[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
MEMBERS' DAY
=======================================================================
HEARING
before the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, MARCH 8, 2001
__________
Serial No. 107-7
__________
Printed for the use of the Committee on the Budget
Available on the Internet: http://www.access.gpo.gov/congress/house/
house04.html
______
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COMMITTEE ON THE BUDGET
JIM NUSSLE, Iowa, Chairman
JOHN E. SUNUNU, New Hampshire JOHN M. SPRATT, Jr., South
Vice Chairman Carolina,
PETER HOEKSTRA, Michigan Ranking Minority Member
Vice Chairman JIM McDERMOTT, Washington
CHARLES F. BASS, New Hampshire BENNIE G. THOMPSON, Mississippi
GIL GUTKNECHT, Minnesota KEN BENTSEN, Texas
VAN HILLEARY, Tennessee JIM DAVIS, Florida
MAC THORNBERRY, Texas EVA M. CLAYTON, North Carolina
JIM RYUN, Kansas DAVID E. PRICE, North Carolina
MAC COLLINS, Georgia GERALD D. KLECZKA, Wisconsin
ERNIE FLETCHER, Kentucky BOB CLEMENT, Tennessee
GARY G. MILLER, California JAMES P. MORAN, Virginia
PAT TOOMEY, Pennsylvania DARLENE HOOLEY, Oregon
WES WATKINS, Oklahoma TAMMY BALDWIN, Wisconsin
DOC HASTINGS, Washington CAROLYN McCARTHY, New York
JOHN T. DOOLITTLE, California DENNIS MOORE, Kansas
ROB PORTMAN, Ohio MICHAEL E. CAPUANO, Massachusetts
RAY LaHOOD, Illinois MICHAEL M. HONDA, California
KAY GRANGER, Texas JOSEPH M. HOEFFEL III,
EDWARD SCHROCK, Virginia Pennsylvania
JOHN CULBERSON, Texas RUSH D. HOLT, New Jersey
HENRY E. BROWN, Jr., South Carolina JIM MATHESON, Utah
ANDER CRENSHAW, Florida
ADAM PUTNAM, Florida
MARK KIRK, Illinois
Professional Staff
Rich Meade, Chief of Staff
Thomas S. Kahn, Minority Staff Director and Chief Counsel
C O N T E N T S
Page
Hearing held in Washington, DC, March 8, 2001.................... 1
Statement of:
Hon. George W. Gekas, a Representative in Congress from the
State of Pennsylvania...................................... 1
Hon. Thomas H. Allen, a Representative in Congress from the
State of Maine............................................. 4
Hon. Bob Goodlatte, a Representative in Congress from the
State of Virginia.......................................... 6
Hon. Robert A. Underwood, a Delegate in Congress from the
Territory of Guam.......................................... 10
Hon. Steny H. Hoyer, a Representative in Congress from the
State of Maryland.......................................... 14
Hon. Brian Baird, a Representative in Congress from the State
of Washington.............................................. 19
Hon. Bob Clement, a Representative in Congress from the State
of Tennessee............................................... 21
Hon. Michael N. Castle, a Representative in Congress from the
State of Delaware.......................................... 23
Hon. Bill Pascrell, Jr., a Representative in Congress from
the State of New Jersey.................................... 26
Hon. James P. McGovern, a Representative in Congress from the
State of Massachusetts..................................... 31
Hon. Charles A. Gonzalez, a Representative in Congress from
the State of Texas......................................... 33
Hon. Rosa L. DeLauro, a Representative in Congress from the
State of Connecticut....................................... 36
Hon. Nancy Pelosi, a Representative in Congress from the
State of California........................................ 40
Hon. Gregory W. Meeks, a Representative in Congress from the
State of New York.......................................... 46
Hon. Curt Weldon, a Representative in Congress from the State
of Pennsylvania............................................ 50
Prepared statement of:
Mr. Gekas.................................................... 3
Mr. Allen.................................................... 6
Mr. Goodlatte................................................ 9
Mr. Underwood................................................ 12
Mr. Hoyer.................................................... 17
Mr. Baird.................................................... 20
Mr. Clement.................................................. 22
Mr. Castle................................................... 25
Mr. Pascrell................................................. 28
Mr. McGovern................................................. 32
Mr. Gonzalez................................................. 35
Ms. DeLauro.................................................. 38
Ms. Pelosi................................................... 43
Mr. Meeks.................................................... 48
Mr. Weldon................................................... 53
Hon. Todd Akin, a Representative in Congress from the State
of Missouri................................................ 54
Hon. Judy Biggert, a Representative in Congress from the
State of Illinois.......................................... 55
Hon. Michael Bilirakis, a Representative in Congress from the
State of Florida........................................... 56
Hon. William Lacy Clay, Jr., a Representative in Congress
from the State of Missouri................................. 57
Hon. Baron P. Hill, a Representative in Congress from the
State of Indiana........................................... 58
Hon. Eddie Bernice Johnson, a Representative in Congress from
the State of Texas......................................... 59
Hon. Dennis J. Kucinich, a Representative in Congress from
the State of Ohio.......................................... 60
Hon. John J. LaFalce, a Representative in Congress from the
State of New York.......................................... 61
Hon. Carrie P. Meek, a Representative in Congress from the
State of Florida........................................... 65
Hon. John E. Peterson, a Representative in Congress from the
State of Pennsylvania...................................... 66
Hon. Charles W. Stenholm, a Representative in Congress from
the State of Texas......................................... 68
MEMBERS' DAY
----------
THURSDAY, MARCH 8, 2001
House of Representatives,
Committee on the Budget,
Washington, DC.
The committee met, pursuant to call, at 2 p.m. in room 210,
Cannon House Office Building, Hon. Jim Nussle (chairman of the
committee) presiding.
Members present: Representatives Nussle, Spratt, Clement,
and Holt.
Chairman Nussle. The Budget Committee will come to order.
Today is an opportunity for what we call Members' Day. It is
the one hearing that is, as I understand it, commanded by the
Budget Act, and we are pleased to have a number of Members
before us today. I believe that we will go in order. Mr. Gekas,
I believe you are the first one. We will invite you to testify.
Just for the Members, we will include your entire testimony
in the record, and you may summarize your testimony during the
5 minutes.
Mr. Gekas.
STATEMENT OF HON. GEORGE GEKAS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF PENNSYLVANIA
Mr. Gekas. Thank you, Mr. Chairman, and to the members of
the committee for this opportunity. I come today to repeat an
old plea on my part. For every session dating back to 1988 now,
I have introduced legislation to try to bring about prevention
of government shutdown. Everyone is familiar with my forays
into this particular arena.
Each time I meet all kinds of obstacles, until a few years
back it finally was passed, but then President Clinton vetoed
it. That is part of the problem, that the President of the
United States, Democrat or Republican, has been, in my
judgment, a problem in this regard, because they view it
sometimes as if we were successful in implementing this
antishutdown legislation, somehow the President would be robbed
of dealing power, negotiating power.
So, I could understand that on the part of the President,
President Clinton. Frankly, I thought that the same thing would
happen when we started with this new session. But, guess what,
Mr. Chairman? President Bush in his various statements on the
campaign trail that dealt with budget process, with
congressional procedures, and lately in the Blueprint for a New
Beginning, which I know you are familiar with, a responsible
budget for America's priorities, they devote an entire section
to government shutdown prevention.
On page 175, I want to quote this, because it has--it is
better stated than any of my testimony could be. Under the
President's proposal, if the appropriations bill is not signed
by October 1st of the new fiscal year, funding would be
automatically provided at the lower of the President's budget
or the prior year's level. The President's proposal would
remove incentives for the President or the congressional
leadership to use the leverage of shutting down government to
achieve spending objectives or to attach extraneous measures
they could not otherwise obtain through the normal
appropriations process.
My gosh, my testimony should end right there, but my ego
will not let me stop. But it is an absolute perfect statement
of what we have been trying to achieve.
The Chairman, to his credit and for my gratitude, has
joined in every year that I have introduced this in trying in
various ways to support the measure, but we have not been
successful.
I have to hark back then to another organ of the
government, the GAO. Back in June 6, 1991, back then I had only
introduced it a couple of times. Since then it has been even
more. But in their report on the budget procedures, et cetera,
they make reference on the last page to a shutting down of the
government during temporary funding gaps is an inappropriate
way to encourage compromise on the budget. Very little has ever
been said on this. But in a footnote they say this: As we were
preparing this report, a bill was introduced in the House, H.R.
And so forth, providing new authority for an automatic
continuing resolution that, although broader in scope than our
recommendation, is aimed at preventing government shutdowns.
The bill to which they refer was my predecessor to this
bill on ending government shutdowns.
One worrisome feature about all this is the appropriators.
We seem to run into an obstacle with the appropriators deeming
it, just as Presidents have in the past, as a hindrance to
their negotiating power at the end of the fiscal cycle. We
believe we have to encourage everyone to understand that this
does not rob them of any power. This still provides them with
whatever incentives they have to mold a new budget after
October 1st, while keeping the old budget intact, if indeed we
had not completed the spending plans.
So we have some selling to do, I know, but for the first
time we have the President of the United States eager to help,
and Secretary Daniels--could I yield to the Chairman for one
question? I would like to yield for him to answer. Is the
Secretary due to testify before your committee soon?
Chairman Nussle. Actually, Director Daniels of OMB has
testified this last Monday--excuse me, this last Thursday.
Mr. Gekas. Did he touch upon this?
Chairman Nussle. He did not touch upon the budget process
reform issue at length, but in part that is because we believe
that budget process reform will be an issue that we take up as
soon as the budget is done. So I think he was just keeping his
powder dry until that time.
Mr. Gekas. Thank you.
It is interesting to me also that Congressman Kleczka, who
is a member of your committee, I believe--is he or is he not?
Chairman Nussle. Yes.
Mr. Gekas [continuing]. Has been a cosponsor of my
legislation throughout our joint careers in the Congress, and
it is noteworthy that his State, Wisconsin, has a mechanism in
place that does exactly what we are talking about here. So do
several other States, by the way.
But the point is that for the first time we have a
convergence of legislators, budget people, and the White House
eager to prevent government shutdown.
I yield back the balance of my time.
[The prepared statement of George Gekas follows:]
Prepared Statement of Hon. George W. Gekas, a Representative in
Congress From the State of Pennsylvania
Mr. Chairman, Members of the Committee, thank you very much for
allowing me to testify at this important hearing. I appreciate the
opportunity to appear before you and once again bring to your attention
a matter of great concern to many and an issue that is near and dear to
my heart: preventing government shutdowns.
As you may be aware, I have been introducing legislation to prevent
government shutdowns since 1988. My current legislative effort, H.R.
29, the Government Shutdown Prevention Act, does the same thing as its
predecessor bills: it removes the threat of the government shutting
down due to an impasse in budget negotiations by providing for an
automatic continuing resolution, at the previous year's spending level,
if an Appropriations bill has not been passed.
Under the language of this bill no new programs can be proposed, no
old, terminated or unfunded programs can be resumed, reborn or
refunded. Those determinations are to be made by the committee, not my
bill. The language of my bill is preventative, not curative: it seeks
to prevent problems which could arise from a government shutdown but
does not cure any underlying problems with that budget.
The threat of a government shutdown is very real. Since 1977 the
government has been shut down seventeen times, costing the U.S.
taxpayer over $1 billion. Since my own election to the House in 1982 I
have witnessed eight government shutdowns.
This issue has resonated very strongly with our colleagues. Past
supporters of this legislation included Chairman Nussle, former
Chairman Kasich, Reps. Gutknecht, Klezcka and Toomey. It has also been
endorsed by such organizations as the Concord Coalition Citizens
Council, U.S. Chamber of Congress, Americans for Tax Reform, Citizens
Against Government Waste, The Committee for a Responsible Federal
Budget, and the National Taxpayers Union among others.
Unfortunately, the last Administration was opposed to an automatic
continuing resolution and vetoed a bill which contained this provision.
But now we have an Administration which supports it. OMB Director Mitch
Daniels has stated, ``I believe a measure of this kind is needed to
ensure that the continued operations of government programs are not
threatened by political disputes.'' We now have a real opportunity to
enact this ``good government'' provision.
This legislation has been criticized--unfairly, I believe--as an
attack on the Appropriations Committee and an attempt to usurp their
power. In fact, nothing could be further from the truth. This bill
would give the Appropriations Committee the extra time that it needs to
work out the wide-range of budgetary issues that confront them at the
end of every Session.
It is also argued that implementing this kind of provision would
take away the incentives for us to get our spending bills done on time.
I strongly disagree. For nineteen out of the last twenty years,
Congress and the President have not finished the budget process by the
October 1st deadline. This past year only two of the thirteen spending
bills were finished on time. As a result, Congress had to pass twenty-
one separate continuing resolutions to prevent the government from
shutting down. This provision will not remove any incentives, but will
rather act as a ``safety-net'' while eliminating the need for awkward
and partisan debates over passage of continuing resolutions.
Furthermore, enactment of an automatic continuing resolution is not
some sort of grand experiment. The State of Wisconsin has taken this
good- government approach to budgeting, and it has worked well. It has
not diminished the power of the appropriators and it has not reduced
the pressure to reach agreement on state budget funding levels. An
automatic continuing resolution has been proven effective and workable
at the state level and it can be effective and workable at the Federal
level.
This provision is a good-government, pro-taxpayer idea. It is
simply wrong to shut down the government. It is also wrong to use the
threat of a government shutdown for the advancement of a political
agenda. This is something that we should be committed to making off
limits. We need to assure the taxpayers that regardless of the
disagreements and battles that occur in Washington, they can always
count on the government to be operating and providing its proper
services. This is the people's government. As such, we have no right to
shut down the government or use the threat of a government shutdown to
advance our political agenda. The shutdowns of the past have shaken
America's faith in government. It is within our power to send a clear
message to the American people that there will be no chance of them
ever being a victim of our inability to come to a consensus on our
budget priorities.
In closing, Mr. Chairman, I would like to thank you for your past
support and I ask that the Budget Committee once again consider this
modest, but important, reform.
Thank you for your time and indulgence.
Chairman Nussle. Mr. Gekas, there is nobody in the Congress
that is any more tireless a champion of budget reform than
yourself. You have been carrying this banner a long time. I am
pleased to be on your team, and willing to help in many ways to
try and adjust the budget process so we can fix some of these
problems.
My commitment to you is that while we may not be able to
make the adjustment in this budget because, of course, the
budget does not have the force to accomplish what you and I
would like to accomplish, I will tell you that as soon as we
are done with the budget, we hope to have an exhaustive look
and examination about the budget process so that we can improve
it, and I would hope at that time that you could come back and
maybe share some of your wisdom with us and maybe some of your
ideas on ways to refine this to overcome the concerns that the
appropriators have had.
As you and I have talked, they have some legitimate
concerns that we need to address, and it is worth exploring
that in the budget process reform debate. I thank you for your
testimony.
Mr. Gekas. I thank the Chair.
Chairman Nussle. Any other questions or comments?
If not, Mr. Allen.
STATEMENT OF HON. THOMAS ALLEN, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF MAINE
Mr. Allen. Thank you, Mr. Chairman, Mr. Spratt, and other
committee members. I appreciate the chance to testify before
the committee about the budget resolution for the fiscal year
2002.
I want to speak on special education today, and I urge the
committee to fully fund the Individuals With Disabilities in
Education Act this year. No phase-ins, no excuses. With the
budget surpluses that we see in front of us right now, this is
the time to fulfill, at last, an old promise.
IDEA was enacted by the Congress in 1975, and it authorized
the Federal Government to cover 40 percent of the cost of
special education in order to provide all students with
disabilities a free and appropriate public education. To date,
however, the government has never funded more than 14.9
percent. We reached that level last year based on the third of
three successive years in which we increased appropriations by
about $1 billion a year.
Last year's appropriation was $6.3 billion through the
grants to the States program. According to the Department of
Education, all we need to do is approximately $17.7 billion.
That would represent the full 40 percent funding formula for
fiscal year 2002. This is an increase of about $11.4 billion
over current funding levels.
With the ongoing debate merely focusing on how to use
trillions of dollars in surpluses, budgeting $17.7 billion for
special education is not asking too much. If we invest only a
fraction of the estimated surplus, we can help States, towns
and cities meet the needs of all their students in a way they
choose.
I have been holding different forums in Maine with parents,
with teachers, with administrators and some students, and the
number one issue that comes up in all of those meetings is
special education. The second has to do with the problems they
face in attracting and holding teachers, and the third has to
do with the cost of construction. But, by and large, it is the
cost of special education that is most on their minds.
Everyone suffers because the Federal Government has reneged
on its commitment to fund 40 percent of special education
costs. Students with disabilities often do not receive
necessary aid; students without disabilities miss out on
programs that cannot be funded; and local property taxpayers
experience a very high tax burden.
Here in Congress we talk a lot about fully funding this
mandate, but we never put up the money to do it. We pass
nonbinding resolutions on full funding to make us feel good,
but we hang our local school districts out to dry.
Just last year we did it again. We passed H.Con.Res. 84 by
a vote of 413 to 2 to urge Congress and the President to fully
fund its obligations under IDEA. In fact, the language there
made it clear that we should fully fund that program prior to
authorizing or appropriating funds for any new education
initiative.
Well, here we are again, it is another year, and this time,
for a change, the first time since I have been here certainly,
and probably the first time in anyone's memory, there is a
surplus that is more than adequate to meet this particular
need.
We don't need more resolutions, more phase-in bills. We
don't need catchy reforms. We simply need $17.7 billion for
special education costs this year and make full funding of
special education an old promise with a new future.
The bill can be paid, and our responsibility met, without
pain, if you compare this modest investment here in Washington
with the amounts proposed for other uses of the surplus, like
the proposed tax cut of $1.6 trillion.
Let me just say this in conclusion: If the tax cut passes
at the level of $1.6 trillion, there will be people back at
this table next year saying we need to fully fund IDEA, but the
opportunity will be gone because the surplus will be gone. That
is why this is the only year in which we can do this. This is
the only committee that can make that message clear right at
the beginning of this Congress. A simple reduction of $150
billion in the tax cut, and you fully fund IDEA. In the long
run, keeping that promise is more important than anything else
we can do with that money.
Thank you very much. I yield back the balance of my time.
Chairman Nussle. Thank you for your advocacy. We appreciate
that.
[The prepared statement of Thomas Allen follows:]
Prepared Statement of Hon. Thomas H. Allen, a Representative in
Congress From the State of Maine
Mr. Chairman, Mr. Spratt, and other committee members, thank you
for allowing me this opportunity to testify before the Committee about
the Budget Resolution for Fiscal Year 2002.
Today, I want to speak on special education, and urge the Committee
to fund the Individuals with Disabilities in Education Act (IDEA) in
full, this year. No phase-ins. No excuses. With these budget surpluses,
the time is now to fulfill, at last, an old promise.
In 1975, Congress enacted IDEA, and authorized the Federal
Government to cover 40 percent of the costs of special education in
order to provide all students with disabilities a free and appropriate
public education. To date, however, the government has never provided
more than 14.9 percent.
In Fiscal Year 2001, Congress appropriated $6.3 billion (14.9
percent) for special education assistance through the grants to states
program. According to the Department of Education, approximately $17.7
billion would represent the full 40 percent funding formula for Fiscal
Year 2002. This is an increase of about $11.4 billion over current
funding levels. With the on-going budget debate in Washington focusing
on how to use trillions in surpluses ($5.6 trillion in surpluses and
$1.6 trillion (or more) in tax cuts), budgeting $17.7 billion for
special education costs is not asking too much. If we invest only a
fraction of the estimated surpluses we can help states, towns, and
cities meet the needs of all their students in a way they choose.
In conversations with teachers, legislators, families, and others
in my home state of Maine, the number one challenge facing local school
districts today is the cost of educating special education students.
Everyone suffers because the Federal Government has reneged on its
commitment to fund 40 percent of special education costs. Students with
disabilities often do not receive necessary aid; students without
disabilities miss out on programs that cannot be funded; and local
property taxpayers experience a high tax burden.
Congress talks a lot about fully funding this mandate, but never
puts up the money to actually do it. We pass non-binding resolutions on
full funding to make us feel good, but then leave our local school
districts out to dry. Last year, the House passed, by a vote of 413-2,
H.Con.Res. 84, to urge Congress and the President to fund fully its
obligations under IDEA. It specifically stated that the President and
Congress must ``give programs under the Individuals with Disabilities
in Education Act (20 U.S.C. 1400 et seq.) the highest priority among
Federal elementary and secondary education programs by meeting the
commitment to fund the maximum State grant allocation for educating
children with disabilities under such Act prior to authorizing or
appropriating funds for any new education initiative.''
Yet, what good are such feel-good resolutions when we consistently
ignore them at budget time, and consistently ignore the promise we made
to our states?
Today, we talk of education reform and how to leave no child
behind. Proposals have been aired to cut funding for failing schools
after 3 years. Well, Congress and the President should first look at
its own track record regarding special education. We have been failing
our obligations since 1975. But that does not mean we have to keep
failing. We can succeed by meeting our 40 percent obligation, now.
There is one solution that achieves true reform. It is not more
resolutions, or phase-in bills, or enacting ``catchy'' reforms. It is
simply to budget $17.7 billion for special education costs this year,
and make full funding of special education an old promise with a new
future. The bill can be paid, and our responsibility met, without pain,
if you compare this modest investment with the amounts proposed for
other uses of the surplus, like the proposed tax cut of $1.6 trillion.
Again, thank you, Mr. Chairman, Mr. Spratt, and other members of
this Committee for allowing me to testify. I look forward to working to
ensure that the Federal Government finally meets its mandate of funding
40 percent of special education costs, and I urge the Committee to
budget $17.7 billion this year to make this mandate a reality.
Chairman Nussle. Mr. Goodlatte.
STATEMENT OF HON. BOB GOODLATTE, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF VIRGINIA
Mr. Goodlatte. Thank you, Mr. Chairman. I also want to
endorse Mr. Gekas's budget reform efforts and fully funding
special education, but George told me if I endorsed his
proposal, he would endorse mine. I thought that was a pretty
good deal.
I would like to bring to the committee's attention three
issues of nationwide import that I would hope you would take
into account in your budgetary considerations and in the budget
that you submit to the Congress. The first is legislation that
I introduced and which passed the Congress last year and was
signed into law by the President dealing with funding for the
Rural Utilities Service within the Department of Agriculture to
fund a loan guarantee program so that every community in the
country can receive local-into-local television service. This
is something that about the top 30 television markets in the
country today are receiving, but nobody in rural Iowa or South
Carolina is getting, and that is to allow satellite dish owners
in your district and in my district and virtually every other
district around the country to be able to get their local
television stations by satellite.
Ultimately this will also mean the possibility of getting
high-speed Internet service by satellite, because what this
will allow is for private enterprise to construct a satellite.
It could be a consortium of the small television stations in
the nearly 150 smaller markets that will never get this without
a loan guarantee, or it could be the rural electric
cooperatives. And the loan guarantee is up to $1.2 billion
authorized by the legislation.
The cost to the Budget Committee in putting this into your
budget is obviously substantially less than that. It depends on
whose figures you use, but it is no more than $200 million in
terms of the cost of funding whatever risk there may be.
The legislation requires insurance that if the rocket is
launched and blows up, the taxpayers don't get stuck holding
the tab. There are other protections. Any loan guarantees have
to be approved by a panel of the Secretary of Treasury, the
Secretary of Commerce, the Secretary of Agriculture and the
Federal Reserve Board Chairman. So it is going to undergo
pretty tough scrutiny to qualify for one of these. But unless
this takes place, the ability of folks to get their local news,
weather, sports, emergency information, community information
by satellite and end what has probably been, for you as for me,
one of the largest generators of correspondence from
constituents, that is their being upset about the fact they
can't get their network programming on their satellite because
of protection of local licensing requirements, is very
important.
The second issue that I would like to bring to your
attention is the need to fund efforts to combat crimes
committed over the Internet. As the world becomes increasingly
interconnected and reliant upon global telecommunications
structures to provide these connections, a new vector for
criminal activity has arisen. I support increased spending
levels for programs that provide funding to investigate and
prosecute individuals who commit illegal acts over the
Internet.
Recent events have brought to light the serious problems
surrounding security on the Internet. With an increasing number
of consumers corresponding, conducting business and shopping
online, it is critical that all Americans maintain their
confidence to use the Internet as a means to live their daily
lives. By providing law enforcement officials with the tools
they need to combat the burgeoning problem of cybercrime,
Congress can help ensure that consumers and businesses will be
protected and the Internet will continue to grow at its current
pace. Therefore, I encourage you to strengthen resources for
the government to investigate and prosecute crimes committed
over the Internet.
The last area I would commend to your attention is the
issue of combined sewer overflow problems. I have an eclectic
group of issues to bring before you. There are many, many
cities all across the country that are older and have older
water and sewer systems and storm overflow systems that are
combined that cause serious environmental problems. We have
over the years tightened up the Federal regulations to deal
with this. In many instances those regulations are very, very
appropriate. But, nonetheless, the burden has been imposed upon
these communities to change how they are operating based upon
Federal mandates imposed upon them.
The community of Lynchburg in my district, and Richmond in
Eric Cantor's district, are the two I am aware of in Virginia,
but there are many others around the country as well. The rates
that the users in those communities have to pay in order to
make these hundreds of millions--in the case of Lynchburg, a
city of 65,000 people, the cost of making these changes to
their sewer system is in excess of $200 million. So help from
the Federal Government is very, very important, and the more
you can allow for this, the better.
The 2-year grant program that is proposed would be
administered by the EPA and is triggered by a $1.35 billion
appropriation to the Clean Water Revolving Loan Fund for
wastewater treatment facilities. Grants will be awarded to
facilitate the implementation of both combined sewer overflow
and sanitary sewer overflow control programs, and the Federal
share will be at least 55 percent. Priority consideration will
be given to communities that have already invested local
resources into their sewer improvement programs as well as
financially distressed communities.
The condition of our Nation's wastewater collection and
treatment facilities is alarming. In its 1996 Clean Water Needs
Survey, the EPA estimates that nearly $140 billion will be
needed over the next 20 years to address wastewater
infrastructure problems in our communities. In March 1999, the
EPA revised its figures upwards, with infrastructure needs now
estimated at $200 billion. Other independent studies indicate
that the EPA has undershot the mark, estimating that these
incredible unmet needs exceed $300 billion over the next 20
years.
Simply put, we are talking about a new generation of
municipal water quality infrastructure. Given the great need in
our Nation for wastewater infrastructure improvements and to
protects the environment, I believe the Federal Government has
a responsibility to assist communities trying to fix their
problems and comply with Federal water quality mandates.
Therefore, I strongly urge the committee to include full
funding for the new sewer overflow grant program.
Thank you, Mr. Chairman.
