, and
Wisconsin. The EPA first proposed the initiative on April 16,
1993, and is required by court order to issue the rules on
March 13, 1995. The EPA estimates that the proposal could cost
from $80 million to $500 million annually. But in a study
conducted for the Council of Great Lakes Governors, DRI-McGraw
Hill estimated that it would cost over $2 billion per year and
up to 33,000 jobs lost. According to the Great Lakes Water
Quality Coalition, which consists of local governments,
businesses, and agricultural interests in the region, the
initiative will not ``significantly improve'' water quality and
``does not address the predominant sources of chemical
pollutants into the Great Lakes Basin--air deposition and
stormwater runoff.''

Clean Air Permitting Rule. The EPA is considering
finalizing a costly permitting rule that goes far beyond the
congressional purpose behind Title V of the 1990 Clean Air Act
Amendments. The rule will provide few, if any, environmental
benefits, but would stifle industrial innovations, impede
economic growth, and empower Federal bureaucrats to micromanage
industrial production.

Atrazine Pesticide Product Approval. The EPA is rumored to
have thrown sound science out the window in its approval of
Atrazine--a pesticide that has been on the market for 30 years.
The EPA's Science Review Board is reported to have recommended
no changes to the labeling of Atrazine. Despite this science-
based recommendation, Administrator Carol Browner is believed
to have ordered her EPA to conduct a special review. The EPA
should be required to justify its actions based on sound
science, risk assessment, and cost/benefit analysis.

Indoor Air Quality Regulations. The Occupational Safety and
Health Administration is preparing to issue new regulations to
require restaurants, retailers, office building owners, and
other business people to implement comprehensive indoor air
quality programs and ventilation plans. OSHA estimates that the
rule would cost $8.1 billion annually.

OSHA Fall Protection Regulations. These regulations went
into effect on February 6, 1995, and impose burdensome
workplace regulations whenever employees are working 6 feet
above the ground. Houses are already expensive enough. One
roofing company estimates these new regulations will drive the
cost of every new roof up by $500.

EPA Pulp and Paper Cluster Rules. The EPA has proposed what
it terms ``cluster rules'' for the paper industry. Basically,
these rules combine requirements under the Clean Air and Clean
Water Acts. While the EPA claims the new rules would simplify
existing regulations, many businesses say they actually
complicate them. According to the paper industry, the rules
would cost $11 billion in capital expenditures. According to
the Richmond Times Dispatch, the EPA admits ``the new rules
would force 33 mills to close; 21,000 people would lose their
jobs.''

EPA's Enhanced Monitoring Rule. The EPA has proposed
regulations to establish pollution monitoring, recordkeeping
and reporting requirements for ``major sources'' of air
pollution. An EPA funded study reported that the average oil
refinery's cost of complying with this rule will be $4 million
in initial costs and $2.4 million in annual operating costs.

Chemical Use Inventory Rule. The EPA is working on
regulations to expand reporting requirements on chemicals used
in the manufacturing process. These regulations would likely
drive more companies overseas and increase the cost of many
goods used by all Americans. In addition, the EPA has proposed
making the information reported to it available to trial
lawyers who will use the information to sue companies for
phantom risks.

California Car Rule. The California car rule for the
Northeast, issued by the EPA just before Christmas, prevents
cost-effective marketplace trading of emission reduction
responsibilities among car companies and utilities. The
estimated cost to the Northeast is $4.7 billion per year by
2007. This rule will increase the price of cars by $1,500.

EPA Section 112g Rules. EPA issued proposed rules requiring
``major source'' facilities to obtain pre-approval from EPA for
changes in their manufacturing processes. The EPA should be
prohibited from expending funds to finalize these rules.

Occupational Health and Safety

OSHA Ergonomics Rule. OSHA is currently working on a rule
that would require employers to take a number of actions to
address repetitive motion injuries. These are injuries due to
repeated hand, wrist, or other physical motions that cause or
aggravate musculoskeletal disorders. Employers would be
required to have written plans to prevent these injuries and to
redesign work areas, to slow assembly lines and potentially to
pay for medical bills. Private industry estimates that a
similar rule proposed by California OSHA would cost $3.1
billion annually in that State alone. Other sources estimate
the Federal rule would cost $21 billion to implement.

The Teenage Cardboard Baler Rule. As currently implemented,
this regulation prevents teenagers from certain kinds of safe
and gainful employment. The 40-year old regulation prohibits
teenagers from loading paper balers or compactors even when the
machines are turned off, despite the fact that new technology
and advanced features make the machines very safe. Hazardous
Occupation Order No. 12 [HO12] should be modified to allow 16-
and 17-year olds to load balers that meet current American
National Safety Institute [ANSI] worker safety standards.

Comprehensive Occupational Safety and Health Programs. OSHA
is preparing a notice of proposed rulemaking that would require
employers to develop and implement an occupational safety and
health program in their workplace. It is expected this rule
will cover employers with over 10 employees and may cover all
employers. According to OSHA, ``costs are likely to exceed $1
billion annually.'' Private cost estimates are much higher. The
Employment Policy Foundation estimates that similar programs,
which were required in the Kennedy-Ford OSHA bill in the 103d
Congress, would cost $6.3 billion annually.

Other

Eliminate the Boren Amendment Regulating Medicaid Payment
Levels. The Boren amendment provides that Medicaid payment
rates for hospitals and nursing facilities must be ``reasonable
and adequate'' to meet the costs of ``efficiently and
economically operated'' facilities in providing care that meets
Federal and State quality and safety standards. Although the
goal is laudable, it is disruptive to State's management of
Medicaid for two reasons. First, the language is ambiguous and
therefore has been the subject of numerous costly lawsuits
against States by providers seeking higher payment levels.
Second, the requirements of Boren do not make the payment
levels dependent on the ability of the State to pay providers
at this level. For example, it does not take into account the
number of Medicaid recipients or the fiscal capacity of the
State. The State is better able to determine the health care
circumstances and needs prevailing in the State and the payment
levels that would provide appropriate care.

Motor-Voter Act Mandate. This unfunded mandate on States
increases the likelihood of electoral fraud and is unnecessary
for effective civic participation. Many States have complained
about this program and its costs. It is a well-known mandate
that could be eliminated.

Crime Victims Compensation. Under the Crime Victims
Compensation Program, States are required to prioritize the
order in which crime victims are compensated. States should be
left to run these programs as they see fit.

Public Utility Regulatory Policies Act [PURPA]. This act
mandates that public utilities invest in renewable electricity
generation sources, such as wind power. This mandate, enacted
during the government-created energy scare of the late 1970's,
is based on the notion that insufficient energy resources
caused the energy shortage. Today it forces companies into
inefficient and politically correct resources.

The Public Utility Holding Company Act [PUHCA]. This is a
New Deal-era regulation that regulates who can own electric and
gas utilities. It was intended to fight abuses in the electric
and gas industry, but now restricts competition.

The Community Reinvestment Act. This act requires
depository institutions to reinvest depositors' funds back into
the communities they came from. This diverts resources from
their most efficient allocation. It also represents Federal
micromanagement in private lending.

Rescind Synar Amendments--Enforcement of Laws Regarding
Cigarette Sales to Minors. Draft Federal regulations would
require States to reach a level of 50-percent compliance with
prohibitions against the sale of cigarettes to minors. The
mandated level of compliance rises each year, as does the
percentage loss of Federal money for drug and alcohol treatment
if States fail to comply. States are capable of enforcing such
cigarette prohibitions themselves.

Job Service Requirement. Under the Job Training Partnership
Act, States must provide job placement services for men, women,
and youths, with special priority for veterans. The Job Service
also must maintain a national network to clear employer job
openings statewide and between States using a computerized job
bank. This appears to duplicate Federal and State job-training
efforts.

Student Right-to-Know and Campus Security Act. Campuses are
required to collect and report graduation rates for athletes
and nonathletes and maintain and report campus crime
statistics. The crime statistics should be maintained, but
graduation levels should be required by other means, such as
the NCAA.

FEMA Grants. FEMA makes grants to States to encourage
uniform reporting of fire incidence and suspected arson cases.
This is an unnecessary level of Federal involvement in local
activities.

Federal Requirement for Archeological and Historic Impact
Statements. The Federal Government requires historic and
archeological impact statements for certain construction
projects under the National Historic Preservation Act. State
historical societies contract out for the service. But most
States and municipalities now have sufficient infrastructure to
make historic and archeological evaluations on their own,
without a Federal requirement. Therefore, this mandate can be
waived.

Real Estate Settlement Procedures Act. The Department of
Housing and Urban Development [HUD] plans to issue a final rule
that would significantly reverse a 1992 rulemaking that
streamlines settlement services and provides substantial
benefits to consumers. By providing a variety of services and
products at the point of sale, consumers can save up to $150
per transaction, or almost $150 million annually for all
homebuyers. A final regulation that restricts the services that
can be offered by real estate settlement providers increases
both the time and money required to purchase a house.

USDA Proposed Mega-Rule on Meat and Poultry Inspection. The
Department of Agriculture plans to issue a ``mega-rule'' in
early 1995 that would require substantial, new inspection
requirements for meat and poultry. Rather than revise the
existing regulatory structure, this rule will simply be layered
on top of the existing system. As a result, serious concerns
about health and safety are not being addressed and resources
that could otherwise be used promoting safety will be wasted.
Without a thorough reform of the entire process, the costs of
the regulatory structure may exceed the benefits of the
regulation.

FIFRA Worker Protection Standard. EPA issued 66 pages of a
revised worker protection standard under the Federal
Insecticide, Fungicide and Rodenticide Act [FIFRA] in 1992 and
EPA Administrator Carol Browner signed an order implementing
enforcement of the rule on January 3, 1995. The rule imposes
significant burdens on farmers in areas of safety, training,
decontamination, information posting, emergency assistance, and
worker reentry into fields after pesticides are applied. In a
sign that even the EPA is uncomfortable with the standards,
recently it amended the standards in four areas. Unfortunately,
many additional problems remain. In the past both the USDA and
the National Association of State Departments of Agriculture--a
bipartisan organization of all 50 States--have expressed
serious concerns about these standards. NASDA has said, ``As
proposed, the regulation cannot feasibly be implemented by
farmers and cannot effectively be regulated by State
regulators--not to mention it represents a huge unfunded
mandate.'' The U.S. Department of Agriculture commented in a
December 1994 letter that the changes made to the worker
protection standard in the draft proposed rule would impose a
``significant and substantial'' burden on employers and
workers, ``considerably in excess of that estimated by EPA in
the draft proposed rule and its Regulatory Impact Assessment.''
In light of the number of problems that remain with the
standard, EPA should suspend enforcement.

Sunglasses Labeling. The FDA is working on a proposal,
still in the pre-rule stage, which would require labeling of
sunglasses to ensure that consumers are aware that overexposure
to ultraviolet radiation could hurt their eyes.

FDA Reference List. Since April 1992, the Food and Drug
Administration has been executing what the agency calls the
Medical Device Reference List (reference list). The reference
list is a set of programs that the FDA's Center for Devices and
Radiological Health uses to link current good manufacturing
practices [GMP] inspections to the agency's normal scientific
review of pre-market notification (510(k)) submissions. From
April 1992 until the publication of a Public Notice in the
Federal Register in October 1993, the existence of a reference
list program was kept secret from the medical device community
and the American public. A medical manufacturer may be placed
on the reference list by being in violation of one or more of
FDA's GMP regulations. Whether or not a medical manufacturer is
placed on the reference list because of an alleged violation is
completely at the discretion of the agency. No company is sure
when, or if they have been placed on the list because it is an
FDA internal document. In other words, no notification letter
is sent to a company informing them that they are on what has
been described as an agency ``black list.'' When a company is
placed on the reference list, the agency immediately halts
their work on any pending 510(k) application submissions.

Redundant FDA Controls on Advertising of Prescription
Drugs. Currently, both the FTC and the FDA regulate ``direct to
consumer'' advertising of prescription drugs. The FDA's
regulations originated out of its authority over advertisements
in medical journals, whereas the FTC has a long history of
directly regulating consumer advertising. The FTC has full
authority to protect consumers from false and misleading
advertising in this area and has much more experience and
expertise in consumer advertising. By attempting to protect the
consumer from false and misleading advertising, the FDA has
slowed the dissemination of truthful and important medical
information to the public, and is wasting resources that could
be spent on other areas of concern. Congress has been informed
that one of the bizarre results of this dual control over
advertising is an FDA ban on the Rogaine TV advertisements
before midnight.

Overbroad FTC Proposed Telemarketing Sales Rule. The FTC
issued a proposed rule on February 9, 1995, that will be made
final before August 16, 1995. Acting under the direction of the
last Congress, the FTC has an overly broad proposal that lumps
legitimate businesses that conduct business over the telephone
with fraudulent telemarketers. In doing so, it unnecessarily
burdens many industries. This rule is so broadly written that
long-recognized, legitimate activities are captured that have
never before been considered to be telemarketing. For example,
newspaper delivery carriers could be barred from making route
collections under the rule's restriction on couriers. Moreover,
proposed restrictions on contacting existing customers would,
in many cases, require a newspaper subscription to lapse before
the customer could be called about renewal. The rule would even
apply to charitable and nonprofit organizations if they couple
requests for donations with an offer of a prize, or a chance to
win a prize or the opportunity to purchase any goods or
services.

Disinfectant Byproduct Rulemaking. The EPA currently is
proposing to regulate disinfection byproducts in drinking
water. The proposed rule regulates substances that are formed
when chlorine is added to the water supply in order to
disinfect drinking water. The EPA cites several studies as
justification for establishing the maximum contaminant level,
yet the most reliable studies do not support the EPA's
regulation. A National Cancer Institute study concluded that
overall there was no association of duration of exposure to
chlorinated water with bladder cancer risk. The EPA itself
cites several other studies which showed no correlation between
cancer risk and disinfection byproducts. The EPA has estimated
the first-phase cost of this regulation at more than $1 billion
per year. The extended second phase would cost an additional
$2.6 billion per year. The costs will be borne by the
municipalities and communities that operate water treatment
facilities as well as the States charged with overseeing their
operations. For water systems serving fewer than 10,000
people--which represent 94 percent of all water systems--the
cost per household of complying with Federal drinking water
mandates would more than double, while providing no measurable
public health benefits.

FDA Draft Policy Statement on Industry-Supported Scientific
and Educational Activities. This policy statement stops the
exchange of valuable information on medical devices between
inventors and surgeons, and leads to unnecessary patient deaths
and injuries. The FDA should be prohibited from enforcing this
policy statement.

FDA Humanitarian Device Exemption Regulations. In November
1990, through the Safe Medical Devices Act of 1990, Congress
ordered the FDA to promulgate streamlining regulations that
simplify the approval process for humanitarian devices--which
benefit a small segment of the population--less than 4,000
patients. The FDA was ordered to publish final regulations by
November 1991, but has failed to act for over 3 years. The FDA
issued proposed rules in December 1992, that generated a large
number of negative comments from the public. The FDA should be
prohibited from expending any funds on enforcement actions
against humanitarian devices until it has promulgated final
regulations that are reconciled with the public comments.

Unauthorized Rescissions by FDA of 510k Approvals. The FDA
has recently started rescinding approvals of 510k applications
on grounds it simply made a ``mistake.'' These rescissions are
without statutory authority. Absent a finding of fraud in the
application, the FDA should be prohibited from expending funds
to rescind prior approvals.

