[House Report 104-499]
[From the U.S. Government Publishing Office]



104th Congress                                            Rept. 104-499
                        HOUSE OF REPRESENTATIVES

 2d Session                                                      Part 2
_______________________________________________________________________


 
                         TRUTH IN BUDGETING ACT

                                _______


 March 29, 1996.--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

                             ADVERSE REPORT

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 842]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Budget, to whom was referred the bill 
(H.R. 842) to provide off-budget treatment for the Highway 
Trust Fund, the Airport and Airway Trust Fund, the Inland 
Waterways Trust Fund, and the Harbor Maintenance Trust Fund, 
having considered the same, report unfavorably thereon and 
recommend that the bill do not pass.

                                CONTENTS

                                                                   Page
  I. Purpose..........................................................2
 II. Background and need..............................................2
III. Section-by-section analysis......................................9
 IV. Legislative history.............................................10
  V. Congressional Budget Office estimates...........................11
 VI. Budget Committee estimates......................................12
VII. Miscellaneous budgetary information.............................13
VIII.Inflation impact statement......................................13

 IX. Budget Committee Oversight findings.............................13
  X. Government Reform and Oversight findings........................14
 XI. Changes in existing law.........................................14
XII. Committee votes.................................................16
XIII.Dissenting views................................................18


                                Purpose

    On March 29, 1996 the House Committee on the Budget 
reported H.R. 842 with a recommendation that the House of 
Representatives not pass this legislation. In the legislative 
process, this was an important and uncommon event: Committees 
have reported legislation adversely on only two other occasions 
in the 104th Congress.
    This vote recognized that the American people have called 
upon Washington to control federal spending and to stop heaping 
debt upon their children. Lawmakers now face tough choices in 
order to get that done. H.R. 842, the misnamed ``Truth in 
Budgeting Act,'' represents an effort to avoid these tough 
choices. It seeks to allow one area of federal spending--
transportation programs--to rise without restraint. Yet if we 
are to remain on the path to a balanced budget, this would 
occur at the expense of other programs.
    The bill would provide a more favorable budgetary treatment 
for highway and other transportation projects than nearly every 
other federal program. This is unfair, and in the opinion of 
the Committee on the Budget, the measure should be defeated.

                          Background and Need

    The bill would remove four transportation-related trust 
funds from the unified budget. The four funds are the 
following:
          The Highway Trust Fund;
          The Harbor Maintenance Trust Fund;
          The Airport and Airway Trust Fund;
          The Inland Waterway Trust Fund.
    Moving these trust funds off-budget would exempt them from 
all ``general budgetary limitations'', including the 
discretionary spending caps and Pay-As-You-Go requirements. It 
would also remove trust fund spending and revenues from all 
budgetary totals, except one--the deficit.
    Currently, these trust funds have paper balances. 
Proponents of taking the trust funds off-budget purport that 
these balances reflect collected but unspent dedicated taxes. 
This occurs, they claim, because Congress holds down highway 
trust fund spending and uses the unspent gas tax receipts to 
``mask the true size of the Federal deficit.'' This claim is 
not true. In fact, in 12 of the past 15 years spending exceeded 
tax revenues.
    Congress and the American people need to know the 
consequences of taking the transportation trust funds off-
budget.

(1) The transportation trust funds do not mask the deficit

    According to the General Accounting Office (GAO), ``The 
deficit is an annual measure of what the government takes in 
and what it spends. A trust fund surplus only masks the deficit 
when the trust fund takes in more revenue (exclusive of 
interest earned) than it spends in any one year.'' Interest is 
a payment between government accounts and, therefore, has no 
impact on the deficit.
    Since 1980, the Federal government has spent about $14 
billion more on highway trust fund programs than it has 
collected in trust fund taxes. This means that the Highway 
Trust Fund has contributed about $14 billion to the deficit--
the exact opposite of masking the deficit. (Chart 1.) During 
that time, however, $20 billion was credited to the trust fund 
from the general fund for compounding interest on balances 
accumulated during the Vietnam War. This compounding interest 
has allowed a paper balance to grow even though spending has 
exceeded tax revenue. (Chart 2.)
    According to the Congressional Research Service, since 
1980:

          In all but three years, FY1984, FY1989, and FY1991, 
        expenditures exceeded revenues. Nonetheless, the 
        balance in the combined fund in FY1995 stood at 
        approximately $19 billion, or approximately double the 
        FY1983 level. This buildup is attributable mostly to 
        the accumulation of interest on a significant beginning 
        balance.