[The prepared statement of Bob Goodlatte follows:]
Prepared Statement of Hon. Bob Goodlatte, a Representative in Congress
From the State of Virginia
I thank the Chairman and the members of the Committee for the
opportunity to appear before the Budget Committee today to share with
you several items that I believe deserve priority in the FY 2002
budget.
First, I want to express my support for full funding for the Rural
Utilities Service within the Agriculture Department, specifically for
the administration of the loan guarantee program enacted last fall to
address the inability of many of our constituents in rural and smaller
communities to receive their local network television signals over
satellite.
The loan guarantee program will enable consumers outside the top 40
television markets (there are 211) to receive this ``local-into-local''
service. Since enactment of the Satellite Home Viewers Act over a year
ago, consumers outside the top 40 markets have expressed their desire
for this legislation to make available to them `local-into-local'
technology. I know my office received thousands of letters and calls
from constituents concerned about this issue. This new law, when
supplemented by the loan guarantee program, will allow satellite
providers to become more effective competitors to cable operators who
have been able to provide local over-the-air broadcast stations to
their subscribers for years. It will also benefit American consumers in
markets where local TV via satellite is made available by offering them
full service digital television at an affordable price.
The bill is crucial for Americans in rural and smaller markets who
rely on their local television stations for news, politics, weather,
sports, and emergency information. Local television is often the only
lifeline folks have in cases of natural disasters such as hurricanes,
tornadoes, blizzards, earthquakes, or flooding. The bill's language to
encourage the delivery of local television signals to these
constituents in America will not only benefit consumers, it will save
lives.
Next, I would like to discuss Congress' efforts to combat crimes
committed over the Internet. As the world becomes increasingly
interconnected and reliant upon global telecommunications structures to
provide these connections, a new vector for criminal activity has
arisen.
That is why I support increased spending levels for programs that
provide funding to investigate and prosecute individuals who commit
illegal acts over the Internet. Recent events have brought to light the
serious problems surrounding security on the Internet. With an
increasing number of consumers corresponding, conducting business, and
shopping online, it is critical that all Americans maintain their
confidence to use the Internet as a means to live their daily lives.
By providing law enforcement officials with the tools they need to
combat the burgeoning problem of cyber-crime, Congress can help ensure
that consumers and businesses will be protected and the Internet will
continue to grow at its current pace. Congress has the opportunity to
provide law enforcement officers with the tools they need to prosecute
these crimes, and we should not merely blink our collective eyes at
this issue.
Therefore, I encourage you to strengthen resources for the
government to investigate and prosecute crimes committed over the
Internet.
And lastly, I want to express my support for full funding--$750
million--for a new sewer overflow control grant program which was
authorized in the Consolidated Appropriations Act for FY 2001.
The new law authorizes a $1.5 billion grant program to help local
communities upgrade and improve their wastewater collection and
treatment systems. The 2-year grant program will be administered by the
Environmental Protection Agency, and is triggered by a $1.35 billion
appropriation to the Clean Water Revolving Loan Fund program for
wastewater treatment facilities. Grants will be awarded to facilitate
the implementation of both combined sewer overflow and sanitary sewer
overflow control programs, and the Federal share will be at least 55
percent. Priority consideration will be given to communities that have
already invested local resources into their sewer improvement programs
as well as financially distressed communities.
The condition of our nation's wastewater collection and treatment
facilities is alarming. In its 1996 Clean Water Needs Survey, the EPA
estimates that nearly $140 billion will be needed over the next 20
years to address wastewater infrastructure problems in our communities.
In March 1999, the EPA revised its figures upwards, with infrastructure
needs now estimated at $200 billion. Other independent studies indicate
that EPA has undershot the mark, estimating that these incredible unmet
needs exceed $300 billion over 20 years. Put simply, we are talking
about a new generation of municipal water quality infrastructure.
Given the great need in our nation for wastewater infrastructure
improvements, I believe the Federal Government has a responsibility to
assist communities that are trying to fix their problems and comply
with Federal water quality mandates. I strongly encourage you to
include full funding for the new sewer overflow grant program which has
already been authorized.
Again, I thank the Committee for allowing me to testify before you
today.
Chairman Nussle. Just a quick question. Is that the Federal
share that you are talking about in the estimates from EPA,
200- or 300-?
Mr. Goodlatte. That is, I think, the estimate of the total
cost of accomplishing it. I think the program provides 55
percent of that to be paid by the Federal Government.
Chairman Nussle. Thank you.
Mr. Underwood.
STATEMENT OF HON. ROBERT UNDERWOOD, A DELEGATE IN CONGRESS FROM
THE TERRITORY OF GUAM
Mr. Underwood. Thank you, Mr. Chairman. I am willing to
endorse all these ideas if they endorse mine.
I appreciate the opportunity to raise an issue of concern
to Guam and other territories. The Federal budget affects all
Americans, no matter where they reside. So as Congress
continues to debate deficit reduction and the size of our
Nation's surplus and the level of tax relief for U.S.
territories, I feel compelled to speak from the point of view
of someone from Guam.
I am very concerned about the President's proposed budget
on U.S. territories. Unbenownst to most Americans, and I think
most Members of the House, while the Nation as a whole has
experienced economic growth over the last several years, the
U.S. territories have not fared as well and continue to face
staggering double-digit unemployment rates and dismal economic
conditions.
We do not have the luxury of talking about what portion of
the national surplus should be used for tax relief like the
States do. While I support the concept of a tax cut for the
people of Guam and hard-working taxpayers across the country,
especially for middle- and low-income families, the President's
tax plan and the budget does not take into account the
budgetary shortfall it will have on the U.S. territories,
especially Guam and the Virgin Islands.
Unlike the rest of the Nation, Guam and the Virgin Islands
are the only two U.S. jurisdictions which have tax systems
which mirror the U.S. Internal Revenue Code. That means that
Guam's tax law mirrors the Internal Revenue Code as required
under the Organic Act. Whatever tax policies are implemented at
the Federal level will take effect at the local level without
any input from the people or Government of Guam. Unlike the
States, however, the tax cuts for Guam will come from the
Government of Guam, not the Federal Government, since the
Federal revenues collected remain on Guam.
This will greatly disrupt the revenue stream for the
Government of Guam since the territorial government has no
surplus and will directly affect government services and the
local economy. We anticipate a $30 to $50 million reduction in
revenues from the President's tax plan, which is approximately
5 to 10 percent of total operating revenues for Guam.
Guam's economy is still rebounding from the Asian financial
crisis, particularly since our tourism industry relies heavily
on tourists from Japan and other Asian countries. Guam's
unemployment rate is currently over 15 percent, which is a
dramatic increase over the early 1990's when the Asian
economies were doing well, when our unemployment rate was below
2 percent. Due to these circumstances, I am asking that special
consideration be given to Guam and other affected territories
for the fiscal year 2002 budget.
I have already requested White House and Treasury officials
and the appropriate congressional tax committees to find ways
to ameliorate the effects of the President's tax plan on the
territories through actual offsets or through proposals that
deal with tax equity for Guam, Federal obligations to Guam that
have not been fully paid, mainly compact-impact aid, and other
important issues that affect our Federal territorial
relationship, like the child tax credit and the earned income
tax credit.
On the budgetary front, I urge the Federal Government to
start targeting some of its surplus toward economically
distressed areas, including the U.S. territories, through
economic incentives or recovery plans similar to those devised
for rural areas in American Indian communities.
As an example of how hard it is to get anyone to pay
attention to the territories, last Congress the territories had
to fight continuously to be included in the President's New
Markets Initiative which targeted distressed communities.
Although the territories were eventually included in the
conference report for this initiative, the policy struggle we
faced throughout the process is emblematic of how we are
treated by Federal policymakers in the executive branch or in
the Congress on a daily basis.
The President has proposed $9.8 billion for the Department
of Interior, which is a 4 percent reduction from last year. The
Department's budget includes the Office of Insular Affairs,
which covers U.S. territories and Freely-Associated States. I
strongly believe that the funding for the Office of Insular
Affairs should not be cut, and as a matter of fact, it should
probably be increased, particularly in the areas of technical
assistance, in order to be able to allow the territories to
find ways toward economic recovery.
An important funding issue facing Guam, more than any other
territory or State, involves the unmonitored migration to Guam
by citizens of the Freely-Associated States and Micronesia.
These are three newly created nations in our region. According
to their Compacts of Free Association, they are allowed free
migration into the United States without any quotas and just
simply show their passport.
The July 2000 report by the Department of the Interior
Office of Insular Affairs on the compact-impact costs on Guam
cited an Ernst & Young analysis which showed total costs for
1997 in Guam between $16 million and $17 million. Since the
Compacts of Free Association were established in 1986, Guam
only started to receive compact-impact aid in 1996, 10 years
later. During this time, we have received $4.58 million from
the Department of Interior's Office of Insular Affairs budget.
In fiscal years 2000 and 2001, Guam received $7.5 and $9.58
million respectively. The Government of Guam continues to
expend between $15 and $20 million annually to provide
education and social services for migrants from the Freely-
Associated States under compact agreements with the U.S. We are
also proposing the consideration of raising the Medicaid caps
for the U.S. territories and also asking that we think about
what impact this newly implemented welfare reform legislation
is going to have when the time comes up.
In welfare reform in Guam, it will have a dramatic impact
on our economy. There are 11,000 people on welfare currently as
a result of our economic downturn out of a total population of
150,000. We need to examine how the welfare reform initiative
is implemented in economically distressed and geographically
isolated areas.
The privatization of former military jobs on Guam has
already impacted hundreds of families, who have been forced to
move to Hawaii or the U.S. mainland for employment
opportunities. Should Guam's economy continue to stagnate, I am
concerned that the number of individuals who will be coming off
of welfare will be unable to find employment opportunities on
Guam. This is why I believe that Federal assistance in the form
of economic and tax incentives and job training programs will
be necessary to mitigate these circumstances.
Thank you very much.
Chairman Nussle. Thank you very much.
[The prepared statement of Robert Underwood follows:]
Prepared Statement of Hon. Robert A. Underwood, a Delegate in Congress
From the Territory of Guam
Mr. Chairman, I appreciate being given the opportunity to present
my views on the FY 2002 Budget.
I think it is ironic that as the House considers the President's
tax plan on the floor today, the Budget Committee is holding hearings
on the President's budget, because it would be through these hearings
that the Administration would have a better idea of how to gauge the
views of the Congress on these important matters.
The Federal budget affects all Americans, no matter where they
reside under U.S. jurisdiction. So as Congress continues to debate
deficit reduction, the size of our nation's surplus, and the level of
tax relief for U.S. taxpayers, I feel compelled to speak up for my home
island--the territory of Guam--and the other U.S. insular areas.
BUDGET/TAX IMPACT ON GUAM
I am very concerned about the President's proposed budget on the
U.S. territories. Unbeknownst to most Americans, while the nation as a
whole has experienced economic growth over the last several years, the
U.S. territories have not fared as well and continue to face staggering
double digit unemployment rates and dismal economic conditions. We do
not have the luxury of talking about what portion of the national
surplus should be used for tax relief like the states. While I support
the concept of a tax cut for the people of Guam and hard working
taxpayers across the country, especially for middle- and low-income
families, the President's tax plan in the budget does not take into
account the budgetary shortfall it will have on the U.S. territories,
particularly Guam and the U.S. Virgin Islands.
Unlike the rest of the nation, Guam and the Virgin Islands are the
only two U.S. jurisdictions which have tax systems which ``mirror'' the
U.S. Internal Revenue Code. That means that Guam's tax law ``mirrors''
the Internal Revenue Code as required under Guam's Organic Act of 1950.
Whatever tax policies are implemented at the Federal level will take
effect at the local level without input from the people of Guam or the
Government of Guam. Unlike the states, however, the tax cuts for Guam
will come from the Government of Guam, not the Federal Government since
the Federal revenues collected remain in Guam. This will greatly
disrupt the revenue stream for the Government of Guam, since the
territorial government has no surplus, and will affect government
services and the local economy.
The Government of Guam anticipates a $30-$50 million reduction in
revenues from the President's tax plan. Considering that the Government
of Guam is projecting $243 million in income tax revenue for 2001, such
a decrease in revenue will greatly impact Guam's economy. Guam's
economy is still rebounding by the Asian financial crisis, particularly
since our tourism industry heavily relies on tourists from Japan and
other Asian countries. Guam's unemployment rate is a reported 15
percent, more than three times the national average.
Due to these circumstances, I am asking that special consideration
be given to Guam and other affected territories for the FY 2002 Budget.
I have already requested White House and Treasury officials, and the
appropriate Congressional tax committees, to find ways to ameliorate
the effects of the President's tax plan on the territories through
actual offsets or through proposals that deal with tax equity for Guam,
Federal obligations to Guam that have not been fully paid, or other
important issues that affect our federal-territorial relationship like
the Child Tax Credit and the Earned Income Tax Credit.
On the budgetary front, I urge the U.S. government to start
targeting some of its surplus toward economically distressed areas,
including the U.S. territories, through economic incentives or recovery
plans similar to those devised for rural areas and American Indian
communities. As an example of how hard it is for the territories to get
anyone to pay attention to them, last Congress the territories had to
fight continuously to be included in the President's New Markets
Initiative which targeted distressed communities. Although the
territories were eventually included in the conference report for this
Initiative, the policy struggle we faced throughout the process is
emblematic of how we are treated by Federal policymakers in the
Executive Branch or the Congress on a daily basis. Federal and
budgetary policy should simply not be developed in this fashion.
DEPARTMENT OF INTERIOR OFFICE OF INSULAR AFFAIRS
The President has proposed $9.8 billion for the Department of
Interior for FY 2002, a 4-percent reduction from FY 2001. The
Department's budget includes the Office of Insular Affairs which covers
the U.S. territories and the freely associated states. I strongly
believe that funding for the Office of Insular Affairs should not be
cut. Funding for the Office of Insular Affairs has seen a dramatic
decline in funding over the past 10 years despite the increased
responsibilities that the office has incurred and the anticipated
accountability role it expects to play as a result of the U.S. Compact
negotiations with the Federated States of Micronesia and the Republic
of the Marshall Islands. Moreover, it makes logical sense for the
Technical Assistance Program in this office, whose job it is to address
economic and fiscal conditions in the territories, to actually see an
increase in funding. It is cost efficient and promotes economic self-
sufficiency.
An important funding issue facing Guam, more than any other
territory or state, involves the unmonitored migration to Guam by
citizens of the Freely Associated States in Micronesia that continues
to have significant financial and social impacts on our island. A July
2000 report by the Department of the Interior Office of Insular Affairs
on the Compact Impact costs on Guam cited an Ernst & Young analysis
which showed total costs for 1997 in Guam between $16.1 million to
$17.7 million.
Since the Compact of Free Association was established in 1986, Guam
only started to receive Compact Impact Aid in FY 1996. During the FY
1996-FY 1999 period, Guam received $4.58 million annually from the
Department of Interior's Office of Insular Affairs budget. In FY 2000
and FY 2001, Guam received $7.58 million, and $9.58, respectively.
However, the Government of Guam expends between $15-$20 million
annually to provide educational and social services for migrants from
the Freely Associated States under the Compact agreements. I request
that Guam be adequately reimbursed by the Federal Government for the
actual costs incurred under the Compact of Free Association for FY
2002.
RAISING THE MEDICAID CAPS FOR THE U.S. TERRITORIES
I also request support for legislation to provide Medicaid relief
to the territories by removing the Medicaid caps imposed on the
territories and adjusting the Federal matching rate, tying it to that
of the poorest state.
As part of the 1997 Balanced Budget Act negotiations, the previous
Administration proposed a phase out of the caps. While Congress
appropriated the initial increase of 20 percent for FY 1997, no other
increases were appropriated in the following years. I request that we
follow through with this phase out.
The territories have the highest unemployment rates, the highest
poverty levels and the lowest per capita incomes in our nation. Their
ability to meet the Medicaid needs of their residents is further
constrained by their economic situation. Faced with depressed economic
conditions and rising health needs of growing indigent populations, the
reliance on Medicaid assistance has grown beyond the Federal caps and
beyond the territorial governments' abilities to match the funds.
Lifting the cap or even following up on the FY 1997 commitment to raise
the Medicaid caps for the territories by 20 percent each year until all
achieve parity with the rest of the nation is vital to insuring that
all American citizens and children who depend on Medicaid support are
not limited by geography when it comes to meeting basic health care
needs.
WELFARE TO WORK IN GUAM
Lastly, welfare reform in Guam will have a dramatic impact on our
economy. There are 11,000 people, out of a total population of 150,000,
who are on welfare. We need to reexamine how the welfare reform
initiative is implemented in economically distressed and geographically
isolated areas. The privatization of former military jobs through the
Navy's A-76 Program on Guam has already impacted hundreds of families
on the island who have been forced to move to Hawaii or the U.S.
mainland for employment opportunities. Should Guam's economy continue
to stagnate, I am concerned that the number of individuals who will be
coming off of welfare will be unable to find employment opportunities
on Guam. That is why I believe that Federal intervention in the form of
economic and tax incentives and job training programs will be necessary
to mitigate these circumstances.
I appreciate the opportunity to present my views today.
Chairman Nussle. Thank you to all the Members who have
testified. We hope that this budget is a much more realistic
product than what we have seen in the last couple of years and
it can be enforced. We look forward to your continued
involvement in that process as it goes through.
Are there questions for the panel?
Thank you very much for coming.
Mr. Akin, Mr. Castle, Mr. Hoyer, Mr. Cummings, Mr. Baird
and Mr. Clement. We realize because the of the votes we are
taking this a little out of order and hopefully not too far out
of context. We want to accommodate those of you who have shown
an interest to come, so we welcome you.
Mr. Hoyer, would you begin? We appreciate all of you
coming, and you have certainly been involved in this process
many times in many ways. We appreciate your continued
involvement, and welcome, and we would be pleased to receive
your testimony.
All Members, by the way, your testimony is in the record.
We would invite you to summarize during the 5 minutes. Thank
you.
STATEMENT OF HON. STENY HOYER, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF MARYLAND
Mr. Hoyer. Thank you very much, Mr. Chairman. I appreciate
this opportunity. I am pleased that my full statement will be
included in the record.
Let me focus on five issues, if I can: First, budget
reality; second, Federal employees; third, election reform;
fourth, education reform; and last, but certainly not least,
Treasury-Postal appropriations. As you know, I am the Ranking
Member on the appropriations subcommittee and used to chair
that subcommittee.
First, Mr. Chairman, we are involved in a debate about a
tax cut. Some of us lament the fact that we are involved in
that debate prior to the adoption of a budget plan where we are
going fiscally. On top of that, many of us believe the tax cuts
we are debating will not leave necessary funding for national
priorities such as defense, prescription drug coverage for
seniors, education, and debt reduction.
The President's budget provides growth for 4 percent, much
lower than CBO deemed necessary to maintain purchasing power.
Frankly, Mr. Chairman, from the perspective of many, it is hard
to figure out how the budget will accommodate increases for
prescription drugs, defense, education, conservation, and law
enforcement.
I would urge the committee, as you and I have done
privately in discussions, Mr. Chairman, to come up with a
budget that is realistic so the Appropriations Committee can
realistically implement that budget. We will have disagreements
on the numbers, but at least if we believe they are real, and
asset parameters that can, in fact, be adopted, then I think
the appropriations process as well as the budget process will
be more real.
Secondly, Federal employees. Recruitment and retention is a
serious issue, Mr. Chairman, for both the military and civilian
employees. The pay gap between the military and the private
sector is estimated to be 10 percent by the Bureau of Labor
Statistics. That is between the military and the private
sector. The pay gap between the Federal civilian work force and
the private sector is estimated by the BLS to be 32 percent.
Human capital is the latest buzzword in government. Fifty-three
percent of the Federal work force will be eligible to retire by
2004. We need to be able to recruit and retain our most
valuable employees.
Therefore, Mr. Chairman and Mr. Spratt, I would urge you to
focus on the provision for Federal pay. The President's budget
includes funding for 4.6 percent for the military and 3.6
percent for civilians. For the most part, we have achieved
parity in pay adjustments between the military and civilian
work force, and I would hope we would do the same in 2002. We
will not be able to, in either the military or the civilian,
eliminate the gap.
Frankly, under the Federal Employee Pay Comparability Act,
which I sponsored and added to the Treasury-Postal bill in
1990, and which President George Bush signed, after working
with his administration to get it, we have not cut the gap. We
must continue to do that, and I would ask your committee to pay
very close attention to that and hopefully come up with a
recommendation for parity between the military and the
civilians at the 4.6 percent level. That is not what it ought
to be, but parity is what I think realistically can become.
Thirdly, election reform. Mr. Chairman, I think this is a
critical issue. It affects the budget as well. I might say that
many of your committee members are on a bill I am sponsoring,
the Voter Improvement Act, introduced last week. We need
election reform. We need it now; not in 2004, 2006, or 2008,
but by 2002.
Last week Congressman Horn and I introduced, along with
many others, over 66 cosponsors, the Voter Improvement Act.This
legislation would provide up to $6,000 per precinct to replace
punch card systems. This would be, if every precinct that has
punch cards was replaced, $432 million. Thirty percent of the
voters in America use punch cards, so it is not a problem of
Florida, it is a problem that we is have nationally. As a
matter of fact, California and New York, two of our biggest
States, use the punch card system.
In addition, the bill that I have sponsored would provide
$150 million in annual grants for voter education, poll worker
training, equipment purchases and R&D, and would establish a
bipartisan election reform commission. I think this is
critically needed.
The President has observed that every American has the
right to vote. That, of course, I think, is without
disagreement. But the fact of the matter is every American also
has the right to have their vote counted properly. I don't
perceive this as a partisan issue, I perceive it as an issue
for our entire democracy in a bipartisan fashion.
Fourthly, education reform. I applaud the President and all
who are proposing that all States develop comprehensive systems
of standards and accountability. That is needed. We must also
ensure that our school systems have the capacity to provide
effective teachers, a strong curriculum and swift academic
intervention. Once a school has been identified as failing, we
must have interventions in place to improve schools' outcomes.
Soon I will introduce the Full Service School Act of 2001,
a bill that will provide support for our children in many
different disciplines, including, but not limited to,
education. The Full Service School Act will create a $200
million annual grant program for States and local education
agencies to encourage community organizations to coordinate
their services within a school setting.
We spend a lot of capital money on schools. They ought to
be utilized fully not only for education, but for health,
recreation, before- and after-school care, kindergarten, Head
Start, all sorts of programs that can be school-based and
cited. I urge you to consider this important legislation.
Lastly, Mr. Chairman, within the limited time frame, let me
speak about the Treasury-Postal appropriations bill. I am
concerned the level of funding included in the President's
budget for the Department of Treasury is not adequate. It
provides for $700 million over a $14 billion budget,
approximately 5 percent. Included is $325 million for IRS's
Information Technology Investment Account. There is bipartisan
agreement on the fact that we need that.
Let me speak briefly, because I see my time is running out,
on courthouse construction. Mr. Chairman, that is looked at by
some as a pork-barrel project. I look at it as a law
enforcement-justice challenge. We have a tremendous backlog.
Jim Kolbe, the Chairman of the Treasury-Postal Committee, led
us in going strictly by the Administrative Office of the
Courts' and GSA's recommendation. There were no political
favors done. We went by the book, but we created a big backlog.
The President has not included sufficient funds in the
budget; he is about one-third low. GSA says we need about $665
million to keep even with the need. This is the Administrative
Office of the Courts and GSA, not any of the Members who are
saying this. It is the people who have the responsibility of
daily providing for the administration of justice.
Mr. Chairman, my time has expired. My full statement is in
the record. I look forward to working with you. I would
emphasize at the end I would hope that this committee would not
simply expect agencies to absorb pay raises, but would look at
that as a cost that ought to be set aside and identified in an
honest way to reflect what we need to have to pay our people
properly.
Thank you, sir.
Chairman Nussle. Thank you very much.
[The prepared statement of Steny Hoyer follows:]
Prepared Statement of Hon. Steny H. Hoyer, a Representative in Congress
From the State of Maryland
Mr. Chairman, and Members of the Committee: I would like to thank
you for the invitation to appear before the committee this afternoon to
discuss several critically important issues related to the Federal
budget for fiscal year 2002.
I would like to focus on five important subjects: Budget reality;
Federal employees; election reform; education reform; and Treasury-
Postal appropriations.
BUDGET REALITY
The budget for the next fiscal year, in my opinion, should continue
the fiscal framework that this Congress and the previous Administration
established over the last 8 years. The American people deserve a budget
that incorporates a balanced and responsible approach to meeting those
needs. We can give the American people a sizable and affordable tax
cut, and still have surplus funds to pay down the debt; invest in
priorities such as education and a prescription drug benefit under
Medicare; modernize our national defenses; and extend the solvency of
Social Security and Medicare.
The Administration is unfortunately taking a different course.
President Bush wants us to enact a $1.6 trillion tax cut, but the
numbers just don't add up. When you factor in the higher interest cost
associated with the revenue reduction and changes to the Alternative
Minimum Tax, the cost increases to $2.3 trillion.
Practically the entire non-Social Security and non-Medicare surplus
will be allocated to tax cuts, leaving next to nothing for crucial
national priorities such as defense, prescription drug coverage for
seniors, education and debt reduction.
In the President's budget ``Blueprint,'' he calls for growth of
non-defense programs that is lower than the amount the Congressional
Budget Office has deemed necessary to maintain purchasing power. In
light of this fact, I am at a loss as to where the funding is going to
come from to pay for programs that the American people demand.
Mr. Chairman, your counterpart on the other side of the Capitol,
Senator Pete Domenici has said that ``It will be very hard to live on 4
percent with all the priority items that our president wants.'' I hope
that this Committee will construct a budget framework that is
responsible, realistic, and workable for the American people.
FEDERAL EMPLOYEES
The next issue that I would like to address, Mr. Chairman, is pay
for Federal employees.
The recruitment and retention issues in the military that have
received so much attention are also occurring in the Federal civilian
sector. The pay gap between the military and the private sector is
approximately 10 percent, according the Bureau of Labor Statistics. The
same survey estimates that the Federal civilian workforce and the
private sector gap has grown to 32 percent. If our civilian workforce
is going to be successful in the future they, just like the military,
will have to compete for talent in a competitive market.
Frankly speaking, we will not be able to recruit, much less retain,
the best and most valuable employees if we pay them one third less than
they can make in the private sector. No successful fortune 500 company
would stand for this and I don't think we should either.
In 1990, I worked to enact the Federal Employee Pay Comparability
Act which was intended to reduce the pay gap between the private sector
and Federal employees to 5 percent. Unfortunately, that disparity has
not been reduced.