Untimely FDA Action on IDE Notices. Medical device
manufacturers are required to notify the FDA that they are
conducting clinical trials on investigational devices. By
regulation, the FDA has 30 days from the date of submission to
object. If it fails to object, the manufacturer is free to
start the trials. Although manufacturers are not required to
obtain FDA approval, they routinely wait for approval which can
take far longer than 30 days. The FDA should be barred from
objecting to an IDE clinical trial after the 30-day waiting
period has expired.

FDA Informal Rulemaking. The FDA currently makes policy
through a variety of improper means, including the issuance of
``Points to Consider,'' ``Draft Guidances,'' and ``Warning
Letters.'' These writings--as well as speeches--are extremely
difficult to track, yet often contain substantive rules. FDA
should be prohibited from announcing substantive rules through
means other than Federal Register notice and the solicitation
of comments.

FDA Restrictions on Manufacturing Changes to Class III PMA
Devices. FDA should be prohibited from expending funds to
enforce restrictions on manufacturing changes that could not
significantly affect the safety or effectiveness of a medical
device.

Clarification of Rules Governing Athletic Opportunities.
Regulations implementing Title IX of the Education Amendments
of 1972 currently allow for the elimination of athletic
opportunity, primarily as a result of heavy reliance on the
proportionality rule. This rule is supposed to be one option
under a three-pronged test of accommodation of interests and
abilities, but has been given undue deference. Proportionality
has caused many colleges and universities to respond with the
elimination of entire athletic teams. As this was not the
original intent of Congress, Congress should move to clarify
title IX with respect to athletic opportunities.

Budget Process Language

Debt Limit. The public debt limit was last increased to
$4.9 trillion as part of OBRA 1993. According to recent
estimates, the debt limit will be breached sometime in October
1996. A bill must be enacted into law before that date to raise
the debt limit.
The reconciliation instructions do not include, as
permitted under Section 310 of the Budget Act, directives to
the Committee on Ways and Means to report a bill raising the
debt limits. In the absence of such a bill, the Committee on
Ways and Means could report out a free standing bill or, under
House rule 49, the vote on the conference report would
automatically trigger the engrossment of a bill rasing the debt
limit.
The budget resolution includes several sections relating
the debt limit. Section 10 includes Sense of Congress language
that the ultimate goal of a balanced budget is to pay off the
public debt. Section 11 provides Sense of Congress language
calling for the repeal of rule XIX of the Rules of the House of
Representatives.

Asset Sales. In a significant departure from the existing
treatment of assets sales, the budget resolution includes
language to facilitate the sale of government assets to the
private sector. Previous budget resolutions included language
expressly prohibiting Congress from counting asset sales when
enforcing points of order under the Budget Act. Similarly,
Section 257 provides that such proceeds cannot be counted under
the PAYGO requirements for tax and entitlement legislation.
Under Section 5, authorizing committees will be credited
with the net benefit from asset sales--taking into
consideration both the one-time proceeds from selling a
government asset and the long-term revenue that the asset would
have generated had it remained a possession of the Federal
Government. Estimates will capture on a credit basis both the
long-term costs and benefits arising from the sale of a
government asset.
Section 5 specifies that the proceeds from assets sales
will counted for purposes of determining compliance with the
reconciliation instructions enforcing points of order under the
Congressional Budget Act. The proceeds and costs arising from
asset sales will be reflected in committee allocations,
reconciliation instructions and in estimates used to determine
whether legislation complies with the budget resolution.

Student Loans. Section 9 provides Sense of Congress
language that the Federal Credit Reform Act understates the
true costs of direct student loans because administrative costs
are not included in the net present value calculation of
Federal direct loan subsidy costs.
Since the Credit Reform Act of 1990, direct student loans
and guaranteed student loans have been scored on a net present
value rather than cash basis. However, the administrative costs
for direct loans are not included in the net present value
calculation. Consequently, Congressional Budget Office
estimates understate the true costs of direct loans as compared
to guaranteed student loans in which the administrative costs
are calculated as part of the subsidy costs. As a result, there
is a strong incentive to substitute direct loans for guaranteed
loans through the costs of the latter is understated.

Baselines. Section 7 provides Sense of Congress language
finding that baseline are inherently biased against provisions
that would reduce projected growth in spending. The language
further finds that baseline budgeting encourages Congress to
yield control over the funding of Federal programs.

Emergencies. Section 8 provides Sense of Congress language
relating to emergencies. Under current law, funding emergencies
are exempt from both the discretionary spending limits and the
PAY-AS-YOU-GO requirements. Congress and the President need
only designate an emergency to invoke the exemption.
The language provides that emergency exemption has led to
two abuses: piggy-backing funding requirements that would not
pass on their own merits on to dire emergency relief bills; and
designating as emergencies funding requests that are not
genuine emergencies for the sole purpose of circumventing the
discretionary spending limits and PAYGO.

IRS. Section 6 restates language in the budget resolution
for fiscal year 1995 which provided additional funds for
activities of the Internal Revenue Service. The language
provides that the discretionary spending limits may be adjusted
to accommodate appropriations of up to $404 million in budget
authority and outlays for taxpayer compliance activities. On
the assumption that such activities will increase tax
collections, the chairmen of the budget committees must certify
that such appropriations will not affect the deficit.
COMMITTEE VOTES

Clause 2(1)(2)(B) of House Rule XI requires each committee
report to accompany any bill or resolution of a public
character, ordered to include the total number of votes coast
for and against on each rollcall vote on a motion to report and
any amendment offered to the measure or matter, together with
the names of those voting for and against. Listed below are the
rollcall votes taken in the Budget resolution on the concurrent
resolution on the budget for fiscal year 1996.
On May 10, 1995, the Committee met in open session, a
quorum being present. The Committee adopted and ordered
reported the Concurrent Resolution on the Budget for Fiscal
Year 1996.
The following votes were taken by the Committee:
1. Mr. Hobson made a motion to authorize the Chairman,
consistent with rule XVI, clause 4 of the Rules of the House,
to declare a recess at any time during the Committee meeting.
The motion was agreed to by voice vote.
2. Mr. Sabo offered an amendment to the Chairman's Mark to
change the aggregate level of revenues by the amounts necessary
to reflect elimination of the tax cuts contained in H.R. 1215.
The amendment by Mr. Sabo was not agreed to by a rollcall vote
of 17 ayes and 24 noes.
AYES NOES
Mr. Sabo Mr. Kasich
Mr. Stenholm Mr. Hobson
Ms. Slaughter Mr. Walker
Mr. Coyne Mr. Kolbe
Mr. Mollohan Mr. Shays
Mr. Costello Mr. Herger
Mr. Johnston Mr. Smith (Texas)
Mrs. Mink Mr. Allard
Mr. Orton Mr. Miller
Mr. Pomeroy Mr. Lazio
Mr. Browder Mr. Franks
Ms. Woolsey Mr. Smith (Michigan)
Mr. Olver Mr. Inglis
Ms. Roybal-Allard Mr. Hoke
Mrs. Meek Ms. Molinari
Ms. Rivers Mr. Nussle
Mr. Doggett Mr. Hoekstra
Mr. Largent
Mrs. Myrick
Mr. Brownback
Mr. Shadegg
Mr. Radanovich
Mr. Bass
Mr. Parker

3. Mr. Doggett offered an amendment to the Chairman's Mark
to increase aggregate revenue levels, to amend the committee
report to reflect the assumption that the President's fiscal
year 1996 budget proposal will be enacted and to include the
following language:
``The Committee is greatly concerned about the growing
phenomenon of millionaire and billionaire Americans renouncing
their United States citizenship in order to avoid paying their
fair share of our society's tax burden. The Committee strongly
believes that the Congress should take steps to stem the
revenue loss from expatriation for tax avoidance. As such, the
Committee recommends the immediate adoption of the President's
fiscal year 1996 budget proposal on this subject. The budget
assumes enactment of the President's proposal.''
a. Mr. Nussle offered an amendment to Mr. Doggett's
amendment to substitute the following report language.
The Committee is greatly concerned about the growing
phenomenon of millionaire and billionaire Americans renouncing
their United States citizenship in order to avoid paying their
fair share of our society's tax burden. The Committee strongly
believes that the Congress should take steps to stem the
revenue loss from expatriation for tax avoidance.''
The amendment was agreed to by voice vote.
b. Mr. Doggett's amendment as amended by Mr. Nussle, was
agreed to by a voice vote.
4. Ms. Woolsey and Mr. Pomeroy offered an amendment to the
Chairman's Mark to increase budget authority and outlays for
Function 500 to reflect continuation of the in-school interest
subsidy for student loans, to increase the aggregate level of
revenues by an equal amount reflecting reduction of the tax
cuts in H.R. 1215, and for other purposes. The amendment by Ms.
Woolsey and Mr. Pomeroy was not agreed to by a rollcall vote of
17 ayes and 24 noes.
AYES NOES
Mr. Sabo Mr. Kasich
Mr. Stenholm Mr. Hobson
Ms. Slaughter Mr. Walker
Mr. Coyne Mr. Kolbe
Mr. Mollohan Mr. Shays
Mr. Costello Mr. Herger
Mr. Johnston Mr. Smith (Texas)
Mrs. Mink Mr. Allard
Mr. Orton Mr. Miller
Mr. Pomeroy Mr. Lazio
Mr. Browder Mr. Franks
Ms. Woolsey Mr. Smith (Michigan)
Mr. Olver Mr. Inglis
Ms. Roybal-Allard Mr. Hoke
Mrs. Meek Ms. Molinari
Ms. Rivers Mr. Nussle
Mr. Doggett Mr. Hoekstra
Mr. Largent
Mrs. Myrick
Mr. Brownback
Mr. Shadegg
Mr. Radanovich
Mr. Bass
Mr. Parker

5. Mrs. Mink offered an amendment to the Chairman's Mark to
increase budget authority and outlays for Function 500 to
reflect continuation of discretionary education programs and
Head Start at 1995 levels, to increase the aggregate level of
revenues by an equal amount reflecting reduction of the tax
cuts in H.R. 1215, and for other purposes. The amendment
offered by Mrs. Mink was not agreed to by a rollcall vote of 17
ayes and 23 noes.
AYES NOES
Mr. Sabo Mr. Kasich
Mr. Stenholm Mr. Hobson
Ms. Slaughter Mr. Walker
Mr. Coyne Mr. Kolbe
Mr. Mollohan Mr. Shays
Mr. Costello Mr. Herger
Mr. Johnston Mr. Smith (Texas)
Mrs. Mink Mr. Allard
Mr. Orton Mr. Miller
Mr. Pomeroy Mr. Lazio
Mr. Browder Mr. Franks
Ms. Woolsey Mr. Smith (Michigan)
Mr. Olver Mr. Inglis
Ms. Roybal-Allard Ms. Molinari
Mrs. Meek Ms. Nussle
Ms. Rivers Mr. Hoekstra
Mr. Doggett Mr. Largent
Mrs. Myrick
Mr. Brownback
Mr. Shadegg
Mr. Radanovich
Mr. Bass
Mr. Parker

6. Ms. Meek offered an amendment to the Chairman's Mark to
increase budget authority and outlays for Function 500 to
reflect continuation of discretionary higher education programs
at 1995 levels, to increase the aggregate level of revenues by
an equal amount reflecting reduction of the tax cuts in H.R.
1215, and for other purposes. The amendment offered by Ms. Meek
was withdrawn.
7. Mr. Parker offered an amendment to the Chairman's Mark
to reduce budget authority and outlays for Function 270 to
reflect a merger of the Institutional Conservation grant
program into the State Energy Conservation program. The
amendment offered by Mr. Parker was agreed to by a division of
41 ayes and 0 noes.
8. Ms. Woolsey and Ms. Roybal-Allard offered an amendment
to the Chairman's Mark to increase budget authority and outlays
for Function 600 to reject the Chairman Mark's proposals in the
area of child nutrition to increase the aggregate level of
revenues by an equal amount reflecting reduction of the tax
cuts in H.R. 1215, and for other purposes. The amendment by Ms.
Woolsey and Ms. Roybal-Allard was not agreed to by a rollcall
vote of 17 ayes and 24 noes.
AYES NOES
Mr. Sabo Mr. Kasich
Mr. Stenholm Mr. Hobson
Ms. Slaughter Mr. Walker
Mr. Coyne Mr. Kolbe
Mr. Mollohan Mr. Shays
Mr. Costello Mr. Herger
Mr. Johnston Mr. Smith (Texas)
Mrs. Mink Mr. Allard
Mr. Orton Mr. Miller
Mr. Pomeroy Mr. Lazio
Mr. Browder Mr. Franks
Ms. Woolsey Mr. Smith (Michigan)
Mr. Olver Mr. Inglis
Ms. Roybal-Allard Mr. Hoke
Mrs. Meek Ms. Molinari
Ms. Rivers Mr. Nussle
Mr. Doggett Mr. Hoekstra
Mr. Largent
Mrs. Myrick
Mr. Brownback
Mr. Shadegg
Mr. Radanovich
Mr. Bass
Mr. Parker

9. Mr. Hoekstra offered an amendment to the Chairman's Mark
to strike Section 10 and to insert in lieu thereof the
following language:
SEC. 10. SENSE OF THE HOUSE REGARDING DEBT REPAYMENT.

It is the sense of the House of Representatives that the
Congress has a basic moral and ethical responsibility to future
generations to repay the federal debt. The Congress should
enact a plan that balances the budget, and then also develops a
regimen for paying off the federal debt.
After the budget is balanced, a surplus should be created,
which can be used to begin paying off the debt.
It is the sense of the House that such a plan should be
formulated and implemented so that this generation can save
future generations from the crushing burdens of the federal
debt.

The amendment offered by Mr. Hoekstra was agreed to by
voice vote.
10. Mr. Hobson made a motion that the Committee adopt the
aggregates, function totals, and other appropriate matters
contained in the Chairman's Mark. The motion offered by Mr.
Hobson was agreed to by voice vote.
11. Mr. Hobson made a motion that the Committee adopt the
Concurrent Resolution on the Budget. The motion offered by Mr.
Hobson was agreed to by a rollcall vote of 24 ayes and 17 noes.
AYES NOES
Mr. Kasich Mr. Sabo
Mr. Hobson Mr. Stenholm
Mr. Walker Ms. Slaughter
Mr. Kolbe Mr. Coyne
Mr. Shays Mr. Mollohan
Mr. Herger Mr. Costello
Mr. Smith (Texas) Mr. Johnston
Mr. Allard Mrs. Mink
Mr. Miller Mr. Orton
Mr. Lazio Mr. Pomeroy
Mr. Franks Mr. Browder
Mr. Smith (Michigan) Ms. Woolsey
Mr. Inglis Mr. Olver
Mr. Hoke Ms. Roybal-Allard
Ms. Molinari Mrs. Meek
Mr. Nussle Ms. Rivers
Mr. Hoekstra Mr. Doggett
Mr. Largent
Mrs. Myrick
Mr. Brownback
Mr. Shadegg
Mr. Radanovich
Mr. Bass
Mr. Parker

12. Mr. Hobson made a motion that the Committee report the
Concurrent Resolution on the Budget to the House with the
recommendation that the Concurrent Resolution be agreed to and
that the Concurrent Resolution do pass. The motion offered by
Mr. Hobson was agreed to by a rollcall vote of 24 ayes and 17
noes.
AYES NOES
Mr. Kasich Mr. Sabo
Mr. Hobson Mr. Stenholm
Mr. Walker Ms. Slaughter
Mr. Kolbe Mr. Coyne
Mr. Shays Mr. Mollohan
Mr. Herger Mr. Costello
Mr. Smith (Texas) Mr. Johnston
Mr. Allard Mrs. Mink
Mr. Miller Mr. Orton
Mr. Lazio Mr. Pomeroy
Mr. Franks Mr. Browder
Mr. Smith (Michigan) Ms. Woolsey
Mr. Inglis Mr. Olver
Mr. Hoke Ms. Roybal-Allard
Ms. Molinari Mrs. Meek
Mr. Nussle Ms. Rivers
Mr. Hoekstra Mr. Doggett
Mr. Largent
Mrs. Myrick
Mr. Brownback
Mr. Shadegg
Mr. Radanovich
Mr. Bass
Mr. Parker

13. Mr. Hobson asked for and received unanimous consent
that the staff be given authority to make necessary technical
and conforming changes in the bill and the committee
amendments, and calculate any remaining elements required in
the Concurrent Resolution on the Budget.
14. Mr. Hobson made a motion that the Chair be authorized
to file the report and to make a motion to go to conference
pursuant to Rule XX of the Rules of the House. The motion
offered by Mr. Hobson was agreed to by voice vote.
15. The motion to reconsider was laid on the table by
unanimous consent.
Budget Committee Oversight Findings

Clause 2(1)(3)(A) of rule XI requires each committee report
to contain oversight findings and recommendations required
pursuant to clause 2(b)(1) of rule X. The Committee has no
oversight findings.