(2) Taking the transportation trust funds off-budget could increase the 
        federal budget deficit by $20 billion over the next five years. 
        To remain on the glidepath to a balanced budget, this would 
        require $20 billion in cuts to non-transportation programs

    The intent of H.R. 842 is to free the transportation trust 
funds from every statutory spending control. The result would 
be disastrous to the goals of deficit reduction.
    In a letter dated March 27, 1995, Alice Rivlin, Director of 
the Office of Management and Budget (OMB) stated:

          * * * the Administration estimates that, should H.R. 
        842 become law, allowable transportation trust fund 
        spending could increase by about $20 billion over five 
        years (1996-2000), compared with the so-called current 
        service estimates.

    In a letter dated October 2, 1995, the Congressional Budget 
Office (CBO) concurred with OMB:

          CBO estimates that increasing obligations to the 
        authorized levels would result in outlays that exceed 
        the uninflated baseline amounts by about $21 billion 
        over the 1996-2000 period.

(3) The transportation trust funds are not ``deficit proof by law''

    The supporters of taking the transportation trust funds 
off-budget state that these funds are deficit proof. However, 
history does not support this claim. In 12 of the past 15 
years, spending from the highway trust fund exceeded tax 
revenue, and in 12 years since the inception of the trust fund, 
spending has exceeded all taxes plus interest transfers from 
the general fund (Chart 3).


    Supporters base their claim on a provision in highway law 
known as the Byrd Amendment which states that unfunded 
authorizations cannot exceed projected revenues for the next 
two years. But the Byrd Amendment is a poor control on spending 
for two reasons: First, it regulates authorizations, not 
obligations, and obligations are key to determining spending 
levels. Second, the Byrd Amendment has been amended in the 
past, and Congress could do so again.

(4) If the transportation trust funds were taken off-budget, obligation 
        limitations set by the Committee on Appropriations would be 
        meaningless

    The Transportation and Infrastructure Committee Report on 
H.R. 842 states ``both the Appropriations and authorizing 
committees will still be able to set obligation limitations to 
manage the programs.'' In reality, if the trust funds were 
taken off-budget, obligation limitations would be meaningless.
    Currently, outlays for all transportation programs are 
considered discretionary and are subject to the discretionary 
spending caps. The Appropriations Committee sets obligation 
limitations on transportation trust fund programs in part to 
ensure that total discretionary outlays remain within the caps.
    Because H.R. 842 would exempt transportation trust fund 
programs from the caps, the Appropriations Committee would have 
not reason or basis to set the obligation limitations below the 
fully authorized level.
    GAO has stated that even if obligation limitations were 
permitted,

        if the trust funds did not have to compete for funding 
        under the discretionary caps, it would be reasonable to 
        think that obligations would be limited only by trust 
        fund balances and receipts [including interest from the 
        general fund]. * * * Whatever the immediate effect on 
        the deficit, exempting one type of spending from BEA 
        controls makes it likely that such spending would 
        increase over time. Unless spending in other areas was 
        reduced by the same amount, the result would be a 
        higher deficit.

(5) If the transportation trust funds were taken off-budget, spending 
        on demonstration projects would be completely unconstrained

    As indicated above, supporters of H.R. 842 state that 
obligation limitations would be a method of ``managing'' 
spending from the trust funds. However, highway demonstration 
projects are ``exempt from obligation limitation.'' This means 
that the Appropriations Committee is statutorily prohibited 
from limiting demonstration project spending.
    If the Trust Funds were taken off-budget, there would be no 
available means of restraining demonstration projects. Because 
they would not even be subject to PAYGO rules, demonstration 
projects would be afforded more budgetary protection than 
entitlement programs.

(6) Nearly $40 billion has been spent from the General Fund on 
        highways, but never debited from trust fund balances

    The Congressional Research Service determined that since 
the Highway Trust Fund's inception in 1956, $38 billion has 
been spent from the General Fund on highways without being 
debited from the trust fund. These highways were constructed 
through the Economic Development Administration, the 
Appalachian Regional Commission, and the Army Corps of 
Engineers, and are no different than those constructed through 
the Department of Transportation.
    Currently there is nearly a $20 billion paper balance in 
the Highway Trust Fund. Had all highway spending been 
appropriately funded through the Highway Trust Fund, this cash 
balance would not exist.