This year, the administration has proposed only a 3.6 percent
adjustment for the civilian workforce. This is far less than they are
entitled to under the Federal Employee Pay Comparability Act and lower
than the 4.6 percent estimated for the military.
In 1967, Public Law 90-207 required that military pay be increased
by the same proportion as pay for Federal employees. For the most part,
we have historically achieved parity between the military and civilian
workforce and we should continue that trend in 2002. Given this
historic parity and the widening pay gap I ask that when you draft the
budget resolution you include 4.6 percent for the Federal civilian
workforce.
ELECTION REFORM
Mr. Chairman, another issue that clearly affects our budget but has
far broader implications for the integrity of our political system and
democracy itself is the national imperative of election reform.
I don't intend to revisit last November's election debacle here.
But I feel compelled to note that an estimated 2 million votes
nationwide went uncounted last November. That's 2 million voices
silenced. That's 2 million Americans essentially disenfranchised.
That's totally unacceptable in the greatest democracy the world has
ever known. And it cries out for a remedy that includes the infusion of
Federal assistance to the States to ensure that it never ever happens
again.
Practically every Member and citizen that I have spoken with on
this topic over the last few months agrees: We need election reform and
we need it now not four, six, or 8 years from now.
To that end, let me add that last week I introduced the ``Voting
Improvement Act of 2001,'' with Congressman Horn. This is a bipartisan
election reform bill that currently has 66 co-sponsors in the House,
including several Members of this Committee. Unlike any other Federal
legislation introduced to date, this bill proposes a Federal buyout of
all punch-card voting systems nationwide. Punch cards, which gained so
much notoriety in Florida, have proven particularly prone to error and
must be replaced by more reliable equipment.
The Voting Improvement Act would provide up to $6,000 per precinct
to replace punch-card systems. If every precinct in America that
currently uses punch cards took advantage of this Federal buyout, the
total cost would be approximately $432 million.
In addition, the bill would provide $150 million in annual grants
for voter education, poll worker training, equipment purchases, and
research and development. It also would establish a bipartisan Election
Reform Commission that would study and make recommendations on
improvements to our election system.
Mr. Chairman, I know that budgeting is all about setting
priorities. And I know that this is far from easy because there are so
many worthy endeavors that deserve Federal funding.
However, election reform strikes at the core of our political
system and our democratic values. Whether or not it's the Voting
Improvement Act or other election reform legislation, I urge you and
the Members of this Committee to do all that you can to address this
issue.
EDUCATION REFORM: FULL-SERVICE SCHOOLS
Improving education is the top priority in America today.
Educators, parents, students, elected officials, community
organizations, the private sector and others are all searching for ways
to ensure excellence in our schools. I applaud the President for
proposing that all states develop comprehensive systems of standards
and accountability. However, it is not enough to set high standards and
then measure students' progress toward them. We must ensure that our
school systems have the capacity to provide effective teachers, a
strong curriculum, and swift academic interventions. And most
importantly, once a school has been identified as failing, we must have
interventions in place to improve the school's outcomes.
Soon, I will introduce the Full-Service Schools Act of 2001, a bill
that will provide the support our children need to be successful in
school. A Full-Service school actively partners with community
organizations and agencies to create a united movement for our schools.
The Full-Service Schools Act will bring services such as after-school
care, head start, health care, job training, and juvenile justice right
into our schools, so that when our children first sit down at a desk,
they are ready to learn. We cannot expect our children to achieve high
academic standards if they do not have their basic needs met. The Full-
Service Schools Act will create a $200 million annual grant program for
states and local education agencies to encourage community
organizations to coordinate their services within a school setting. I
urge you to consider this important legislation when determining the
budget for the Departments of Education and Health and Human Services.
TREASURY-POSTAL APPROPRIATIONS
Finally, Mr. Chairman, I am concerned with the level of funding
included in the President's budget for the Department of Treasury. The
budget includes a $700 million increase over fiscal year 2001 spending.
Of that amount, $325 million is for the Internal Revenue Service's
(IRS) Information Technology Investment Account. I am pleased to see
that this Administration is committed to modernizing the IRS, which is
an essential effort mandated by Congress and one that must continue.
However, the rest of the Treasury Department would be required to
operate under a 2.67 percent increase for fiscal year 2002, well below
the amount the Congressional Budget Office identifies as necessary to
maintain purchasing power for current programs. It is hard to envision
how this meager increase could possibly support the essential Treasury
law enforcement programs that make up one third of all Federal law
enforcement.
In particular, the U.S. Customs Service must continue to modernize
their import processing system, called the Automated Commercial
Environment, or ``ACE.'' This is a $1.3 billion, 5-year effort, which
Congress appropriated $130 million for in FY 2001, yet the
Administration's budget does not appear to provide an increase to meet
the 5-year development plan.
It does not appear that the Secret Service will have the resources
to continue an essential recruitment and retention effort that is
necessary to reduce overtime levels among agents that have reached as
high as 90 hours per month or to provide security support for the 2002
Winter Olympics.
Mr. Chairman, we depend on the Department of Treasury to be a tax
administrator, a revenue collector, a law enforcer, and a financial
manager. They deserve a budget that appropriately reflects these
priorities.
Finally, the President's budget includes $500 million for the
Federal Courthouse Construction program, which is funded under the
General Services Administration. This number includes approximately
$276 million in advanced appropriations, so the new funding level for
courthouse projects is $224 million. What is worrisome is that the
request made by the Administrative Office of the Courts totals $665
million, a $441 million difference. We have a serious crisis going on
across the country in terms of adequate Federal courthouses. Congress
has spent billions of dollars over the last 10-15 years on the war
against drugs and crime. This has resulted in an enormous increase in
the judiciary's caseload. Over the past 5 years for example, the number
of appeals filed per authorized three-judge appellate panel increased 5
percent; criminal case filings grew 30 percent and bankruptcy filings
rose 14 percent. I am a strong supporter of the Courthouse Construction
program and hope that this committee will recognize the need to provide
sufficient funding to meet the demand for Federal courthouses.
Mr. Chairman, this concludes my statement. I would be happy to
answer any questions at this time.
Chairman Nussle. I also understand you have a time
constraint, so if we have further things to discuss, I am sure
we will have that opportunity.
Mr. Hoyer. I look forward to it.
Chairman Nussle. My understanding is that Mr. Baird and Mr.
Clement, a member of the committee, would like to testify
together today. I welcome you both. As I said, your testimony
is in the record, and you may proceed.
STATEMENT OF HON. BRIAN BAIRD, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF WASHINGTON
Mr. Baird. Thank you, Mr. Chairman, and Ranking Member
Spratt and Members. We are here today to speak about a simple
matter of fairness that involves the Tax Code. Seven States in
our Nation have no income tax, but pay their States' taxes
through sales tax. The challenge is that the Tax Code currently
disadvantages those States in a manner we consider unfair and
quite costly. States under the Tax Code--residents of States
with income taxes are allowed to deduct their State income
taxes from their Federal returns, but those with State sales
taxes are not allowed to do so.
We have drafted a simple and fair bill which would allow
residents to elect to deduct either their State income tax or
their State sales tax. This has recently been scored, a fairly
modest cost over 10 years of about $23 billion. It would be a
simple reform; it would not complicate the Tax Code. What we
have proposed is to ask the IRS to develop a simple table for
each State.
Taxpayers would look at the total income for the family,
the family size, find the column on the proper chart, insert
that number on their return, and that would be their deduction.
It would add about 60 seconds at most, I would think, to
preparing a tax return. We would encourage this committee to
include that in their budgetary plans.
I want to commend my good friend Bob Clement for his great
leadership and work on this. The seven States directly involved
are Florida, Texas, Tennessee, South Dakota, Wyoming, Nevada,
and did I leave any out----
Mr. Clement. Did you mention your State?
Mr. Baird. Washington State. Thank you.
It is about fairness. There is no reason if we are looking
at restoring or correcting fundamental inequities and saying
you shouldn't penalize someone for getting married, my
goodness, we shouldn't penalize people for living in those
seven states I identified.
[The prepared statement of Brian Baird follows:]
Prepared Statement of Hon. Brian Baird, a Representative in Congress
From the State of Washington
Mr. Chairman and members of the Committee, I'm honored to be here
today with my good friend Representative Bob Clement for this extremely
important hearing, and I truly appreciate the opportunity to share some
specific tax and budgetary concerns that have put a strain on my
constituents in the state of Washington and in Bob's home state of
Tennessee.
In principle, Mr. Chairman, I believe that the Federal Government
must strive to avoid budgetary policies that favor residents of some
states over others. Unfortunately, I believe that one egregious failure
to adhere to this principle is found in the manner in which the Federal
Government allows taxpayers to deduct state and local taxes.
I'm sure, Mr. Chairman and members of the Committee, that you are
well aware of the problem. Simply put, residents of states with income
taxes can take a deduction on their Federal taxes. Residents of states
with sales taxes and no income tax cannot. That differential treatment
of taxpayers is a profound inequity that this Congress should rectify.
The repeal of the sales tax deduction in 1986, although well
intended, resulted in a significant disparity between states. By
disallowing state sales tax deductions, but retaining state income tax
deductions in the Federal code, we now have a system in which one
individual with an income and financial profile that is identical to
another person may pay higher taxes to the same Federal Government
simply because they live in different states. As a result, residents of
states such as Texas, Florida, Washington, Tennessee, South Dakota,
Nevada, and Wyoming, pay more in Federal taxes than residents of equal
income in other states. In effect, residents of states without income
taxes are underwriting a disproportionate share of the Federal budget.
It's not that Washingtonians pay less in taxes. On the contrary,
we're in the top quarter of states in amount of our personal income
that goes to taxes. The question becomes, should residents of my state
pay hundreds more dollars per year to the Federal treasury for nothing
more in return, than those individuals living across the river in
another state. I believe that they should not.
To remedy this situation, I have proposed H.R. 322, the Tax
Deduction Fairness Act of 2001, along with about 50 cosponsors,
including several members of this committee, that will restore the
sales tax deduction for taxpayers in states that do not have an income
tax. My measure would allow taxpayers to deduct either their state
income tax or state sales taxes paid in a given year. By giving a
choice of deducting either sales or income tax, the budgetary scoring
is kept to a minimum, but equity and fairness are restored across
states.
To keep the sales tax deduction simple for taxpayers, under this
legislation the Internal Revenue Service would be directed to develop
standard tables for taxpayers to use in determining their average sales
tax deduction. Such tables, similar to those used by taxpayers prior to
1986, would include average calculations, based upon income and
household size, for a taxpayer in a given state. The bill does not
restore the itemized deduction of individual purchases; it only allows
taxpayers to deduct an averaged amount based on income level and family
size.
I, like all of my colleagues in this body, am committed to
maintaining a balanced budget, and I am also committed to the principle
of equal taxation as dictated by the Constitution. But, as we wrestle
with the options for spending projected budget surpluses in the
foreseeable future, I ask my colleagues to put themselves in the
position of more than 50 million taxpayers who live in sates with no
income tax and no means of deducting sales taxes; and I ask that we
prioritize the restoration of fairness for taxpayers nationwide.
So, as you review the many proposals before you today and as the
committee develops a budget resolution, I strongly encourage you to
consider this common-sense proposal, for the simple reason that it is
the right thing to do.
Again, I want to thank you, and members of the committee for
graciously granting me this opportunity, and I yield back the balance
of my time.
Mr. Baird. I would like to yield time to my good friend Bob
Clement from Tennessee.
STATEMENT OF HON. BOB CLEMENT, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF TENNESSEE
Mr. Clement. Thank you, Mr. Baird, and thank you, Mr.
Chairman and Mr. Spratt. It is a great honor to say a few words
before my committee, the Budget Committee, which I think a lot
of and its various members.
What Mr. Baird said is true. You do have about 50 million
people that are really being penalized today that live in those
seven States that have already been mentioned, and it is a
fairness issue, but it is also a States rights issue. We
shouldn't be forced to enact a State income tax in those seven
States if we don't want a State income tax, if we want to have
some other type tax structure. But in 1986, because of the 1986
tax reform, we no longer can deduct our State sales tax from
our Federal income tax return.
If you happen to live in a State with a State income tax;
you can deduct that from your Federal income tax. It was an
oversight. It should have been a technical correction over
these years, yet it has not been corrected yet, and it should
be now.
Tennessee, as well as the other States, really wants this
corrected as soon as possible. We have a golden opportunity in
the 107th Congress to accomplish that goal and objective. I
would like to see it in the Bush tax plan. I would like to--I
know that in this last session of Congress, in the 106th
Congress, it was in the Democratic substitute. It is becoming
more and more of a political issue in the various States. We
have already been over to the White House. We have had the
opportunity to speak with Dr. Larry Lindsey, the chief economic
officer. We have had the opportunity to speak with the Vice
President Dick Cheney. We have also had the opportunity to talk
with the Secretary of the Treasury as well as the Director of
OMB.
This is a serious matter. I hope that the 107th Congress in
its wisdom will look at this very seriously and act on it,
because it is tax fairness, it is a States rights issue, and we
need to face up to it once and for all. And as a matter of
fact, we have had it scored as well, and it is $23 billion over
a 10-year period of time. Surely in a $1.6 trillion tax cut
proposal that is before Congress now, we can find a place for
this $23 billion to bring about tax fairness once and for all.
Thank you, Mr. Chairman.
[The prepared statement of Bob Clement follows:]
Prepared Statement of Hon. Bob Clement, a Representative in Congress
From the State of Tennessee
Thank you, Mr. Chairman. It is a privilege for me to testify before
this Committee today with my colleague, Congressman Brian Baird from
the state of Washington.
I am here today to urge you to include in this year's budget
resolution an issue of tax fairness and tax equity. Congressman Baird
and I have introduced H.R. 322 which would restore the sales tax
deduction to the Federal income tax code. This is an issue of tax
fairness that has been wrongly denied to the citizens of Tennessee and
six other states for 15 years. I am pleased that about 50 of my
colleagues--including several members of this Committee and the entire
Tennessee delegation--have joined us in cosponsoring this bill.
In 1986, the state sales tax deduction was eliminated from the
Federal tax code in an effort to expand the tax base. While probably
well-intentioned, the elimination of the sales tax deduction is not
well-received by my fellow Tennesseans who continue to be unfairly
taxed. This poorly evaluated change in the tax code created a
fundamental inequity between those states that have instituted a state
income tax and those that have not. This is because, under the current
tax code, taxpayers living in states that have an income tax can deduct
their state taxes from their Federal tax bill. However, the 50 million
Americans living in states without an income tax, such as Texas,
Florida, Wyoming, Washington, South Dakota, Nevada and Tennessee, do
not have an equivalent tax deduction. As a result, they end up paying
significantly more in taxes to the Federal Government than a taxpayer
with an identical profile in a different state.
Mr. Chairman, like many of my colleagues on this panel, in this era
of unprecedented budget surpluses, I support tax cuts. I think it is
only fair that we return some hard-earned money to our hard working
Americans. However, I think we must prioritize tax fairness. Sales tax
deduction is an issue of tax fairness.
In 2000, the citizens of Tennessee paid an average of $730 in state
sales taxes, but could not deduct one dollar of it from their Federal
income tax returns. So, basically, Tennesseans are being forced to pay
taxes on their taxes. This is not right! It is unfair, it is unjust and
it must be corrected here in the 107th Congress! The citizens of
Tennessee and Washington and the other states are being discriminated
against simply because they live in a state that has chosen not to
enact a state income tax.
Mr. Chairman, I think we all agree here, that the Federal
Government should treat all taxpayers equally, regardless of the system
of taxation that their state employs. I have some friends back home in
Nashville who just had two beautiful twin daughters who I know would
agree. With a combined income right around fifty thousand dollars, they
would save $358 with the passage of this tax equality bill. That, Mr.
Chairman, is a lot of diapers.
This bill is very simple. It would allow taxpayers to deduct their
state income tax returns from their Federal income tax returns. Those
living in a state that has an income tax would still be able to take an
income deduction as they do today. However, residents of states that do
not have an income tax would be provided with the opportunity to take a
similar deduction.
We, as Federal officials, have no right to suggest to a state how
best to tax its citizens. H.R. 322 is an opportunity to limit the
Federal Government's influence on the methods of taxation across this
country. It does so by taking away the incentive for a state to impose
a state income tax on its citizens. Regardless of your views on income
taxes, sales taxes or some alternate tax structures, I'm sure my
colleagues on both sides of the aisle would agree that states should
have the right to decide for themselves how they want to collect their
revenues without interference from the Federal Government.
In closing, I would like to thank my friend, Congressman Brian
Baird, for his hard work on this issue that we have been working years
to enact. We have an opportunity to restore fairness and equity to the
tax code in this Congress without making the tax code more complex and
without abandoning our fiscal discipline.
I urge my colleagues to support the inclusion of this provision in
the budget resolution and reinstate the sales tax deduction.
Mr. Baird. If I might, I would just like to add that this
proposal has been endorsed by the National Council of State
Legislators. They emphasize there are even States that are not
directly affected which have endorsed the proposal, largely on
the grounds that my colleague Mr. Clement mentioned, that it is
a States rights issue. It should not be left to the Federal Tax
Code to dictate to local States the manner in which they should
choose to tax their citizens. Neither should residents of one
State be unfairly disadvantaged in comparison to residents of
other States.
Again, let me just reiterate finally, it is fair, it is
simple, it is affordable, and its time has come. We appreciate
this committee's support, and we continue to lobby vigorously
on behalf of what we think is a common-sense tax reform.
Chairman Nussle. Thank you very much for your testimony. We
appreciate both of you testifying. We will take it under
advisement.
Mr. Baird. Thank you, Mr. Chairman, Ranking Member Spratt.
Chairman Nussle. If the other Members, Mr. Gonzalez and Mr.
Pascrell, if you would like to come up to the table.
Mr. Castle, you may proceed while they are joining us as
well.
STATEMENT OF HON. MICHAEL CASTLE, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF DELAWARE
Mr. Castle. Thank you very much, Mr. Chairman. I feel sort
of like a broken record. You have heard what I am going to say
before, and Mr. Spratt and Mr. Holt probably have heard it
before also. In some ways I wish I were testifying before the
Appropriations Committee instead of the Budget Committee,
because I think they are the ones to listen to the message
which I am trying to convey since I have been in the Congress
of the United States.
But I believe very strongly we need a budget reserve
account each year to properly plan for and pay for natural
disasters and other emergencies. I will introduce my budget
reserve account legislation, which I had in the 106th Congress,
again shortly. Basically to boil it down, it really has the
Federal Government prepare for emergencies in the same manner
as practically every State and local government, which I know
now does by basically budgeting for them.
Under current law, emergency spending is not subject to
annual budget limits and deficit reduction requirements. When a
disaster strikes, Congress simply appropriates emergency funds,
which are most times not covered by offsets and other cuts, and
thereby we are adding to the debt or spending the surplus. In
addition, as we all know, that is a perfect opportunity for
Members to add unrelated nonemergency pork-barrel projects. It
is probably the single best opportunity to add such that we
have in the Congress of the United States.
This practice adds up to more money each year than probably
most Members realize, which obviously erodes the work of this
committee, which pays a lot of attention to every dollar which
is spent. In fact, according to the Congressional Research
Service, the average cost of emergency appropriations bills
from 1991 to 1999 was $9 billion a year. It excludes special
significant items such as the Persian Gulf War, but for the
basic emergencies we have.
The legislation would require the President to submit a
budget and Congress to appropriate these average funds annually
in a budget reserve account to offset the costs of natural
disasters or other emergencies. These funds would be included
under the annual discretionary spending cap set by the budget
resolution, and if it is not used during a particular year, it
would be used for debt reduction.
Finally, the Office of Management and Budget would be
required to report to Congress each year on how the emergency
funds from the reserve account were spent, which is not
insignificant because of the pork-barrel spending that goes on
now.
I was pleased to work with you, Mr. Chairman, and I cannot
thank you enough for the work you have done on this, and
Representative Cardin, in the 106th Congress to include a
budget reserve account in your omnibus budget process reform
bill. As you know, this committee supported its passage, but we
were unable to secure the support of the full House of
Representatives.
Now we have a new ally, now that the 107th Congress has
begun. OMB Director Mitch Daniels has indicated to me his
interest in a budget reserve account. On February 22nd of this
year, I sent President Bush and carbon copied Director Daniels
a letter requesting that he include a budget reserve account in
the fiscal year 2002 budget proposal. I would, with your
permission, like to submit a copy along with my statement here
today.
Chairman Nussle. Without objection.
[The information referred to follows:]
Michael N. Castle,
House of Representatives,
Washington, DC, February 22, 2001.
President George W. Bush,
The White House, Washington, DC.
Dear President Bush: I am writing to request your support for
setting aside funds in your Fiscal Year 2002 Budget for emergencies,
particularly natural disasters. Although the timing and circumstances
of natural disasters cannot be predicted, our government must respond
to disasters and other emergencies on an annual basis. We should plan
for these inevitable expenses by setting aside funding within the
budget to respond in a timely and fiscally responsible manner.
As you know from your service as Governor of Texas, many states set
aside funds in preparation for natural disasters in a ``rainy day'' or
``budget reserve'' account. Many families budget a percentage of their
income for family emergencies. In sharp contrast, the Federal
Government does not set money aside before hand, but simply
appropriates emergency funds above and beyond annual budget limits. In
times of budget surpluses, this erodes the surplus that could be used
for tax cuts, debt reduction, education, and defense priorities. From
1991 to 1999, emergency funding averaged $9 billion a year. Setting
aside that figure within the budget each year would be a common-sense
budget reform and go a long way toward paying for the natural disasters
that are bound to occur.
Last year, I introduced legislation, H.R. 537, to create a budget
reserve account, which passed the House Budget Committee as part of a
package of reforms. New legislation will be introduced again this year.
To aid in this effort to bring more fiscal discipline to the Federal
budgeting process, we respectfully request that the White House provide
leadership by setting aside funds for emergencies in the Fiscal Year
2002 Budget. It is not only common-sense budgeting, but it will help
clarify the level of funds available for surplus-related initiatives.
Again, your leadership on this important issue would go a long way
in bringing Washington, D.C. budgeting in line with the common-sense
budgeting followed by most state governments and many family budgets. I
hope you will include this reform in your Fiscal Year 2002 Budget
proposal.
Sincerely,
Michael N. Castle,
Member of Congress.
Mr. Castle. Thank you, sir. I am hopeful when the President
submits his detailed budget proposal, he will take a step
toward reserving funds for annual emergencies.
Again, thank you, Mr. Chairman. You have been supportive of
this from the very beginning. I know you have been advocating
similar reforms ever since you have been here as well, and I am
pleased to work with you again this year.
I would say in closing, most families, most States, most
local governments, practically all of them, including my State
of Delaware, set aside funds for emergencies. It is time for
the Federal Government to join them.
[The prepared statement of Michael Castle follows:]
Prepared Statement of Hon. Michael N. Castle, a Representative in
Congress From the State of Delaware
Chairman Nussle and respected members of the House Budget
Committee, thank you for giving me this opportunity to testify on the
need to create a budget reserve account in order to plan for natural
disasters and other emergencies.
Shortly, I will reintroduce my ``Budget Reserve Account''
legislation from the 106th Congress (H.R. 537). It would require the
Federal Government to prepare for emergencies in the same manner state
and local governments do--by budgeting for them. Briefly, here is how
the account would work:
Under current law, ``emergency'' spending is not subject
to annual budget limits and deficit reduction requirements. When a
disaster strikes, Congress simply appropriates emergency funds which
are often not offset by other cuts, thereby adding to the debt and
spending the surplus. In addition, funds are often added for unrelated,
non-emergency ``pork-barrel'' projects.
This practice adds up to a significant amount of money
each year, thus eroding the discipline of this committee's budget plan.
According to the Congressional Research Service, the average cost of
emergency appropriations bills from 1991 to 1999 was $9 billion a year
(excluding the Persian Gulf War).
My legislation would require the President to submit a
budget and Congress to appropriate these average funds annually in a
budget reserve account to offset the costs of natural disasters or
other emergencies.
These funds would be included under the annual
discretionary spending caps set by the Budget Resolution.
If the reserve funds are not used during a particular
year, they would be used for debt reduction.
Finally, the Office of Management and Budget (OMB) would
be required to report to Congress each year on how the emergency funds
from the reserve account were spent.
In the 106th Congress, I was pleased to work with Chairman Nussle
and Representative Cardin to include a budget reserve account in their
omnibus budget process reform bill (H.R. 853). As you know, this
committee supported its passage, but we were not able to secure the
support of the full House of Representatives.
However, as the 107th Congress begins, we have a new ally. OMB
Director Mitch Daniels has indicated to me his interest in a budget
reserve account. On February 22, 2001, I sent President Bush (and
carbon copied Director Daniels) a letter requesting that he include a
budget reserve account in the Fiscal Year 2002 Budget Proposal. With
your permission, I would like to submit a copy of this letter into the
committee record. I am hopeful that when the President submits his
detailed budget proposal, he will take a step toward reserving the
funds for annual emergencies.
Chairman Nussle, I thank you for your past support on this issue. I
know you have been advocating this reform since you first came to
Congress in 1991. I would be pleased to work with you again this year
to develop strategies for enacting this common-sense reform to our
emergency spending process. Many families and States, including my
state of Delaware, set aside funds for emergencies. The Federal
Government should join them.
Chairman Nussle. Mr. Castle, you have been carrying this
ball longer than anybody else, and I appreciate your advocacy.
We do have a new ally in all of this with the President being
on board. This is a bipartisan issue. We have a number of
members on this committee that will be very interested in that.
I believe the time has come, and I believe this will be part of
this budget.
One thing I would request is in the next couple of weeks as
we are trying to put that budget together, we may need your
help to work on some of the definitions and mechanisms to make
sure we do it right. But I think you will find bipartisan
agreement, one of the areas we might not have any disagreement
on in the budget, and that is to plan for the rainy day as we
both discussed. Thank you very much for your work. We finally
got to the goal line.
Mr. Castle. I stand ready to help. I hope we can put the
points up on the scoreboard.
Chairman Nussle. I hope so. Thank you very much.
Mr. Pascrell.
STATEMENT OF HON. BILL PASCRELL, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEW JERSEY
Mr. Pascrell. Mr. Chairman, Mr. Spratt, Mr. Holt, et al.
Chairman Nussle. Just so Members know, your entire
statement will be made part of the record, and you may
summarize during the 5 minutes, please.
Mr. Pascrell. Mr. Chairman, also Congressman McGovern is
here to talk on one of the things I am going to be talking
about. I want to bring that to your attention.
Last week the President delivered his Blueprint for a New
Beginning. There are several aspects of this blueprint that
compelled me to come here today, Mr. Chairman.
First I would like to speak to you about the importance of
an appropriation for the second year for the Firefighter
Assistance Grant Program. Last year we succeeded in adding this
legislation, the Firefighters Investment and Response
Enhancement Act, the FIRE Act, to the Department of Defense
appropriations bill.