Oversight Findings and Recommendations of the Committee on Government
Reform and Oversight

Clause 2(1)(3)(D) of rule XI requires each committee report
to contain a summary of oversight findings and recommendations
made by the Government Reform and Oversight Committee pursuant
to clause 4(c)(2) of rule X, whenever such findings have been
timely submitted. The Committee on Budget has received no such
findings or recommendations from the Committee on Government
Reform and Oversight.

Federal Assistance to State and Local Governments

Assumed in this budget is a dramatic devolution of
government programs from distant bureaucracies in Washington,
DC back to the State and local governments that are closer to
and more accountable to the people these programs are intended
to serve. The number of Federally controlled programs has
proliferated over the years, to the point where for a given
need there are a multitude of different Federal programs, each
with its own set of onerous rules and regulations. The Budget
Committee and the 104th Congress are committed to bypassing the
inert Washington, D.C. bureaucracies, and providing State and
local governments with the flexibility necessary to solve
peoples' needs through logical and innovative ways at the State
and local level, instead of with a Federal cookie cutter
approach.

Miscellaneous Budgetary Information

With respect to the requirement of clause 2(1)(3)(B) of
rule XI of the Rules of the House of Representatives and
section 308(a) of the Congressional Budget Act of 1974, the
concurrent resolution on the budget for fiscal year 1996 does
not contain any new budget authority, spending authority,
credit authority, or provide an increase or decrease in
revenues or tax expenditures.

Views of Committee Members

Clause (2)(1)(5) of rule XI requires each committee to
afford a 3-day opportunity for members of the committee to file
additional minority, or dissenting views and to include the
view in its report. The following views were submitted:
MINORITY VIEWS

The Republican Budget--An Exercise in Extremism

The Republican budget goes too far. It cuts revenues too
much. It cuts Medicare too deeply. It cuts Medicaid too much.
It cuts education too much. It hurts our cities and farms
unnecessarily. It relies too much on good luck. The Republican
budget does too much for the most privileged in our society and
too much against the most vulnerable in our society.
There is no doubt that the federal government needs reform.
The American people want and deserve quality services at a
reasonable price. And they want the federal government to
``live within its means''. It is clear that many programs can
be eliminated, consolidated, streamlined or otherwise improved,
but this budget is too extreme. And it is too mean-spirited.
The Republican budget starts out with the premise that we
can balance the budget and cut taxes at the same time. Yet, all
our historical experience runs counter to that premise. And, in
fact, we are still suffering from the last time that tactic was
tried in 1981.
As the Budget Committee went around the country on field
hearings last winter, its members were told over and over that
the people wanted spending cut first. Then, when the budget is
balanced, they said they would like a tax cut. Yet the
Republican budget cuts taxes first and spending second--
precisely the opposite of what the people told us to do.

The Spending Cuts

Clearly, federal health care programs need reform. Both
Medicare and Medicaid are growing at rates of 10 percent a year
as far as the eye can see. That is not sustainable. It is
commendable that the Republican budget wants to deal with these
issues, but this plan is too extreme.
The Republican budget cuts Medicare $288 billion over the
next seven years. It assumes Medicare spending can be reduced
from a projected growth of 10 percent a year over the next
seven years down to 9.0 percent next year and then further down
to 4.5 percent in the year 2000 and thereafter.
The number of people who need Medicare increases a little
more than 1 percent every year. That means in the year 2000 and
after, when new caseload is accommodated, all other program
costs are assumed to grow only 3.4 percent. Even under the best
of circumstances it is difficult to imagine an inflation level
that low in a health care system that treats older people. It
is difficult to believe cuts that deep could be reached without
serious harm to the nation's seniors. And even if they could be
implemented in the near future, it is highly unlikely that such
a low growth rate can be sustained over time.
The Republican budget plan cuts Medicaid $187 billion over
the next seven years. The Medicaid program serves low-income
people who don't have health insurance, and it is the main
source of funding for long-term nursing home care for most
senior citizens. As more and more people live past the age of
85, this program is much more necessary and it becomes more
expensive.
The plan assumes a reduction in Medicaid growth from
projections of 10 percent a year over the next seven years to 8
percent next year. By 1998, it assumes growth in the federal
share of this program is capped at 4 percent a year and stays
at that level thereafter. Clearly, this program could benefit
from large-scale regulatory reform and again the Republican
budget is to be commended for tackling this difficult task.
Unfortunately, cuts of this magnitude go way beyond the level
of savings that can be achieved through regulatory change.
These cuts will necessitate removing the entitlement status
from the program and turning it into a block grant. While it is
technically possible to ``make these reductions stick'' under
the block grant structure, it is highly unlikely the nation's
governors will be able to live with this level of constraint
over the long haul.
The Head Start program is frozen at 1994 levels for the
next seven years. There now exists more than 20 years worth of
data and analysis on the Head Start program. It is a program of
proven effectiveness in helping young vulnerable children who
might overwise not make it grow into productive students and
workers., Clearly this program meets a critical national need.
Yet, under the Republic plan, the program would lose 26 percent
of its real buying power by the year 2002. This cut is just too
deep.
The Republican budget cuts funding for education, training
and child care by $82 billion over the next seven years. That
is a reduction of 35 percent in real purchasing power. At a
time when the nation is facing significant structural changes
in its economy and the government is making a renewed attempt
to help poor people get off welfare and into the workforce,
these cuts are ``penny-wise and pound foolish''. While some
reform is desirable, this cut is just too deep.
This budget incorporates the Republican welfare package
passed by the House earlier this year. One of the most
disingenuous features of that package was the merging of
several time-tested, effective nutrition programs, such as
school lunch, into two new block grants in a thinly-veiled
attempt to cut funds without acknowledging that children will
be hurt. This is one of the Republican budget's most egregious
violations of that fundamental rule, ``if it ain't broke, don't
fix it''.
Further the welfare package caps spending because it
assumes that people will move off welfare into jobs. Yet at the
same time it is reducing welfare spending, it is cutting job
training, education, child care, housing, and transportation
funds so dramatically that it is unlikely that welfare
recipients will actually be able to get off welfare and into
the workforce. Once again, this budget goes too far.

The Tax Breaks

Is it necessary to cut needed services this deeply to
balance the budget? The answer clearly is no. Then why does
this budget have to go so far?
The Republican budget needs to slash many areas vital to
everyday Americans, because it contains huge tax breaks for the
most affluent and privileged members of this society. While the
most commonly discussed tax break in the Republican budget is
the child credit for families whose incomes are between $15,000
and $250,000, it is the other tax breaks in the package that
explode over time, draining off badly-needed resources to give
special breaks to America's most privileged citizens.
This budget provides $350 billion in special tax breaks, 67
percent of which goes to Americans who make more than $75,000 a
year. At the same time only 1.5 percent of these tax breaks go
to families whose incomes are below $20,000 a year. This drain
on the federal treasury then is made up by slashing support for
ordinary working people and the most vulnerable among us.

Conclusion

Over and over throughout this budget we see the extreme
ideology of the new Republican majority at work. From Medicare
to Head Start, from school lunches to student loans, from
agricultural support payments to bus systems in our nation's
cities, this budget is too extreme.
There is widespread support throughout the American public
for balancing the federal budget, but this support will surely
erode if the job is not done more fairly than this. The
American people want fiscal discipline exercised with fairness
and compassion. This budget does not meet that test.

REPUBLICAN 1996 BUDGET RESOLUTION CHANGES IN DISCRETIONARY PROGRAM FUNDING
[In billions of dollars]
----------------------------------------------------------------------------------------------------------------
Amount needed in Percent change in
Enacted 1995 2002 to maintain Budget amounts buying power from
1995 services year 2002 1995 to 2002
----------------------------------------------------------------------------------------------------------------
Total Discretionary:
Budget Authority ^{1.............. 510.4 663.9 503.2 -24.2
Outlays......................... 547.9 678.9 522.7 -23.0
===========================================================================
Defense discretionary:
Budget Authority................ 262.3 334.2 288.0 -13.8
Outlays......................... 270.3 325.2 280.0 -13.9
Nondefense discretionary:
Budget Authority ^{1.............. 248.1 329.6 215.2 -34.7
Outlays......................... 277.6 353.7 242.7 -31.4
===========================================================================
Budget functional categories: ^{3
150 International Affairs....... 20.4 26.1 13.9 -46.5
250 General Science, Space...... 17.1 21.8 14.8 -31.8
270 Energy...................... 6.3 8.4 4.2 -50.7
300 Natural Resources &
Environment.................... 22.0 27.7 18.6 -32.8
350 Agriculture................. 4.0 5.2 3.5 -31.6
370 Commerce & Housing Credit... 3.3 4.4 1.8 -58.8
400 Transportation \2\.......... 38.9 47.6 33.2 -30.3
450 Community & Regional
Development.................... 8.9 11.2 6.6 -40.6
500 Education & Training........ 42.0 53.2 34.7 -34.7
550 Health...................... 22.8 29.1 20.8 -28.5
570 Medicare administration..... 3.0 4.1 3.0 -26.8
600 Income Security \1\......... 34.0 55.4 39.0 -29.6
650 Social Security
administration \2\............. 2.5 3.2 2.5 -22.7
700 Veterans.................... 18.3 23.9 18.2 -23.8
750 Administration of Justice... 18.1 23.4 15.9 -32.1
800 General Government.......... 12.3 15.8 10.6 -32.9
900 Net Interest................ 0.0 0.0 0.0 na
920 Allowances.................. 0.0 0.0 -2.6 na
950 Undistributed Offsetting
Receipts....................... 0.0 0.0 0.0 na
----------------------------------------------------------------------------------------------------------------
\1\ Note: Budget authority to maintain current services includes long-term housing contract renewals sufficient
to maintain current housing assistance. Expiring contracts bunch more in some than other years, including the
year 2002.
\2\ Note: Outlays are shown for this function. For technical reasons, budget authority is not a good indicator
of budget resources.
\3\ (Budget Authority is shown unless otherwise noted.)

MAJOR ENTITLEMENT REDUCTIONS IN THE HOUSE REPUBLICAN 1996 BUDGET
[In billions of dollars]
------------------------------------------------------------------------
Percentage change from
current law
1995 level -------------------------
1996 2002
------------------------------------------------------------------------
Medicare......................... $158.1 -4 -27
Medicaid......................... 89.2 -3 -32
Food stamps...................... 25.1 -6 -24
Supplemental Security Income..... 24.3 -6 -16
Family support payments (AFDC)... 17.2 -8 -24
Child nutrition.................. 7.6 -16 -33
Student loans \1\................ 5.2 -43 -94
Agriculture support payments..... 8.4 -11 -49
Civilian and foreign service
retirement...................... 38.3 -4 -6
AFDC JOBS........................ 1.0 -85 -100
------------------------------------------------------------------------
\1\ Reductions represent loss of the federal subsidy. The unsubsidized
student loan program will remain.

Note: Totals do not reflect the impact of the CPI minus 0.6%, which the
resolution assumes will begin in 1999.

MAJOR ENTITLEMENT REDUCTIONS IN THE HOUSE REPUBLICAN 1996 BUDGET SHOWN AS CHANGES FROM THE CBO BASELINE
[In billions of dollars]
----------------------------------------------------------------------------------------------------------------
5-year 7-year
1996 1997 1998 1999 2000 2001 2002 total total
----------------------------------------------------------------------------------------------------------------
Medicare.............. -6.5 -15.4 -24.7 -36.7 -51.1 -67.6 -86.4 -134.4 -288.4
Medicaid.............. -2.9 -8.4 -16.3 -24.9 -33.8 -43.7 -56.6 -86.3 -186.6
Food stamps........... -1.5 -3.6 -4.4 -5.0 -5.8 -6.9 -8.4 -20.2 -35.5
Supplemental Security
Income............... -1.5 -4.2 -4.7 -5.1 -6.0 -6.7 -7.6 -21.5 -35.8
Family support
payments (AFDC)...... -1.4 -1.5 -1.9 -2.6 -3.2 -4.0 -5.1 -10.6 -19.6
Child nutrition....... -1.3 -2.1 -2.5 -2.8 -3.1 -3.5 -3.9 -11.8 -19.1
Student loans......... -1.6 -2.5 -2.6 -2.8 -2.9 -3.0 -3.2 -12.4 -18.7
Agriculture support
payments............. -1.0 -1.0 -2.0 -2.0 -3.0 -4.0 -4.0 -9.0 -17.0
Civilian and foreign
service retirement... -1.5 -2.2 -2.4 -2.4 -2.3 -2.6 -3.2 -10.9 -16.7
FCC spectrum auction.. -0.0 -0.6 -2.3 -3.7 -3.8 -2.4 -2.4 -10.3 -15.0
AFDC jobs............. -0.8 -1.0 -1.0 -1.0 -1.0 -1.0 -1.0 -4.7 -6.6
Veterans benefits..... -0.3 -0.3 -0.5 -1.2 -1.3 -1.3 -1.5 -3.6 -6.4
Asset sales........... -2.4 -1.5 -3.4 -1.0 -0.5 -0.9 -0.8 -5.9 -4.1
User fees (excl.
veterans)............ -1.0 -1.1 -1.2 -1.4 -1.5 -1.6 -1.7 -6.1 -9.4
All other............. -0.4 -1.5 -0.6 -0.1 -0.1 -2.2 -4.7 -1.6 -5.3
-----------------------------------------------------------------------------------------
Total
entitlement
changes........ -24.1 -43.9 -69.3 -90.3 -118.3 -149.7 -188.7 -346.0 -684.3

----------------------------------------------------------------------------------------------------------------
Note: Totals do not reflect the impact of the CPI minus 0.6%, which the resolution assumes will begin in 1999.