(7) Moving the transportation trust funds off-budget and freeing 
        transportation programs from spending disciplines would set a 
        precedent for nearly 160 other trust funds, and hundreds of 
        similar accounts seeking budgetary protection

    There are approximately 160 trust funds in the federal 
government and hundreds of other programs that operate in a 
similar fashion. Giving transportation spending preferential 
treatment would send a signal to other trust fund programs that 
moving off-budget is a means of being inoculated from budget 
cuts.
    History has proven this. During the consideration of the 
1988 Budget Resolution in the Senate, amendments were offered 
to take 12 trust funds off-budget.
    In testimony before the Committee on the Budget, Allen 
Schick, Visiting Fellow at the Brookings Institution, said:

          One should not be surprised if enactment of H.R. 842 
        were to generate fresh demands for earmarking chunks of 
        federal revenue to particular funds which then would be 
        able to claim off-budget status on the grounds that 
        they are self-financing.
          I shudder to think of what the federal budget might 
        look like under this ``worst case scenario.'' The 
        budget might be balanced, but the budget would account 
        for a declining portion of federal spending. The 
        general fund would be the residual fund for weak 
        claimants who do not have sufficient clout to get 
        earmarked revenue, their own trust funds, off-budget 
        protection, and exemption from budget enforcement rules 
        and other controls.

    The Transportation and Infrastructure Committee Report on 
H.R. 842 states that the transportation trust funds are unique 
and more deserving of favorable budgetary treatment than other 
trust funds. This would suggest that the transportation trust 
funds are a higher national priority than the Black Lung Trust 
Fund, Civil Service Retirement Trust Fund, Federal Employees 
Life Insurance Trust Fund, the Rail Industry Pension Fund, and 
others.

(8) Moving trust funds off-budget would erode the credibility of 
        Congress's efforts to balance the Federal budget

    Removing the transportation trust funds from the unified 
budget would make a shell game out of the federal budget to 
allow one area of federal spending to grow without constraint. 
In a letter dated October 31, 1995, Federal Reserve Chairman 
Alan Greenspan wrote:

          As a general matter, it has been the practice of the 
        board not to take positions on the details of 
        individual tax and spending issues that are before the 
        Congress. However, the shifting of certain spending 
        categories off-budget raises some broader concerns, 
        with implications for discipline and control over 
        federal outlays. Notably, moving some spending 
        categories off-budget would lead to fragmentation of 
        the budgeting process and would detract from the 
        unified budget as an indicator of the government's 
        fiscal operations and hence the impact of the U.S. 
        budget on credit markets and the economy. Moreover, it 
        could weaken the ability of the Congress to prioritize 
        and control spending effectively.
          * * * Moving programs off-budget raises the risk that 
        resource trade-offs would become obscured and could 
        engender cynicism in financial markets and the public 
        at large about the commitment and ability of the 
        government to control federal spending.

    The Washington Post called the trust funds off-budget vote 
``a classic test'' of ``how serious House Republicans are about 
balancing the budget.'' The Wall Street Journal said ``Turning 
pork-barrel spending into a virtual entitlement sounds like a 
trick that the old Congress the Republicans ran against used to 
pull.''

                               Conclusion

    Taking the transportation trust funds off-budget would have 
profound consequences as Congress works toward a balanced 
budget. It would subject non-transportation programs to deep 
cuts, it would raise questions about Congress's commitment to 
balancing the budget without gimmicks, and it would send a 
wrong signal to countless other interests seeking budgetary 
protection.
    Ultimately, balancing the budget is about choices. Should 
Congress choose to remove the transportation trust funds from 
the unified budget, it must also choose what non-transportation 
programs it will cut to pay for the additional spending that 
could result.

                      Section-by-Section Analysis

                         Section 1. Short Title

    Provides that the act may be cited as the ``Truth in 
Budgeting Act.''

  Sec. 2. Budgetary Treatment of Highway, Airport and Airway, Inland 
             Waterways, and Harbor Maintenance Trust Funds

    The effect of this language is to remove the trust funds 
from: (1) calculations of the on-budget deficit, (2) 
congressional budget resolutions, including spending 
allocations provided to committees, and (3) spending points of 
order under the Budget Act.