I say ``we,'' because two-thirds of the members who were on
this committee last year signed that legislation, signed on to
that legislation, including the Chair, and the Ranking Member,
who both supported this bipartisan legislation.
The legislation established a program through the Federal
Emergency Management Agency, because we thought this was the
least bureaucratic of the agencies, that could run it and
provide dollars directly to the municipalities and not to the
States. It is authorized for fiscal years 2001-2002, in the
amounts of $100 million and $300 million respectively.
Delightedly, we received funding for the first year of the
program, $100 million, and are seeking $300 million for the
second year in the fiscal year 2002 appropriations cycle. It
provides grants for purchasing new and modernized equipment,
fire prevention and education programs, wellness programs for
our firefighters, modifying outdated fire stations, et cetera.
These grants go directly to paid departments, as well as part-
paid and volunteer departments and emergency medical
technicians.
These days I have been busy fielding many phone calls from
excited firemen and from fire departments all over America
asking when the applications for the program will be available,
and we have been speaking to FEMA every day to monitor its
progress in getting the necessary program up and running.
This program has been endorsed by the seven major fire
service organizations in the Nation, and the supporting
legislation had 285 bipartisan cosponsors in the House and 33
cosponsors in the Senate. It was comprehensive legislation long
overdue.
When firefighters go into a burning building, Mr. Chairman,
you know just as well as I do they don't ask folks inside
whether they are Democrats or Republicans. They just do their
job. In light of the overwhelming support, I was shocked when I
saw that the President, his blueprint, includes the explicit
cut of this critical new program. President Bush thinks that
this program does not, quote/unquote, represent an appropriate
responsibility of the Federal Government, on page 153 of the
blueprint. With all due respect to the President, Mr. Chairman,
I am here today to make it clear why it does.
First of all, there is a tremendous need for additional
funding for fire departments around the country. Mr. Chairman,
when we first went into this legislation, the beginning of this
attempt 2-1/2 years ago, my position was this is either needed
or it is not needed. My position has always been, and
particularly when we look at the budget where there is over $11
billion for one-half of the public safety equation, that it is
our police officers which we all support here, and very, very
little on the other side for our firefighters in the 31,000
fire departments throughout America, almost 1 million
firefighters.
In my district we found that 75 percent of the departments
were understaffed, some terribly understaffed, by as many as 40
firefighters in the bigger cities in my district. Jersey City,
right on the coast of New Jersey, has 100 less firefighters
than they had a decade ago, and yet they have six new tall
office buildings. Many departments in cities and suburbs and
rural areas all over America, we have done our homework, as you
know, simply cannot afford even the most basic equipment
upgrade because of funding shortfalls.
Secondly, I challenge the President's assertion that
supporting our firefighters is not an appropriate use of
Federal funds. I strongly believe that there is a Federal role
here. Current spending for fire services is $40 million in the
Federal budget. The level of funding for Firefighters
Assistance Grant Program is appropriate. The funding is an
investment in the safety of our firefighters and confirmation
to the communities across America that the Federal Government
will work to provide our fire service personnel with the best
equipment and resources available.
We know that this is primarily a local decision, a local
responsibility, but, as in so many other appropriate areas, the
Federal Government should have a role. There is no selective
assistance here. Every fire department imaginable was in here,
except, of course, Federal firefighters.
Let me also remind colleagues that the role of firefighters
is expanding and has changed over the past 20 to 30 years.
Several fire departments in this Nation reach across the State,
their counties, their city lines, to assist each other with
natural disasters and incidents of domestic terrorism.
As you know, there are two fire search and rescue units
that have responded to international disasters on behalf of the
United States. The Miami-Dade Fire Rescue Department and the
Fairfax County Search and Rescue teams have traveled to several
countries, Colombia, Turkey, Mexico, Mozambique, and provided
disaster relief. Natural and manmade disasters do not
discriminate when and where they arise. Proudly, the
firefighters of this great Nation do not discriminate when and
where they provide help.
This Congress spends billions and billions on law
enforcement. We support that critically needed investment. But
this is a minuscule amount of money for our firefighters. When
six firefighters died in Worcester, Massachusetts, which my
good friend and colleague Congressman McGovern will address,
this tragedy highlighted the need for more funding for our fire
services. For these fallen heroes, we owe this grant program,
Mr. Chairman, so that one more unnecessary death can be
prevented. We should fund the Firefighters Assistance Grant
Program for fiscal year 2002 and demonstrate that the Congress
is fully committed.
Very briefly, Mr. Chairman, I know my time is up, I wanted
to bring to your attention the fact that in that same
blueprint, in the Small Business Administration, it was cut 43
percent.
We worked hard over the last 4 years on a bipartisan basis
to bring programs that are productive and, where we can,
monitor where those dollars are being spent. We ask you to
please examine that draconian cut in the Small Business
Administration. Is the idea to make up for these monies through
fees? I would question that. We opposed it 4 years in a row,
Democrats and Republicans. As you remember, the Clinton
administration wanted to propose fees in order to relieve some
of the dollars that the Federal Government was putting up. We
opposed it then, we oppose it on a bipartisan level now, and we
can't allow the SBA to fall apart. It has provided such a
tremendous amount of help to our work force in America. Whether
it is the New Markets Program, or whether we are talking about
the loan programs, these are dollars that have gone to
worthwhile situations.
Finally, just one other thing, I want to commend the
budget, and you folks on the Budget Committee and the
President, for leaving in the budget the dollars to support the
newly authorized sewer overflow control grants. Our communities
cannot afford, in terms of the CSOs, what is going on in
America. I really commend you for that. It was based upon H.R.
828, which I worked on with Congressman Barcia and Congressman
LaTourette, and we had passed last year. It is so helpful in
trying to really support and uphold the Clean Water Act.
Mr. Chairman, thank you so much for your time. I am
available for questions. I feel this in my bones about our
firefighters. I hope you do, too.
Chairman Nussle. As a former volunteer firefighter, I do. I
appreciate your advocacy.
[The prepared statement of Bill Pascrell follows:]
Prepared Statement of Hon. Bill Pascrell, Jr., a Representative in
Congress From the State of New Jersey
Thank you Chairman Nussle and the entire Budget Committee for
allowing me to speak with you today. Last week President Bush delivered
his ``Blueprint for a New Beginning'' to our offices. There were
several aspects of this budget proposal that compelled me to come
before you today.
First, I would like to speak to you about the importance of an
appropriation for the second year of the Firefighter Assistance Grant
Program.
Last year, we succeeded in adding my legislation, the Firefighters
Investment and Response Enhancement Act or ``FIRE'' Act to the
Department of Defense Authorization bill. This legislation established
the Firefighters Assistance Grant Program that is now administered
through the Federal Emergency Management Agency.
The program is authorized for fiscal years 2001 and 2002 in the
amounts of $100 million and $300 million respectively. Delightedly, we
received funding for the first year of the program--$100 million--and
are seeking $300 million for the second year in the fiscal year 2002
appropriations cycle.
This program will provide grants for purchasing new and modernized
equipment, fire prevention and education programs, wellness programs
for our firefighters, modifying outdated fire stations, and more. These
grants will go directly to paid departments as well as part-paid and
volunteer departments and emergency medical technicians as well.
I am busy these days fielding phone calls from excited fire
departments around the country asking when the applications for this
program will be available. I am also speaking with FEMA every day to
monitor its progress in getting this necessary program up and running
successfully.
This program has been endorsed by seven major fire service
organizations in the nation, and the supporting legislation had 285
bipartisan cosponsors in the House and 33 cosponsors from both parties
in the Senate.
I am very encouraged that Members have supported this legislation
on its merits and have refused to make this a political or partisan
issue. After all, when fire fighters go into a burning building they do
not ask the inhabitants whether they are Democrats or Republicans.
In light of this overwhelming support, I was shocked when I saw
that President Bush's ``Blueprint'' includes the explicit cut of this
critical new program. President Bush thinks that this program does not,
``represent an appropriate responsibility of the Federal Government.''
(p.153)
With all due respect to the President, I am here today to make it
clear why it does. First of all, there is a tremendous need for
additional funding for fire departments around the country.
A fire department in this country responds to a fire every 18
seconds. And there is a civilian fire death every 2 hours. A survey I
did in my district found that 75 percent of departments are
understaffed--some terribly understaffed by as many as 40 firefighters
in the bigger cities.
Our state's second largest city--Jersey City--has seen its fire
personnel be reduced by 200 in just the last decade. And many
departments--in cities and suburbs alike--simply cannot afford even the
most basic equipment upgrade because of funding shortfalls.
Secondly, I challenge the President's assertion that supporting our
firefighters is not an appropriate use of Federal funds. I strongly
believe that the Federal role in the fire fighting service can and
should be increased. Current spending for fire services is roughly $40
million, which is dreadfully inadequate.
The level of funding for the firefighters assistance grant program,
however, is appropriate. This funding is an investment in the safety of
our fire fighters and confirmation to our communities that the Federal
Government will work to provide our fire service personnel with the
best equipment and resources available in order to ensure public
safety.
Furthermore, there is no selective assistance in this bill--all
31,000 plus departments are recognized and included. And, it sends the
dollars directly to the departments to the communities in need through
competitive grants, therefore bypassing potential red tape at the state
level.
Let me also remind colleagues that the role of fire fighters is
expanding. Several fire departments in this nation reach across state,
county and city lines to assist each other with natural disasters and
incidents of domestic terrorism. For instance, Oklahoma City.
As you know, there are two fire search and rescue units that have
responded to international disasters on behalf of the United States.
Collectively, the Miami-Dade Fire Rescue Department and the Fairfax
County Search and Rescue teams (SAR) have traveled to several
countries--including Colombia, Turkey, Mexico City and Mozambique--in
order to help with disaster relief.
Natural and man made disasters do not discriminate when and where
they arise; proudly, the fire fighters of the United States do not
discriminate when or where they provide help. The role of our fire
fighters is ever changing, and it is my belief that the role that the
Federal Government plays during these changes must be commensurate.
This Congress spends billions and billions on law enforcement in
our communities. And we all support that critically needed investment.
It has helped to foster crime reduction year after year.
We don't ask communities to go it alone for their law enforcement
needs, and we shouldn't do it for their fire safety needs either.
When six firefighters died in Wooster, Massachusetts in 1999--this
tragedy highlighted the need for more funding for our fire services.
These deaths could have been prevented if the Wooster firefighters had
been using certain fire-fighting protection equipment. Unfortunately,
their department could not afford the equipment that could have saved
their lives.
For these fallen heroes--and all those who lost their lives in the
pursuit of our safety--we owe this grant program. So that one more
unnecessary death can be prevented.
We should fund the firefighters assistance grant program for Fiscal
Year 2002 and demonstrate that the Congress is fully committed to fire
safety in America. Our firefighters--and the communities we represent
here--deserve nothing less.
Next, I'd like to talk to you about the proposed cuts to the Small
Business Administration that President Bush included in his
``Blueprint.'' We all know how important small businesses are
throughout America. But we sometimes forget that small business
accounts for 99.7 percent of America's employers and employs 52 percent
of the private work force. Small companies account for 47 percent of
all the nation's sales.
Over the last decade, America has experienced a period of growth
unprecedented in our history. We reached all time highs in small
business growth, job creation and all-time lows in loan interest rates
and unemployment. But the economic boom is slowing down.
Financial losses for many companies are mounting and job cuts are
affecting every industry in America. As a result, the need to help our
communities deal with these signs of economic slowdown are more
critical than ever.
Unfortunately, President Bush's proposed budget goes against all
these signs with a slap in the face to the Small Business
Administration and its critical programs. President Bush has announced
a budget that will cut the Small Business Administration's budget from
$900 million to $540 million. This represents a 43 percent cut!
This budget pushes aside the collective futures of women-owned and
minority owned small businesses while at the same time assuring that
other small businesses will lose access to vital capitol resources
offered by the agency. Much of the shortfall will be through
terminating programs serving low-income areas and by charging fees.
Not only do small businesses get no tax break in the Bush plan,
they will be taxed to pay for tax cuts that go mainly to the wealthiest
of the nation. Small businesses will pay for the President's tax cuts
through higher loan costs and newer taxes designed as fees, while
critical programs spurring investment in low and moderate income areas
and helping minority businesses will be eliminated.
For example: The ``New Markets Venture Capital'' program, which
provided technical assistance and financing to businesses in low-income
areas will be zeroed out. As well as the ``PRIME'' program, which
provided seed capitol to the absolute smallest of small businesses.
The 7(a) loan program will now be totally fee funded. This will
make the cost of a loan to businesses much higher. Even though the
administration acknowledges that some small businesses will have
trouble accessing private capital in the absence of a Government
guarantee, it still doesn't want the Government to subsidize the cost
of borrowing.
This is unfortunate in my view. I think the Bush administration is
sending the wrong message to our nation's small businesses. If the
President insists on these cuts, small businesses will no longer have a
real voice or champion to protect their interests.
And finally, one segment of the proposed budget I was pleased with
was where the President expressed his support for the newly authorized
sewer overflow control grants. Through the important Clean Water Act,
the Federal Government mandates that municipalities address large
wastewater projects to ensure clean water.
As part of the Omnibus appropriations bill last year, Congress
passed H.R. 828, a bill that combined legislation by my friend Mr.
Barcia from Michigan with legislation introduced by Mr. LaTorrette and
myself. HR 828 authorized $750 million in fiscal years 2002 and 2003
for a grant program to states to address combined sewer overflow (CSO)
systems.
The bill also codified the U.S. Environmental Protection Agency's
policy on Combined Sewer Overflows (CSOs), requiring the development
and implementation of long-term control plans to meet applicable water
quality standards. Pending appropriations are set to start this year,
and the President's support has given us a boost. Hopefully, the grant
funds will be issued to the states and passed onto municipalities for
the development of treatment systems that will lessen the mixing of
untreated wastes with stormwater.
This grant program gives cities and towns the resources they need
to clean up their sewers and comply with the Clean Water Act. It also
authorizes $45 million in grants for demonstration projects on the use
of watershed management for wet weather control in urban areas and to
determine the most cost-effective management practices for wet weather
flows. This additional money will allow cities and towns to
comprehensively address the complex issue of stormwater runoff.
I appreciate the opportunity the Committee has given me to express
both my concerns and support of the President's proposals for the
upcoming budget. Thank you.
Chairman Nussle. Mr. McGovern.
STATEMENT OF HON. JAMES McGOVERN, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF MASSACHUSETTS
Mr. McGovern. Mr. Chairman, speaking of firefighters----
Chairman Nussle. Is that the reinforcements you are calling
for? You are good.
Mr. McGovern. Mr. Chairman, I appreciate the opportunity to
testify today. I am not going to take up the full 5 minutes,
and I am going to submit my statement for the record.
I just want to associate myself with the remarks of my
classmate from New Jersey Mr. Pascrell and thank him for his
leadership on the FIRE Act, which really is very important to
our fire departments all across the country.
As he mentioned in his statement, I am from Worcester,
Massachusetts, and in December 1999, we lost six brave
firefighters who were fighting a fire in an abandoned building
and looking for homeless people. They lost their lives, and
many of their colleagues believe that with better equipment,
the loss of life would not have been so great.
I don't know whether we can predict that with any accuracy
or not, but the fact of the matter is that our fire departments
are lacking in the state-of-the-art equipment, much of what is
available right now on the market, because of lack of resources
and lack of funding, and it just seems to me if we expect them
to protect our communities and to save lives, that we need to
make sure they have the resources to do their job.
I know that, speaking for the firefighters in Worcester who
came down here and lobbied very hard for Bill Pascrell's bill,
that they were somewhat disappointed to say the least when they
saw the budget blueprint and saw that future monies for this
program were basically eliminated. It was determined in his
budget blueprint this was not an effective use of Federal
resources. Well, you know, protecting our communities is an
effective use of Federal, State and local resources. We are all
in this together.
I think that we need to do more to support our firefighters
in the same spirit we have done more to support our police
officers, which I think has been a great success story. Our
police departments all across the country have benefited from
the Federal resources we have funneled back home.
In addition, in the budget blueprint, the administration
also eliminated funds for this program called Project Impact,
which is another program which is part of FEMA. Project Impact
has saved many lives and billions of dollars by ensuring that
communities all across the Nation are as resistant to disaster
as possible, from earthquakes in California, to hurricanes in
South Carolina, to the tragic fires that plagued my home State
of Massachusetts.
Ironically, on the same day that this budget blueprint was
published, we had a massive earthquake in Seattle, Washington,
in a city that has benefited greatly from Project Impact, and
Washington Governor Gary Locke has said that as a result of
Project Impact dollars, earthquake preparedness offered by FEMA
had a tremendous amount to do with minimizing the damage and
injury of that recent earthquake.
You know, both of these programs, I think, are vitally
important for the safety of our communities, and I am hoping
that what was printed in the budget blueprint of this
administration was basically a recommendation that maybe wasn't
very well researched, and people maybe thought that these were
programs that were expendable. What I am hoping is that this
committee will make it clear that these are priorities of the
Congress, that they deserve to be funded, that this is in part
a responsibility of the Federal Government, and we need to do
much more, much more than, quite frankly, has been allocated
for these programs to help our firefighters and to protect our
communities.
With that, I will submit the rest of my testimony for the
record. But, again, I urge that you listen to Mr. Pascrell's
words and that we reinstate these programs.
[The prepared statement of James McGovern follows:]
Prepared Statement of Hon. James P. McGovern, a Representative in
Congress From the State of Massachusetts
Thank you for allowing me to testify here today. I am here today to
strongly urge this committee to reinstate full funding for the FIRE act
and FEMA's Project Impact in the FY 2002 budget. Every year, across
this nation, over 100 fire fighters are killed in the line of duty. In
1999, the number of fire fighter deaths was up by over 20 percent. The
time to address the nationwide lack of proper funding for fire
personnel and facilities is NOW. Just as important, Project Impact has
saved dozens of lives and billions of dollars, by ensuring that
communities all across the nation are as resistant to disaster as
possible, from earthquakes in California, to Hurricanes in South
Carolina, to tragic fires in my home state of Massachusetts.
Despite their proven effectiveness, these two programs were
summarily dismissed in President Bush's FY 2002 budget blueprint.
Ironically enough, the proposed FEMA cuts were printed in the Budget
Blueprint the same day a massive earthquake hit Seattle, Washington--a
city that has benefited greatly from Project Impact. Washington Gov.
Gary Locke has said that as a result of Project Impact dollars,
earthquake preparedness offered by FEMA had a tremendous amount to do
with minimizing damage and injury in the recent quake. Project Impact
is more than just money, it brings communities together. As former
Director James Lee Witt said recently, `` The big thing is that it gets
people in the community involved in eliminating the risks themselves.''
The FIRE Act is equally important. Last year, 285 members of
congress co-sponsored the FIRE Act before it was added to the FY 2001
Department of Defense Appropriations Bill. This tremendous outpouring
of bipartisan support for one piece of legislation is proof of the
importance of this issue. Fire departments all over this nation, and in
each one of our districts, are in dire need of updated equipment,
increased safety measures, and heightened training. In December 1999,
my hometown of Worcester lost 6 brave fire fighters in a tragic blaze
in an abandoned cold-storage warehouse. The city of Worcester is
currently applying for a FIRE Act Grant to build a new fire training
facility to better train our fire fighters in dealing with on the job
conditions. In an effort to avoid similar tragedies in the future, FEMA
Director James Lee Witt visited Worcester and granted the city $100,000
in Project Impact funding to kick off a pilot program to deal with the
problem of abandoned buildings, a problem that is plaguing many of this
country's cities and towns. From Boston to Los Angeles, abandoned
buildings across America are creating death traps for fire fighters and
homeless citizens in urban areas. The Worcester pilot program, funded
by Project Impact dollars, will be a national model for the handling of
these dangerous structures. In President Bush's budget blueprint, both
the Fire Act and Project Impact are dismissed as inneffective, and
beyond the scope of the Federal Government. As the Worcester experience
shows, nothing could be further from the truth. Tragedies can be
prevented, but not if vital FEMA programs such as these are eliminated
in the name of a huge tax cut. We must learn from the past, so that we
are not condemned to repeat it.
I strongly urge each of you to reconsider this dangerous
elimination of vital FEMA funding. Both Project Impact and the FIRE Act
are crucial to safety of our citizens across the nation, and their
complete elimination from the budget do nothing but make our
communities more dangerous places to live.
Chairman Nussle. I appreciate the advocacy of both of you
on this. Regardless of whether somebody may believe it is a
Federal function or not, I think we all know that--and I
supported your FIRE Act--that there are unfunded mandates that
also go back; that in part this was an attempt to try and meet
that obligation as well, and that needs to be responded to. If,
in fact, it is not a Federal responsibility, then why do we
have all of the mandates and regulations that come down from
our all-knowing bodies that seem to know quite a bit about it,
even though it is not a Federal function?
So I think you have a powerful argument, and we will
certainly take a look at it.
Mr. McGovern. Thank you very much.
Chairman Nussle. Mr. Gonzales.
STATEMENT OF HON. CHARLES GONZALEZ, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Gonzalez. Good afternoon, Mr. Chairman. Thank you very
much, and to Ranking Member Spratt. It is a real pleasure to
appear before you this afternoon and discuss some of the budget
priorities for my district, which is half of San Antonio, the
eighth largest city in the Nation, as well as the impact for
all of south Texas.
I will briefly go over the six points I was going to cover
and that are covered in more detail in the paper, in the
statements that I have presented formally. Please do not
interpret the brevity of my summary with the importance of the
matters.
First is Kelly Air Force Base. You would wonder, how could
one Air Force base loom so large in a city's future? Kelly Air
Force Base in the first round of BRAC has been scheduled for
formal closing this coming July. We will realize a loss of
19,000 jobs. At the present time we have a nonprofit entity
that is attempting to redevelop Kelly and has been able to
recapture about 4,000 of those jobs.
The problem with the BRAC process has been--and I think
other bases which have been closed have also encountered--is
that those promises have not really been kept, and that is
there has not been the kind of support that the Federal
Government indicated would be there for the redevelopment of
these bases.
Much of the prime equipment has been removed from the base.
You are left with some of the older buildings, which require
either demolition or vast improvement. Even the runway, which
we have been guaranteed the private sector's joint use with the
military, has been co-opted to some extent and really deprives
us of a valuable asset. The infrastructure and the
environmental remediation that is necessary is immense, as I
have told you about the buildings.
But I need to tell you about a serious and pressing problem
for a large section of my district, and that is the
environmental damage left behind by the military after years of
use. As you understand and everyone would know, Air Force bases
did not have to comply with certain State and Federal mandates
and regulations, and therefore today we have pollution that
extends far beyond the base. It now has a tremendous impact on
our local health services in San Antonio, and the Federal
Government definitely has a responsibility.
Priority number two is the infrastructure needs arising out
of increased trade with Mexico. I am a supporter of NAFTA, and
I welcome it and the great opportunities it poses for the
entire State and the Nation. Cross-border trucking will soon be
a reality. That means there is no doubt we will have increased
accidents and more air pollution, along with all its benefits.
More roads will need to be constructed. We will need more
safety personnel and inspection stations, and the State will
require some assistance from the Federal Government. We will
also have the tremendous impact on Customs resources.
Number three, increased law enforcement and judicial
resources in the south Texas border area. Because of NAFTA and
the increased traffic, you would have to be there to believe
the tremendous increase in traffic, we will need more judges
along our border States, and especially in the Laredo and Del
Rio areas of Texas, for the drug-related and immigration cases
which currently are backlogging all of the dockets. We will
need more Customs agents for all of the obvious reasons and a
tremendous investment in technology when it comes to the
Customs outposts throughout the border areas.
Number four is school construction. San Antonio may be the
eighth largest city in the United States, but it also happens
to be the second poorest large city in the United States. Where
you have a school system district that relies on property
taxes, you have serious problems where you have a very poor tax
base.
We are talking about school construction. There is not a
school district in San Antonio among the poorer ones that have
not had a recent bond election for school construction. We know
of past plans regarding the Federal assistance with those
endeavors, and I think it is important for us to step up to the
plate and do our part.
Number five, increased needs of veterans. As indicated,
Kelly may be closing, but we still have four other bases. Along
with that means we have a tremendous number of retired military
personnel in the area, and with their increasing age comes
increasing needs, and they must be addressed immediately.
Number six, increased needs of active duty military
personnel. We still have those four bases which we are very
grateful for, but we have neglected those buildings and the
facilities. What we are talking are quality-of-life issues for
the personnel, the Armed Forces as well as their families.
We have base schools--we have three base schools in San
Antonio. That means we have schools that are contained within
the confines of a base. These are independent school districts
which rely on Department of Education funds for funding because
they do not have a property tax base like other school
districts.
We now have buildings that have been in existence for a
period of 50 years, when truly they were only planned to serve
their purposes for 30 years. We are talking about the education
of the children of our men and women in uniform.
I have gone over briefly and summarized important issues,
but truly they are not unique to San Antonio, and there are
many Members in the House of Representatives that will face the
same dilemma with the other round of BRAC closings or have
already been the targets of closing.
Also, please note that five of the six areas I have covered
are all a direct result of Federal Government activities in my
District. We are grateful for the Federal Government's
activities and the benefits that it produces, but the Federal
Government also has a responsibility to assist the local
government and the State governments in making sure that we can
adjust and do the necessary repairs, remediation and make sure
that when the military leaves that they do leave it in better
shape than they found it.
Thank you very much, and I appreciate your consideration.
Chairman Nussle. Thank you very much for your testimony.
[The prepared statement of Charles Gonzalez follows:]
Prepared Statement of Hon. Charles A. Gonzalez, a Representative in
Congress From the State of Texas
Mr. Chairman, Ranking Member and members of the Budget Committee,
thank you for giving me this opportunity to present to you the budget
priorities for San Antonio the nation's 8th largest city, my
constituents and many of the citizens of South Texas. First let me
outline the basic issues we are facing in my part of the country,
namely: (1) Kelly AFB closure and the subsequent redevelopment and
environmental contamination issues; (2) Infrastructure needs arising
out of increased trade with Mexico; (3) Increased law enforcement and
judicial resources in the South Texas border area; (4) School
construction and teacher retention in the region; (5) Increased needs
of veterans living in this area; (6) Increased needs of active duty
military personnel living on the remaining bases in the area,
especially, housing and base schools. I should begin by pointing out
that all of these issues are interrelated and have a direct effect on
the economic development of our region.
1. Kelly AFB Issues. In the first round of BRAC, Kelly AFB in San
Antonio was slated for closure. This closure will take place this
coming July. There has been a great deal of redevelopment activity that
has taken place over the last few years as the city prepares for the
economic fallout from the closure. The city has formed a non-profit
entity to oversee the development, and to date about 4,000 jobs have
been created, but the job loss from the base closure will be closer to
19,000.