ADDENDUM TO MINORITY VIEWS

The Luck Factor

Will this budget work? The Republican budget plan is very
fragile, relying on a great deal of luck to achieve its
objective of a zero deficit by the year 2002. It includes six
underlying assumptions, each of which is plausible alone, but
when taken together can best be described as ``interlocking
optimism''.
First, the Republican budget includes an interest and
growth bonus of $170 billion in deficit reduction. It assumes
that financial markets will respond to passage of a balanced
budget plan with lower interest rates and builds savings from
this assumption into the plan. However, interest rates are not
going to come down unless financial markets find the plan
credible and realistic. For the bonus to be realized,
everything else has to work as planned.
The budget is highly backloaded, assuming many of its
deepest cuts can be made in later years. This backloading is
made necessary by the exploding costs of the Republican tax
breaks in the last two years of the plan. However, this feature
makes the plan less credible to financial markets. Interest
rates may not come down until sizable deficit reduction is
actually achieved in later years, thereby reducing the interest
and growth bonus.
It is not unreasonable to assume that major changes in
programs such as Medicare will take time and may need to be
phased in over a period of years. In that sense the backloading
of some of the budget cuts is realistic. However, this
Republican budget assumes an unprecedented ability to restrain
the growth in health care costs, particularly health care for
the elderly, over a long period of time.
For instance, in the Medicare program the plan assumes
current annual growth can be lowered from 10 percent to 4.5
percent. Even if it were possible to get these costs down to
such a low rate of growth for a year or two, extensive
experience in both the private and public sectors suggests that
these low levels cannot be maintained over time. Unless the
Republicans are willing to reduce Medicare services
dramatically, it is highly unlikely this assumption will work.
In the Medicaid program, this budget relies on conversion
to a block grant to hold cost growth down to 4 percent a year.
Since the program will experience new caseload growth of
between 3 percent and 4 percent a year throughout the budget
time frame, this level represents a real crunch. While it is
technically feasible to contain the federal share of the
program this way, it is unlikely that states will be able to
meet the demand for these services. Political pressures may
very well force more federal contributions by the end of this
budget cycle. Once again, the assumption of continued austerity
may be highly unrealistic.
The Republican budget assumes agriculture spending and
welfare costs will continue to decrease over seven years. But,
they are only reconciled for five years. Without the
enforcement mechanism of reconciliation the assumption that
these cuts will ultimately be realized is shaky at best.
Along with these program changes there is an additional
backloaded cut built into the Republican budget baseline. That
is the assumption that the Consumer Price Index (CPI) will be
reduced by 0.6 percent a year starting in 1999. This is
important because many federal benefit programs and tax
brackets are indexed to the CPI. If the CPI is lower than
currently projected, the government will spend less on
retirement and Social Security benefits and it will take in
more revenue in income taxes.
While there is widespread agreement that new statistical
work in progress at the Bureau of Labor Statistics will result
in some lowering of the CPI by the end of the decade, it is not
at all certain that this reduction will be as high as 0.6
percent. Clearly, this is another questionable assumption.
Last, but not least, the Republican budget incorporates the
tax breaks passed by the House earlier this year which increase
revenue losses over time quite dramatically. In fact, years six
and seven of this budget cycle contain revenue losses of $82
and $90 billion respectively from the tax bill. It is because
these revenue losses are so great in the last two years that
spending cuts had to be so heavily backloaded. Clearly the tax
breaks drive a risky final balancing act.
While it is possible that each of these above mentioned
changes could occur as planned, it is not likely that they will
all work together. And, since the budget savings in the plan
are compounded over time, any loss of savings will have the
reverse effect of exploding the deficit over time. At the end
of the day, the interest and growth bonus will not be realized
if the whole package does not work together.
It is safe to conclude from a view of the entire plan that
its achievement of actual balance in 2002 is fragile at best.
And most of this fragility is driven by the need to pay for
exploding tax breaks for the most affluent members of American
society.

Martin O. Sabo.
Alan B. Mollohan.
William J. Coyne.
Harry Johnston.
Louise Slaughter.
Glen Browder.
Lucille Roybal-Allard.
Lynn N. Rivers.
William H. Orton.
Jerry F. Costello.
Carrie P. Meek.
Patsy T. Mink.
John W. Olver.
Lynn C. Woolsey.
Earl Pomeroy.
Charlie Stenholm.
DISSENTING VIEWS--AGRICULTURE HON. EARL POMEROY

There has been a stark contrast over the past eight years
between agricultural spending and total federal spending. The
Committee-approved budget resolution does not recognize this
fact. The resolution proposes reductions in agricultural farm
programs by approximately 40 percent--$17 billion over seven
years. This is a disproportionate cut.
Since 1986 Commodity Credit Corporation (CCC) spending has
been reduced by 60 percent, while total federal spending has
increased nearly 50 percent. Agricultural programs have
delivered a solid return on taxpayers' investments and,
therefore, should not be singled out for a disproportionate
share of any required spending reductions.
The Budget Resolution also appears to double-count savings
in agriculture that have already taken place. For example, the
Committee appears to envision savings from reorganization at
USDA, while in fact, reorganization of USDA was approved last
year and is already expected to save as much as $4.1 billion
through Fiscal Year 1999 as more than 1,200 field offices are
closed, over 13,000 employees terminated and 43 agencies
consolidated into 29.
Furthermore, under the recent Uruguay Round of GATT
Agreement, the US along with other countries is required to
reduce its support for domestic farm programs by 20 percent by
the year 2000 from the 1986-88 base period. However, the US has
already more than achieved these reductions, by reducing
spending by over 70 percent from the 1986 base year. On the
other hand, in this same time-frame the European Union (EU) has
increased spending by over 200 percent. To require the US is to
make further reductions in such programs without requiring
similar corresponding reduction by the EU and other foreign
competitors would be unfair to US farmers.
US agriculture currently faces a farm program disadvantage.
Further cuts in US agriculture spending--as proposed in this
budget resolution--will worsen the situation. Not only will our
farmers be disadvantaged, but American consumers will share in
their loss.
In the United States we have an excellent example of the
effects of eliminating a farm program. Last year, Congress
eliminated the wool and mohair program. In only one year since
the elimination: 500 sheet farmers/ranchers have been forced
out of business each month; the American sheep inventory has
decreased by 18 percent; US wool production has dropped to an
all-time record low; and 29 percent of sheep meat slaughter and
packing plants have closed their doors. Unfortunately, this is
just the beginning of the demise for the sheep and wool
industry.
The fundamental objective of domestic farm subsidies is to
compensate farmers at a level sufficient to attract financing
for what, by nature, is a high risk investment, yet allow
agricultural products to be sold at lower market prices. The US
farm policy is offset by EU subsidies, the extent to which the
global system of agriculture subsidies ``buys down'' consumer
prices. The inescapable conclusion is that these relationships
bear some relation to comparative production costs in the US
and the EU. If agricultural products from the US, the EU--and
virtually every other exporting nation--were marked at prices
sufficiently to fully cover production costs and provide a
reasonable return on a risky investment, retail prices would be
much higher! In other words, the American consumer benefits
from the US farm program.
The record of federal spending for agricultural programs
and the return on taxpayers' investment should be held up as a
model for other budget items, not singled out for
disproportionate cuts.

Earl Pomeroy.
DISSENTING VIEWS--POWER MARKETING AGENCIES

The Committee has scored a one-time net funding gain of
$4.18 billion from the asset sale of the power marketing
agencies (PMAs). At best, this is a questionable policy.
The PMAs already operate on a ``no-net-cost'' basis to the
federal government. While the government does loan money to the
PMAs, all the money--plus interest--is paid in full. Selling
the PMAs may provide a one-time cash infusion--but selling PMAs
won't mean real savings to the government in the long-run.
That is why earlier this year, over 55 Members of the House
wrote a letter to the Speaker and Chairman Kasich urging them
to do all that they could to oppose the sale. Despite the
obvious message of concern about moving forward on the PMA sale
proposal, the budget resolution approved by the Committee
scores a savings to the treasury from this initiative.
There are many who question the result of a PMA sale--
specifically with regard to the impact on electric rates for
consumers currently receiving PMA power. It remains the
position of many that it is foolish to push forward a proposal
that won't save the government money, but could increase
electric rates for consumers.

Earl Pomeroy.
DISSENTING VIEWS--LOW INCOME HOME ENERGY ASSISTANCE PROGRAM

The Republican budget errs when it assumes that eliminating
the Low Income Home Energy Assistance Program (LIHEAP) will
save federal dollars. By assisting families with their heating
bills, we help them makes ends meet, rather than accessing more
costly programs. For senior citizens, their LIHEAP benefit can
be the element which keeps them living independently in their
homes, rather than entering costly senior care facilities.
Reducing or eliminating an effective program like LIHEAP
sends a confusing and inconsistent message to the states
regarding our ongoing efforts to reform federal social service
programs, and to allow greater local flexibility. As welfare
reform highlights self-sufficiency and independence from
welfare, it is ironic that one program which is really cost-
effective has been targeted for elimination.

John W. Olver.
Carrie P. Meek.
Earl Pomeroy.
DISSENTING VIEWS OF LOUISE SLAUGHTER

I voted against the FY 1996 Republican Budget Resolution
because I am deeply troubled about the impact this package will
have America's working families and senior citizens. I support
the efforts of the Chairman to balance the budget and
streamline federal programs. Some of the very suggestions
offered by the Republicans are those that have been put forth
by a Democratic Administration. There is no doubt that reducing
deficit spending is good fiscal policy.
In 1993, with bi-partisan support, the U.S. Congress
enacted a major National Institutes of Health (NIH)
authorization which for the first time placed an emphasis on
women's health research. The 1993 NIH Reauthorization bill
restored gender equity to health care research. No longer would
we have major health studies excluding women and the unique
health care needs of women. The impact of 28.5% across-the-
board reduction in health related programs, as called for in
the Republican budget will undermine the objectives of the 1993
legislation. All of the gains made in areas like breast and
ovarian cancer research and detection will be gone. The
discovery of a breast cancer gene if directly attributed to an
increased focus on women's health research. Breast cancer is
one of the greatest threats to the American family.
The massive reductions in Medicare spending as called for
in the Republican Budget resolution will result in increased
premiums, deductibles and co-payments for millions of low and
moderate income senior citizens. I am particularly concerned
abut the impact of a 20% co-payment for Medicare home health
care. This new out-of-pocket expense for Medicare recipients
would be nothing more than a ``sick tax'' on those elderly who
can least afford it. Currently most of the elderly receiving
home healthcare services have just been discharged from a
hospital and heed sub-acute or rehabilitation care. Almost 80%
of Medicare home health users have annual incomes of less than
$15,000. Three-quarters of all program users are over age 75.
And two-thirds of Medicare home health service recipients are
elderly women. A 20% co-payment would jeopardize the quality of
care for millions of low income senior citizens and force them
into nursing homes or back into hospitals. Effective and
efficient home health care benefits reduce both Medicare and
Medicaid costs and is an option that should be encouraged, not
discouraged. I am hopeful that it trying to meet a $283 billion
reduction in Medicare that the Ways and Means Committee does
not impose a new ``sick tax'' on our most vulnerable citizens.
The Republican budget, adopted on May 10th makes radical
and arbitrary reductions in important educational programs.
Study after study has shown the direct link between education
and productivity. Ensuring access to quality education both at
the secondary and postsecondary is critically in a competitive,
global economy. We should be improving our investment in
education, not dismantling every program regardless of the
targeted constituents. For a small amount of federal funding,
and estimated 350,000 children have received services through
the McKinney Homeless Education Program. As a result of this
program, the number of homeless children not in school has been
reduced from more than 50% to approximately 18%. In 1994 over
80% of state grant funds from the program went directly to
local programs; the local districts design their own programs
so as to best meet their individual community's needs. The
Homeless Education Program is almost completely ``bureaucrat-
Free.'' I am dismayed that the Republicans wish to eliminate
this program. The cost is so low; the program so productive
that it can only be meanness that causes this cut.
In conclusion, the Budget Resolution approved by this
Committee on May 10th threatens working families, children and
senior citizens. If the republicans were serious abut deficit
reduction, they would not be attempting to implement a $700
billion tax give-away. I cannot support this kind of assault on
working women, children and our nation's elderly. I stand ready
to work towards a balanced budget, and have supported real
deficit reduction, but I will not stand by and watch this
inhumane political grandstanding at the expense of the most
vulnerable in our society.

Louise Slaughter.
DISSENTING VIEWS OF CARRIE P. MEEK

Let me begin by stating my strong opposition to the
Republican Budget Resolution for FY 1996. This budget assumes
massive cuts in vital programs such as Medicare, Medicaid,
education, Head Start, child nutrition, and programs affecting
the elderly and children in order to pay for a $350 billion tax
cut to the most affluent in our society. That trade-off is
totally unacceptable to me, and I believe when Americans learn
exactly what is in the `` Contract With America'' and this
budget, they will agree that this compact is anathema to our
ideals. I heartily oppose deep reductions in housing,
agriculture, transportation, natural resources, veterans'
programs, and other extremely important areas.

medicaid

The Republican Budget Resolution assumes $186.6 billion in
Medicaid savings by block granting and reducing Medicaid
funding. A Medicaid block grant capped at 5 percent growth per
year would devastate Florida. Florida would lose over $5
billion over five years if this plan is adopted. The current
Medicaid formula is severely flawed, and a block grant without
any attention to changing the underlying distribution of funds
would lock in the extremely unfair Medicaid allocation to
states.
Florida is a high growth state, and of the large states,
has the largest elderly population as a percentage of its total
population. In addition, Florida has the second highest poverty
rates among the largest states--17.6 percent. Florida's growing
demand for health care is based on population trends and will
not stop expanding because Federal funds shrink. Since these
important demographic factors are not taken into account with a
block grant based on current law, many states will be in severe
financial straits and probably not be able to provide the
health care safety net.
A capped block grant is likely to preclude some preventive
health care, acute care and nursing home care for the elderly
and children. It will require states to either choose one group
over another, cut specific benefits, or raise taxes. This puts
us in an untenable position, and I strongly object to the
Republicans' budget resolution assumptions about Medicaid.
Florida has been fiscally responsible; it has held down
Medicaid costs and has not exploited loopholes in the Medicaid
disproportionate share (DSH) payments. Therefore, a lower
Florida Medicaid base will be the inequitable foundation of a
new block grant to states. Florida will be punished by a block
grant rather than being rewarded for its cost-saving efforts.
No amount of flexibility can make up for the loss of these
billions of Federal funds.

medicare and health care reform

When President Clinton took office, he inherited a major
Medicare crisis, and twenty-seven days later proposed a deficit
reduction plan that included policies to strengthen the
Medicare Trust Fund. In fact, this action kept Medicare solvent
for three additional years. On the other hand, the ``Contract
With America'' included a proposal that would weaken the Trust
Fund by $27 billion over seven years. The additional Medicare
cuts of $288.4 billion assumed in this Republican Budget
Resolution would not have been necessary if the Republicans had
not pushed through $350 billion in tax cuts to the wealthy.
The Medicare trust fund is estimated to be insolvent by the
year 2002. Democrats tried to shore up the Medicare trust fund,
and the legislation was opposed by all Republicans. The
President proposed an overall health care reform plan that
dealt with the nation's health care problems. That was
rejected. Now it is time for the Republicans to show some
leadership and propose a plan that will deal with the health
care crisis. Slashing Medicare and Medicaid does not reform the
``system.'' Without a plan that includes all aspects of the
health care community, the result is cost shifting from the
federal government to the private sector. That is the only
accomplishment of the Republican plan.