  Sec. 3. Safeguards Against Deficit Spending out of the Airport and 
                           Airway Trust Fund

    This section provides that if the Secretary of 
Transportation, in consultation with the Secretary of the 
Treasury, determines that fund balances and expected receipts 
do not cover unfunded aviation authorizations, those 
authorizations are reduced on a pro-rata basis to cover the 
shortfall. This provision duplicates the Byrd Rule in the 
Highway Trust Fund.

Sec. 4. Safeguards Against Deficit Spending out of the Inland Waterways 
              Trust Fund and Harbor Maintenance Trust Fund

    This section mirrors Section 3, except that it applies to 
the Inland Waterways and Harbor Maintenance Trust Funds and has 
the Secretary of the Army consult with the Secretary of the 
Treasury in making the necessary determinations.

                         Sec. 5. Applicability

    Provides that this act becomes effective beginning with the 
1996 fiscal year.

                          Legislative History

    H.R. 842 was introduced on February 7, 1995. The bill was 
referred to the Committees on Transportation and 
Infrastructure, Government Reform and Oversight and Budget. The 
bill was reported to the House amended by the House Committee 
on Transportation and Infrastructure.
    On September 27, 1995 the Office of Management and Budget 
communicated by letter to Chairman John R. Kasich that it 
strongly opposed enactment of H.R. 842. The letter noted that 
moving funds off budget would increase the likelihood that 
resource tradeoffs would be ignored and total spending would 
rise. The Administration estimated that shifting the 
transportation trust funds off-budget could increase 
transportation spending by about $20 billion over five years.
    The Committee on the Budget held a hearing on the subject 
of taking the transportation trust funds off-budget on March 
28, 1996. Testifying before the Committee were Rep. Shuster, 
chairman of the Committee on Transportation and Infrastructure, 
James Oberstar, ranking minority member of the Committee on 
Transportation and Infrastructure, Rep. Livingston, chairman of 
the Committee on Appropriations, Rep. Wolf, chairman of the 
Appropriation's Subcommittee on Transportation, Rep. Ronald 
Coleman, ranking minority member of the Subcommittee on 
Transportation, Allen Schick, Visiting Fellow at the Brookings 
Institution, and David Luberoff, Assistant Director of the 
Taubman Center for State and Local Government of Harvard 
University's Kennedy School of Government.
    The Committee marked up the bill on March 29, 1998 and took 
the unusual action of reporting the bill with a recommendation 
that the bill not pass.

                 Congressional Budget Office Estimates

    Clause 2(l)(3)(C) of rule XI requires each committee to 
include a cost estimate prepared by the Director of the 
Congressional Budget Office, pursuant to section 403 of the 
Congressional Budget Act of 1974, if the cost estimate is 
timely submitted. The following is the CBO cost estimate as 
required:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 29, 1996.
Hon. John R. Kasich,
Chairman, Committee on the Budget
House of Representatives, Washington, DC.
    Dear Mr. Chairman: the Congressional Budget Office has 
reviewed H.R. 842, a bill to provide off-budget treatment for 
the Highway Trust Fund, the Airport and Airway Trust Fund, the 
Inland Waterways Trust Fund, and the Harbor Maintenance Trust 
Fund, as ordered reported adversely by the House Budget 
Committee on March 29, 1996.
    This bill would take the Highway, Airport and Airway, 
Harbor Maintenance, and Inland Waterways Trust Funds off-budget 
and may exempt trust fund spending from the Balanced Budget and 
Emergency Deficit Control Act of 1985 (including discretionary 
spending caps and pay-as-you-go procedures) and Congressional 
budget controls (including the Budget Resolution, 602 
allocations, and reconciliation instructions). However, it is 
unclear whether the bill, as ordered reported by the House 
Budget Committee, actually exempts the spending from these 
budgetary enforcement procedures. Even though the language that 
makes Social Security off-budget is much more specific than the 
provisions in H.R. 2274, the administrative expenses of the 
Social Security Administration are still subject to all these 
procedures.
    By itself, taking programs off-budget does not change total 
spending of the federal government and does not affect spending 
or revenue estimates for Congressional scorekeeping purposes. 
However, if this provision exempts trust fund spending from the 
budgetary control and enforcement procedures that apply to most 
other programs, transportation spending could increase 
significantly. The likelihood and amount of such increase are 
very uncertain because they would depend upon future actions by 
both authorizing and appropriations committees. Competing 
factors would come into play. On the one hand, the Congress 
would be free to spend more money because the current budgetary 
controls would no longer apply. On the other hand, the Congress 
plans on balancing the overall federal budget by 2002, and 
spending for these programs would still count in determining 
whether the budget is balanced.
    At the beginning of 1996, the amount of unobligated 
contract authority for transportation programs subject to an 
obligation limitation totals $10.3 billion. In the years after 
1996, the balance would grow under CBO's baseline assumptions. 
The Congress could decide to make these balances available for 
obligation. In addition, it could choose to increase funding 
for the Federal Aviation Administration in order to modernize 
the air traffic control system. Even if the Congress limits 
trust fund spending to the amounts of income to the funds, 
spending could increase substantially over the 1995 level.
    The bill would try to establish rules--similar to the Byrd 
rule for the Highway Trust Fund--to preserve the solvency of 
the other trust funds. The rules would require that enough 
funds be available in the trust funds to cover the 
authorizations of appropriations or amounts available for 
obligation from the trust funds. CBO cannot determine how these 
rules would be carried out because authorizations of 
appropriations and funds available for obligation are unrelated 
concepts. Authorizations of appropriations are an authorizing 
committee's stamp of approval for funds to be appropriated and 
made available for obligation. Funds that are available for 
obligation may be authorized or unauthorized.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Clare 
Doherty.
            Sincerely,
                                         June E. O'Neill, Director.