When BRAC was originally presented to Congress there were promises
made, especially with regards to the closure of Kelly, that led the
people to believe there would be a substantial amount of assistance in
the redevelopment process. For Kelly this has not been the case, and as
far as I can tell, it has not been the case for the other closed bases.
Kelly is not necessarily asking for more money, but in this case the
military has chosen to keep most of the prime equipment and transfer it
to an adjoining base, leaving Kelly with only the older equipment and
buildings. In addition, Kelly is guaranteed joint use of the runway,
but the military needs have impacted the private sector's ability to
fully utilize this valuable asset.
The military has also left Kelly with huge infrastructure and
environmental remediation needs, to the tune of some $100 + million.
Roads need to be built, old buildings need to be demolished, noise
abatement work needs to be done to comply with local and Federal laws,
and a new hangar needs to be built.
Added to this is the tremendous amount of environmental damage left
behind by the military after decades of use. The pollution extends far
beyond the base. With this pollution comes the incumbent health
concerns, meaning the city has to provide screenings for individuals
who may have been affected by contaminants.
2. Infrastructure Needs Arising Out of Increased Trade With Mexico.
With the impending implementation of the cross border trucking
provisions of NAFTA over the next few months, South Texas will feel the
full brunt of the increased traffic that accompanies the increased
trade promised by NAFTA.
The infrastructure needs stemming from this increased traffic are
tremendous. San Antonio, Laredo, and many other cities along the border
are already facing huge traffic problems, increased accidents and more
air pollution. More roads need to be built and truck checkpoints need
to be established to help control traffic, ensure safety regulatory
compliance and preserve the integrity of our roadways.
3. Increased Law Enforcement and Judicial Resources in the South
Texas Border Area. Another NAFTA related need is increased law
enforcement resources for the border. We need more judges, because our
courts are overrun with immigration and drug-related cases as well as
other issues arising out of the increased traffic along the border.
In addition, to keep traffic flowing, more customs agents are
needed to inspect trucks more quickly and keep them from backing up at
the customs check points. From the standpoint of Customs, adding the
latest technology is also vital to this mission. Finally, we also need
additional public safety officers on the highways looking out for
potential hazards.
4. School Construction. As one of the poorest regions in Texas, the
border area has many educational issues to contend with, chief among
these is school construction. As with most other localities, school
funding is based solely on property taxes, meaning poorer school
districts often lack the resources to make needed repairs or to build
new schools. San Antonio, like many other cities, has not built many
new schools in the last 30+ years. But, unlike many other parts of the
country, San Antonio's population has grown exponentially due to
immigration, causing our schools to be severely overcrowded. Almost
every school district in San Antonio has issued a bond to construct new
schools. Any significant Federal help is greatly needed in these
poorer, property tax based school districts.
5. Increased Needs of Veterans. As with most other cities San
Antonio has many veteran issues. But unlike most other cities, San
Antonio has five military bases, meaning the number of retired military
personnel in our area is greater than most other cities. We need
additional funding to meet the ever increasing needs of the veterans
living in San Antonio.
6. Increased Needs of Active Duty Military Personnel. With our now
four remaining bases, San Antonio has a large active duty military
population, including dependents. Due to the severe neglect they have
faced over the last 30 to 40 years, there are tremendous needs that
must be met. The first and most important of these are the conterminous
school districts. These are base schools that serve military
dependents, but are independent of the military. They receive their
funding from the Department of Education, but get little in the way of
funding. Consequently, the schools which were built to last 30 years
are now in their 50th year of service. This is no way to treat our
military personnel and their families.
Finally, I want to add that we must address the military housing
crisis that exists on our bases. Just as with the schools, we must
ensure that our service men and women have decent accommodations for
them and their families.
I know I have given you a lot to think about and I know not
everything will be able to be fully funded, but as you prepare your
outline of budget priorities, I hope you will give these issues serious
consideration. I have also included recent news articles discussing
these issues to further help you understand some of our problems.
Thank you.
Chairman Nussle. Ms. DeLauro, we don't mean to stick you
behind the corner there. If you would like to move over.
Ms. DeLauro. All right. Let me do that.
Chairman Nussle. It is just such a big table that that ends
up happening.
Welcome. Your full testimony will be made a part of the
record, and you may summarize.
STATEMENT OF THE HON. ROSA DELAURO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CONNECTICUT
Ms. DeLauro. Thank you so very much, Mr. Chairman.
I appreciate the opportunity to testify this afternoon, and
I thank you for the invitation. I thank the ranking member, Mr.
Spratt. It is always a pleasure to work at your side. And I am
delighted to be here with my colleague, Rush Holt.
I think that this is a critical turning point for this
Nation, and I believe that the budget resolution that we adopt
for this fiscal year can either start us on the road back to
past failures or on to a successful future.
When the President presented his budget to the Congress
last week, I applauded him for setting a positive tone for the
country, for trying to find areas of agreement----
Mr. Spratt. Could you pull the mike a little closer?
Ms. DeLauro [continuing]. And where we can make--I usually
have a very loud voice, John--so, anyway, areas of common
ground, if you will, and areas of agreement where we can make
progress.
While I agree with many of the President's priorities, I am
concerned about the overall budget and, quite frankly, the lack
of detail provided so far. I am also concerned about the fiscal
discipline that is potentially at risk because this has been so
important to our strong economy and the need to make
investments for our families.
Just one point, and I won't belabor this because there is
agreement and disagreement, I am concerned that the tax plan
that has been presented doesn't provide tax cuts for those who
need it the most and crowds out areas where we need to make a
real investment.
Since I came to the Congress, I have spent a lot of time
trying to advance two critical areas, child care and
development and women's health; and I think that this is where
the budget raises a number of serious concerns.
Consider that more than five million American children
under the age of 3 are in the care of other adults while their
parents work outside of the home; 25 percent of these children,
three million, are living below the poverty line. These are
children who are too often left behind. They are less likely to
receive the care that they need from parents or other child
care providers to be able to grow and develop as healthy and
thriving youngsters; and by the time they get to school, they
are disadvantaged.
Head Start and the Child Care and Development Block Grant
Program are critical parts of the solution. Last year, Head
Start received a boost of about $1 billion. Yet Head Start
serves currently little more than half of the 4-year-old
children that are eligible for the program. A similar increase
this year would allow for the enrollment of another 82,000
children.
The budget outline, however, does not address future
funding for Head Start. In fact, the words ``Head Start'' do
not appear in this budget blueprint at all. Quite frankly, that
is not exactly reassuring; and I urge the committee to make
room in its budget resolution for this critical program.
Access to child care is critical for low-income families
who are struggling to make ends meet. The Child Care and
Development Block Grant Program focuses on improving child care
quality and access for those families who need it to work and
to remain self-sufficient. While the President's budget claims
to increase the block grant program by $200 million this year,
it actually creates a set-aside within the program of $400
million for a new after-school care initiative. So this
``increase'' is, in fact, a $200 million cut below last year's
level. I support after-school programs, but it should not come
at the expense of the core mission of the Child Care and
Development Block Grant Program.
We need to focus in on child care from zero to three. The
President's blueprint is so general it doesn't focus in on this
area. We have so many studies on when kids are learning. It is
zero to three, zero to five. I truly do believe that we are
criminally at fault, given the amount of information that we
have about when youngsters are learning and what our mission
needs to be in terms of doing something for them.
Let me just quickly mention the area of women's health
research. There is nothing by way of detail in this area in the
President's budget plan. Again, significant cause for concern
due to the lower than needed increase in the budget for meeting
what is a bipartisan goal of doubling the National Institutes
of Health budget. By including only a $2.8 billion increase in
this year, a $4.2 billion jump would be required the meet the
goal in 2003. This is a massive budgetary hurdle that will be
difficult to clear in a single year.
Let me just mention one or two items that are specifically
of concern to the challenges in my community. This has to do
with defense policy and, again, I think some flawed direction
in terms of the kind of commitment we are trying to make to
missile defense which puts in jeopardy important weapons
programs such as the F-22 and the Joint Strike Fighter. These
are systems that are--do look to the future and look to the
future both in terms of our needs and in terms of our threats.
Let me just conclude by just thanking you again for the
opportunity to be here. I am hopeful that we can come together
on a fiscally responsible budget that does cut taxes for all
families, that it does invest in education and Social Security
and Medicare, as we have been talking about, and keeps us on
track to paying off the debt.
I think we have a chance to work together to put together a
blueprint that sets us on the right course for this fiscal year
and that takes into consideration some of the issues that are
so critical to our families today. I believe that government
has an obligation to reflect what is going on in the lives of
families today, and the public policy that we engage in needs
to reflect that. I think in terms of where families are working
today, two people in the workplace, everybody giving it their
all, that our public policy has--in terms of families today has
lagged behind their needs and their efforts.
Again, thank you for letting me come before you this
afternoon.
Chairman Nussle. Thank you. And, as a classmate, I have
always appreciated your passion that you bring to the
arguments; and we appreciate that.
Ms. DeLauro. Thanks so very much.
[The prepared statement of Rosa DeLauro follows:]
Prepared Statement of Hon. Rosa L. DeLauro, a Representative in
Congress From the State of Connecticut
Good afternoon. I would like to thank Chairman Nussle for extending
an invitation to Members to come before the Committee to share their
thoughts and views on the Budget Resolution for Fiscal Year 2002. I
believe we stand at a critical juncture in the debate over fiscal
policy in America and I am grateful the Chairman has made this time
available.
Let me also thank Ranking Member John Spratt, a good friend and one
of the most thoughtful Members of the House. Members of the Democratic
Caucus know they can count on John Spratt's insightful advice and
candid counsel on so many issues related to the nation's budget. It is
always a pleasure to work by his side.
As I stated, I do feel that we are at a critical turning point for
the nation, and given the scope of the changes in spending and tax
policy that are being debated, there is a great deal at stake. The
Budget Resolution adopted for this fiscal year can either start us on a
road back to past failures or on to a successful future.
When the president presented his budget to Congress last week, I
applauded him for setting a positive tone for the country and for
trying to find areas of agreement where we can make progress.
While I agree with many of the priorities that the president
outlined, I am very concerned about his overall budget and the lack of
detail he has provided thus far. It risks the fiscal discipline that
has been important to our strong economy. And it fails to make the
investments that our families need.
The president's tax plan could weaken our economy and fails to
provide fair and significant tax cuts for those who need it the most.
Instead of cutting taxes for working and middle class families, the
president's budget gives 43 percent of the benefit of his tax cut to
just the top 1 percent of earners.
If we act responsibly, we can have significant tax cuts for all
Americans and still meet the nation's other pressing needs, such as
education, Social Security, a Medicare prescription drug benefit, and
national defense. Yet by pressing forward with such a large,
inequitable tax cut, the president makes it impossible to meet these
other priorities.
The president's budget will put American families in double
jeopardy. If his tax cut should pass, the president must either dip
into Social Security funds to pay for his other stated priorities or
begin deficit spending, returning us to the days of higher interest
rates and slow growth.
Not only would the president's budget fail to provide tax cuts for
all American families, it increases the chance for higher interest
rates and an economic slowdown that would hit working families the
hardest. The president's plan provides the least benefit for working
families, but leaves them the most at risk.
Additionally, and contrary to the president's statement, his tax
cut would not provide any immediate stimulus to spur our economy. The
majority of the tax cuts do not go into effect for years. In fact,
seventy-one percent of the tax cuts would occur after 2006.
This fact represents a critical misstep if the tax cut's intent is
to provide economic stimulus. Even Alan Greenspan has agreed that the
president's tax plan provides little or nothing in the way of a boost
for our economy. We would do better to provide greater relief, faster,
and make sure that it helps working and middle class families.
I also strongly agree with the position of my Blue Dog colleagues
that we should act on a budget resolution before voting on tax or
spending legislation. No family or business would make a decision that
would have a major impact on their finances for the next 10 years
without first sitting down and working out a budget to figure out what
they can afford. It would be like writing checks without balancing your
checkbook.
This is not just an argument about process or arcane budget rules,
although these processes and the work of this committee are a vitally
important part of how the Congress accomplishes its work. This is about
an important principle about acting responsibly to balance priorities
important to our constituents. It is impossible to balance these needs
unless we see the big picture.
In the remaining time I have, I would also like to briefly present
my concerns about how this year's budget could affect a number of
programs that I believe are important nationally, as well as in my own
district.
Since I came to the Congress, I have spent a great deal of time and
effort trying to advance proposals in two critical areas: child care
and development and women's health. The president's budget raises a
number of serious concerns about the president's commitment to these
two critical issues.
Consider this: more than 5 million American children under the age
of 3 are in the care of other adults while their parents work outside
of the home. Twenty-five percent of these children--3 million
nationwide--are living below the poverty line. These are the children
who are too often left behind. They are less likely to receive the care
they need from parents or other child care providers to grow and
develop heathy and thriving. By the time they arrive in school, they
are already at a monumental disadvantage.
Head Start and the Child Care and Development Block Grant Program
are critical parts of the solution. Last year, Head Start received a
big boost with a one billion dollar increase. Yet Head Start currently
serves only a little more than half of the 4 year old children eligible
for the program. A similar increase this year would allow for the
enrollment of another 82,000 children.
The president's budget outline, however, does not address future
funding for Head Start. In fact, the words ``Head Start'' do not appear
in his budget blueprint at all; not exactly a reassuring development. I
urge the Committee to make room in its budget resolution for this
critical program.
Access to child care is critical for low-income families struggling
to make ends meet. The Child Care and Development Block Grant program
focuses on improving child care quality and access for those families
who need it to work and remain self-sufficient. While the president's
budget claims to increase CCDBG by $200 million this year, it actually
creates a set-aside within the program of $400 million for a new after-
school care initiative. For CCDBG, this `increase' is in fact a $200
million cut below last year's levels. While I support after-school
care, it should not come at the expense of the core mission of CCDBG.
In the area of women's health research, the president has thus far
provided nothing in the way of detail. There is, however, significant
cause for concern due to the lower than needed increase his budget
provides to meet the bipartisan goal of doubling the National
Institutes of Health budget. By including only a $2.8 billion increase
this year, a $4.2 billion jump would be required to meet the goal in
2003. That is a massive budgetary hurdle that will be difficult to
clear in a single year.
In addition to these critical national needs, my constituents are
also concerned about what the president's budget will mean for a number
of critical challenges our community faces.
Defense policy and spending is also a critical priority. While I
was pleased with the president's stance during the recent campaign, I
was very disappointed that his budget failed to make necessary
investments. In recent years, we have worked on a bipartisan basis to
address quality of life issues for men and women in uniform. I am
pleased that the president seeks to continue this commitment. However,
our budget resolution must address what I see as critical shortcomings
in the president's plan.
The president's desire to continue to pursue a flawed missile
defense policy would require cuts of important weapons programs such as
the F-22 and Joint Strike Fighter (JSF).
The F-22 is the Air Force's fighter for the next century. This
stealth aircraft is designed to penetrate enemy airspace, and achieve
first-look/first-kill capability against multiple targets. The JSF is
being developed to be an affordable, lightweight, stealth fighter/
attack plane for the Navy, the Marines, and the Air Force. Both
programs are vital if we are to address the threats of the near future.
Let me once again thank Chairman Nussle and Ranking Member Spratt
for providing me with the opportunity to speak with you. I am hopeful
that we can come together on a fiscally responsible budget that cuts
taxes for all families, that invests in education, Social Security and
Medicare, and keeps us on track to paying off the debt. While I was
disappointed with the budget outline the president provided, we have a
chance now to work together to craft a bipartisan budget roadmap that
sets us on the right course for the coming fiscal year and those that
follow. Thank you.
Chairman Nussle. Ms. Pelosi, welcome. Your testimony will
be made part of the record, and you may summarize.
STATEMENT OF THE HON. NANCY PELOSI, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Pelosi. Thank you, Mr. Chairman, Mr. Spratt, Mr. Holt.
Thank you for the opportunity to testify this afternoon.
Before I begin my testimony, though, I want to thank this
committee for early recognizing the challenge that AIDS would
be presenting to our society. That is where I am focusing my
testimony today.
As a member of the Subcommittee on Appropriations with
Congresswoman DeLauro, I fully support all the priorities she
talked about and hope that the--we are anxiously awaiting the
budget resolution and hope that it would provide us with the
resources necessary to meet the priorities of all of America's
families. As I said, though, today I will focus on the AIDS
epidemic.
To define the problem, for over a decade new HIV infection
in our Nation has remained steady at approximately 40,000 each
year. It is estimated that of these new infections half occur
in young people under the age of 25. In addition, people of
color now represent a majority of new AIDS cases; and the
proportion of new AIDS cases among women has grown from 11
percent in 1990 to 23 percent in most recent statistics.
Internationally, the extent of the AIDS-HIV epidemic is
staggering. In 2000, an estimated 5.3 million were newly
infected; and three million people died of AIDS, the highest
annual AIDS death total ever.
I won't read my entire testimony, Mr. Chairman and members
of the committee, Ranking Member Spratt and members of the
committee, but I will walk through it with you.
The recent investments that have been made domestically and
internationally in HIV care treatment and prevention and
research have significantly strengthened our ability to combat
this global pandemic and dramatically improve the lives of
millions of people who are living with HIV and AIDS. It is
imperative that we do not abandon this important commitment
that this Budget Committee made so many years ago at the start
of the AIDS epidemic.
Domestically, basically, we talk about AIDS and HIV in
three categories, research, care and prevention. Domestically,
the substantial increase in funding of the National Institutes
of Health contained in the President's budget outline is an
important part of the research investment. By advancing
scientific knowledge of the immune system and viral infections,
HIV and AIDS research has also yielded significant benefit s
for people living with other diseases such as cancer and
hepatitis, indeed any disease that is related to the immune
system.
Research is a good investment. We received estimates,
however, that nonNIH discretionary health spending will need to
be cut by 5.4 percent to account for the President's tax cut
and other spending priorities in the Bush outline. Given the
significant level of unmet needs in HIV-AIDS treatment,
prevention and housing, cuts of this magnitude would be
disastrous.
Some of the ways that we invest in our research must be
matched with a commitment to our public health infrastructure
in order to ensure that the knowledge that we gain through
research is translated into improved health care for people
living with HIV-AIDS and stronger HIV prevention. So I would
hope that we would include substantial increases for these
programs in the budget resolution.
Among them are--and turning to care, the Ryan White Care
Act administered by HRSA was modelled on a system of community-
based care that San Francisco developed to face the AIDS crisis
in the '80's. I want to address the changing nature of the HIV-
AIDS epidemic along with the continuing impact of HIV-AIDS in
traditionally affected communities, that has created new
challenges. So we have to address the research and the care in
ways that recognize the changing faces of AIDS.
But most important in that is prevention. Prevention is
important not only from a public health perspective but also
from an economic perspective. The CDC estimates that there are
6 to 700,000 people living with HIV in the U.S. Lifetime
treatment for these people is $155,000. So from a strictly
financial standpoint it saves lives, but it also saves money to
prevent. And how we deal with that is to prevent, obviously,
transmission.
CDC programs are reaching individuals and helping them
change risky behaviors. We also see a risk significant link
between substance abuse and the HIV epidemic. Therefore,
funding for the Substance Abuse and Mental Health Services
Administration, SAMHSA, is very important. Numerous studies
have demonstrated the effectiveness of drug and alcohol
treatment and education in relationship to this.
I want to call your attention to the Minority HIV-AIDS
Initiative, because significant progress must and has and must
continue to be made to develop the capacity to combat HIV-AIDS
within communities of colors.
My statement goes into further detail there, but in the
interest of the committee's time I will proceed to talk about
another area of concern in terms of AIDS, and that is AIDS
housing for people living with HIV and AIDS. The Department of
Housing and Urban Development's OPWA program, the needs are
greater now than ever; and my statement goes into detail there.
I am hoping that as I keep my comments shorter the budget
allocation will be larger.
I would like to also just talk--spend a moment to talk
about Medicaid expansion for HIV positive A systematic
individuals as the next critical step in meeting the needs of
communities that are disproportionately impacted by this
epidemic.
Mr. Chairman, Ranking Member Spratt and Mr. Holt, right
now, in order to go on to Medicaid, you have to have a full-
blown case of AIDS. The science tells us that you can save
lives, improve the quality of life if you intervene sooner when
somebody has HIV. So it is very important to get people with
HIV onto Medicaid and not wait until they are full-blown case
of AIDS. That is what Mr. Gephardt and I are proposing in our
legislation, and we are asking for funding in this bill for
HIV-infected people to be on Medicaid. It is a savings even in
the short but certainly the long run.
I just want to turn to internationally for a moment. We
hope that we can double to $465 million our international
funding for HIV-AIDS. The figure we really need is $7 billion,
just to give you a perspective on far we have to go. We also
must develop a vaccine.
The international is part of our conscience that we should
do this. We have the resources here in terms of research, care
and treatment but--and prevention, but the fact is, members of
the committee, it is in our interest to prevent the spread of
AIDS internationally for economic reasons, for national
security reasons and in terms of research. We cannot do the
research effectively unless we have this broader base.
My time has expired, so I will thank you for the
opportunity to testify today. I thought I was reducing my
statement down, but it is a big issue, a big problem. This
committee has been there from day one. I am grateful for that.
Again, thank you for the opportunity to testify today.
Chairman Nussle. Ms. Pelosi, this is a very important area.
We may be able to find an opportunity later on this year--I
mentioned it to Ranking Member Spratt--to have a hearing to
discuss this in a little bit more detail.
Ms. Pelosi. Wonderful.
Chairman Nussle. But it probably could or should include a
number of infectious diseases, that maybe--Mr. Spratt informed
me that possibly hepatitis C is another area of concern that we
need to keep an eye on; and it may have some very dramatic
budgetary and fiscal impact as the years go on. So I would be
interested in working with you to see if--how we might
facilitate something like that.
Ms. Pelosi. Thank you Mr. Nussle. All of these are
connected--hepatitis C, tuberculosis. All of the infectious
disease issues are connected. I appreciate your comments and
Mr. Spratt's input into that. His leadership over the years has
been magnificent. And thank you, Mr. Holt, for your courtesy
today.
Chairman Nussle. Thank you.
[The prepared statement of Nancy Pelosi follows:]
Prepared Statement of Hon. Nancy Pelosi, a Representative in Congress
From the State of California
Mr, Chairman, Ranking Member Spratt, thank you for this opportunity
to testify today. As a Member of the Appropriations Committee, I will
be closely following the development of the Budget Resolution in the
hope that we will be provided with the resources necessary to meet the
priorities of all American families. Today, I will focus on the AIDS
epidemic.
For nearly a decade, new HIV infections in our nation have remained
steady at approximately 40,000 each year. It is estimated that of these
new infections, half occur in young people under the age of 25. In
addition, people of color now represent the majority of new AIDS cases
and the proportion of new AIDS cases among women has grown from 11
percent in 1990 to 23 percent in the most recent statistics.
Internationally, the extent of the HIV/AIDS epidemic is staggering. In
2000, an estimated 5.3 million were newly infected and 3 million people
died from AIDS, the highest annual total of AIDS deaths ever.
The recent investments that have been made, domestically and
internationally, in HIV care, treatment, prevention, and research have
significantly strengthened our ability to combat this global pandemic
and dramatically improved the lives of the millions of people who are
living with HIV and AIDS. It is imperative that we do not abandon this
important commitment.
Domestically, the substantial increase in funding for the National
Institutes of Health (NIH) contained in the President's budget outline
is an important part of that investment. Research at the National
Institutes of Health (NIH) has yielded great results. AIDS research has
doubled the survival time of a person with AIDS and vastly improved the
quality of life for thousands of Americans and their families. By
advancing scientific knowledge of the immune system and viral
infections, HIV/AIDS research has also yielded significant benefits for
people living with other diseases such as cancer and hepatitis.
Research is a good investment. However, we have received estimates
from Mr. Spratt that non-NIH discretionary health spending will need to
be cut by 5.4 percent to account for President Bush's tax cut and the
other spending priorities that are presented in the Bush budget
outline. Given the significant level of unmet need in the areas of HIV/
AIDS care, treatment, prevention, and housing, cuts of this magnitude--
in fact, any cuts at all--would be disastrous.
The investment in NIH research must be matched with a similar
investment in our nation's public health infrastructure in order to
ensure that the knowledge that we gain through NIH research is
translated into improved health care for people living with HIV/AIDS
and stronger HIV prevention efforts. The Health Resources and Services
Administration and the Centers for Disease Control and Prevention are
the NIH's essential public health partners in the effort to combat HIV/
AIDS. Unfortunately, President Bush's budget outline did not emphasize
the need for strong investments in the HIV/AIDS programs administered
by HRSA and the CDC. These investments are a vital complement to NIH
research, and I urge my colleagues on the Budget Committee to include
substantial increases for these programs in the budget resolution.
The Ryan White CARE Act, administered by HRSA, was modeled on the
system of community-based care that San Francisco developed to face the
AIDS crisis in the 1980's. Today, CARE Act programs provide the
foundation for care and treatment for low income individuals with HIV
and AIDS. The recent declines we have seen in AIDS deaths are a direct
result of the therapies and services that have been made more widely
available through the CARE Act to large numbers of uninsured and under-
insured people with HIV and AIDS.
Although great strides have been made, there is much more to be
done. The combination therapies that have brought so much hope are
still not reaching all of those in need. And the changing nature of the
HIV/AIDS epidemic, along with the continuing impact of HIV/AIDS in
traditionally affected communities, has created new challenges for the
CARE Act.
In addition, new HIV infections have remained constant at 40,000
per year. These new infections combined with the decline in AIDS deaths
means that more individuals than ever before are living with HIV and in
need of treatment regimens that are costly, complicated and lifelong.
As a result, the demands on HIV care providers have grown.
The changing nature of the HIV/AIDS epidemic, along with the
continuing impact of HIV/AIDS in traditionally affected communities,
has created new challenges for our HIV prevention efforts. And
increases in the number of people living with HIV/AIDS mean that there
are more opportunities for transmission of the virus. Although we have
made HIV/AIDS research a high priority in recent years, a cure or
vaccine is still many years away. As a result, HIV prevention efforts
take on an even greater importance for helping stem the tide of this
epidemic.
Prevention is important not only from a public health perspective,
but also from an economic perspective. The CDC estimates that there are
600,000-900,000 people living with HIV in the US. The lifetime medical
cost of treating each person infected with HIV is estimated at
$155,000. So each HIV infection that we prevent saves our health care
system a great deal of money, in addition to preventing other costs
including loss of earnings due to premature death from AIDS. Prevention
is clearly a cost-effective investment.
