[House Report 105-185]
[From the U.S. Government Publishing Office]
Union Calendar No. 114
105th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 105-185
_______________________________________________________________________
REPORT ON THE REVISED SUBDIVISION OF BUDGET TOTALS
FOR FISCAL YEAR 1998
together with
ADDITIONAL VIEWS
SUBMITTED BY MR. LIVINGSTON, CHAIRMAN,
COMMITTEE ON APPROPRIATIONS
July 16, 1997.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
SBDV 98-3
COMMITTEE ON APPROPRIATIONS
BOB LIVINGSTON, Louisiana, Chairman
JOSEPH M. McDADE, Pennsylvania DAVID R. OBEY, Wisconsin
C. W. BILL YOUNG, Florida SIDNEY R. YATES, Illinois
RALPH REGULA, Ohio LOUIS STOKES, Ohio
JERRY LEWIS, California JOHN P. MURTHA, Pennsylvania
JOHN EDWARD PORTER, Illinois NORMAN D. DICKS, Washington
HAROLD ROGERS, Kentucky MARTIN OLAV SABO, Minnesota
JOE SKEEN, New Mexico JULIAN C. DIXON, California
FRANK R. WOLF, Virginia VIC FAZIO, California
TOM DeLAY, Texas W. G. (BILL) HEFNER, North Carolina
JIM KOLBE, Arizona STENY H. HOYER, Maryland
RON PACKARD, California ALAN B. MOLLOHAN, West Virginia
SONNY CALLAHAN, Alabama MARCY KAPTUR, Ohio
JAMES T. WALSH, New York DAVID E. SKAGGS, Colorado
CHARLES H. TAYLOR, North Carolina NANCY PELOSI, California
DAVID L. HOBSON, Ohio PETER J. VISCLOSKY, Indiana
ERNEST J. ISTOOK, Jr., Oklahoma THOMAS M. FOGLIETTA, Pennsylvania
HENRY BONILLA, Texas ESTEBAN EDWARD TORRES, California
JOE KNOLLENBERG, Michigan NITA M. LOWEY, New York
DAN MILLER, Florida JOSE E. SERRANO, New York
JAY DICKEY, Arkansas ROSA L. DeLAURO, Connecticut
JACK KINGSTON, Georgia JAMES P. MORAN, Virginia
MIKE PARKER, Mississippi JOHN W. OLVER, Massachusetts
RODNEY P. FRELINGHUYSEN, New Jersey ED PASTOR, Arizona
ROGER F. WICKER, Mississippi CARRIE P. MEEK, Florida
MICHAEL P. FORBES, New York DAVID E. PRICE, North Carolina
GEORGE R. NETHERCUTT, Jr., CHET EDWARDS, Texas
Washington
MARK W. NEUMANN, Wisconsin
RANDY ``DUKE'' CUNNINGHAM,
California
TODD TIAHRT, Kansas
ZACH WAMP, Tennessee
TOM LATHAM, Iowa
ANNE M. NORTHUP, Kentucky
ROBERT B. ADERHOLT, Alabama
James W. Dyer, Clerk and Staff Director
LETTER OF SUBMITTAL
----------
House of Representatives,
Committee on Appropriations,
Washington, DC, July 16, 1997.
Hon. Newt Gingrich,
The Speaker, U.S. House of Representatives,
Washington, DC.
Dear Mr. Speaker: By direction of the Committee on
Appropriations, I submit herewith the Committee's report on
revised subdivision of budget authority and outlays for fiscal
year 1998 pursuant to section 302(e) of the Congressional
Budget Act of 1974, as amended, which was ordered reported by
the Committee on July 11, 1997.
The following subdivision is consistent in all instances
with the Budget Resolution.
Sincerely,
Bob Livingston,
Chairman.
Union Calendar No. 114
105th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 105-185
_______________________________________________________________________
REPORT ON THE REVISED SUBDIVISION OF BUDGET TOTALS FOR FISCAL YEAR 1998
_______
July 16, 1997.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______________________________________________________________________
Mr. Livingston, from the Committee on Appropriations, submitted the
following
R E P O R T
report on the revised subdivision of budget totals for fiscal year 1998
The Committee on Appropriations submits the following
report on the subdivision of budget totals for fiscal year 1998
pursuant to section 302(e) of the Congressional Budget Act of
1974.
