[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

    [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 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

    [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 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

    [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 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

    [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 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

    [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 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

    [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.]

                                                        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

    [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 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

    [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 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

    [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 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

    [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.]

                                              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

    [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.]

                                          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

    [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.]

                                                  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

    [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.]

                                  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

    [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.]

                                    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

    [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.]

                                        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

    [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.]

                                            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

    [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.]

                                 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.