                       Budget Committee Estimates

    Clause 7(a) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
committee of the cost which would be incurred in carrying out 
H.R. 842. However clause 7(d) of that rule provides that this 
requirement does not apply when the committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act.
    The Committee generally concurs with the estimate submitted 
by the Congressional Budget Office (CBO). The CBO estimates 
discussed the implications of removing transportation spending 
from all budgetary controls. CBO noted that ``if this 
provisions exempts trust fund spending from budgetary control 
and enforcement procedures that apply to other programs, 
transportation spending could increase significantly.'' CBO 
noted that there was $10.3 billion in unobligated contract 
authority in the transportation trust funds.
    The Office of Management and Budget estimated that moving 
the trust funds off budget could increase spending by $20 
billion over five years. In his testimony to the Budget 
Committee on January 29, 1996, Allen Schick referred to 
estimates projecting an increase in transportation spending of 
$3 billion per year.
    CBO's estimate also punctured the myth that the Byrd rule 
limitation that the bill extends to the Airport and Airway, 
Harbor Maintenance, and Inland Waterway trust funds would 
constrain transportation spending. ``The rules would require 
that enough funds be available in the trust funds to cover the 
authorizations of appropriations or amounts available for 
obligation from the trust funds. CBO cannot determine how these 
rules would be carried out because authorizations of 
appropriations and funds available for obligation are unrelated 
concepts.''

                  Miscellaneous Budgetary Information

    Clause 2(l)(3)(B) of rule XI of the Rules of the House of 
Representatives and section 308(a) of the Congressional Budget 
Act of 1974 requires miscellaneous additional budgetary 
information in the report if the bill provides any new budget 
authority, spending authority, or an increase or decrease in 
revenues or tax expenditures. This bill does not technically 
provide spending authority or change revenues because 
transportation spending levels would continue to be provided 
through obligation limitations in future appropriations bills.
    However, the CBO estimate suggests that taking the 
transportation trust funds off budget could ultimately result 
in higher transportation since such spending would no longer be 
subject to the discretionary spending limits. While CBO did not 
venture an estimate of the increased level of spending, it 
noted that there was a $10.3 billion of unobligated contract 
authority for programs subject to obligation limits. In his 
testimony before the Committee, Allen Schick alluded to 
estimates that the bill would lead to an annual increase in 
transportation-related spending of $3 billion. OMB estimated a 
five year increase in transportation spending of $20 billion.
    Mr. Schick further testified that the higher spending 
likely to result from this bill would create pressure to 
increase transportation-related taxes. An increase of $3 
billion in annual transportation spending would draw down the 
cash balances in the trust fund such that outlays would exceed 
tax receipts. In a matter of a year this would trigger the Byrd 
amendment which caps unpaid commitments at a level based on the 
unexpended balance in the trust fund plus projected trust 
revenue into the trust fund. Schick reasoned that this would 
lead transportation lobbyists to pressure Congress for a tax 
increase to sustain the higher levels of transportation 
spending.