ADDITIONAL VIEWS OF HON. DAVE OBEY
The adoption of 602b allocations is one of the most
important actions taken by this committee during the course of
the yearly budget cycle. It is the first step in converting the
largely incomprehensible macro numbers of a budget resolution
into the final spending decisions that affect the daily lives
of virtually all Americans. While the 602b allocations don't
provide a totally clear picture of how our nation's roads,
schools, health care, environmental protection and other
services will fare in the deliberations that are about to
begin, they provide a framework for those decisions and they
are the first real indicator of what will be possible under the
numbers assigned in the budget resolution.
Specifically, the allocations for Fiscal 1998 contained in
this report, give us a reasonably good notion of what will or
will not be possible in the markups that are about to take
place. This year's allocations will not force deep draconian
cuts below prior year levels as we have faced in a number of
our bills in recent years. By the same token, these allocations
will not provide sufficient funds to do what many members of
this body and many in the general public feel is the minimum
that should be done to improve our schools, enhance our
transpiration systems or ensure adequate medical care to those
who have served this nation in time of war.
implication for future 602b allocations
Whether or not this shortage of funding makes passage of at
least some portion of the fiscal 1998 appropriation bills
problematic will depend in large part how the committee
conducts its business in the coming weeks. But these
allocations should be very instructive to this Committee, to
the House and the public with respect to another question: the
future year spending plans contained in the bipartisan budget
agreement and the budget resolution. Any careful analysis of
the five year budget plan with respect to discretionary
spending will reveal that extraordinary cuts will be required.
If there are questions raised about the adequacy of this years
funding levels and doubt as to whether some of these bills can
be passed, it is clear that the prospects will be very dim for
appropriation bills in future years if they are reported within
the discretionary spending guidelines of the budget resolution.
This fact should be confronted squarely before--rather than
after the tax breaks which these proposed spending cuts are
supposed to offset become law.
The budget agreement permits aggregate tax breaks totaling
$135 billion over the next 5 years. It simultaneously calls for
discretionary spending to be cut $138 billion below the amount
the Congressional Budget Office estimates will be necessary to
sustain existing programs at existing levels.
What is not well understood about the budget agreement is
that while the tax cuts are at least on paper paid for by
reductions in discretionary spending, those reductions are
largely postponed until after the tax breaks can be safely
signed into law. As a result, the first year of the budget
agreement calls for relatively generous levels of discretionary
spending with nearly all of the ``heavy lifting'' postponed
until the second year and beyond. In fact, of the $91 billion
in non-defense discretionary savings anticipated by the budget
resolution over the 5 year period, only $25 billion will take
place in the first three years and $66 billions of 72% will
take place in the last three. For fiscal 1998, the year for
which we are now preparing appropriation bills, the budget
resolution provides only marginal reductions from the amount
CBO estimates is necessary to sustain current program levels.
It further provides that the statutory outlay caps on
appropriation bills be raised by a total of $7 billion in order
to facilitate higher levels of spending than would have been
permitted under the terms of earlier budget deals. In short,
this pill may be sugar coated but it ain't necessarily good for
you.
what is planned for fiscal year 2002?
The spending levels anticipated for the final two years of
the 5 year agreement are truly draconian. By the fifth year,
fiscal 2002, non-defense discretionary programs will be cut by
a total of 12% or $30 billion below current program.
The fine print of the 1988 Budget Resolution shows how the
Republican Congressional leadership would distribute this
overall 12 percent real cut in the year 2002 among the
functional categories of the federal budget (see following
table). All Members should take a careful look at these
figures, to see what is supposedly in store for us in the
coming years to pay for the tax cuts now moving through
Congress. Here are some examples of what they are recommending:
Administrative costs for Social Security (function 650)
would be cut by 23 percent by fiscal year 2002, in inflation
adjusted terms. This would mean elimination of more than 20,000
or the 83,000 employees who are presently working to distribute
Social Security benefits. The current 3-month backlog in
processing new claims would undoubtedly be driven to a year or
more.
Veterans programs (function 700) are slated for a 19
percent real cut in fiscal year 2002--over $4 billion below
what CBO says would be needed to retain the current level of
service. Are these cuts going to come in hospital and medical
care for veterans--which accounts for 94 percent of
discretionary spending in this category? If not, where will
they come?
Health programs (function 550) would cut by 16 percent
under the Republican Budget Resolution plan. Half the spending
in this category goes for the National Institutes of Health.
Are we really planning to make a 16 percent real cut in NIH by
2002? Or are we going to make even deeper cuts in the roughly
40 percent of the category devoted to community health centers,
maternal and child health, the Indian Health Service, substance
abuse and mental health services, and the like?