HIV transmission, like many health problems, is the product of many
factors. In order to reach as many people at-risk as possible, HIV
prevention programs at the CDC are addressing these factors through a
community planning process that allows localities to guide HIV
prevention efforts in their neighborhoods and communities.
CDC programs are reaching individuals and helping them change risky
behaviors. Studies have shown that the availability of counseling and
testing has a direct impact on the spread of this epidemic,
particularly among young people. The CDC recently reported that 90
percent of young people changed their sexual behaviors after
discovering they had HIV. When HIV is diagnosed, people do take action
to protect themselves and others. Unfortunately, current resources do
not allow counseling and testing programs to reach all those in need,
and one-third of the HIV infections in this country still go
undiagnosed.
There is also a significant link between substance abuse and the
HIV epidemic. Over two-thirds of all reported AIDS cases among women,
nearly two-thirds of the cases among children, and nearly one-third of
all cases among men are associated with substance abuse. In addition to
the dangers associated with needle sharing and injection drug use,
individuals who abuse alcohol, cocaine, or other non-injected drugs are
more likely to contract HIV than the general population because of the
link between drug use and unprotected sex.
The Substance Abuse and Mental Health Services Administration
(SAMHSA) supports HIV/AIDS prevention and outreach through
demonstration programs and the HIV/AIDS set-aside in the Substance
Abuse Prevention and Treatment Block Grant. Numerous studies have
demonstrated the effectiveness of drug and alcohol treatment and
education. SAMHSA's HIV programs must be strengthened in order to
address the dual epidemics of AIDS and substance abuse found in many
communities.
Significant progress has been made in the effort to develop the
capacity to combat HIV/AIDS within communities of color through the
Minority HIV/AIDS Initiative. While African Americans make up
approximately 12 percent of the total U.S. population, they account for
nearly 37 percent of AIDS cases. In addition, nearly two-thirds of all
women living with AIDS are African American. Hispanic Americans are
also disproportionately impacted. Hispanic Americans represent 13
percent of the total U.S. population, but account for 20 percent of all
new AIDS cases.
These demographic changes have created many challenges for our
nation's response to the epidemic. The Minority HIV/AIDS Initiative
provides the funding needed to enhance existing systems of HIV/AIDS
care in communities of color and to develop the service and
infrastructure capacity that these communities need to effectively
fight AIDS. Nearly all of the areas that I have discussed today are
impacted by the resources provided to this important initiative because
we must strengthen all aspects of HIV/AIDS programs in communities of
color, including prevention, care, and substance abuse treatment.
The need for housing assistance for people living with HIV/AIDS
through the Department of Housing and Urban Development's Housing
Opportunities for People with AIDS (HOPWA) program is greater now than
ever. The new treatments that are extending so many lives involve a
complicated regimen of medications, requiring certain medications to be
taken at certain times, certain medications to be taken after eating,
and still others on an empty stomach. This makes adherence very
difficult, and nearly impossible without stable housing.
As the number of people living with HIV/AIDS increases, so do the
number of cities and states qualifying for HOPWA formula grants. At the
same time, the rising costs of housing across the country, particularly
in urban areas where a large proportion of people living with HIV/AIDS
live, make it difficult for HOPWA to maintain current services without
funding increases. Increases in the number of eligible jurisdictions
means that without a significant increase in HOPWA funds, the funding
available for each HOPWA jurisdiction will be cut. I urge the Budget
Committee to include the resources necessary to meet this growing need
in the budget resolution.
I would also like to add that Medicaid expansion for HIV positive
asymptomatic individuals is the next critical step in meeting the
treatment needs of the communities that are disproportionately impacted
by this epidemic. Medicaid must play an expanded role in HIV care. With
the advent of powerful new therapies, it is unconscionable that people
cannot become eligible for Medicaid until they have lost the
opportunity for early and effective treatment of HIV. Representative
Gephardt and I introduced the Early Treatment for HIV Act in the last
Congress, and CBO estimated a first year implementation cost of $100
million. I urge you to include funding for this expansion of Medicaid
to include people with HIV in the budget resolution.
Now, to turn to the global epidemic. Over the course of the past
year, the world has finally, albeit belatedly, started taking notice of
the global AIDS pandemic and the havoc it is creating in the developing
world. I respectfully urge the Members of the Budget Committee to
provide the highest possible funding levels to combat global HIV/AIDS,
which is the world's most deadly infectious disease ever. The social,
economic, security and human costs of this crisis are devastating
entire nations. Increased funding for global AIDS programs must be
provided as part of a renewed commitment to a comprehensive and
adequately funded development assistance strategy addressing the new
challenges facing the developing world as a result of HIV/AIDS.
The United States must take the lead. Our investment in the fight
against the global AIDS pandemic not only has a direct impact, but it
also leverages significant funds from other countries and multilateral
institutions. Non-governmental organizations working to fight global
AIDS believe that the U.S. funding for global AIDS programs should be
doubled this year, to a total across all U.S. agencies and programs of
$464.5 million. Just to put this number in perspective for you, the
Joint United Nations Programme on HIV/AIDS (UNAIDS) estimates that $3
BILLION is needed annually for Africa alone to provide minimal care,
anti-viral drugs, and HIV prevention. Estimates of costs for an
effective response to the epidemic worldwide start at $7 BILLION
annually.
In FY 2001, Congress and the Administration significantly expanded
funding for global HIV/AIDS efforts with the LIFE (Leadership and
Investment in Fighting an Epidemic) initiative. The Foreign Operations
Appropriations Subcommittee, on which I have served as the Ranking
Democrat, succeeded in our effort to dramatically increase funding for
global AIDS at the United States Agency for International Development.
Programs which last year received $190 million for international
prevention, care, and education efforts, including programs to prevent
mother-to-child transmission and address the needs of the growing
population of AIDS orphans, will receive $315 million in the current
fiscal year.
So much more needs to be done.
Comprehensive prevention efforts have turned around HIV epidemics
in Uganda and Thailand, and averted an epidemic in Senegal. We know
that prevention and education programs work. The United States must now
demonstrate leadership in providing needed funding so that effective
programs can be expanded and replicated.
We must also invest in the efforts to develop a vaccine. Vaccines
are our best hope to bring this epidemic under control, and we must do
all we can to facilitate cooperation between the public and private
sectors in order to bring together the necessary resources and
expertise.
Unfortunately, these challenges are only the beginning. India
already has more infected people than any other nation, over 3.5
million. Experts are predicting that without significant efforts to
treat those with HIV and prevent new infections the number of people
living with HIV/AIDS in India could surpass the combined number of
cases in all African countries within two decades. Asia already
accounts for one out of every four infections worldwide. The Newly
Independent States in the former Soviet Union are also seeing
significant increases in their HIV infection rates. There has been a
six-fold increase in the number of HIV infections in Eastern Europe and
Central Asia in the last 4 years.
Developing nations will be unable to turn the tide on this epidemic
if even the most basic health care is unavailable or out of reach for
most of their citizens. Yet despite such scarcity, community-based
organizations in villages are doing much with little. People must be
educated about HIV and how to prevent its spread. Increased testing and
counseling opportunities are desperately needed. Basic care and
treatment that can be delivered in homes or makeshift clinics is
essential. And the need for support for the growing number of children
orphaned by AIDS looms large.
We are attacking HIV on many fronts: primary prevention and
surveillance through the CDC, strengthened health infrastructure in
developing countries through USAID, care and treatment provided through
the Ryan White CARE Act, adequate housing through HOPWA, a strong
commitment to research at the NIH, and substance abuse treatment
programs through SAMHSA. I hope that the budget resolution will include
adequate funding for each of these vital areas of public health.
Thank you again for the opportunity to testify today. I look
forward to working with you as the Budget process moves forward to
provide sufficient resources to move quickly toward the ultimate goal
that we all share, the end of the AIDS epidemic.
Chairman Nussle. Mr. Meeks, welcome to the committee. Your
testimony will be made part of the record, and you may
summarize.
STATEMENT OF THE HON. GREG MEEKS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEW YORK
Mr. Meeks. Thank you, Mr. Chairman and Ranking Member
Spratt. I thank you for the opportunity to testify before the
committee today.
I must say at the outset that I do testify somewhat out of
frustration. Given the process that we are currently engaged
in, the setting of budget priorities, I don't know if making a
priority of tax cuts first without having set the budget
follows our process. As a result, I have some problems with
reference to how we set what our priorities are, but I will
talk about that when I submit my statement.
You know I support the proposal to revive the American
people with a hard-earned tax cut, but I am equally concerned
about the established spending process which has to be governed
by this body for many years.
Today we are engaged with each other on the floor of the
House about the merits of a tax cut and which group of
taxpayers stand to benefit the most. We have wholly ignore d a
most vital part of our democratic system. We have completely
overlooked the people's agreed upon process by selecting
representatives to set budgetary parameters and priorities. My
concern about the process represents my first thoughts in
reference to current fiscal issues before the House. However, I
am equally concerned about other budgetary issuance I would
like to present to the committee and hopefully get some clarity
on how we as a body will approach them.
Many issues relate directly to the current administration's
budget, and this far-reaching tax cut essentially relies on far
too many uncertainties and projections. I am concerned, Mr.
Chairman, about the extent to which we rely on the CBO
projections as a basis for projected surplus. Forecast of
economic performance is risky at best as a planning tool and is
subjected to constant revisions, and even the best market
prognosticator already with estimates of over $2 trillion are
floating as well as a result of the Ways and Means Committee's
decision to accelerate the proposed 10 percent bracket ahead of
the President's own timetable. I feel that the Congressional
Budget Act will result in tax cuts at the expense of every
other potential priority we may identify as we conduct the
normal budgetary process in the House of Representatives.
Our foremost concern has been and must be to retain the
sanctity of the Social Security and Medicare surpluses. The
baby boomer generation is rapidly becoming our next wave of
Social Security recipients, and we must protect the surpluses
which rightfully belong to them.
The Congressional Budget Act grants the right and privilege
of the Congress to use the budget process to set the
priorities. In the absence of that process we are merely
responding or reacting to established parameters which have
little or nothing to do with the priorities established by the
process itself.
The tax cuts as well as the repayment in nondiscretionary
spending must be part of a greater inclusive budget process.
Whether or not we agree on some of the established priorities,
is hardly the issue. The issue is that we have a process in
place, and the American people deserve the benefit of full and
inclusive debate about U.S. budget priorities.
The helping hand program for prescription drugs is a
valuable component. Medicare reform is beneficial to all, and
tax cuts are the legitimate award of a fiscally responsible
Nation. But I submit to you, Mr. Chairman, they, too, must take
their rightful place in the context of all of our national
priorities.
I join my colleague, Nancy Pelosi, in talking about HIV-
AIDS. I think that is a priority that we need to make sure that
is included in the budget.
When I look at public housing and economic development and
saving section 8s so more people in this country can benefit
from the great surpluses that we have, I think that needs to be
a budget priority that this committee should consider when we
move forward.
When we talk about school construction and an additional
hundred thousand teachers or more in technology so that our
students and our young people are able to keep up, that should
be a budget priority, and I think all of that has to be taken
in context. We should not just have tax cuts as our only budget
priority, but these other items need to be considered. I think
rightfully they stand side by side with a tax cut priority, and
they need to be done proportionately.
I just think that the process is flawed because we are
doing tax cuts without looking at the other priorities; and
this committee has to do it after the fact, as opposed to doing
it alongside with the other priorities that the committee
should be able to set and put in place.
I thank the chairman for the time. I yield back the rest of
my time.
Chairman Nussle. Thank you very much for coming and
testifying.
[The prepared statement of Greg Meeks follows:]
Prepared Statement of Hon. Gregory W. Meeks, a Representative in
Congress From the State of New York
Mr. Chairman, I welcome the opportunity to offer testimony before
your Committee today. I would like to extend appreciation and
commendation to the distinguished ranking member, Congressman John
Spratt, Jr. of South Carolina, for his diligent and consistent work
toward a sound and bi-partisan approach to setting budget priorities
for the 107th Congress.
Mr. Chairman, it is with great concern for process and convention
that I address you today. The House is scheduled to begin debate on
perhaps the most broad sweeping and profound tax rate reduction measure
since the creation of the current tax structure. To even consider a tax
cut prior to setting budget priorities and budget parameters is
philosophically adolescent and risky at best.
While I support the proposal to provide the American people with a
hard earned tax cut, I am equally concerned about the established
spending process which has governed this body for many many years.
Today, as we engage each other on the floor of the House about the
merits of a tax cut and which group of taxpayers stand to benefit the
most, we have wholly ignored a most vital part of our democratic
system. We have completely overlooked the people's agreed upon process
by its elected representatives to set budgetary parameters and
priorities.
Mr. Chairman, my concerns about the process represent my first
thoughts on the current fiscal issues before the House, however, I am
equally concerned about other budgetary issues, and I would like to
present those to the Committee and hopefully get some clarity on how
we, as a body, will approach them.
Having addressed the lack of process, I would like to outline
budget priorities:
Mr. Chairman, as we continue to strive toward urban revitalization,
economic development has become the cornerstone of the recovery of the
most depressed areas in the country. We must support and increase
empowerment zones. Community Development Financial Institutions, The
Prime Act and other programs contribute to our ability to foster
economic development in areas of greatest need. We must continue to
support the entrepreneurs who are willing to invest their time, energy
and expertise in urban America. We must target funds to expand those
opportunities and make it possible for the nation's community economic
revitalization to flourish.
When I think of the devastating AIDS epidemic and the impact it is
having on the economy; the family; the health care system; and the very
fibers of our nation, I am humbled by the task before us. We must
devote resources to the education, prevention and cure of AIDS. The
rise in the infection rate among teenagers is calamitous . We must
remember that the youth are our future. No greater investment or return
can we find than in the youth of today. The amount of funds devoted to
youth AIDS is inadequate. Faced with statistics which suggest that
almost half of new infections occur in Americans under the age of 25,
we must meet this challenge head on.
The majority of new cases of AIDS infection is among people of
color. AIDS cases among women have reputedly doubled in the last 10
years. The AIDS epidemic has cast a wide net internationally and that
is of paramount concern to the United States. There are many community
based, direct care programs helping to improve the lives of those
living with AIDS who receive the bulk of or their total funding from
Federal programs. Title I and Title III program must not be neglected
or reduced in this effort. They must receive our greatest support and
funding in order that we can continue to improve the quality of life
for those living with AIDS. Making our ``War on AIDS'' a budget
priority is in the best interest of this country. Mr. Chairman, we must
support and fund the NIH initiatives to expand and strengthen science-
based HIV prevention research for African-Americans, Latinos, Native
Americans, Asian Americans, Native Hawaiians and Pacific Islanders.
I cannot begin to highlight each and every aspect of the AIDS
crisis to which we must devote both our time and resources. I can only
say that as we look around us and see an entire generation of young
people succumb to this disease we know it is a priority. As we watch
scores of minority women and men leave children, families and jobs, we
know it is a priority. Our commitment to this plague-like malaise must
be met with due diligence.
On education, Mr. Chairman, the current administration's budget,
while representing an increase, does not go far enough. We must not
abandon the nation's public schools because we say we cannot afford to
improve them. We must reward the nation's teachers commensurate with
the job they are doing. Mr. Chairman, I am not making a case for merit
based teaching . I am making a case for making teaching a meritorious
and financially rewarding occupation. We are a nation where ball
players are paid one quarter of a billion dollars and we squawk at a 10
percent raise for teachers. I take my hat off to the agent who secures
the high salaries for athletes, however, as the agent and caretaker of
the nation's education system, we must do a better job by the dedicated
men and women playing in our education field. I am proposing an
increase in the education budget and a real commitment to the nation's
public school system.
As we move through the digital age, many small businesses are
playing catch up. I am convinced that our economic future is linked to
the prosperity of the nation's small businesses. The techno-revolution
cannot pass by the small business community. We must invest in their
dream and make it our dream. We must set a standard for providing start
up capital to the nation's small business community not to make them
competitive with the giants, but rather to provide a complement to the
giants. Mr. Chairman, we must increase the funds available to the small
business community.
I believe that we, as a nation, must seek to make adequate and
available housing a major priority. Too many Americans wait far too
long before they can find the right help, funding, or units in our
communities. Housing spans the spectrum of our national neglect.
Impoverished families living on the street have become more prevalent;
AIDS patients who can no longer sustain employment and must live in
inadequate situations makes our requested funding level of $300 million
dollars for the Housing Opportunities for Persons with AIDS (HOPWA)
program a national priority. The issue of homelessness has far reaching
implications for an individual's employability. As the richest nation
in the world, we must lend Federal support to communities trying to
build on vacant lots; trying to revitalize retailers; and improve the
nation's infrastructure.
In the area of health and social services, we must respect and
reserve the hard earned surplus in Social Security and Medicare. The
medically under-served in the United States benefit from many Federal
programs. We must exercise compassion and caution as we try to trim
spending. There are children in this country who would live without
health care but for the largess of Federal programs. Mr. Chairman, in
my District, we strive to maintain those programs providing direct
health care services to children. Our national list of priorities must
include keeping children healthy as well as making preventative care
available, accessible and affordable; if we can do this, Mr. Chairman
our Federal dollars will be well spent.
I would be remiss, Mr. Chairman, if I did not include on my list of
budget priorities, a tax cut. The people of this country have earned
and deserve a tax cut and I am convinced that in the grand scheme of
things, we can give them one. I believe that fiscally sound policy,
based on real numbers will show that a tax cut is plausible and
expected.
On the international front, our commitment to global peace and
cooperation should be reflected in our allocations to the 150 account.
As the world's leading industrialized nation, we commit less than 1
percent of our GNP to our foreign policy agenda. We are often time
viewed as stingy to the rest of the world when it comes to fulfilling
our obligation as international partners in world affairs. We, however,
wield a great deal of power and influence in the resolution of conflict
around the world. We must resolve, once and for all, our level of
commitment to the international peacekeeping effort and support that
commitment with the appropriate resources. It is imperative that we
continue to encourage and implement debt relief programs so that our
global partners can begin to restore their internal fiscal mechanisms.
Mr. Chairman, as we look toward spending patterns which reflect our
national priorities, we must include the repayment of the national
debt. This body has been a willing partner in the budget development
which has lead to the comfort we now enjoy. We must continue to service
our debt repayment scheme in a timely and satisfactory manner.
I have listed for you, Mr. Chairman, those issues I believe to be
paramount on our list of priorities for this year's budget. It is my
hope that in your attempt to proceed with this budget process, we have
the opportunity to weigh all of our concerns. I ask that we are given
the opportunity to decipher what our coffers contain and then decide
where the funds will go. We may not see eye to eye on all issues.
However, at least we will have an open, honest and inclusive debate on
those items on the table.
Many issues relate directly to the Bush Administration budget and
this far reaching tax cut essentially relies on far too many
uncertainties and projections.
I am concerned , Mr. Chairman, about the extent to which we rely on
CBO projections as a basis for projected surplus. Forecast of economic
performance is risky at best as a planning tool, and is subjected to
constant revisions with even the best market predictors. Already,
estimates of over $2 trillion are floating as a result of the Ways and
Means Committee's decision to accelerate the proposed 10 percent
bracket ahead of the President's own time table.
Mr. Chairman, I fear that this attack on the Congressional Budget
Act will result in tax cuts at the expense of every other potential
priority we may identify as we conduct the normal budgetary process in
the House of Representatives. Our foremost concern has been and must
remain the sanctity of the Social Security and Medicare surpluses. The
baby boomer generation is rapidly becoming our next wave of Social
Security recipients and we must protect the surpluses which rightfully
belong to them. The Congressional Budget Act grants the right and
privilege of the Congress to use the budget process to set the
priorities. In the absence of that process, we are merely responding or
reacting to established parameters which have little or nothing to do
with the priorities established by the process itself.
Tax cuts, as well as debt repayment and non-discretionary spending
must be a part of a greater inclusive budget process. Whether or not we
agree on some of his established priorities is hardly the issue. The
issue is that we have a process in place. The American people deserve
the benefit of a full and inclusive debate about US budget priorities.
The ``Helping Hand'' program for prescription drugs is a valuable
component; Medicare reform is beneficial to all; tax cuts are the
legitimate reward of a fiscally responsible nation; but I submit to you
Mr. Chairman that they too must take their rightful place in the
context of all of our national priorities. We must make those decision
in a bi-partisan, compassionate and fiscally responsible way.
Mr. Chairman, as we speak, the hospital industry in New York is
still reeling from a 1997 Balanced Budget Act provision which was based
in part on predictions, projections and forecasting. While some of the
impact has been remedied by a partial restoration of funds, it is an
ideal example of what happens when we make predictions. It should be a
lesson about what can happen when we abrogate process and turn our
backs on the tried and tested.
I am encouraged by the fact that we are engaging the budget process
and hopefully we can catch up to the tax cut process before it becomes
an Achilles heel for years to come. It is my sincere wish, as the voice
of the people, that we restore order, balance and legitimacy to our
proceedings. Then and only then can we really set our budget priorities
in a fair and inclusive way.
Chairman Nussle. Mr. Weldon.
STATEMENT OF THE HON. CURT WELDON, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF PENNSYLVANIA
Mr. Weldon. Thank you, Mr. Chairman.
Chairman Nussle. We heard a siren a little while ago, and
we were all speculating that it was you arriving to talk about
what Mr. Pascrell and Mr. McGovern were here to talk about
earlier. So we kind of heard you coming, I guess is what we are
saying.
Mr. Weldon. Well, you heard us coming long before we got to
this hearing, because we all know that your background was in
the fire service, and you are one of us, and we appreciate that
personal relationship you have had with the fire service of
this country.
Mr. Spratt has been equally supportive. He has a strong
fire service community in his State. I have spoken to them
numerous times, and they have nothing but solid praise for the
work he has done in supporting their efforts in the State.
I am here to basically support--and I could come for many
issues, as you all know, but I am coming for one and one only,
and that is for a modest amount of money to provide assistance
for our domestic defenders. We are asking these people--32,000
departments across the country representing 1.2 million people,
85 percent of whom are volunteers, we are asking these people
to do more and more in the way of protecting our homeland. It
is not just fighting fires. They are now being trained to
handle chemical and biological incidents. They are the first in
on floods, hurricanes, tornadoes. They are the first to respond
to HAZMAT incidents. They are the first to be called, not FEMA,
not the National Guard, not the Marine Corps sea berth teams.
They are the first to be called to respond in every incident in
America involving terrorism.
The problem is that with all of these new responsibilities
and with the pressures, especially with the volunteers, they
are spending more and more of their time raising money to buy
very expensive equipment, which means they can't do the job of
protecting the communities. If we don't help these people out,
especially the volunteers, you are going to see more and more
communities go to the paid departments, which is going to cause
a huge problem for the taxpayers of this country.
What we are trying to do is not to federalize the Nation's
domestic defenders. We are trying to give them the basic tools
and equipment they need with matching funds that they provide
to buy equipment, turn out gear, to do training, to do the
kinds of things that they need to do to protect their
communities.
Now, some say--when we had the initiative that we
successfully added on to our defense bill last year, the
appropriation for that which I opened up on the House floor in
the form of $100 million passed by a vote of 386 to 28. There
was hardly anybody who opposed it.
Those who opposed it said, well, wait a minute. You know,
this is not the role of the Federal Government. This is the
role of local government.
I don't disagree with that as a former mayor and a county
commissioner, but wait a minute. We spend over $3 billion--it
is going to be in your budget this year, for police--we paid
for half the cost of police vests.
We want to put 100,000 teachers on the street. Well, the
last time I checked there weren't a hundred teachers killed
every year in the line of duty.
Every year in Evansburg at the national Fallen Firefighters
Memorial we pay special recognition to over 100 fire and
emergency services personnel who give their lives in protecting
their communities. We don't have anywhere near that number in
teachers. It is very close to what we have in police, and they
are all fully paid, and yet we do nothing at the Federal level
except this last year in providing support and assistance to
them.
What we propose is a modest program. It was authorized at
$100 million the first year, and we appropriated. In the second
year, we are asking for $300 million to be matched with local
dollars from local communities to buy equipment and resources
to assist these domestic defenders in meeting the challenges
that they are being asked to provide for our country. It is not
out of line.
Again, I don't want to create a national Federal Emergency
Response Force. I am simply asking the Budget Committee to
recognize these important people and to allow us to try to
provide some assistance and incentives for the States to do
more.
In my State of Pennsylvania, we have a great program, which
is currently at $25 million. That money is used to buy every
piece of fire equipment in the State. The firefighters pay off
the loan, but they get a low interest rate. We have another
grant program. We need to encourage the States and local
governments to do more in this area, and some small amount of
Federal funds will help this happen. There could be no better
return on our dollar than to help the domestic defenders of
America by providing a small amount--a relatively small amount
of funds.
So I plead with you, in your budget deliberations, as tight
as things are, to assist us in recognizing this vital need. We
have organized this group of people nationwide. They are ready
to go. They were grossly disappointed that the President's
budget did not include a request for funding here.
I am meeting with the budget director next week, and I will
personally convey to him, along with a number of my colleagues,
our concern with the President's request.
I introduced President Bush in a fire house. He spoke about
the need of these people. And for the budget to come out and
not have any money in the budget to me was not only
shortsighted, it was contradictory. We are going to work with
the administration and attempt to change that and get their
support, but the Budget Committee can really kind of lead the
path here in terms of providing some suggestions to Congress
that this is an area we should in fact be supportive of.
So I would ask my colleagues to assist us in this effort. I
know you have a very difficult time in all the numbers you have
to crunch to come up with a budget on defense issues, health
care issues--but I can tell you this. This is an area where the
money will be well spent and in the end will save taxpayers
money. Because most of these people are volunteers. I mean, I
would love to see our police Departments go out and run tag
days and chicken dinners to buy police cars. I would love to
see that day. That ain't going to happen. Fire companies do it
every day across America, tag days and chicken dinners, to pay
off loans to buy $500,000 fire trucks. The least we can do is
help them afford to buy those pieces of equipment to continue
to serve their communities.
You also mentioned the issue of hepatitis C. Last year, I
included a package in the defense bill of a series of bills to
help the fire and emergency service people. Bob Brady had
legislation, which I was the original co-sponsor of, to
authorize a $10 million pilot program dealing with hepatitis C
as it relates to emergency responders. That is now law.
So if you want to do something in that area, you could
simply request the $10 million that has already been authorized
to implement the $10 million initial program as a pilot program
in looking at hepatitis C and how emergency responders in this
country were suspected of being afflicted with this because of
the incidents where they have to go into unknown situations and
rescue people, whether it is in a hostile environment, a fire,
a HAZMAT incident or whether it is in an accident on the street
corner.
So I would ask you to consider this, both the general
funding and the hepatitis C program.
Thank you for your support. I thank both of you for your
sensitivity to the domestic defenses of this country and look
forward to working with you as you unfold your process. Thank
you.