veterans' health care

The Republican Budget Resolution proposes cuts of $8.8
billion in budget authority and $8.6 billion in outlays over
seven years, with a $1.2 billion discretionary cut below a 1995
freeze. This represents a 24 percent decline in discretionary
spending purchasing power between 1995 and the year 2002. The
major discretionary accounts are for veterans' medical care.
The Department of Veterans Affairs serves primarily
veterans who are older, more disabled, and poorer than the
average American. It is essential that the VA system maintain
funding sufficient to serve our veterans. The VA cannot provide
adequate health care if funding is reduced. Straining the
systems to its limits by severely underfunding it is
unconscionable.
Another major concern of mine is a Republican Budget
Resolution assumption that will ``withhold compensation
[service-connected disability] for certain incompetent veterans
with large estates.'' I strongly oppose this proposal if it is
the one previously enacted and repealed.

women's and minorities' health
The Republican Budget Resolution targets nearly $13 million
in discretionary health program cuts between now and the year
2002, including a $4 billion reduction below the 1995 level of
funding for the National Institutes of Health (NIH). This
represents a decrease of over 28 percent in real terms between
1995 and the year 2002. this would have a significant impact on
Americans' health and well-being, biomedical research, and our
international competitiveness.
Women's health issues have been ignored for years in the
biomedical community, including the National Institutes of
Health. Only recently have federal funds been targeted to
women's health, after decades of slighting women's health
research. I have a special interest in Lupus, an immune system
disease that strikes a disproportionate share of women,
particularly African American women. Nine out of ten persons
stricken with this incurable disease are women, and Lupus has
the most impact on women during their childbearing years. From
1.4 million to 2 million Americans suffer from this painful,
debilitating disease. H.R. 835, which I introduced, authorizes
increased funding to the National Institutes of Health to
conduct research into the causes and cure of Lupus. It is time
to make up for many years of neglect and fully fund biomedical
research into the cause(s) and cures of Lupus and other major
causes of women's death such as cardiovascular diseases, lung
and breast cancer. I urge the Appropriations Committee to meet
my challenge.
Health statistics indicate that three is wide health
disparity among different groups of Americans. Those who have
traditionally been disadvantaged economically and educationally
are more at risk for a variety of diseases. One of the most
compelling indicators is infant mortality. Although the U.S.
infant mortality rate is at an all-time low, the rate for
African American infants continues to be twice the rate of
whites. African Americans suffer disproportionately from
cancer, diabetes, hypertension, low birth weight, and infant
mortality. ``Healthy People 2000,'' a Health and Human Service
analysis, indicates that rates for African American men are 55
percent higher for heart disease, 26 percent higher for cancer,
180 percent higher for stroke and 100 percent higher for lung
disease. Life expectancy for this group has lagged behind that
of the total population, and has actually widened in the last
decade. Closing the gap in health status should be one of our
highest priorities.
Every effort should be made to end such disparities through
research, expanding preventive, routine, and prenatal health
care, and additional strategies to increase education and
income status, because socioeconomic factors are underlying
causes of many health problems.

education

The Republican Budget Resolution assumes the elimination of
the Department of Education. If the proposed savings of $49.2
billion (BA) are adopted, I believe in the long run these
program cuts will cost us dearly.
Well-educated students are our nation's future. They assure
a competitive economy, as well as bolstering our Democratic
system, social progress, and equality of opportunity. In 1993-
94, over six million students received Federal financial aid
for post-secondary education. The investment in our students is
immeasurable. I am committed to every aspect of education from
preschoolers' Head Start experience to higher education.
The Budget Resolution assumes the elimination of the in-
school interest subsidy for guaranteed student loans. In
addition, discretionary higher education programs targeted to
low-income students were assumed to be eliminated. I proposed
an amendment to restore all of the higher education cuts, which
I withdrew after a party-line vote in which all Republicans
opposed adding back all cuts in Federal education programs.

humanitarian aid

My office has received a large number of letters requesting
that the United States' humanitarian aid be continued. Most
Americans share a deep concern for starving, dying children in
a war-torn world. We are a compassionate people. Let the budget
underscore that.
Children and young people are our most valuable resource
and will shape American's future, I can think of no other
investment quite as important as funding programs to educate
and provide health care for our children. The Republican Budget
Resolution reflects a low priority on our children, and that
deeply troubles me. The Budget Resolution's lack of concern for
our elderly and disabled also strikes a somber chord. Because
of these and other concerns, I strongly oppose this Budget
Resolution.

Carrie P. Meek.
ADDITIONAL VIEWS--ARMY CORPS LOCAL FLOOD CONTROL AND WATER PROJECTS

We urge the Appropriations Subcommittee on Energy and
Water, when making the spending reductions required to comply
with this Resolution, to place priority on funding for all
local flood control and water projects already begun by the
Army Corps of Engineers before appropriating funds for newly
proposed projects.
Notwithstanding this provision, the localities which are
required to provide matching funds for these local flood
control and water projects should retain the option to
discontinue them should they lack the matching funds necessary
to qualify for federal funding.

Lynn Woolsey.
Louise Slaughter.
Jerry F. Costello.
Carrie P. Meek.
ADDITIONAL VIEWS HON. JERRY F. COSTELLO

I am concerned the budget resolution adopted by the House
Budget Committee on May 10, while potentially successful in
reducing the deficit, is irresponsible fiscal policy. I cannot
support a budget resolution that gives enormous tax breaks to
the wealthy while cutting critical government programs,
including a virtual assault on Medicare.
I fully support getting to a balanced budget. In fact, I
have voted for an amendment to the Constitution mandating a
balanced federal budget. The budget resolution for Fiscal year
1996, however, cuts crucial programs at a time when our federal
belt-tightening will mandate a greater need for certain
programs. I am especially concerned about the deep cuts in
education, the elimination of the Legal Services Corporation
and clean coal technology programs, as well as drastic
reductions in mass transit.
The education of our children should be a top priority for
our nation. The education our children receive must be adequate
in keeping the U.S. economy competitive in the next century.
Recent assessments of math and science achievement found that
American children ranked dismally compared with students from
other nations. The proportion of young people completing high
school has remained stagnant for a decade, despite the
everincreasing demands for education in the job market.
National education reforms under Goals 2000 pointed our nation
in the right direction. This budget, however, eliminates Goals
2000. Having all our students starting school ready to learn,
increasing the high school graduation rate, teaching every
adult to read and ridding our schools of drugs and violence are
not goals we should abandon. While our deficit needs to be
eliminated, we must not eliminate the education of future
generations.
The budget resolution also eliminates funding for portions
of the federal Impact Aid program. Impact aid provides for the
basic educational program for children enrolled in school
districts impacted by a federal presence such as military
installments. The impact aid program must be properly funded to
ensure that those children educated in schools impacted by a
federal presence are guaranteed a quality, basic educational
program.
Federally-connected students deserve the same opportunities
as children in non-impacted areas. Because of where they live
or where their parents work, these children do not bring in the
same local tax dollars as do their non-federally-connected
peers, so the local taxpayer must subsidize their education.
This puts an unfair burden on localities with a strong federal
presence. Local governments justifiably regard federally-
connected students as a federal responsibility; these students
are there because of the federal government.
Year after year we have to fight to continue funding for
the impact aid program. Impact aid is a means of survival for
school districts educating students who live in communities
impacted by federal property. The proposed cuts come at a time
when a majority of states are facing budget deficits and local
school districts will have to either increase local tax
revenues or cut programs. It is not fair to ask local taxpayers
to subsidize the bill for federally-connected students,
especially at a time when we are promising no more federal
mandates on the states.
The Legal Services Corporation is a good example of a
federal program that is effectively administered at the local
level, which is the direction this Leadership seems to be
heading. The Legal Services Corporation (LSC) is a private,
non-profit corporation established by Congress to help provide
equal access to justice under the law for all Americans. It
receives funds annually from Congress and makes grants directly
to independent local programs that provide civil legal
assistance to those who otherwise would be unable to afford it.
At a time when the leadership of this body desires to
expand the role of state and local authority and shrink the
size and scope of the federal government, the Legal Services
Corporation sets an example of where this idea is working. The
LSC is all about giving authority to localities. The creators
of the LSC recognized that decisions about how legal services
should be allocated are best made not by bureaucrats in
Washington, but at a local level, by the people who understand
the problems that face their communities.
The LSC currently provides funds to 323 programs operating
over 1200 neighborhood law offices. Together they serve every
county in the nation. LSC programs provide services to more
than 1.7 million clients a year, benefitting approximately 5
million individuals, the majority of them children living in
poverty. The phase-out of the Legal Service Corporation
represented in this budget eliminates a much-needed program and
threatens the life and livelihood of every poor or near-poor
person in this country.
During the Bush Administration, the Clean Air Act was
signed into law. This law disproportionately affects the
midwestern coal industry because of the high sulfur content of
midwestern coal. Western, low sulfur coal complies more easily
to the Clean Air Act. This budget resolution further hurts the
midwestern coal industry by eliminating clean coal technology
development programs. Clean coal technologies are imperative to
the future of the midwestern coal industry in order for it to
be a competitive energy source.
Additionally, by promoting clean coal technologies in our
nation and throughout the world (especially in Eastern Europe
and developing countries) we can help achieve common goals: a
cleaner environment and less dependence on oil. Innovative
clean coal technologies offer tremendous potential as part of
the solution to many complex problems facing the nation and the
world regarding energy, economic and environmental issues.
Coal's abundance makes it one of the nation's most important
strategic resources for building a more secure energy future.
To abandon the future development of clean coal technology is a
step backward both economically and environmentally.
Finally, I want to express my strong reservations about
cuts in mass transit included in this budget. These cuts,
coupled with the Republican welfare package passed by the House
earlier this year, will disproportionately impact those who
rely on public transportation who do not have access or cannot
afford private transportation. This budget assumes people will
move off welfare into the workforce. This will be increasingly
difficult since federal programs are being drastically scaled
back, including food assistance, housing, child care and
transportation. In effect, individuals who want to move into
the workforce will be forced to stay home if they have no way
of commuting to a job.
This budget eliminates future funding for expansion of mass
transit projects such as subway systems and light rail
projects--thereby continuing to deny access to those without
transportation. By reducing the federal matching rate for mass
transit capital expenditures to fifty percent, local
communities who have budgeted for certain federal assistance
will now have to raise local taxes or raise fares to
accommodate this new federal mandate. It is hidden costs such
as these that will hit American citizens hard to pay for tax
cuts which primarily benefit large corporations and the richest
in our society.
This budget is too extreme. It is unfair, and it asks too
much of the majority of Americans. I firmly believe we must
continue on a serious path toward real deficit reduction. Our
$4.7 trillion dollar debt is not a legacy I, in good
conscience, can leave to my children and grandchildren which is
why I think we cannot afford a tax cut until we reach a
balanced budget. However, as we reduce government services we
must protect those who will be hardest hit by such reductions.

Jerry F. Costello.
Additional Views Regarding the Department of Energy's Dismantlement of
Nuclear Weapons

During Committee markup, I asked Congressman Allard, a
Member of the Committee, about the majority's intentions
regarding the dismantlement of nuclear weapons performed by the
Department of Energy (DOE). I was told that they intended to
privatize these activities by handing them over to a private
company. I can't believe they've thought this through:
privatizing the dismantlement of nuclear weapons is not the
same as privatizing janitorial services at the DOE. The risks
to national security, indeed to the very safety of the American
people, require the highest level of supervision by personnel
who have absolutely no interest in cutting corners by reducing
their costs for the sake of increasing profits.

Earl Pomeroy.
ADDITIONAL DISSENTING VIEWS OF HON. PATSY T. MINK

The Budget Resolution adopted by the full Budget Committee
outlines a vision for the future of our country in which we
will achieve a zero budget deficit at the expense of working
Americans and the most vulnerable in our society, while
increasing the coffers of the most wealthy. I wish to express
my particular concerns about the Child Nutrition Block Grant
and the Davis-Bacon Act, and clarify the record on cuts to the
Perkins College Loan program.
Despite Republican rhetoric to the contrary, the Republican
Budget Resolution confirms and relies on the fact that the
Republican Welfare Reform plan reduces funds for the school
lunch and breakfast programs in order to achieve the necessary
budget savings to reach a zero budget deficit in the year 2002.
According to the Congressional Budget Office (CBO) funds
necessary to carryout the programs under the current school-
based nutrition programs will increase from $8 billion in
Fiscal Year 1995 to $10.9 billion in Fiscal Year 2000. However,
the Republican Budget provides only $6.6 billion in Fiscal Year
1996 rising to $8.5 billion in Fiscal Year 2002.
CBO estimates take into account projected increases in
enrollment, increases in food prices, and other inflation
factors. However, even if one does not consider these factors
(as the Budget Resolution does not), funds for school nutrition
programs will be reduced under the Republican Budget
Resolution. By not taking into account the inflation factors,
the Republican Budget Resolution assumes a savings of $8
billion per year from the repeal of the child nutrition
programs, but replaces those programs with block grant funds of
only 46.6 billion in FY96, $6.9 billion in FY97, $7.2 billion
in FY98, $7.5 billion in FY99 and $7.8 billion in FY2000.
The following chart demonstrates the CBO estimates of the
amount of savings resulting from the repeal of the school-based
children nutrition programs, the Budget Committee estimates of
these same savings, and the amount of money included in the
school-based nutrition block grant.

----------------------------------------------------------------------------------------------------------------
Fiscal year--
-----------------------------------------------------------
1995 1996 1997 1998 1999 2000
----------------------------------------------------------------------------------------------------------------
CBO Estimates:
Budget Authority................................ (8.093) (8.565) (9.142) (9.739) (10.385) (10.984)
Outlays......................................... (7.987) (7.299) (9.055) ((9.649) (10.271) (10.891)
Budget Committee Estimate:
Budget Authority................................ (8.093) (8.093) (8.093) (8.093) (8.093) (8.093)
Outlays......................................... (7.985) (7.985) (7.985) (7.985) (7.985) (7.985)
Block Grant Funding:
Budget Authority................................ n/a 6.681 6.956 7.237 7.538 7.849
Outlays......................................... n/a 6.013 6.929 7.209 7.508 7.818
----------------------------------------------------------------------------------------------------------------

Clearly the funds provided in the School-based Nutrition
Block grant do not equal or exceed the funds which would have
been available for this program under current law, by both the
CBO and Budget Committee estimates.
I would also like to clarify the record on the issue of the
Carl Perkins Loan program. During the debate on the elimination
of the in-school interest subsidy for the Federal Stafford
Student Loan program, Republican Members made reference to the
fact that students would be able to take advantage of a full
range of other student aid programs which they did not cut,
including the Perkins Loan program.
However, according to the documents provided by the
Majority, the Budget Resolution assumes $158 million in annual
savings from capital contributions to the Perkins Loan program.
This $158 million are funds normally provided on an annual
basis to the amount of capital available for the Perkins Loan
program. The Administration requested $178 million for this
program for Fiscal Year 1996.
Finally, the Budget Resolution's recommendation to repeal
the Davis-Bacon Act, which requires contractors on federally-
funded construction projects to pay their workers no less than
a local area's prevailing wage rates for the same type of
construction, is ill-advised. It will adversely impact the over
one-half million construction workers who currently receive
prevailing wages pursuant to the Davis-Bacon Act.
The Davis-Bacon Act minimizes the exploitation of unskilled
and semi-skilled labor, of which 35% are women and minorities,
by ensuring that if these workers are paid less than the
prevailing wage, they must be enrolled in apprenticeship or
training programs that will help them develop their skills and
increase their marketability. Without Davis-Bacon, contractors
will have less incentive to enroll workers in training
programs.
It should be noted that repealing Davis-Bacon will not
necessarily lower the cost of construction for the Federal
Government because equating wage reductions with dollar-for-
dollar savings does not account for factors such as the
relationship between productivity and wages. For example,
higher wage rates attract better skilled and productive workers
which result in higher efficiency and decreases the chance of
cost overruns. In addition, estimates of the savings
attributable to the Davis-Bacon Act do not take into account
the loss of income tax revenues from construction workers whose
earnings will be reduced without a Davis-Bacon requirement.
A February 1995 study by the University of Utah estimated
that Federal income tax collections would fall by at least $1
billion per year if Davis-Bacon is repealed. The study which
examined the economic impacts of the repeal of state Davis-
Bacon laws in nine states also concluded that the repeal of
Davis-Bacon would increase workplace injuries (due to increased
use of less skilled workers) and generate a period of
significant cost overruns on Federal construction projects.
In addition, the dislocation of local construction
companies is the most egregious of all effects of the repeal of
the Davis-Bacon Act. These small businesses will lose Federal
contracts to larger ``pirate'' construction conglomerates who
will win Federal contracts solely on the basis of low bids
without consideration of quality of workmanship or stability of
the local economy.
Davis-Bacon does not require payment of union wage rates.
The perception that the Davis-Bacon rate is ``usually the union
rate'' is a carry-over from the days preceding 1983, when the
prevailing rate was the union rate if that union rate went to
30% of the workers in any one classification. Since 1983, the
prevailing rate is the union rate only if that union rate is
paid to 50% of the workers in any one classification.
Accordingly, only 29% of the prevailing wage schedules issued
by the Department of Labor require Federal contractors to pay
collectively-bargained rates across-the-board.