The community and regional development category (function
450) is slated for a 29 percent real cut in 2002. Within this
category, Community Development Block Grants plus FEMA and
other disaster relief programs together account for 71 percent
of spending.
These are not just isolated examples. The Budget Resolution
recommends cuts of 23 percent for agriculture, 19 percent for
the administrative costs of Medicare, and 16 percent for
natural resources and the environment by the fifth year of the
budget plan.
Cuts in defense spending are also required to offset the
new tax breaks. For the most part these cuts remain
unspecified. But those which have been put forward are certain
to be highly controversial and while they are supported by the
Secretary of Defense and the White House it is not at all clear
that they can garner sufficient support to be enacted by
Congress. One proposal is a 55,000 person cut in National Guard
and Reserve strength levels. A second is a new round of U.S.
base closures (BRAC). Rather than holding the tax package until
there is a minimal assurance that Congress can move forward on
any of these current proposals to reduce defense spending and
to permit additional proposals to be considered to achieve the
remaining savings that are necessary, the budget plan does just
the opposite. This year, as we are considering the tax bill, we
will go forward in the defense area with new construction, new
procurement and no significant new downsizing to meet the five
year spending targets in the budget agreement. Those tasks will
be left to a future President and a future Congress--well after
the proposed changes in tax law have been written into the U.S.
Code.
All of this discussion is really trying to put forward a
single point. The American people are being told that they can
simultaneously enjoy tax cuts and deficit reduction. They are
being told that the reason this is possible is that there will
be deep cuts in ``discretionary spending.'' But no one has
explained what the term ``discretionary spending'' means or how
its reduction affects the programs that affect peoples lives.
That information is being left to this committee to convey. We
are the ones whose job it will be to tell other Members of
Congress and the American people: ``of course we had to cut
cancer research, of course we had to cut aid to schools and
eliminate funds for better roads, environmental protection,
medical care for veterans and land acquisition to protect our
national parks. That is discretionary spending. That was what
got cut.'' Ultimately, the country, the Congress and the
committee will face a choice of cutting services that a broad
segment of the American people strongly support or failing to
deliver on the deficit reduction which the budget plan requires
to achieve balance. Whichever of those directions we choose to
take, our jobs will be less difficult if we begin to share
these facts now before final actions have been taken and before
the country and the Congress has a chance to fully weigh the
options.
should we begin making a downpayment?
One question that each member of Congress should ask as the
Committee adopts the fiscal 1998 602b is whether he or she
would be comfortable supporting a 602b allocation that would
force the kinds of cuts outlined above--in other words, the
kind of allocationwe will be asking members of the committee in
the Congress-after-next to support.
But even if we don't want to try to take the full fifth-
year cut now, should we try instead to get on a steady glide
path toward that cut. If we did, our allocations would look
very much different than those just approved by the committee.
To make steady progress toward the five-year cuts in non-
defense discretionary programs required by the budget agreement
would require a $4.2 billion reduction in this year's
allocation.
Just getting onto this steady path toward the five-year
cuts required by the budget agreement would require taking an
additional $1.3 billion in budget authority out of the FY 1998
602(b) allocation for the Labor-HHS-Education bill, $1.1
billion out of the VA-HUD bill, $499 million out of the
Commerce-Justice-State bill, $220 million out of the
Agriculture bill, and so on (see accompanying table). If that
were done, it would be highly questionable as to whether these
bills could pass the House.
Attached are three tables. The first is taken from the data
presented with the House Budget Resolution and compares the
discretionary spending anticipated under the resolution for
fiscal 2002 with the CBO baseline. The second shows how far the
total non-defense discretionary numbers in the budget
resolution deviate from the amounts of spending that would be
permitted under a plan requiring the cuts be made in equal
increments. The final table illustrates what the 602b
allocation for fiscal 1998 would look like if we began
implementing the spending reductions this year rather than
postponing the disproportionate share for later appropriation
bills.