[The prepared statement of Curt Weldon follows:]
Prepared Statement of Hon. Curt Weldon, a Representative in Congress
From the State of Pennsylvania
crucial funding for america's firefighters
First of all, I would like to thank Chairman Nussle for allowing me
to speak today. The chairman, like me, is a former firefighter, and I
know him to be an individual who is deeply committed to providing our
nation's first responders with the means necessary to do their job. And
their job is, of course, to protect us all, at great risk to
themselves.
Chairman Nussle's leadership this year will be critical to the
success of the fire service. I look forward to working with him in the
future on this issue.
Last year, Congress passed unprecedented legislation designed to
help needy local fire departments. Attached to the FY2001 Defense
Authorization bill, this legislation established a grant program to be
administered by FEMA. These grants would be awarded based on need, and
would go directly to local departments, bypassing intermediate
beauracracies. The grant program was authorized at $100 million for
FY2001 and $300 million for FY2002. Another major victory was had when
we achieved the full $100 million appropriation last year, and cash-
starved fire departments nationwide are eagerly awaiting FEMA's
implementation of the program. The application process is expected to
begin in April.
Unfortunately, President Bush's recently released budget blueprint
did not include funding for the program in FY2002. It based this
decision on the rationale that this is a local responsibility, not a
Federal one. While there was a time that this may have been true, such
is no longer the case. Fire companies are becoming increasingly
involved in the planned response to terrorist attacks and potential
events involving weapons of mass destruction. Our brave firefighters
are referred to as first responders for a reason, whether it be a fire
or an earthquake, a terrorist attack or a rescue operation,
firefighters, often volunteers, are the first on the scene. The
situations to which they respond are often federally managed, and yet
fire departments have been neglected by the Federal Government. Last
year we changed that. This year, as we anticipate massive spending
increases in traditionally local matters such as education, let us not
turn our backs on the 32,000 fire departments nationwide, and 1 million
firefighters who serve them. Let us not forget the 100 people every
year who suit up in their firefighting gear, and never come home. They
are our responsibility.
There can be no doubt that our nation's first responders are in
dire need of help. Many volunteer fire departments face a manpower
crisis. Even worse, declining budgets force many firefighters to put
their lives on the line with aging and outdated equipment. New
responsibilities and larger populations mean that we are asking them to
do more with less. At the same time, fire service personnel have to
hold pot-luck dinners to pay for equipment, or have to stand on street
corners holding the donation boot to keep fire trucks running. This
simply is not right. Would we ask the police or the military to submit
to this?
I am proud to support the grant program for our local fire
companies, and my discussions with other members lead me to believe
that this support is very widespread. This is not a partisan matter.
Republicans and Democrats alike contributed to this program's
realization. My good friend Steny Hoyer has been a great partner over
the years in helping to promote congressional awareness of the needs of
the fire service, and Members on both sides helped us achieve victory
last year.
Local fire departments serve every town in every congressional
district in America. In many communities, the fire station is the
center of civic participation. I urge all members of this committee to
support full funding for the firefighter assistance program. It's time
to answer our firefighters' call for help, as they have done for us for
so long.
Mr. Chairman, thank you for letting me appear before you today.
Chairman Nussle. Would you let me know what you hear back
from Mr. Daniels? Because I would be interested in talking to
him about this as well.
Mr. Weldon. I will absolutely let you know. We are planning
a major parade, as we did once before, down Capitol Street to
the White House; and we are going to surround the White House
with fire trucks. So I am sure he is going to get the word one
way or the other.
Mr. Spratt. Take it all the way down to the executive
offices.
Mr. Weldon. We already did the Capitol Building, and the
Congress responded. Thank you.
Chairman Nussle. Thank you for your advocacy.
I ask unanimous consent that members have 7 legislative
days to submit statements. The statements that we have already
received from members who have not testified will be made part
of the record, and we will continue to accept statements for 7
more legislative days.
[The information referred to follows:]
Prepared Statement of Hon. Todd Akin, a Representative in Congress From
the State of Missouri
Chairman, ranking member, members of this committee, I want to
thank you for the opportunity to share my budget priorities.
I know this committee and this Congress must balance many competing
priorities. However, there are two top priorities--taxes and national
security--that I believe must receive our highest attention.
America has a tax surplus. The tax surplus comes from a direct tax
rate on the average American family greater than the cost of food,
clothing, shelter and transportation combined! We have a tax surplus;
it is time to give the money back to where it belongs--to the people!
At the same time, the American economy is in need of immediate
attention. Our economy reacts to a number of forces, including high
taxes, a non-existent energy policy and a troubled stock market.
The solution is simple: return the money back to the people in
order to jump-start our slowing economy.
Through Republican leadership, Congress now has a standard
operating procedure to balance the budget and lockbox Social Security
and Medicare revenues. With those safeguards in place, Congress must
return the tax surplus to the people to stimulate critical sectors of
the economy.
I fully support President Bush's modest $1.6 trillion tax cut over
the next 10 years, but I feel we can do more. There are six steps I
believe this Congress must take to provide meaningful tax relief and
aid our slumping economy.
First, spending must come under control. In developing the budget,
we must target a few crucial trouble areas--particularly the need for a
tax cut and increased defense spending.
Second, I support eliminating the marriage penalty altogether,
which will cost $250 billion over the next 10 years.
Third, the capital gains tax must be greatly reduced to encourage,
not penalize, free enterprise and savings.
Fourth, the 1993 Clinton Tax on Social Security must be repealed,
which will cost $45 billion over the next 5 years.
Fifth, the U.S. tax code must be simplified so more individuals and
families can file their own tax returns.
Sixth, the contribution limit on Individual Retirement Accounts
must be increased to $5,000 and indexed to inflation. Furthermore, 401
(k) plans must be expanded to encourage individual retirement savings.
These two retirement savings steps will cost $55 billion.
With the Congressional Budget Office (CBO) projecting a $5.6
trillion surplus over the next 10 years, it is unconscionable for the
government to deny a tax cut to taxpayers. The government is collecting
more than it needs, while the average taxpayer is giving over one-
quarter of all of their earnings to the government. This is absolutely
the right time to return our constituents' hard-earned money.
A robust economy sets the stage for the proper funding for our
armed forces.
And just as we have a debt to pay down regarding taxes, we have
both a moral and ethical obligation to pay down the debt we have
accumulated in terms of worn out and outdated military equipment,
research and development that never took place, and rigorous field
training that took place too infrequently over the past 8 years.
It is imperative that we accomplish the following:
We must pass a Fiscal Year 2001 Supplemental Appropriations bill
this spring to address the most pressing shortfalls in the current
year's budget. While I much appreciate the political difficulties
associated with such legislation, I think it essential that we make
good on our responsibilities to our service men and women. Should we
fail to do so, our Service Chiefs, as they reported only a few days
ago, will have to cut deeply into third and fourth fiscal quarter
operating budgets in order to fund current operations and programs.
Contrary to what you may have heard, there are countless readiness-
related programs that require funding immediately. Seemingly mundane,
but vitally important, programs that fund training and procure spare
parts do not require the completion of a strategic review.
In addition, we must pass a Fiscal Year 2002 Budget Resolution that
fully meets our national security requirements. While Budget
Resolutions typically deal only with aggregate sums rather than
specific programs, we should keep in mind that defense spending must
address both our immediate requirements relating to readiness, or
combat preparedness, and quality-of-life issues--and our longer-term
modernization, and research and development.
Despite talk of a ``strategic pause,'' or a ``threat trough,''
extending out over the next 10 to 15 years, the fact is that our
Services must be ready today, tomorrow, next year and beyond. As former
Army Chief of Staff, General Gordon Sullivan, stated a few weeks ago,
``We can not take a pass on readiness.''
We have, however, 'taken a pass on readiness' over much of our
nation's history. Unfortunately, we have a nearly perfect record of not
being prepared for military conflict--from the War of Independence and
War of 1812, all the way to the Korean and Vietnam wars. In an era of
increasingly deadly weapons, and with conflicts more likely to be come-
as-you-are affairs, a lack of preparedness could come at a tragically
high cost.
Therefore, we must do the following:
First, we must fully fund our training accounts, which directly
support our ability to execute our national military strategy. Absent
robust and ongoing training programs--there is no readiness. Readiness
should be increased by $5 billion per year.
Second, we must properly fund modernization. Even former President
Clinton's Secretary of Defense, William Perry, testified before the
House Armed Services Committee last year, stating that we are
underfunding procurement by $20 billion per year. His testimony, in
fact, represents the low end of the spectrum. We should, at a minimum,
increase procurement by $20 billion per year.
Third, long-term military readiness is maintained through adequate
research and development. This portion of the defense budget could
quite easily and responsibly utilize an additional $5 billion per year.
Fourth, our military construction accounts have been underfunded
for years. Many of our facilities, to include much of our housing
stock, should have been replaced years ago. Our service men and women
put up with substandard housing because they love what they do. We
should increase military construction by nearly a $1 billion per year.
Finally, the President's personnel and quality-of-life package will
require approximately $5.7 billion. If we are to close the pay gap in a
timely manner and address health care concerns--and we must do both--
then this must be part of the mix.
We should, therefore, pass a Fiscal Year 2002 Budget Resolution
that increases defense spending by at least $40 billion per year over
current spending levels.
Prepared Statement of Hon. Judy Biggert, a Representative in Congress
From the State of Illinois
Mr. Chairman, Members of the Budget Committee, I appreciate this
opportunity to testify on the fiscal year 2002 budget.
I am here today to urge you to maintain the Federal Government's
commitment to scientific research and development by increasing funding
for the Department of Energy's (DOE) Office of Science. Scientific
research may not be as politically popular as health care and education
right now, but science is as important to progress in these two areas
as it is to America's continued economic growth and national security.
I hope my testimony today can shed some light on this fact.
Economic experts maintain that today's unprecedented economic
growth would not have been possible were it not for the substantial
investment in research made by the public and private sectors over the
past several decades. For America to continue to benefit from this kind
of investment, we must provide strong financial support for basic
research across all of the scientific disciplines - including the DOE's
Office of Science.
The Office of Science is the nation's primary supporter of the
physical sciences, providing an important partner and key user
facilities in the areas of physics, mathematics and advanced computing,
chemistry, geology, biology, environmental sciences, and engineering.
The Office of Science supports a unique system of programs based on
large-scale, specialized user facilities and large teams of scientists
focused on national priorities.
This makes the Office of Science unique among, and complementary
to, the scientific programs of many other Federal science agencies,
including the National Institutes of Health (NIH) and the National
Science Foundation (NSF). I applaud the strong support shown by
Congress in recent years for research conducted within the NIH and NSF,
and I commend President Bush for supporting efforts to double NIH
funding by 2003.
This level of support should be extended to DOE's Office of Science
because future medical breakthroughs depend on fundamental advances in
the physical sciences and other research conducted by the Office of
Science. One recent example is the Human Genome Project, which
progressed so rapidly because of advanced computing technology and
biological technology pioneered by the DOE Office of Science. Harold
Varmus, former director of the NIH, said, and I quote, ``Medical
advances may seem like wizardry. But pull back the curtain, and sitting
at the lever is a high-energy physicist, a combinational chemist, or an
engineer.''
Unfortunately, the reality of the situation is that while federally
supported medical research like that conducted by NIH has skyrocketed,
funding for research in the physical sciences has remained stagnant.
During the past decade, funding in constant dollars for the DOE Office
of Science was reduced by approximately 13 percent.
It is the research itself that has been most significantly
impacted, since the costs of maintaining existing facilities and their
associated staffs continue to rise with inflation. This has prevented
the Office of Science from fully participating in technical areas
important to DOE's statutory mission, such as high performance
computing and nanotechnology.
This erosion of resources has also reduced the number of scientists
and students conducting physical science research at DOE's national
user facilities and America's colleges and universities. This aspect
alone could have a disastrous long-term effect.
Already, doctoral candidates are choosing life sciences over
physical sciences. In 1999, the number of doctorates awarded in science
and engineering was the lowest figure in 6 years. This trend is
reflected in undergraduate degrees as well, which over the past decade
have declined significantly.
Doubtless this exacerbates a shortage of highly skilled labor,
posing a serious dilemma for academia, business, and government leaders
alike because of the potential effect it could have on America's
continued economic growth.
This shift in human capital and resources to the life sciences has
had a dramatic impact on America's ability to engage in cutting edge
physical sciences research. It also poses a threat to our national
security, but you don't have to take my word for it.
According to the Hart-Rudman Report on National Security, and I
quote ``* * * the U.S. government has seriously underfunded basic
scientific research in recent years. The quality of the U.S. education
system, too, has fallen well behind those of scores of other nations. *
* * the inadequacies of our systems of research and education pose a
greater threat to U.S. national security over the next quarter century
than any potential conventional war that we might imagine.''
The report goes on to recommend doubling the Federal Government's
investment in science and technology research and development by 2010.
While I understand that it may not be practical to double the Federal
research and development budget this year, I believe Congress should
take the necessary steps to move in that direction. One of the first
steps should be to increase Federal funding for the research and
development conducted by the DOE Office of Science.
This Committee is the key to taking that first step forward. By
recommending that the Office of Science receive a substantial FY 2002
budget increase, this Committee can begin to reverse this troubling
situation and help the DOE attract the best minds, support the
maintenance and construction of modern facilities, and continue to
provide the quality of scientific research that has been its trademark
for so many years. As Congress continues to work through the budget
process, I encourage you to support the research that has been crucial
to America's economic success and national security.
Thank you again for this opportunity to testify.
Prepared Statement of Hon. Michael Bilirakis, a Representative in
Congress From the State of Florida
As you begin work on the Budget Resolution for Fiscal Year 2002, I
urge the Budget Committee to include budgetary authority sufficient to
remedy the inequitable offset of military retirement pay and VA
disability compensation.
As you may know, some military retirees--individuals who are
eligible for military retirement benefits as a result of a full service
career--are also eligible for disability compensation from the VA based
on a medical problem they incurred while in the service. Under present
law which dates back to the 19th century, these service-disabled
retirees must surrender a portion of their retired pay if they want to
receive the disability compensation to which they are entitled.
Think of two soldiers who joined the Army together and were wounded
in the same battle. Joe left the Army after his 4-year stint and joined
the Department of Justice as a civilian employee. Jim stayed on and
made a career in the military. Thirty years later, both men are
receiving Federal longevity retired pay based on their careers. Both
are also eligible for VA disability compensation as a result of the
injuries they sustained while in the Army. The difference is that in
order to get his disability compensation, Jim must forfeit an equal
amount of his retired pay, while Joe collects the full amount of both
benefits without a deduction in either.
Why should the individual who chose a military career be penalized?
One benefit is based on longevity in a career, the other on an injury
sustained while in the service. Joe in our example can even receive
civil service retirement credit for his 4 years in the military. Yet,
Jim is branded a ``double dipper.'' This simply is not fair.
Nationwide, more than 400,000 disabled military retirees must give
up their retired pay in order to receive their VA disability
compensation. In effect, they must pay for their VA disability out of
their military retirement--something no other Federal retiree must do.
How can we possibly expect to maintain a viable national defense if
service members realize that if they experience a service-connected
disability, they cannot receive both VA disability compensation and
military retired pay?
I have once again introduced legislation, H.R. 303, to eliminate
this inequitable offset. My legislation has already received strong
bipartisan support with over 200 cosponsors in the House of
Representatives. I am pleased to report that 18 members of the Budget
Committee are cosponsors of H.R. 303. In the 106th Congress, 31 members
of the Committee cosponsored my legislation.
H.R. 303 is also strongly supported by the American Legion, the
Disabled American Veterans, the Veterans of Foreign Wars, the Retired
Officers Association, the Retired Enlisted Association, Uniformed
Services Disabled Retirees, the Military Order of the Purple Heart, the
Non-commissioned Officers Association, the Reserve Officers
Association, the Fleet Reserve Association, the Air Force Sergeants
Association, the National Military Family Association, the National
Association for Uniformed Services, AMVETS, and the Jewish War
Veterans.
Retirement pay is based on the number of years a servicemember has
on active duty service and is earned for 20 years or more of faithful
service. VA disability compensation was established to replace the loss
of earnings attributable to a service-connected or service aggravated
injury. Disability compensation also serves to compensate the disabled
veteran for reduced ability to compete for civilian employment.
Clearly, DOD retirement pay and VA disability benefits are vastly
different. Yet, current law ignores any distinction.
The 106th Congress took the first steps toward addressing this
inequity by authorizing the military to pay a monthly allowance to
military retirees with severe service-connected disabilities rated by
the Department of Veterans Affairs at 70 percent or greater. In this
era of dramatic surplus projections, it would be unjust not to seize
the opportunity to end the unfair practice of offsetting military
retirement pay and VA disability compensation once and for all. We have
a unique opportunity to show our gratitude to the men and women who
have sacrificed so much for this great country of ours, and we must not
squander it.
As the sponsor of H.R. 303, I strongly urge your Committee to
include the budgetary authority necessary to remedy the inequitable
offset of military retirement pay and VA disability compensation in the
Fiscal Year 2002 Budget Resolution.
Prepared Statement of Hon. William Lacy Clay, Jr., a Representative in
Congress From the State of Missouri
Chairman Nussle and Congressman Spratt, thank you for the
opportunity to come before your committee today to offer my thoughts on
the Administration's budget proposals.
I would like to specifically address a number of President Bush's
HUD proposals, which I believe are fundamentally flawed and critically
under-funded.
The Administration would have Americans believe that its overall
HUD spending proposals will actually increase that department's budget
by $1.9 billion. But in real terms, if you do not count the
Administration's $3.63 billion increase in technical budget authority--
increases that have virtually no impact on outlays or on assisting
families--the Bush Administration's HUD budget actually cuts spending
in fiscal year 2002 by $1.3 billion. And when adjusted for inflation,
these cuts total $2.2 billion, which represents an 8 percent cut in the
total HUD budget.
The fact is, President Bush's proposed funding levels for HUD
housing programs are so regressive, they are actually $1.8 billion
below HUD housing funding levels for Fiscal Year 1995.
These severe cuts encompass housing and economic development
programs that are vital to senior citizens and low-income families
struggling to find safe and affordable housing. As an example, the
Administration proposes cutting $700 million from the Capital Fund, a
program that provides critical housing resources for the repair and
rehabilitation of homes in depressed communities. Additionally, the
President's budget calls for a dramatic 11 percent percent cut in the
HOME affordable housing program.
The Administration also proposes cutting $422 million from the
Community Development Block Grant Program, and terminating the $309
million Drug Elimination program. Both programs provide cities with
important resources for revitalizing communities, combating crime, and
for providing needed job training skills.
And just as critical is the Administration's proposal to cut $640
million in Section 8 housing reserves and limit the number of new
Section 8 vouchers to 34,000 nationwide.
These cuts, if approved, would have a devastating effect on my own
District. The Administration's proposed housing cuts would in effect
``turn back the clock'' on my District's efforts to expand access to
affordable housing for seniors and low-income families. In both the
City of St. Louis and in St. Louis County, we have made great strides
over the last decade to increase affordable housing in the area, but we
are still far from resolving the problem.
Five years ago, we had over 10,000 people in both the county and
the city on Section 8 voucher waiting lists. Today, those numbers stand
at 5,600 and 2,500 respectively. However, if the Administration's
Section 8 voucher limit of 34,000 nationwide is allowed to stand,
cities like St. Louis will see an immediate and dramatic increase in
the number of people forced to wait for Section 8 housing. In New York
City alone, over 215,000 families are currently on waiting lists for
Section 8 vouchers.
In an era of record budget surpluses and shrinking affordable
housing options, we should be increasing--not cutting--our investments
in affordable housing. The Administration's HUD budget proposals would
deny millions of families any hope of finding safe and affordable
housing in the near future and make it even more difficult for us to
effectively address our nation's growing affordable housing needs.
Given that fact, I believe the Administration's HUD budget is wholly
inadequate and must be rejected.
Prepared Statement of Hon. Baron P. Hill, a Representative in Congress
From the State of Indiana
The annual Budget Resolution is Congress' opportunity to present to
the American taxpayers its version of the ``big picture.'' It is the
moment when Congress looks at all the competing interests in our nation
and our Federal Government and decides what is really important.
Without a budget framework, we politicians can remain detached from
financial realities and promise everything to everybody. The budget
resolution forces us to make the difficult choices we always have to
make when there are not enough resources to satisfy everybody's needs.
It requires us to acknowledge that governing involves tough choices. We
politicians do not like saying no to anybody, but it is part of our
job. I commend all of the members of this committee for the hard work
they do to produce the budget resolution. I look forward to studying
this committee's view of the ``big picture.''
Unfortunately, the leadership of the House of Representatives
appears to have decided that it would rather put off the tough choices
for a later time. They have decided to eat their dessert before their
dinner. This week they are sending to the House floor a bill involving
almost one trillion dollars of current and projected future tax
revenues, but have not shown the American people how this bill will
affect our other priorities, such as eliminating the marriage penalty
and the estate tax, protecting the surpluses in the Social Security and
Medicare HI Trust Funds, and paying down the national debt.
Politics always has been and always will be part of the budget
process, but unfortunately it looks as though this year politics has
completely replaced the budget process. The leaders of the House have
decided to go out and buy a fancy new car without first figuring out if
they can afford one. Responsible American businesses and families would
never do what House leaders are doing this week. I urge them to restore
``regular order'' to our budget process and allow your committee to do
its important work.
President Bush has acted more responsibly. He sent us his budget
framework just 1 month after he took office. The President's
``Blueprint for New Beginnings'' is a very admirable first effort at
laying out the new Administration's budget priorities. Although I can
find places in President Bush's 200-page document where I disagree with
him and see places where we he will have to produce more details in a
later budget submission, I share most of President Bush's priorities. I
believe the Federal Government should give Americans significant tax
relief, it should continue paying off the national debt, it should take
steps to strengthen the Social Security and Medicare programs, and it
should commit more resources to important national priorities such as
our armed forces and our schools.
I believe this year's budget framework should commit to both short-
term and long-term tax relief. We can help today's families and
businesses by devoting some of our budget surpluses to tax cuts, and we
can help our children's families and businesses by devoting a
significant amount of our surpluses to paying down the national debt.
Paying off the national debt helps lower long-term interest rates and
eliminates the billions of dollars the government spends every year to
service the debt.
I support the Blue Dog Democrats' ``50-25-25'' budget plan, which
makes a greater commitment to debt reduction than President Bush's
budget. It reserves all of the Social Security and Medicare HI Trust
Funds for debt reduction, and devotes one-half of all remaining
surpluses to debt reduction. As USA Today pointed out in a March 2nd
editorial, President Bush's budget would slow down debt repayment by
$590 billion over the next 5 years.
This year's budget framework should also recognize the uncertain
nature of 10-year budget estimates. In its most recent budget outlook,
the Congressional Budget Office (CBO) offered a harsh critique of its
own estimates. It projected that its fiscal year 2002 surplus estimate
has a 50 percent chance of being wrong by more than $97 billion and
that its 2006 estimate has a 50 percent chance of being off by more
than $245 billion. It also said its estimates for the sixth through the
tenth years are likely to be even more inaccurate.
Our budget framework should acknowledge that the projected $5.6
trillion 10-year surplus is a highly speculative forecast and is likely
to be wrong. It should take into account that two-thirds of the
projected surplus ($3.68 trillion) would occur in the second 5 years,
the period for which CBO admits it can do little more than guess what
will happen to our economy and our budget.
I believe your committee and all Members of Congress should not act
as if the projected surpluses are already in the bank. We should create
a budget framework that commits the budget surpluses that materialize
over the next 10 years to our important priorities, but does not lock
us in to policies that depend on speculative 10-year budget estimates.
Writing a budget this year that depends on revenue that we may or may
not have in future years is not responsible fiscal policy and risks
taking us back to the era of deficit spending and accumulating national
debt.
Prepared Statement of Hon. Eddie Bernice Johnson, a Representative in
Congress From the State of Texas
Chairman Nussle and Ranking Member Spratt, I want to thank you for
the opportunity to speak today to express my principal interests
regarding the Budget Resolution for FY2002.
First, I need to express my deep concern about the President's
decision to hold the rate of growth in discretionary programs to 4
percent . I must align myself with the concerns expressed by Senate
Budget Chairman Pete Domenici who has repeatedly stated that a 4
percent rate of growth is not enough. These discretionary programs
represent many of the government programs which people relied upon in
their everyday lives. When the rate of growth for those who need the
services provided by a program is greater than the rate of growth in
program funding, there is a reduction in the amount and type of
services. A failure to keep pace with growth means that someone will
not be served or will receive far less than they need. We must stop
engaging in ``fuzzy math.'' These are not mere numbers. These are real
people. And as their elected representatives we have a duty to ensure
their well-being. We fail in that duty if we do not provide the
resources they need.
Now with that general overview, let me share my specific concerns
with you:
The priorities of the Administration include several proposals
concerning the National Science Foundation (NSF). Chairman Greenspan
stated that ``On the issue of research, there is just no question that
if you're going to have technology as the base of your economy, which
we do, research is crucial.'' We simply cannot expect our Nation to
continue on its path of superiority if we do not provide the proper
tools for our students to do so. These include a Math and Science
Partnership Initiative, a study of the effect of NSF grant size and
duration on possibly creating inefficiencies in the academic research
enterprise, language requiring NSF to develop improved procedures for
managing large facility projects and language to set up a blue ribbon
panel to determine the pros and cons of transferring all of NSF's
astronomy programs to NASA. These proposed initiatives have so much to
do with increasing the present budget of the National Science
Foundation (NSF).
To succeed in this effort, it is necessary that we pass a budget
that provides at least a 15 percent increase for the NSF. The present
increase of 1.3 percent by the Administration is inadequate. The
Administration has requested a 20 percent increase for NIH, while
providing so little for NSF, its fellow science entity. The current
proposal suggested by the Administration cuts programs such as basic
science, renewable energy and oil and gas research and development by
about $1 billion.
Second, I have a great concern about education funding. It is clear
that America needs to increase its efforts to improve the competence of
our students. Such an initiative is said to cost the nation around $200
million ($1 billion over 5 years). Unfortunately, the Administration
has not included this in its budget. It is impossible for NSF to
continue its work if it is unable to increase the number of grants
across the nation.
Further, an increase in education funding must include additional
funding for Historically Black Colleges and University and Hispanic
Serving Institutions. If this nation is truly supposed to provide
opportunity for all people, we must adequately fund the academic,
research and capitol projects of these institutions.
Thirdly, we must assure that our veterans receive competent care in
sound facilities. That is why I believe we must increase funding for
the Veteran's Administration's capital construction projects in the
areas with greatest demographic growth. As we all know, Texas and other
areas of the South and West are experiencing phenomenal population
growth. We must have enough forethought to dedicate resources for
capital funding to those areas of growth.