Patsy T. Mink.
ADDITIONAL DISSENTING VIEWS ON REPUBLICAN CUTS IN STUDENT AID AND CHILD
NUTRITION

During consideration of the FY 1996 Budget Resolution,
debate on two deficit-neutral amendments drew an especially
clear distinction between Democrats and Republicans on the
Committee: the Woolsey/Pomeroy amendment to reject cuts in
student aid, and the Woolsey/Roybal-Allard amendment to reject
cuts in child nutrition programs.

student aid

On May 8, 1995, the New York Times called the Republican
budget ``the strongest assault in recent years [on the student
aid programs which] many lower and middle-income families have
relied on since passage of the nation's first major federal
student aid program, the Higher Education Act of 1965.'' In
supporting the Woolsey/Pomeroy amendment to restore the college
loan interest subsidy which the government provides to students
while they are in college, we hoped to beat back some of this
unfair assault on low and middle-income college students and
their families.
We proposed to pay for this student aid restoration by
taking a bite out of the $350 billion tax cut which Republicans
inserted into the Resolution. We argued that it was unfair to
close the classroom door on college students in order to pay
for a tax cut which primarily benefits wealthy special
interests.
The Woolsey/Pomeroy amendment to reject Republican cuts in
student aid was defeated on a party line vote. We believe this
assault on student aid makes a mockery of our nation's core
values--the opportunity to get a good education, and the
opportunity to get ahead. In addition, we believe these cuts in
student aid threaten our future economic health and global
competitiveness. In a time when our country needs people who
are more educated, not less, in order to compete in the global
marketplace, this assault on our low and middle-income kids and
their families is also an assault on America's economic future.

child nutrition

The Woolsey/Roybal-Allard amendment to reject Republican
cuts in School Lunch, School Breakfast, and other nutrition
programs was an effort to protect our nation's most important
asset--our children. Again, the amendment was paid for by
slightly scaling back the Republican $350 billion tax cut.
Unfortunately, our nation's most important asset lost out to
the wealthy special interests who benefit from this tax break,
and the amendment was defeated on a party-line vote.
Committee Republicans argued that their proposed reductions
in funding to meet future needs in child nutrition programs was
not an important issue. They claimed that they were not even
cutting child nutrition programs, but were simply reducing the
rate of increase. They argued that ``only in Washington do
people call a reduction in the rate of increase a cut.'' We
responded that only in Washington do people call the mean-
spirited deprivation of nutrition to low-income children a
``reduction in the rate of increase.'' We believe that
Republican efforts to steer the discussion to budgetary
semantics masks the reality which will confront our children if
this Resolution passes. Children will go hungry.
The ``increase'' which Republicans propose in this
Resolution is not nearly enough to maintain current services
under these child nutrition programs, primarily due to
expanding eligibility and rising food prices. States would be
forced to either deny eligibility to kids who currently
qualify, or cut the nutrition level of the meals that children
receive, or sometimes both.

the differences are real

When defending their efforts to cut student aid and child
nutrition, Committee Republicans argued that everything must be
on the table in order to reach a balanced budget. This argument
fails to recognize that passage of these amendments would still
have led to a balanced budget by 2002. Republicans failed to
acknowledge that these amendments were not choices between
student aid and a balanced budget, or child nutrition and a
balanced budget. These amendments asked Budget Committee
Members for a clear ``yes or no'' answer to the following
question: Should we take nutrition away from kids and college
aid away from low and middle-income students in order to pay
for tax cuts which put money into the hands of wealthy special
interests? Committee Republicans answered ``yes.'' Democrats
answered ``no.'' The differences are real.

Lynn Woolsey.
Earl Pomeroy.
Lucille Roybal-Allard.
A P P E N D I X

----------

HOUSE CONCURRENT RESOLUTION
Resolved by the House of Representatives (the Senate
concurring),

SECTION 1. CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 1996.

The Congress determines and declares that this resolution is
the concurrent resolution on the budget for fiscal year 1996,
including the appropriate budgetary levels for fiscal years
1997, 1998, 1999, 2000, 2001, and 2002, as required by section
301 of the Congressional Budget Act of 1974.

SEC. 2. RECOMMENDED LEVELS AND AMOUNTS.

The following budgetary levels are appropriate for the fiscal
years beginning on October 1, 1995, October 1, 1996, October 1,
1997, October 1, 1998, October 1, 1999, October 1, 2000, and
October 1, 2001:
(1) The recommended levels of Federal revenues are as
follows:
Fiscal year 1996: $1,057,500,000,000.
Fiscal year 1997: $1,058,500,000,000.
Fiscal year 1998: $1,099,600,000,000.
Fiscal year 1999: $1,138,700,000,000.
Fiscal year 2000: $1,189,300,000,000.
Fiscal year 2001: $1,247,200,000,000.
Fiscal year 2002: $1,316,600,000,000.
and the amounts by which the aggregate levels of
Federal revenues should be changed are as follows:
Fiscal year 1996: $14,987,000,000.
Fiscal year 1997: -$24,393,000,000.
Fiscal year 1998: -$34,772,000,000.
Fiscal year 1999: -$48,354,000,000.
Fiscal year 2000: -$58,836,000,000.
Fiscal year 2001: -$69,275,000,000.
Fiscal year 2002: -$71,859,000,000.
and the amounts for Federal Insurance Contributions Act
revenues for hospital insurance within the recommended
levels of Federal revenues are as follows:
Fiscal year 1996: $103,815,000,000.
Fiscal year 1997: $108,986,000,000.
Fiscal year 1998: $114,877,000,000.
Fiscal year 1999: $120,698,000,000.
Fiscal year 2000: $126,893,000,000.
Fiscal year 2001: $133,590,000,000.
Fiscal year 2002: $140,425,000,000.
(2) The appropriate levels of total new budget
authority are as follows:
Fiscal year 1996: $1,285,900,000,000.
Fiscal year 1997: $1,321,900,000,000.
Fiscal year 1998: $1,355,800,000,000.
Fiscal year 1999: $1,388,800,000,000.
Fiscal year 2000: $1,421,800,000,000.
Fiscal year 2001: $1,436,000,000,000.
Fiscal year 2002: $1,459,800,000,000.
(3) The appropriate levels of total budget outlays
are as follows:
Fiscal year 1996: $1,287,000,000,000.
Fiscal year 1997: $1,313,900,000,000.
Fiscal year 1998: $1,326,800,000,000.
Fiscal year 1999: $1,363,500,000,000.
Fiscal year 2000: $1,400,800,000,000.
Fiscal year 2001: $1,414,200,000,000.
Fiscal year 2002: $1,437,300,000,000.
(4) The amounts of the deficits are as follows:
Fiscal year 1996: -$229,500,000,000.
Fiscal year 1997: -$255,400,000,000.
Fiscal year 1998: -$227,200,000,000.
Fiscal year 1999: -$224,800,000,000.
Fiscal year 2000: -$211,500,000,000.
Fiscal year 2001: -$167,000,000,000.
Fiscal year 2002: -$120,700,000,000.
(5) The appropriate levels of the public debt are as
follows:
Fiscal year 1996: $5,195,000,000,000.
Fiscal year 1997: $5,516,100,000,000.
Fiscal year 1998: $5,809,800,000,000.
Fiscal year 1999: $6,099,700,000,000.
Fiscal year 2000: $6,374,300,000,000.
Fiscal year 2001: $6,614,400,000,000.
Fiscal year 2002: $6,806,100,000,000.
(6) The appropriate levels of total Federal credit
activity for the fiscal years beginning on October 1,
1995, October 1, 1996, October 1, 1997, October 1,
1998, October 1, 1999, October 1, 2000, and October 1,
2001 are as follows:
Fiscal year 1996:
(A) New direct loan obligations,
$37,600,000,000.
(B) New primary loan guarantee
commitments, $193,400,000,000.
Fiscal year 1997:
(A) New direct loan obligations,
$40,200,000,000.
(B) New primary loan guarantee
commitments, $187,900,000,000.
Fiscal year 1998:
(A) New direct loan obligations,
$42,300,000,000.
(B) New primary loan guarantee
commitments, $185,300,000,000.
Fiscal year 1999:
(A) New direct loan obligations,
$45,700,000,000.
(B) New primary loan guarantee
commitments, $183,300,000,000.
Fiscal year 2000:
(A) New direct loan obligations,
$45,800,000,000.
(B) New primary loan guarantee
commitments, $184,700,000,000.
Fiscal year 2001:
(A) New direct loan obligations,
$45,800,000,000.
(B) New primary loan guarantee
commitments, $186,100,000,000.
Fiscal year 2002:
(A) New direct loan obligations,
$46,100,000,000.
(B) New primary loan guarantee
commitments, $187,600,000,000.

SEC. 3. MAJOR FUNCTIONAL CATEGORIES.