DISCRETIONARY SPENDING UNDER BUDGET AGREEMENT--FISCAL YEAR 2002--FIFTH YEAR OF AGREEMENT--BUDGET AUTHORITY
----------------------------------------------------------------------------------------------------------------
CBO baseline Budget Budget resolution compared to
(with full resolution baseline
inflation conference -------------------------------
adjustment) \1\ report Dollar Percent
----------------------------------------------------------------------------------------------------------------
Defense 307.5 289.6 -17.9 -6
Non-Defense (total) 298.4 261.5 -36.9 -12
-------------------------------------------------------------------------------------------------------------
International Affairs 21.0 18.2 -2.8 -13
General Science, space and Tech 19.1 15.6 -3.5 -18
Energy 5.0 4.2 -0.7 -14
Natural Resources and Environment 25.2 21.2 -4.0 -16
Agriculture 4.9 3.8 -1.1 -23
Commerce and Housing Credit 3.3 2.9 -0.4 -12
Transportation 16.5 15.3 -1.2 -7
Community and Regional Development 10.7 7.6 -3.1 -29
Education, Training and Social Services 48.4 49.2 0.8 2
Health 28.8 24.2 -4.6 -16
Medicare (adminis- trative costs) 3.2 2.6 -0.6 -19
Income Security 45.4 39.6 -5.8 -13
Social Security (adminis- trative costs) 4.1 3.1 -1.0 -23
Veterans Benefits and Services 22.0 18.0 -4.1 -19
Administration of Justice 26.9 24.7 -2.3 -8
General Government 13.9 11.4 -2.6 -18
-------------------------------------------------------------------------------------------------------------
Total, Discretionary 605.9 551.1 -54.8 -9
----------------------------------------------------------------------------------------------------------------
\1\ Includes adjustment to reflect VA third-party user fees (per budget agreement).
ADDITIONAL CUTS NEEDED IF DISCRETIONARY SPENDING REDUCTIONS ARE TAKEN EVENLY OVER 5 YEARS
[Dollar amounts in billions]
----------------------------------------------------------------------------------------------------------------
Fiscal years--
------------------------------------------------------- 5-Year
1998 1999 2000 2001 2002 total
----------------------------------------------------------------------------------------------------------------
Non-Defense Discretionary; Budget Authority
CBO baseline (full inflation adjustment)...... $259.1 $269.0 $278.9 $288.5 $298.4 $1,393.9
Budget Agreement.............................. $257.9 $261.5 $261.8 $260.2 $261.5 $1,302.8
Dollar cuts below baseline................ -$1.2 -$7.5 -$17.0 -$28.4 -$36.9 -$91.1
Percentage cuts below baseline............ -0.5 -2.8 -6.1 -9.8 -12.4 -6.5
Steady Glide Path \1\......................... $253.7 $257.8 $261.2 $263.9 $266.2 $1,302.8
Dollar cuts below baseline................ -$5.4 -$11.3 -$17.7 -$24.6 -$32.2 -$91.1
Percentage cuts below baseline............ -2.1 -4.2 -6.3 -8.5 -10.8 -6.5
----------------------------------------------------------------------------------------------------------------
\1\ Percentage cuts below baseline grow by steady 2.1 percentage points per year.
EFFECT ON FISCAL YEAR 1998 602(b) ALLOCATIONS OF PLACING APPROPRIATIONS ON A STEADY GLIDE PATH TO 5-YEAR CUTS
[Budget authority; in billions of dollars]
----------------------------------------------------------------------------------------------------------------
Allocations
Proposed needed for
allocations steady glide Difference
path
----------------------------------------------------------------------------------------------------------------
Non-Defense, total (including crime fund).............. 257,857 253,706 -4,151
--------------------------------------------------
Agriculture.................................................. 13,650 13,430 -220
Commerce, Justice, State, Judiciary.......................... 30,993 30,494 -499
District of Columbia......................................... 805 792 -13
Energy and Water Development................................. 8,960 8,816 -144
Foreign Operations........................................... 12,500 12,299 -201
Interior \1\................................................. 13,700 13,479 -221
Labor, HHS, Education........................................ 79,587 78,306 -1,281
Legislative.................................................. 2,247 2,211 -36
Military Construction........................................ 0 0 0
National Security............................................ 27 27 0
Transportation............................................... 12,211 12,014 -197
Treasury, Postal Service..................................... 12,498 12,297 -201
VA, HUD, Independent Agencies \2\............................ 70,021 68,894 -1,127
Emergency Reserve............................................ 658 647 -11
----------------------------------------------------------------------------------------------------------------
\1\ Includes special allocation for land acquisition.
\2\ Includes special allocation for section 8 contract renewals.
Explanatory Note: In order to place appropriations on a steady glide path toward the $91 billion in cuts in non-
defense discretionary budget authority required by the budget agreement over five years, cuts below the
baseline totaling $5.4 billion would be needed in FY 1998, instead of the $1.2 billion called for in the
budget resolution and reflected in the proposed 602(b) allocations.
This table shows the effect of the additional $4.2 billion in cuts that would be needed, if spread
proportionately over all subcommittees.
Dave Obey.