                       Inflation Impact Statement

    Clause 2(l)(4) of rule XI requires that each committee 
report on a bill or joint resolution of a public character to 
include an analytical statement describing what impact 
enactment of the measure would have on prices and costs in the 
operation of the national economy. Although the bill could 
result in a substantial increase in Federal spending, which if 
not offset by tax increases or cuts in non transportation 
programs, would increase the budget deficit, the Committee has 
determined that H.R. 842 would not have a significant impact on 
prices and costs in the operation of the national economy.

                  Budget Committee Oversight Findings

    Clause 2(l)(3)(A) of rule XI requires that each committee 
report contain oversight findings and recommendations required 
pursuant to clause (2)(b)(1) of rule X. During the course of a 
hearing held by the Budget Committee on the implications of 
taking the transportation trust funds off budget, Dr. Allen 
Schick, the foremost expert on budget process reforms stated 
that exempting off-budget trust funds would put pressure 
Congress to raise taxes and make deeper cuts in discretionary 
spending. Schick noted that the pressure to remove other funds 
and programs and to earmark federal receipts to other program 
would cause deterioration in the condition of the general fund.
    David Luberoff of Harvard University noted ``sound 
budgeting principals require a unified budget particularly in 
an era when deficit reducion clearly is the primary challenge 
facing the Congress and the executive branch. As Congress and 
the executive branch make the difficult decisions required to 
balance the budget, all sources of spending and revenue should 
be on the table.''
    Representatives Livingston, Wolf and Coleman all testified 
against taking transportation trust funds off-budget. In 
particular, Mr. Livingston stated:

          * * * [N]obody likes budget constraints. Nobody likes 
        the hard financial decisions that will have to be made 
        to eliminate the deficit. The next few years will be 
        hard on everyone who receives government spending, 
        including the road builders and airport construction 
        trades. The special interests all around Washington are 
        trying to find ways out of the problem, and off-budget 
        is just one manifestation of it.

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

    Clause 2(l)(3)(D) of rule XI requires that each committee 
report 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 the 
Budget has received no such findings or recommendations from 
the Committee on Government Reform and Oversight.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

              CHAPTER 471 OF TITLE 49, UNITED STATES CODE

                    CHAPTER 471--AIRPORT DEVELOPMENT

                    SUBCHAPTER I--AIRPORT IMPROVEMENT

Sec.
47101. Policies.
     * * * * * * *
47130. Safeguards against deficit spending.
          * * * * * * *