The Congress determines and declares that the appropriate
levels of new budget authority, budget outlays, new direct loan
obligations, new primary loan guarantee commitments, and new
secondary loan guarantee commitments for fiscal years 1996
through 2002 for each major functional category are:
(1) National Defense (050):
Fiscal year 1996:
(A) New budget authority,
$267,300,000,000.
(B) Outlays, $265,100,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $1,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$269,300,000,000.
(B) Outlays, $265,300,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $1,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$277,300,000,000.
(B) Outlays, $265,300,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $1,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$281,300,000,000.
(B) Outlays, $271,300,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $1,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$287,300,000,000.
(B) Outlays, $279,300,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $1,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$287,300,000,000.
(B) Outlays, $279,300,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $1,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$287,200,000,000.
(B) Outlays, $279,200,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $1,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
(2) International Affairs (150):
Fiscal year 1996:
(A) New budget authority,
$15,800,000,000.
(B) Outlays, $17,000,000,000.
(C) New direct loan obligations,
$5,700,000,000.
(D) New primary loan guarantee
commitments, $16,300,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$13,700,000,000.
(B) Outlays, $15,100,000,000.
(C) New direct loan obligations,
$5,700,000,000.
(D) New primary loan guarantee
commitments, $16,300,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$11,300,000,000.
(B) Outlays, $13,300,000,000.
(C) New direct loan obligations,
$5,700,000,000.
(D) New primary loan guarantee
commitments, $16,300,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$9,700,000,000.
(B) Outlays, $11,500,000,000.
(C) New direct loan obligations,
$5,700,000,000.
(D) New primary loan guarantee
commitments, $16,300,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$10,500,000,000.
(B) Outlays, $10,000,000,000.
(C) New direct loan obligations,
$5,700,000,000.
(D) New primary loan guarantee
commitments, $16,300,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$12,000,000,000.
(B) Outlays, $11,100,000,000.
(C) New direct loan obligations,
$5,700,000,000.
(D) New primary loan guarantee
commitments, $16,300,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$12,000,000,000.
(B) Outlays, $10,700,000,000.
(C) New direct loan obligations,
$5,700,000,000.
(D) New primary loan guarantee
commitments, $16,300,000,000.
(E) New secondary loan guarantee
commitments, $0.
(3) General Science, Space, and Technology (250):
Fiscal year 1996:
(A) New budget authority,
$16,700,000,000.
(B) Outlays, $16,900,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$16,300,000,000.
(B) Outlays, $16,600,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$15,700,000,000.
(B) Outlays, $16,000,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999 :
(A) New budget authority,
$15,300,000,000.
(B) Outlays, $15,400,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$14,900,000,000.
(B) Outlays, $14,900,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$14,900,000,000.
(B) Outlays, $14,900,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$14,900,000,000.
(B) Outlays, $14,900,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
(4) Energy (270):
Fiscal year 1996:
(A) New budget authority,
$4,400,000,000.
(B) Outlays, $4,300,000,000.
(C) New direct loan obligations,
$1,200,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$3,900,000,000.
(B) Outlays, $3,200,000,000.
(C) New direct loan obligations,
$1,200,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$3,600,000,000.
(B) Outlays, $2,900,000,000.
(C) New direct loan obligations,
$1,200,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$3,900,000,000.
(B) Outlays, $3,100,000,000.
(C) New direct loan obligations,
$1,200,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$3,600,000,000.
(B) Outlays, $2,700,000,000.
(C) New direct loan obligations,
$1,200,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$3,600,000,000.
(B) Outlays, $2,500,000,000.
(C) New direct loan obligations,
$1,200,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$3,500,000,000.
(B) Outlays, $2,300,000,000.
(C) New direct loan obligations,
$1,200,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
(5) Natural Resources and Environment (300):
Fiscal year 1996:
(A) New budget authority,
$19,300,000,000.
(B) Outlays, $20,200,000,000.
(C) New direct loan obligations,
$100,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$19,100,000,000.
(B) Outlays, $19,900,000,000.
(C) New direct loan obligations,
$100,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$17,200,000,000.
(B) Outlays, $17,800,000,000.
(C) New direct loan obligations,
$100,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$18,600,000,000.
(B) Outlays, $19,100,000,000.
(C) New direct loan obligations,
$100,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$17,400,000,000.
(B) Outlays, $17,800,000,000.
(C) New direct loan obligations,
$100,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$17,900,000,000.
(B) Outlays, $18,200,000,000.
(C) New direct loan obligations,
$100,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$17,800,000,000.
(B) Outlays, $18,100,000,000.
(C) New direct loan obligations,
$100,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
(6) Agriculture (350):
Fiscal year 1996:
(A) New budget authority,
$13,000,000,000.
(B) Outlays, $11,800,000,000.
(C) New direct loan obligations,
$11,500,000,000.
(D) New primary loan guarantee
commitments, $5,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$12,800,000,000.
(B) Outlays, $11,500,000,000.
(C) New direct loan obligations,
$11,500,000,000.
(D) New primary loan guarantee
commitments, $5,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$11,600,000,000.
(B) Outlays, $10,400,000,000.
(C) New direct loan obligations,
$10,900,000,000.
(D) New primary loan guarantee
commitments, $5,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$11,400,000,000.
(B) Outlays, $10,100,000,000.
(C) New direct loan obligations,
$11,600,000,000.
(D) New primary loan guarantee
commitments, $5,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$10,200,000,000.
(B) Outlays, $9,000,000,000.
(C) New direct loan obligations,
$11,400,000,000.
(D) New primary loan guarantee
commitments, $5,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$8,100,000,000.
(B) Outlays, $7,100,000,000.
(C) New direct loan obligations,
$11,100,000,000.
(D) New primary loan guarantee
commitments, $5,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$8,100,000,000.
(B) Outlays, $7,000,000,000.
(C) New direct loan obligations,
$10,900,000,000.
(D) New primary loan guarantee
commitments, $5,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
(7) Commerce and Housing Credit (370):
Fiscal year 1996:
(A) New budget authority,
$2,300,000,000.
(B) Outlays, -$6,900,000,000.
(C) New direct loan obligations,
$1,400,000,000.
(D) New primary loan guarantee
commitments, $123,100,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$4,100,000,000.
(B) Outlays, -$2,600,000,000.
(C) New direct loan obligations,
$1,400,000,000.
(D) New primary loan guarantee
commitments, $123,100,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$2,800,000,000.
(B) Outlays, -$4,700,000,000.
(C) New direct loan obligations,
$1,400,000,000.
(D) New primary loan guarantee
commitments, $123,100,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$2,200,000,000.
(B) Outlays, -$3,000,000,000.
(C) New direct loan obligations,
$1,400,000,000.
(D) New primary loan guarantee
commitments, $123,100,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$1,900,000,000.
(B) Outlays, -$2,200,000,000.
(C) New direct loan obligations,
$1,400,000,000.
(D) New primary loan guarantee
commitments, $123,100,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$1,300,000,000.
(B) Outlays, -$2,500,000,000.
(C) New direct loan obligations,
$1,400,000,000.
(D) New primary loan guarantee
commitments, $123,100,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$1,000,000,000.
(B) Outlays, -$2,600,000,000.
(C) New direct loan obligations,
$1,400,000,000.
(D) New primary loan guarantee
commitments, $123,100,000,000.
(E) New secondary loan guarantee
commitments, $0.
(8) Transportation (400):
Fiscal year 1996:
(A) New budget authority,
$40,500,000,000.
(B) Outlays, $38,800,000,000.
(C) New direct loan obligations,
$200,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$42,700,000,000.
(B) Outlays, $37,500,000,000.
(C) New direct loan obligations,
$200,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$43,500,000,000.
(B) Outlays, $36,600,000,000.
(C) New direct loan obligations,
$200,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$43,700,000,000.
(B) Outlays, $35,600,000,000.
(C) New direct loan obligations,
$200,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$44,300,000,000.
(B) Outlays, $34,900,000,000.
(C) New direct loan obligations,
$200,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$43,800,000,000.
(B) Outlays, $34,200,000,000.
(C) New direct loan obligations,
$200,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$43,300,000,000.
(B) Outlays, $33,700,000,000.
(C) New direct loan obligations,
$200,000,000.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
(9) Community and Regional Development (450):
Fiscal year 1996:
(A) New budget authority,
$6,700,000,000.
(B) Outlays, $9,900,000,000.
(C) New direct loan obligations,
$2,700,000,000.
(D) New primary loan guarantee
commitments, $1,200,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$6,700,000,000.
(B) Outlays, $7,800,000,000.
(C) New direct loan obligations,
$2,700,000,000.
(D) New primary loan guarantee
commitments, $1,200,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$6,700,000,000.
(B) Outlays, $6,700,000,000.
(C) New direct loan obligations,
$2,700,000,000.
(D) New primary loan guarantee
commitments, $1,200,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$6,700,000,000.
(B) Outlays, $6,500,000,000.
(C) New direct loan obligations,
$2,700,000,000.
(D) New primary loan guarantee
commitments, $1,200,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$6,700,000,000.
(B) Outlays, $6,600,000,000.
(C) New direct loan obligations,
$2,700,000,000.
(D) New primary loan guarantee
commitments, $1,200,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$6,200,000,000.
(B) Outlays, $6,400,000,000.
(C) New direct loan obligations,
$2,700,000,000.
(D) New primary loan guarantee
commitments, $1,200,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$6,100,000,000.
(B) Outlays, $6,400,000,000.
(C) New direct loan obligations,
$2,700,000,000.
(D) New primary loan guarantee
commitments, $1,200,000,000.
(E) New secondary loan guarantee
commitments, $0.
(10) Education, Training, Employment, and Social
Services (500):
Fiscal year 1996:
(A) New budget authority,
$45,700,000,000.
(B) Outlays, $52,300,000,000.
(C) New direct loan obligations,
$13,600,000,000.
(D) New primary loan guarantee
commitments, $16,300,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$45,000,000,000.
(B) Outlays, $46,400,000,000.
(C) New direct loan obligations,
$16,300,000,000.
(D) New primary loan guarantee
commitments, $15,900,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$44,900,000,000.
(B) Outlays, $44,600,000,000.
(C) New direct loan obligations,
$19,100,000,000.
(D) New primary loan guarantee
commitments, $15,200,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$45,400,000,000.
(B) Outlays, $44,700,000,000.
(C) New direct loan obligations,
$21,800,000,000.
(D) New primary loan guarantee
commitments, $14,300,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$45,900,000,000.
(B) Outlays, $45,200,000,000.
(C) New direct loan obligations,
$21,900,000,000.
(D) New primary loan guarantee
commitments, $15,000,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$45,000,000,000.
(B) Outlays, $44,200,000,000.
(C) New direct loan obligations,
$22,000,000,000.
(D) New primary loan guarantee
commitments, $15,800,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$44,600,000,000.
(B) Outlays, $43,700,000,000.
(C) New direct loan obligations,
$22,200,000,000.
(D) New primary loan guarantee
commitments, $16,600,000,000.
(E) New secondary loan guarantee
commitments, $0.
(11) Health (550):
Fiscal year 1996:
(A) New budget authority,
$121,900,000,000.
(B) Outlays, $122,300,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $300,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$127,700,000,000.
(B) Outlays, $127,800,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $300,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$132,100,000,000.
(B) Outlays, $132,200,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $300,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$136,700,000,000.
(B) Outlays, $136,700,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $300,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$141,500,000,000.
(B) Outlays, $141,400,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $300,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$146,300,000,000.
(B) Outlays, $146,200,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $300,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$149,100,000,000.
(B) Outlays, $148,900,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $300,000,000.
(E) New secondary loan guarantee
commitments, $0.
(12) Medicare (570):
Fiscal year 1996:
(A) New budget authority,
$177,600,000,000.
(B) Outlays, $175,200,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$186,600,000,000.
(B) Outlays, $185,000,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$195,900,000,000.
(B) Outlays, $194,200,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$206,300,000,000.
(B) Outlays, $203,700,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$214,800,000,000.
(B) Outlays, $212,900,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$224,400,000,000.
(B) Outlays, $222,400,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$234,600,000,000.
(B) Outlays, $232,400,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
(13) Income Security (600):
Fiscal year 1996:
(A) New budget authority,
$222,700,000,000.
(B) Outlays, $225,000,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $100,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$231,800,000,000.
(B) Outlays, $235,300,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $100,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$248,400,000,000.
(B) Outlays, $243,900,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $100,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$255,400,000,000.
(B) Outlays, $254,300,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $100,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$265,900,000,000.
(B) Outlays, $267,600,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $100,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$267,600,000,000.
(B) Outlays, $269,000,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $100,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$277,600,000,000.
(B) Outlays, $279,100,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $100,000,000.
(E) New secondary loan guarantee
commitments, $0.
(14) Social Security (650):
Fiscal year 1996:
(A) New budget authority,
$5,900,000,000.
(B) Outlays, $8,500,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$8,100,000,000.
(B) Outlays, $10,500,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$8,800,000,000.
(B) Outlays, $11,300,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$9,600,000,000.
(B) Outlays, $12,100,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$10,500,000,000.
(B) Outlays, $12,900,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$11,100,000,000.
(B) Outlays, $13,500,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$11,700,000,000.
(B) Outlays, $14,100,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
(15) Veterans Benefits and Services (700):
Fiscal year 1996:
(A) New budget authority,
$37,600,000,000.
(B) Outlays, $36,900,000,000.
(C) New direct loan obligations,
$1,200,000,000.
(D) New primary loan guarantee
commitments, $26,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$38,100,000,000.
(B) Outlays, $38,100,000,000.
(C) New direct loan obligations,
$1,100,000,000.
(D) New primary loan guarantee
commitments, $21,600,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$38,500,000,000.
(B) Outlays, $38,500,000,000.
(C) New direct loan obligations,
$1,000,000,000.
(D) New primary loan guarantee
commitments, $19,700,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$39,100,000,000.
(B) Outlays, $39,000,000,000.
(C) New direct loan obligations,
$1,000,000,000.
(D) New primary loan guarantee
commitments, $18,600,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$39,200,000,000.
(B) Outlays, $40,600,000,000.
(C) New direct loan obligations,
$1,200,000,000.
(D) New primary loan guarantee
commitments, $19,300,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$39,700,000,000.
(B) Outlays, $41,200,000,000.
(C) New direct loan obligations,
$1,400,000,000.
(D) New primary loan guarantee
commitments, $19,900,000,000.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$40,100,000,000.
(B) Outlays, $41,600,000,000.
(C) New direct loan obligations,
$1,700,000,000.
(D) New primary loan guarantee
commitments, $20,600,000,000.
(E) New secondary loan guarantee
commitments, $0.
(16) Administration of Justice (750):
Fiscal year 1996:
(A) New budget authority,
$17,800,000,000.
(B) Outlays, $17,800,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$16,900,000,000.
(B) Outlays, $17,100,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$16,600,000,000.
(B) Outlays, $16,900,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$16,400,000,000.
(B) Outlays, $16,700,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$16,400,000,000.
(B) Outlays, $16,600,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$16,000,000,000.
(B) Outlays, $16,200,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$15,900,000,000.
(B) Outlays, $16,100,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
(17) General Government (800):
Fiscal year 1996:
(A) New budget authority,
$11,600,000,000.
(B) Outlays, $12,400,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$11,600,000,000.
(B) Outlays, $11,800,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$12,500,000,000.
(B) Outlays, $12,600,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$11,700,000,000.
(B) Outlays, $11,500,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$12,100,000,000.
(B) Outlays, $12,000,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$11,300,000,000.
(B) Outlays, $11,100,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$11,300,000,000.
(B) Outlays, $11,000,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
(18) Net Interest (900):
Fiscal year 1996:
(A) New budget authority,
$295,800,000,000.
(B) Outlays, $295,800,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$304,100,000,000.
(B) Outlays, $304,100,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$308,400,000,000.
(B) Outlays, $308,400,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$314,300,000,000.
(B) Outlays, $314,300,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$319,400,000,000.
(B) Outlays, $319,400,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$320,000,000.
(B) Outlays, $320,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$322,600,000,000.
(B) Outlays, $322,600,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
(19) Allowances (920):
Fiscal year 1996:
(A) New budget authority,
$2,300,000,000.
(B) Outlays, $1,900,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$2,400,000,000.
(B) Outlays, $2,300,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$2,400,000,000.
(B) Outlays, $2,500,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$2,500,000,000.
(B) Outlays, $2,700,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$2,600,000,000.
(B) Outlays, $2,800,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$2,600,000,000.
(B) Outlays, 2,900,000,000
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$2,600,000,000.
(B) Outlays, $2,900,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
(20) Undistributed Offsetting Receipts (950):
Fiscal year 1996:
(A) New budget authority,
$34,400,000,000.
(B) Outlays, $34,400,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1997:
(A) New budget authority,
$34,200,000,000.
(B) Outlays, $34,200,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1998:
(A) New budget authority,
$37,600,000,000.
(B) Outlays, $37,600,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 1999:
(A) New budget authority,
$36,400,000,000.
(B) Outlays, $36,400,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2000:
(A) New budget authority,
$38,100,000,000.
(B) Outlays, $38,100,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2001:
(A) New budget authority,
$37,900,000,000.
(B) Outlays, $37,900,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.
Fiscal year 2002:
(A) New budget authority,
$39,000,000,000.
(B) Outlays, $39,000,000,000.
(C) New direct loan obligations, $0.
(D) New primary loan guarantee
commitments, $0.
(E) New secondary loan guarantee
commitments, $0.

SEC. 4. RECONCILIATION.

(a)(1) Not later than July 14, 1995, the House committees
named in paragraphs (1) through (12) of subsection (b) of this
section shall submit their recommendations to the House
Committee on the Budget. After receiving those recommendations,
the House Committee on the Budget shall report to the House a
reconciliation bill carrying out all such recommendations
without any substantive revision.
(2) Each committee named in paragraphs (1) through (11) of
subsection (b) shall report changes in laws within its
jurisdiction that provide direct spending such that the total
level of direct spending for that committee for--
(A) fiscal year 1996,
(B) the 5-year period beginning with fiscal year 1996
and ending with fiscal year 2000, and
(C) the 7-year period beginning with fiscal year 1996
and ending with fiscal year 2002,
does not exceed the total level of direct spending in that
period in the paragraph applicable to that committee.
(3) Each committee named in paragraphs (2)(B), (4)(B),
(5)(B), and (6)(B) of subsection (b) shall report changes in
laws within its jurisdiction as set forth in the paragraph
applicable to that committee.
(4) The Committee on Ways and Means shall carry out
subsection (b)(12).
(b)(1) The House Committee on Agriculture: $35,824,000,000 in
outlays in fiscal year 1996, $171,886,000,000 in outlays in
fiscal years 1996 through 2000, and $263,102,000,000 in outlays
in fiscal years 1996 through 2002.
(2)(A) The House Committee on Banking and Financial Services:
-$12,897,000,000 in outlays in fiscal year 1996,
-$43,065,000,000 in outlays in fiscal years 1996 through 2000,
and -$57,184,000,000 in outlays in fiscal years 1996 through
2002.
(B) The House Committee on Banking and Financial Services
shall report changes in laws within its jurisdiction that would
reduce the deficit by: $0 in fiscal year 1996, -$100,000,000 in
fiscal years 1996 through 2000, and -$260,000,000 in fiscal
years 1996 through 2002.
(3) The House Committee on Commerce: $293,665,000,000 in
outlays in fiscal year 1996, $1,726,600,000,000 in outlays in
fiscal years 1996 through 2000, and $2,625,094,000,000 in
outlays in fiscal years 1996 through 2002.
(4)(A) The House Committee on Economic and Educational
Opportunities: $13,727,000,000 in outlays in fiscal year 1996,
$61,570,000,000 in outlays in fiscal years 1996 through 2000,
and $95,520,000,000 in outlays in fiscal years 1996 through
2002.
(B) In addition to changes in law reported pursuant to
subparagraph (A), the House Committee on Economic and
Educational Opportunities shall report program changes in laws
within its jurisdiction that would result in a reduction in
outlays as follows: -$720,000,000 in fiscal year 1996,
-$5,908,000,000 in fiscal years 1996 through 2000, and
-$9,018,000,000 in fiscal years 1996 through 2002.
(5)(A) The House Committee on Government Reform and
Oversight: $57,725,000,000 in outlays in fiscal year 1996,
$313,647,000,000 in outlays in fiscal years 1996 through 2000,
and $455,328,000,000 in outlays in fiscal years 1996 through
2002.
(B) In addition to changes in law reported pursuant to
subparagraph (A), the House Committee on Government Reform and
Oversight shall report changes in laws within its jurisdiction
that would reduce the deficit by: -$988,000,000 in fiscal year
1996, -$9,618,000,000 in fiscal years 1996 through 2000, and
-$14,740,000,000 in fiscal years 1996 through 2002.
(6)(A) The House Committee on International Relations:
$14,246,000,000 in outlays in fiscal year 1996, $62,076,000,000
in outlays in fiscal years 1996 through 2000, and
$83,206,000,000 in outlays in fiscal years 1996 through 2002.
(B) In addition to changes in law reported pursuant to
subparagraph (A), the House Committee on International
Relations shall report changes in laws within its jurisdiction
that would reduce the deficit by: -$19,000,000,000 in fiscal
year 1996, -$95,000,000,000 in fiscal years 1996 through 2000,
and -$123,000,000 in fiscal years 1996 through 2002.
(7) The House Committee on the Judiciary: $2,580,000,000 in
outlays in fiscal year 1996, $14,043,000,000 in outlays in
fiscal years 1996 through 2000, and $20,029,000,000 in outlays
in fiscal years 1996 through 2002.
(8) The House Committee on National Security: $38,769,000,000
in outlays in fiscal year 1996, $224,682,000,000 in outlays in
fiscal years 1996 through 2000, and $328,334,000,000 in outlays
in fiscal years 1996 through 2002.
(9) The House Committee on Resources: $1,558,000,000 in
outlays in fiscal year 1996, $6,532,000,000 in outlays in
fiscal years 1996 through 2000, and $12,512,000,000 in outlays
in fiscal years 1996 through 2002.
(10) The House Committee on Transportation and
Infrastructure: $16,636,000,000 in outlays in fiscal year 1996,
$83,227,000,000 in outlays in fiscal years 1996 through 2000,
and $117,079,000,000 in outlays in fiscal years 1996 through
2002.
(11) The House Committee on Veterans' Affairs:
$19,041,000,000 in outlays in fiscal year 1996,
$105,965,000,000 in outlays in fiscal years 1996 through 2000,
and $154,054,000,000 in outlays in fiscal years 1996 through
2002.
(12)(A) The House Committee on Ways and Means shall report
changes in laws within its jurisdiction that provide direct
spending such that the total level of direct spending for that
committee for--
(i) fiscal year 1996,
(ii) the 5-year period beginning with fiscal year
1996 and ending with fiscal year 2000, and
(iii) the 7-year period beginning with fiscal year
1996 and ending with fiscal year 2002,
does not exceed the following level in that period:
$356,336,000,000 in outlays in fiscal year 1996,
$2,152,905,000,000 in outlays in fiscal years 1996 through
2000, and $3,297,787,000,000 in outlays in fiscal years 1996
through 2002.
(B) In addition to changes in law reported pursuant to
subparagraph (A), the House Committee on Ways and Means shall
report changes in laws within its jurisdiction such that the
total level of revenues for that committee for--
(i) fiscal year 1996,
(ii) the 5-year period beginning with fiscal year
1996 and ending with fiscal year 2000, and
(iii) the 7-year period beginning with fiscal year
1996 and ending with fiscal year 2002,
is not less than the following amount in that period:
$1,027,612,000,000 in fiscal year 1996, $5,371,087,000,000 in
fiscal years 1996 through 2000, and $7,836,405,000,000 in
fiscal years 1996 through 2002.
(c)(1) Not later than September 14, 1995, the House
committees named in paragraphs (2) and (3) shall submit their
recommendations to the House Committee on the Budget. After
receiving those recommendations, the House Budget Committee
shall report to the House a reconciliation bill carrying out
all such recommendations without any substantive revisions.
(2) In addition to changes in laws reported pursuant to
subsection (b)(3), the House Committee on Commerce shall report
changes in laws within its jurisdiction that provide direct
spending such that the total level of direct spending for that
committee for--
(A) fiscal year 1996,
(B) the 5-year period beginning with fiscal year 1996
and ending with fiscal year 2000, and
(C) the 7-year period beginning with fiscal year 1996
and ending with fiscal year 2002,
does not exceed the following level in that period:
$287,165,000,000 in outlays in fiscal year 1996,
$1,592,200,000,000 in outlays in fiscal years 1996 through
2000, and $2,338,694,000,000 in outlays in fiscal years 1996
through 2002.
(3) In addition to changes in laws reported pursuant to
subsection (b)(12), the House Committee on Ways and Means shall
report changes in laws within its jurisdiction that provide
direct spending such that the total level of direct spending
for that committee for--
(A) fiscal year 1996,
(B) the 5-year period beginning with fiscal year 1996
and ending with fiscal year 2000, and
(C) the 7-year period beginning with fiscal year 1996
and ending with fiscal year 2002,
does not exceed the following level in that period:
$349,836,000,000 in outlays in fiscal year 1996,
$2,018,505,000,000 in outlays in fiscal years 1996 through
2000, and $3,009,387,000,000 in outlays in fiscal years 1996
through 2002.
(d) For purposes of this section, the term ``direct
spending'' has the meaning given to such term in section
250(c)(8) of the Balanced Budget and Emergency Deficit Control
Act of 1985.

SEC. 5. SALE OF GOVERNMENT ASSETS.

(a) Sense of Congress.--It is the sense of the Congress
that--
(1) the prohibition on scoring asset sales has
discouraged the sale of assets that can be better
managed by the private sector and generate receipts to
reduce the Federal budget deficit;
(2) the President's fiscal year 1996 budget included
$8,000,000,000 in receipts from asset sales and
proposed a change in the asset sale scoring rule to
allow the proceeds from these sales to be scored;
(3) assets should not be sold if such sale would
increase the budget deficit over the long run; and
(4) the asset sale scoring prohibition should be
repealed and consideration should be given to replacing
it with a methodology that takes into account the long-
term budgetary impact of asset sale.
(b) Budgetary Treatment.--For purposes of the Congressional
Budget Act of 1974, the amounts realized from sales of assets
shall be scored with respect to the level of budget authority,
outlays, or revenues.
(c) Definition.--For purposes of this section, the term
``sale of an asset'' shall have the same meaning as under
section 250(c)(21) of the Balanced Budget and Emergency Deficit
Control Act of 1985.
(d) Treatment of Loan Assets.--For purposes of this section,
the sale of loan assets or the prepayment of a loan shall be
governed by the terms of the Federal Credit Reform Act of 1990.

SEC. 6. INTERNAL REVENUE SERVICE COMPLIANCE INITIATIVE.

(a) Adjustments.--(1) For purposes of points of order under
the Congressional Budget Act of 1974 and concurrent resolutions
on the budget--
(A) the discretionary spending limits under section
601(a)(2) of that Act (and those limits as cumulatively
adjusted) for the current fiscal year and each outyear;
(B) the allocations to the Committee on
Appropriations under sections 302(a) and 602(a) of that
Act; and
(C) the appropriate budgetary aggregates in the most
recently agreed to concurrent resolution on the budget,
shall be adjusted to reflect the amounts of additional new
budget authority or additional outlays (as defined in paragraph
(2)) reported by the Committee on Appropriations in
appropriation Acts (or by the committee of conference on such
legislation) for the Internal Revenue Service compliance
initiative activities in any fiscal year, but not to exceed in
any fiscal year $405,000,000 in new budget authority and
$405,000,000 in outlays.
(2) As used in this section, the terms ``additional new
budget authority'' or ``additional outlays'' shall mean, for
any fiscal year, budget authority or outlays (as the case may
be) in excess of the amounts requested for that fiscal year for
the Internal Revenue Service in the President's Budget for
fiscal year 1996.
(b) Revised Limits, Allocations, and Aggregates.--Upon the
reporting of legislation pursuant to subsection (a), and again
upon the submission of a conference report on such legislation
(if a conference report is submitted), the chairman of the
Committee on the Budget of the Senate or the House of
Representatives (as the case may be) shall submit to that
chairman's respective House appropriately revised--
(1) discretionary spending limits under section
601(a)(2) of the Congressional Budget Act of 1974 (and
those limits as cumulatively adjusted) for the current
fiscal year and each outyear;
(2) allocations to the Committee on Appropriations
under sections 302(a) and 602(a) of that Act; and
(3) appropriate budgetary aggregates in the most
recently agreed to concurrent resolution on the budget,
to carry out this subsection. These revised discretionary
spending limits, allocations, and aggregates shall be
considered for purposes of congressional enforcement under that
Act as the discretionary spending limits, allocations, and
aggregates.
(c) Reporting Revised Suballocations.--The Committees on
Appropriations of the Senate and the House of Representatives
may report appropriately revised suballocations pursuant to
sections 302(b)(1) and 602(b)(1) of the Congressional Budget
Act of 1974 to carry out this section.
(d) Contingencies.--
(1) The Internal Revenue Service and the Department
of the Treasury have certified that they are firmly
committed to the principles of privacy,
confidentiality, courtesy, and protection of taxpayer
rights. To this end, the Internal Revenue Service and
the Department of the Treasury have explicitly
committed to initiate and implement educational
programs for any new employees hired as a result of the
compliance initiative made possible by this section.
(2) This section shall not apply to any additional
new budget authority or additional outlays unless--
(A) the chairmen of the Budget Committees
certify, based upon information from the
Congressional Budget Office, the General
Accounting Office, and the Internal Revenue
Service (as well as from any other sources they
deem relevant), that such budget authority or
outlays will not increase the total of the
Federal budget deficits over the next five
years; and
(B) any funds made available pursuant to such
budget authority or outlays are available only
for the purpose of carrying out Internal
Revenue Service compliance initiative
activities.

SEC. 7. SENSE OF THE CONGRESS ON BASELINES.

(a) Findings.--The Congress finds that:
(1) Baselines are projections of future spending if
existing policies remain unchanged.
(2) Under baseline assumptions, spending
automatically rises with inflation even if such
increases are not provided under current law.
(3) Baseline budgeting is inherently biased against
policies that would reduce the projected growth in
spending because such policies are scored as a
reduction from a rising baseline.
(4) The baseline concept has encouraged Congress to
abdicate its constitutional responsibility to control
the public purse for programs which are automatically
funded under existing law.
(b) Sense of Congress.--It is the sense of the Congress that
baseline budgeting should be replaced with a form of budgeting
that requires full justification and analysis of budget
proposals and maximizes congressional accountability for public
spending.

SEC. 8. SENSE OF CONGRESS ON EMERGENCIES.

(a) Findings.--The Congress finds that:
(1) The Budget Enforcement Act of 1990 exempted from
the discretionary spending limits and the Pay-As-You-Go
requirements for entitlement and tax legislation
funding requirements that are designated by Congress
and the President as an emergency.
(2) Congress and the President have increasingly
misused the emergency designation by--
(A) designating funding as an emergency that
is neither unforeseen nor a genuine emergency,
and
(B) circumventing spending limits or passing
controversial items that would not pass
scrutiny in a free-standing bill.
(b) Sense of Congress.--It is the sense of Congress that
Congress should study alternative approaches to budgeting for
emergencies, including codifying the definition of an emergency
and establishing contingency funds to pay for emergencies.

SEC. 9. SENSE OF CONGRESS REGARDING PRIVATIZATION OF THE STUDENT LOAN
MARKETING ASSOCIATION (SALLIE MAE).

(a) Findings.--The Congress finds that:
(1) The Student Loan Marketing Association was
established in 1972 as a government-sponsored
corporation dedicated to ensuring adequate private
sector funding for federally guaranteed education
loans.
(2) Since 1972, student loan volume has grown from
$1,000,000,000 a year to $25,000,000,000 a year. The
Student Loan Marketing Association was instrumental in
fostering this expansion of the student loan program.
(3) With securitization and 42 secondary markets,
there currently exist numerous alternatives for lenders
wishing to sell or liquidate their portfolios of
student loans.
(4) Maintaining Student Loan Marketing Association as
a Government-sponsored enterprise exposes taxpayers to
an unnecessary liability.
(b) Sense of Congress.--It is the sense of Congress that the
Student Loan Marketing Association should be restructured as a
private corporation.

SEC. 10. SENSE OF HOUSE OF REPRESENTATIVES REGARDING DEBT REPAYMENT.

It is the sense of the House of Representatives that--
(1) the Congress has a basic moral and ethical
responsibility to future generations to repay the
Federal debt;
(2) the Congress should enact a plan that balances
the budget, and then also develops a regimen for paying
off the Federal debt;
(3) after the budget is balanced, a surplus should be
created, which can be used to begin paying off the
debt; and
(4) such a plan should be formulated and implemented
so that this generation can save future generations
from the crushing burdens of the Federal debt.

SEC. 11. SENSE OF CONGRESS REGARDING REPEAL OF HOUSE RULE XLIX AND THE
LEGAL LIMIT ON THE PUBLIC DEBT.

It is the sense of Congress that--
(1) rule XLIX of the Rules of House of
Representatives (popularly known as the Gephardt rule)
should be repealed;
(2) the fiscal year 1996 reconciliation bill should
be enacted into law before passage of the debt limit
extension; and
(3) the debt limit should only be set at levels, and
for durations, that help assure a balanced budget by
fiscal year 2002 or sooner.

SEC. 12. SENSE OF CONGRESS REGARDING THE BUDGETARY TREATMENT OF THE
ADMINISTRATIVE COSTS FOR DIRECT LOANS.

(a) Findings.--The Congress finds that the Federal Credit
Reform Act of 1990 understates the cost to the Government of
direct loans because administrative costs are not included in
the net present value calculation of Federal direct loan
subsidy costs.
(b) Sense of Congress.--It is the sense of the Congress that
the cost of a direct loan should be the net present value, at
the time the direct loan is disbursed, of the following cash
flows for the estimated life of the loan:
(1) Loan disbursement.
(2) Repayments of principal.
(3) Interest costs and other payments by or to the
Government over the life of the loan after adjusting
for estimated defaults, prepayments, fees, penalties,
and other recoveries.
(4) In the case of a direct loan made pursuant to a
program for which the Congressional Budget Office
estimates that for the coming fiscal year (or any prior
fiscal year) loan commitments will equal or exceed
$5,000,000,000, direct expenses, including expenses
arising from--
(A) activities related to credit extension,
loan origination, and loan servicing;
(B) payments to contractors, other Government
entities, and program participants;
(C) management of contractors;
(D) collection of delinquents loans; and
(E) write-off and close-out of loans.

SEC. 13. SENSE OF THE CONGRESS REGARDING COMMISSION ON THE SOLVENCY OF
THE FEDERAL MILITARY AND CIVIL SERVICE RETIREMENT
FUNDS.

(a) Findings.--The Congress finds that the Federal retirement
system, for both military and civil service retirees, currently
has liabilities of $1.1 trillion, while holding assets worth
$340 billion and anticipating employee contributions of $220
billion, which leaves an unfunded liability of $540 billion.
(b) Sense of Congress.--It is the sense of the Congress that
a high-level commission should be convened to study the
problems associated with the Federal retirement system and make
recommendations that will ensure the long-term solvency of the
military and civil service retirement funds.}}}