                   Subchapter I--Airport Improvement

          * * * * * * *

Sec. 47130. Safeguards against deficit spending

    (a) Estimates of Unfunded Aviation Authorizations and Net 
Aviation Receipts.--Not later than March 31 of each year, the 
Secretary, in consultation with the Secretary of the Treasury, 
shall estimate--
          (1) the amount which would (but for this section) be 
        the unfunded aviation authorizations at the close of 
        the next fiscal year, and
          (2) the net aviation receipts for the 24-month period 
        beginning at the close of such fiscal year.
    (b) Procedure Where There Is Excess Unfunded Aviation 
Authorizations.--If the Secretary determines for any fiscal 
year that the amount described in subsection (a)(1) exceeds the 
amount described in subsection (a)(2), the Secretary shall 
determine the amount of such excess.
    (c) Adjustment of Authorizations Where Unfunded 
Authorizations Exceed 2 Years Receipts.--
          (1) Determination of percentage.--If the Secretary 
        determines that there is an excess referred to in 
        subsection (b), the Secretary shall determine the 
        percentage which--
                  (A) such excess, is of
                  (B) the total of the amounts authorized to be 
                appropriated and the amounts available for 
                obligation from the Airport and Airway Trust 
                Fund for the next fiscal year.
          (2) Adjustment of authorizations.--If the Secretary 
        determines a percentage under paragraph (1), each 
        amount authorized to be appropriated or available for 
        obligation from the Airport and Airway Trust Fund for 
        the next fiscal year shall be reduced by such 
        percentage.
    (d) Availability of Amounts Previously Withheld.--
          (1) Adjustment of authorizations.--If, after an 
        adjustment has been made under subsection (c)(2), the 
        Secretary determines that the amount described in 
        subsection (a)(1) does not exceed the amount described 
        in subsection (a)(2) or that the excess referred to in 
        subsection (b) is less than the amount previously 
        determined, each amount authorized to be appropriated 
        or available for obligation that was reduced under 
        subsection (c)(2) shall be increased, by an equal 
        percentage, to the extent the Secretary determines that 
        it may be so increased without causing the amount 
        described in subsection (a)(1) to exceed the amount 
        described in subsection (a)(2) (but not by more than 
        the amount of the reduction).
          (2) Apportionment.--The Secretary shall apportion 
        amounts made available for apportionment by reason of 
        paragraph (1).
          (3) Period of availability.--Any funds apportioned 
        pursuant to paragraph (2) shall remain available for 
        the period for which they would be available if such 
        apportionment took effect with the fiscal year in which 
        they are apportioned pursuant to paragraph (2).
    (e) Definitions.--For purposes of this section, the 
following definitions apply:
          (1) Unfunded aviation authorizations.--The term 
        ``unfunded aviation authorization'' means, at any time, 
        the excess (if any) of--
                  (A) the total amount authorized to be 
                appropriated or available for obligation from 
                the Airport and Airway Trust Fund which has not 
                been appropriated or obligated, over
                  (B) the amount available in the Airport and 
                Airway Trust Fund at such time to make such 
                appropriation or to liquidate such obligations 
                (after all other unliquidated obligations at 
                such time which are payable from the Airport 
                and Airway Trust Fund have been liquidated).
          (2) Net aviation receipts.--The term `net aviation 
        receipts' means, with respect to any period, the excess 
        of--
                  (A) the receipts (including interest) of the 
                Airport and Airway Trust Fund during such 
                period, over
                  (B) the amounts to be transferred during such 
                period from the Airport and Airway Trust Fund 
                under section 9502(d) of the Internal Revenue 
                Code of 1986 (other than paragraph (1) 
                thereof).
    (f) Reports.--Any estimate under subsection (a) and any 
determination under subsection (b), (c), or (d) shall be 
reported by the Secretary to Congress.
    The Committee notes that the bill as reported by the Budget 
Committee is not identical with the version filed by the 
Committee on Transportation and Infrastructure. The latter 
substantially weakened the Byrd rule-like restrictions that are 
extended in the bill to the Airport and Airway, Harbor 
Maintenance, and Inland Waterway trust funds. The 
Transportation Committee's version also expanded the immunity 
of transportation spending from budgetary controls.

                            Committee Votes

    Clause 2(l)(2)(B) of House Rule XI requires that each 
committee report to accompany any bill or resolution of a 
public character include the total number of votes cast 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. There were no rollcall 
votes. By an overwhelming voice vote, the Committee voted to 
report the bill with the recommendation that the bill not pass.

                            Dissenting Views

    Clause (2)(l)(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 
views in its report. Although neither requirement applies to 
the committee, the committee always makes the maximum effort to 
provide its members with such an opportunity. The only view 
that was submitted is as follows:
           DISSENTING VIEWS OF CONGRESSMAN JERRY F. COSTELLO

    Mr. Chairman, I want to express my strong opposition to the 
action taken by the Budget Committee today on the bill H.R. 
842. As a cosponsor of this important legislation, I believe 
taking the four self-financed transportation trust funds off 
budget is not only appropriate but necessary.
    Currently, the accumulated cash balances of the highway 
trust fund, the airport and airways trust fund, the harbor 
maintenance trust fund and the inland waterways trust fund 
exceeds $30 billion and will reach as high as $77 billion by 
the year 2002. When these trust funds were created, the users 
who contributed to the funds believed their taxes would go 
toward necessary improvements and maintenance of the nation's 
transportation system. Because of the direct connection between 
the tax imposed and the benefit derived from improvements in 
transportation infrastructure, taxpayers strongly support the 
payment of transportation user fees. This support will not 
continue to exist if the trust funds continue to be used to 
make the federal deficit appear smaller.
    Taking the transportation trust funds off budget will 
restore faith with the taxpayers. But this issue is not only 
about tax fairness, it's also about jobs and economic 
productivity. Every dollar spent in highway, transit and 
aviation construction improves a nationwide system upon which 
the people and commerce of the United States depend. Our 
transportation system continues to be our government's best 
investment. Since the 1950s, as much as 25 percent of America's 
productivity growth can be credited to infrastructure 
improvements. For example, recent Department of Transportation 
studies show that every $1 billion invested in highway 
construction and enhancements yields 42,000 good high-wage 
jobs.
    These are among the reasons why I am supporting H.R. 842 
and why I will work for its passage on the House floor in 
April.

                                                 Jerry F. Costello.