Fourth, we cannot forget the important role played by
transportation in the commerce of this nation and our obligation to
assure that travel by air and road is safe. Therefore, we must assure
full funding for Aviation programs consistent with AIR-21 and
especially FAA's Facilities and Equipment Account which would permit
air traffic control modernization. I can assure you that every member
of the traveling public would consider this money well spent.
Fifth, we cannot forget the necessity to engage in responsible
conservation and infrastructure improvement. We should fund the Land
Conservation, Preservation, and Infrastructure Improvement Program and
$1.76 billion and full funding for the Land and Water Conservation Fund
at $900 million (consistent with last year's agreement in the interior
appropriations bill).
Finally, we must assure an across the board increase in funding of
at least 10 percent for the U.S. Civil Rights Commission, and all
Federal agencies which handle discrimination issues, including the
EEOC; OFCCP and the Offices of Civil Rights in each Federal agency and
department. These agencies have not had an increase in funding for 6
years. We must assure that the agencies which investigate, monitor and
remedy the evil of discrimination have adequate funds to do the job.
Each person who lives and works in this country should have the
assurance that they will not be denied opportunity based on race,
gender, religion and national origin. If discriminatory activities
occur, we must assure that people have access to a remedy. We must put
our money where our rhetoric is. If we hate discrimination, we must
fund those agencies charged with protecting its victims.
Again, Chairman Nussle, Ranking Member Spratt and Members of the
Committee, I thank you for this opportunity. I want to place my
complete statement in the record and would be happy to answer any
questions.
Prepared Statement of Hon. Dennis J. Kucinich, a Representative in
Congress From the State of Ohio
Our country is facing a crisis in our infrastructure. It is
something we see every day when we sit in traffic bound by orange
barrels that line our highways. It is something that schoolchildren
experience at their desks, crowded together under leaking roofs. Right
here in Washington, municipal sewer systems overflowed last year,
washing millions of gallons of raw sewage into the Potomac and
Anacostia rivers into the Chesapeake Bay. These incidents happen every
year and happen with increasing regularity as systems age.
Infrastructure problems threaten our productivity, our economy, our
environment and our health.
What will it take to fix these problems? Nationally, it would take
more than $1 trillion to bring our country's roadways up to speed
according to a report released yesterday by the American Society for
Civil Engineers. It would take $127 billion to repair and renovate our
schools according to the National Center for Education Statistics. And
in a recent study completed by the Water Infrastructure Network, it
would take $1.3 trillion over 20 years to build, operate and maintain
drinking water and wastewater facilities.
With these kinds of extraordinary needs, it is no wonder that
municipalities have not been able to make up the difference as the
Federal Government has gradually decreased infrastructure support.
Current Federal water and wastewater funding is about $3 billion per
year, and TEA-21, which passed in the 105th Congress to fund surface
transportation, did not meet half of the funding needs.
My bill would create a low-cost Federal financing mechanism to
administer $50 billion in zero-interest loans every year to localities
for infrastructure projects for 10 years. Twenty percent of these funds
would be targeted for school construction and repair. States would be
totally responsible for choosing which projects to fund with the loans
according to their specific needs.
This bill would create the Federal Bank for Infrastructure
Modernization (FBIM). The bank, as an extension of the Federal
Financing bank under the Treasury, would administer the loans. The
loans would bear a small fee of one-quarter of 1 percent of the loan
principle to cover the administrative costs of the FBIM.
In order to provide the money for the loans, the FBIM would hold a
portion of the Treasury securities that the Federal Reserve normally
holds. The Fed currently holds about $300 billion in Treasury
securities. By transferring about $50 billion annually to the FBIM, it
would still allow the Fed to operate as it does now to add liquidity to
the system. The Fed, instead of buying securities, would buy the
mortgage loans of the states. This way, the FBIM's finances would be
integrated by the Federal Open Market Committee so as not to disrupt
its ability to promote economic stability.
In his February testimony, Fed Chairman Alan Greenspan supported a
very similar type of transaction. Already, the Open Market Committee
conducts repurchase agreements in mortgage-backed securities guaranteed
by the agencies. Greenspan stated: ``the FOMC asked the staff to
explore the possible mechanisms for backing our usual repurchase
operations with the collateral of certain debt obligations of U.S.
States and foreign governments.'' This bill would follow this advice by
providing the tool for the FOMC to integrate the mortgage loans of the
states from the FBIM.
This amount could be varied so these funds could be used as a tool
to foster stable economic growth. During times of economic slowdown,
the FBIM could make more loans available to spur investment. During
times of economic boom, the FBIM could make fewer loans available.
The needs are so great that our old ideas just won't work. If we
talk about the hundreds of billions of dollars needed to make
infrastructure a workable, productive system, it overwhelms nearly
every idea we've had in the past. The President's non-defense
discretionary budget is $338.7 billion. The needs are much greater than
that. Even for certain needs, like school construction, we would have
to spend one-third of his budget. To repair structurally deficient
bridges, we would have to spend one-fourth of his budget. It is
unimaginable that we will fully address even one of these areas.
We must be creative. We must think of ways of solving problems that
are outside-the-box. That is exactly what this proposal is and why it
needs the support of the Budget Committee. The Committee's backing of
this bill reflects an understanding that our nation is asking for
innovative, bipartisan solutions.
The Federal Bank for Infrastructure Modernization is a tool for
leveraging the necessary funds. Cities and states would still be
responsible for paying the net cost of the project, but by making the
loans zero-interest, it cuts the overall cost of the project in half.
This is a workable solution that goes a long way in addressing
infrastructure needs.
I come here today to seek the support of the Budget Committee. With
your leadership, this bill could provide the ingenuity, the essential
boost that projects need.
Prepared Statement of Hon. John J. LaFalce, a Representative in
Congress From the State of New York
Mr. Chairman, Ranking Member Spratt, and Members of the Committee:
As Ranking Member of the Committee on Financial Services, I am pleased
to have the opportunity to present my views on the President's FY 2002
budget. I am particularly pleased to have this opportunity in light of
last week's floor consideration of the President's tax package, which I
strongly oppose.
The American people do not support a massive tax cut that would
jeopardize Federal spending priorities and our efforts to reduce the
national debt, nor should we. Our Republican colleagues know this. But
they nevertheless rushed to put the cart before the horse by passing
the President's tax plan before we even know what our budget will be
for the year.
We have tried this approach before, and it was a disaster. In 1981,
President Reagan assured us that we could first pass a massive tax cut
and then meet Federal spending priorities, all the while keeping the
Federal deficit in check. In reality, the 1981 tax cut plunged us into
a decade of mounting debt, while putting the squeeze on important
Federal programs.
This experience should have taught us that we cannot rely on magic
asterisks and vague promises to meet Federal budget priorities. It is
critical that we consider tax cuts after we give serious consideration
to a detailed budget for the year. It is the fiscally responsible thing
to do and the American people expect this from us.
In adopting the Republicans' plan, we would be turning the
President's message on its head. He has told the American public time
and again that tax cuts would be paid for by what was ``left over''
after budget priorities and debt reduction goals were met. But instead
we are moving headlong into a fiscal plan that will pay for all of the
Federal Government's spending obligations, as well as debt reduction,
out of what is left over from a massive tax cut. We cannot afford to
play fiscal games with our nation's economic future.
The price tag on the Administration's tax cut and the rest of the
Administration's tax plan will crowd out all other Federal priorities.
The budget blueprint the Bush Administration has submitted is driven by
the President's tax cut. To make room for that cut, it assumes a number
of dangerous cuts for important Federal agencies and programs: a 46
percent cut for the Small Business Administration, a 20 percent cut for
Federal Emergency Management Agency, a 17 percent cut for the
Environmental Protection Agency, an 8 percent cut for the Department of
Housing and Urban Development (HUD), a 15 percent cut for the
Department of Transportation, and the list goes on. The
Administration's tax cut effectively slashes important Federal programs
that serve the American people, raids the Social Security and Medicare
trust funds, and reverses progress toward eliminating the national
debt.
Let me address several specific items in the budget of particular
significance to the jurisdiction of the Committee on Financial
Services.
HOUSING AND COMMUNITY DEVELOPMENT
I take strong issue with the Administration's characterization of
the budget for HUD. The Administration claims that it is increasing
funding for housing programs, but, in reality, many key programs are
being subjected to significant budget cuts.
The Administration's budget blueprint purports to increase HUD's
budget by $1.9 billion, almost 7 percent. However, a careful
examination of the numbers reveals that spending is not increased by a
single dollar. Through creative budget gimmickry, the Administration
counts as spending increases some $3.6 billion in existing budget
authority that do not actually raise spending. When you factor out
these phantom increases, the reality is that the Administration's
budget cuts housing programs by $1.3 billion, or 5 percent. When
adjusted for inflation, this cut increases to $2.2 billion, an 8
percent budget reduction.
A detailed analysis of HUD budget cuts undermines the specious
argument that spending on domestic needs is not being sacrificed in
order to pay for the tax cut. The public housing budget is cut by $859
million, on a net basis. The list of specific program cuts is long. The
Community Development Block Grant (CDBG) program is cut by $422
million. The HOME Investment Partnership affordable housing block grant
program is cut by $200 million, an 11 percent cut. The Rural Housing
and Economic Development program is terminated. The reserves that
Section 8 administrators keep on hand are cut from 2 months to 1 month
(a cut of $640 million), a dangerous reduction which could jeopardize
timely payments to low-income tenants should payments from HUD lag.
Empowerment zone funding is cut by $35 million.
But perhaps the most telling criticism of the HUD budget is that,
instead of cutting funding for affordable housing, we should be
increasing it. At its heart, the Administration's budget represents
missed opportunities to address our growing affordable housing needs--
including over 5 million families with worst-case housing needs and
almost a million homeless on any given night.
At a time of record budget surpluses we should be reinvesting at
least some of those surpluses in a housing production program to build
more affordable housing units. There is a growing bi-partisan consensus
that such a program is needed, especially given the loss of our housing
stock through opt-outs and prepayments, and the difficulty of using
vouchers in strong rental markets.
At a time when Republicans in Congress are about to pass a $2
trillion tax cut, predominately tilted to our nation's most affluent,
we should not ignore the needs of our nation's homeless, as the
Administration's budget blueprint does. The estate tax break
Republicans are seeking to pass will ultimately save any one of the
richest ten Americans enough money to provide housing for our nation's
almost one million homeless for an entire year. That is certainly a
misplaced priority.
At a time when we have just begun to make progress over the last
few years in assisting some of our nation's 5 million families with
worst-case housing needs, this Administration proposes to cut in half
the number of annual incremental Section 8 vouchers that we have funded
over the last few years.
Moreover, at a time when the economic expansion has passed some of
our communities by, and signs of recession loom, we ought not to be
cutting the CDBG community development budget by over $400 million,
terminating the rural economic development program, and reducing
funding for Empowerment Zones. But that's what the Bush budget
blueprint assumes.
Put simply, the program cuts underlying the Administration's budget
blueprint reverses the progress we have made in recent years in
increasing resources to address our growing housing needs. At a time of
budget deficits, this budget blueprint would be unacceptable. At a time
of record surpluses, it is simply incomprehensible. It reflects a set
of priorities we absolutely cannot accept.
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND (CDFI FUND)
I am disappointed to see that the President's budget blueprint
states the Administration's intention to reduce funding for this vital
program. Although the blueprint indicates that the Treasury Department
will continue its efforts to promote financial services in low-income
communities through the CDFI Fund, the blueprint points out that the
Administration will reduce the CDFI budget request by an unspecified
amount, but at levels below the FY 2001 appropriation of $118 million.
However, it has come to my attention that the Administration's
request for FY 2002 may be only $68 million, a cut of $50 million, or
42 percent from FY 2001. This massive reduction, if indeed the
Administration follows through with it, is absolutely unacceptable, and
directly contradicts, in spirit and in substance, the compassionate
conservatism that the Bush Administration so often touts.
As significant a cut as that contemplated for the CDFI Fund--a
program that helps so many of our communities across America, and whose
contribution to the expansion of financial services in low-income
communities is unquestioned--sends precisely the wrong signal. In
essence, that policy choice says that America's low-income communities,
unlike the rest of the country, do not deserve ready and equal access
to mainstream financial services. We must not forget that many of
America's low-income communities have long been forgotten by mainstream
financial institutions, many of whom refuse to serve the entirety of
the communities from which they so richly profit. Unfortunately, these
are the same communities that were overlooked by the nation's economic
boom of the last decade.
Since its inception, the CDFI Fund has made significant strides in
accomplishing its goals of expanding the availability of financial
services to America's low-income communities. Overall, the Fund's
efforts have supported an increasing number of CDFIs and other
financial services providers in distressed communities across America.
The efforts of the Fund have led to increased access to capital in
these communities, with significant multiplier effects: increased
employment, more affordable housing, revitalized neighborhoods, and
strengthened local communities.
For example, in FY 1996 and 1997, 72 institutions received $68
million in assistance from the Fund. Between the time they received
their awards and 1999, these institutions doubled their annual lending
and investing, which went from $529 million in the year of award
notification to over $1 billion in FY 1999. During the same time
period, these institutions increased their combined total assets from
$1.6 billion to $2.6 billion.
Moreover, there is clear evidence that demand for this program
increases significantly every year. For example, between 1998 and 1999,
the total number of applicants for all components of the CDFI Fund
increased from 347 to 459, an increase of one-third. Similarly, between
1999 and 2000, the number of applicants increased from 459 to 536, a 17
percent increase. In FY 2000 alone, the CDFI Fund announced that it
would make $50 million available for the CDFI Fund's core component,
the program's single largest element. The Fund ended up receiving $264
million in requests.
Mr. Chairman, I do not understand how this kind of obvious need and
related program growth can justify a 42 percent decrease in the CDFI
Fund's budget, as the Administration is likely to soon propose. In
light of the growth in demand for the program's resources, we should
continue to increase the CDFI Fund's budget, as we have done over the
last few years. I would propose that the Administration fund this
program at $125 million in FY 2002. Full funding will assist the Fund
in meeting the significant demand that the program so clearly continues
to face.
THE PRIME ACT OF 1999
The Program for Investment in Microentrepreneurs Act of 1999 was
included as part of landmark legislation to modernize the laws
governing our nation's financial services industry. The legislation
authorizes the PRIME Act for 4 years at $15 million each year. The
Small Business Administration is responsible for awarding PRIME funds
to qualified organizations to:
Provide training and technical assistance to low-income
and disadvantaged entrepreneurs interested in starting or expanding
their own business;
Engage in capacity building activities targeted to
microenterprise development organizations that serve low income and
disadvantaged entrepreneurs; and
Support research and development activities aimed at
identifying and promoting entrepreneurial training and technical
assistance programs that effectively serve low income and disadvantaged
entrepreneurs.
The legislation authorized the program at $15 million for 4 years,
from FY 2000 to FY 2003. The FY 2001 budget funded the program at its
authorized level of $15 million. Although the President's budget
blueprint does not mention funding for PRIME, I strongly support
continued funding of this initiative at the authorized level of $15
million for both upcoming fiscal years.
INTERNATIONAL DEBT RELIEF
On international debt relief, it is not yet clear if the new
Administration will maintain the schedule for the U.S. commitment to
the World Bank HIPC Trust Fund, a multi-lateral initiative to reduce
the debt burden carried by the world's poorest countries. Funding for
this initiative was authorized in legislation reported out of the
Banking Committee in the 106th Congress (H.R. 1095), parts of which
were incorporated into two successive omnibus appropriations packages.
Although the Administration's blueprint pledges to fully fund ``all
2002 scheduled payments to the Multilateral Development Banks (MDBs),''
in the case of the HIPC Initiative, staying current with this
commitment would entail a $240 million appropriation in this year's
budget, as well as a $135 million appropriation for bilateral debt
relief. In light of tremendous economic and humanitarian benefits
resulting from this initiative, the Committee believes that it is
essential to adhere to our committed schedule for debt relief and to
provide the necessary funding in a timely manner. Last year, Congress
made substantial progress toward fulfilling the U.S. commitment to the
HIPC Initiative, and I am hopeful that we can continue along the same
path in the 107th Congress.
INTERNATIONAL MONETARY FUND
In 1998, Congress increased the U.S. quota of the International
Monetary Fund by $18 billion. As a condition of this funding, P.L. 105-
277 established a number of conditions and requirements to ensure that
the IMF mission is appropriately defined and its functions are carried
out effectively. Congress has an obligation to oversee IMF progress in
various areas of reform, given the claim that IMF funding places on the
Federal budget. In particular, I would urge the Budget Committee to
carefully review IMF progress toward: strengthening financial crisis
prevention measures; adopting policies that promote workers' rights and
environmental considerations; adopting policies that improve
international cooperation in the supervision and regulation of
financial institutions and markets; and promoting policies that
strengthen the financial sector in emerging economies.
WORLD BANK AIDS TRUST FUND
In the 106th Congress, the Banking Committee passed, and the
President signed, important legislation establishing a trust fund at
the World Bank for the purpose of tackling the HIV/AIDS epidemic,
especially in Sub-Saharan Africa. This region has 10 percent of the
world's population but accounts for 80 percent of global AIDS deaths
and 70 percent of the world's 30 million cases of HIV infection.
Because the HIV/AIDS crisis dwarfs any other human health epidemic in
recorded history, former Chairman Jim Leach and Reps. Barbara Lee and
Maxine Waters worked tirelessly in the last Congress to shepherd
legislation to address the problem under the auspices of the World
Bank.
The World Bank AIDS Prevention Trust Fund Act calls on the Treasury
Secretary to negotiate a trust fund at the World Bank that provides
grants to HIV/AIDS-affected countries for the implementation of HIV/
AIDS prevention, education, treatment, and care activities. The fund
will be financed by contributions from governments as well as private
donors, and the U.S. is authorized to make annual contributions of $100
million for 5 years.
In FY 2001, the Congress appropriated $20 million for the trust
fund, which is $80 million short of the authorized level. I also note
with concern that the President's budget is silent on FY 2002 funding
for this important trust fund. If we are to help impoverished and cash-
strapped nations deal with the scourge of HIV/AIDS, the Congress must
appropriate the full $100 million authorized in the legislation for FY
2002, and make up the $80 million shortfall from the FY 2001
appropriation. I also strongly urge the President to make funding for
this trust fund a priority in his budget.
Mr. Chairman, Ranking Member Spratt, and Members of the Committee,
again, thank you for allowing me the opportunity to submit these views.
Prepared Statement of Hon. Carrie P. Meek, a Representative in Congress
From the State of Florida
Good afternoon, Chairman Nussle, Ranking Member Spratt, and Members
of the Committee. Thank you for inviting me to testify before the
Committee.
There are many important issues that you must address in order to
put together a responsible budget resolution. You must ensure that the
budget provides sufficient resources to improve education, provide a
prescription drug benefit, protect the solvency of Social Security,
improve the solvency of Medicare, and pay down the national debt.
As you work toward meeting these important responsibilities, I urge
all of you to focus your attention on the impact that your decisions
will have on the lives of people in communities throughout America.
Your actions (and failures to act) have enormous consequences for my
District and communities throughout America.
I think that it's especially important in your work to use
terminology fairly and accurately so that your resolution reflects not
only what you propose to fund, but also what that funding will
purchase. I am very concerned that all too often the numbers and
percentages that all of us use do not fairly reflect the reality of
what is happening in our communities. We need to do more to consider
the real costs of dealing with the problems that the Federal budget is
supposed to address. Let me offer just a few examples concerning
housing and community development, an issue of particular importance to
me.
Currently, there is a crisis in the Section 8 housing program
because of rising utility costs which usually must be borne by the
tenants. The Administration is proposing a $150 million increase in
HUD's operating subsidy to fund the difference between rent and
expenses. That number sounds pretty impressive until you focus on the
fact that, currently, the operating subsidy fund has a $260 million
shortfall because of those rising utility costs.
Similarly, the Administration claims that they are increasing the
HUD budget by $1.9 billion, a 7 percent increase. Again, while that
number sounds impressive, when you take out the phantom increases in
the budget arising simply from accounting changes that do not increase
the resources available for spending, the reality is that the proposed
HUD budget is $1.2 billion below the amount required to fund a
``freeze'', that is, a current services budget. $2.2 billion more would
be required simply to keep pace with inflation.
An equally sorry story exists when you look at the proposed funding
for the Community Development Block Grant program (a $422 million cut);
for Empowerment Zones ($35 million cut); and for Rural Housing and
Economic Development.
Mr. Chairman, it's not enough simply to have a function or a line
item in your resolution entitled Education or Prescription Drug Benefit
or Public Housing if the amounts that you allocate bear no actual
relation to the needs that exist in our communities. For example, if
your resolution funds a prescription drug benefit but it excludes
coverage for anyone who earns more than $13,000 a year, then it's a
misnomer to speak of providing a prescription drug benefit. You are
only funding a prescription drug benefit for the poorest of the poor,
and millions of middle-income Americans still will lack prescription
drug coverage.
One of my highest priorities is to promote economic development and
community revitalization. Thus, it is tremendously discouraging to me
to see how the Administration is proposing to cut the HUD budget.
The Administration's $700 million cut to HUD's Public Housing
Capital Fund program, a 25 percent cut, will have a devastating impact
on the 3 million low-income residents of public housing throughout
America.
Scores of capital improvement items included in the 5 year plans of
public housing authorities simply will not move forward this year
despite the fact that a HUD study last year identified $22.5 billion in
existing modernization needs in public housing. More public housing
facilities will fail their inspections as fewer funds will be available
to fund repairs to building systems and other aspects of the physical
plant. In the absence of an increase to the Hope VI program, a
reduction in the Public Housing Capital Fund will diminish
revitalization of our affordable housing stock since the Capital Fund
has often been used with Hope VI funding to encourage public/private
partnerships.
Incredibly, despite its rhetoric about fighting drugs, the
Administration also proposes to terminate the Public Housing Drug
Elimination Program, a program presently funded at over $300 million.
This is clearly a large step in the wrong direction. The residents
in public housing face lots of challenges in their lives. Why in the
world would we want to discontinue a program which has proven
successful in protecting children and the community at large from drugs
and drug-related crime?
I have just touched the surface of some of the many issues within
your Committee's jurisdiction. You have a big task. Please step up to
your responsibilities by producing a budget that fairly reflects the
scope of the problems that the Federal Government must address, a
budget with sufficient resources for the Federal Government to meet the
needs of our people. Thanks again for inviting me to appear before you.
I look forward to seeing the Committee's resolution.
Prepared Statement of Hon. John E. Peterson, a Representative in
Congress From the State of Pennsylvania
A RURAL PERSPECTIVE
Chairman Nussle, Ranking Member Spratt, distinguished colleagues, I
come before you today to present a perspective that used to be the
predominant one, a perspective that focuses on simplicity and
community, one that is a way of life. That perspective is from rural
America.
I represent one of the largest rural districts east of the
Mississippi River. In addition, the Commonwealth of Pennsylvania has
more towns with a population of 2,500 or less than any other state in
the Union. If one traveled through my district, they would find a
multitude of manufacturing processes including timber and paper,
powdered metals, steel products, plastics, and hi-end technology
products. In addition, one would come across agriculture, as well as
oil and gas. In fact, the Drake well sight, the first successful oil
drilling site, is located in my district, as is one of the largest gas
storage facilities in the northeast.
Rural America is no longer the agrarian culture it once was and I
highlight the multi-faceted nature of my district because rural America
is slowly transforming into a society that does not rely on agriculture
as heavily as in the past. Farming is still a strong component of life
in rural America, but as that industry is faced with numerous
challenges, the rural economy will continue to slowly transform. The
demand for other jobs is growing and it is time to focus on ensuring
that quality opportunities continue to exist in rural areas.
It is on this transformation that I ask you, my colleagues, to
engage and focus. In order to assist you, I will emphasize the
following issues: education, economic development, energy, and health.
As we begin this discussion, it is important to remember that rural
communities are the first to feel any economic downturn and the last to
realize the benefits of a robust economy. It is my hope that many of
the topics mentioned will eventually help to minimize these economic
effects on rural regions.
Since education is one of the most important subjects for
Americans, it seems like an appropriate one on which to focus first.
Rural education systems face the same demands, challenges, and hurdles
that plague many urban and suburban schools. School modernization
efforts, academic performance issues, and drug-related problems are
just as prevalent, if not more so in rural communities. Schools must
rely on local taxes that come from a very limited base. As such, the
ability to pursue other avenues of funding is greatly hindered. While
many urban and suburban districts have significant administrative
personnel, entire rural school districts rely on one, possibly two
individuals to manage day to day operations and pursue both state and
Federal dollars.
That is why I wholeheartedly agree with the President's focus of
providing more flexibility in Federal funding to the educational
community by pursuing a block grant proposal. Recently, I asked the
Pennsylvania Education Department for a list of every school district
showing the amount of federal, state and local funds relied upon by
each school district. You may be interested to learn that nearly all of
the schools in my district receive roughly 1-percent from the Federal
Government. In contrast, schools in urban areas receive on average
about 7-percent of their funds from the Federal Government with one as
high as twelve-percent. This is simply not fair. While this issue must
be addressed in the context of reauthorizing the Elementary and
Secondary Education Act, it is imperative that the Committee provide
sufficient funds for reforms that address the rural funding inequity
issue.
I have often said that in the 21st Century, business and industry
will locate in areas where there is a quality-trained workforce. One
tremendous deficiency in ensuring the existence of a well-trained
workforce is the lack of classrooms able to support emerging
technologies. In order to address this shortcoming, I will be
introducing legislation in the near future that will provide matching
grants in order to provide more classroom opportunities. However,
economic development money can be utilized to help create new and
enhance existing technical centers. The President's overview budget
discusses economic development accounts. I am a little dismayed it
hints at following the advice of those that argue for the elimination
of the various economic development accounts.
The main thrust of the argument opposing economic development
accounts centers around the duplicity of the various programs. While
such duplicity may exist, certain proposals call for the total
elimination of every program. This is simply irresponsible. In
addition, opponents argue that funds are not targeted to those areas
with the most need. When Congress reauthorized the Economic Development
Agency a few years ago, one of the main tenants of that measure was
focused on assuring that funds were directed to areas most in need.
Rural communities are desperately in need of continued economic
development funds. In fact, over the past 3 months, four companies in
my district have either announced significant lay-offs or have
completely shut down plants. With this decreasing tax base, it is
imperative that communities have access to resources that will attract
new business providing similar or better quality jobs while maintaining
a quality of life. I can personally attest to the success of these
funds, as I have been heavily involved in helping communities utilize
them to attract business.
Another issue that has been thrust into the forefront of today's
priorities is energy. As I mentioned, I represent an area that has been
heavily influenced by the oil industry. In addition, nearly all the
natural gas destined for New England is stored or travels through my
district. Our country is facing a crossroads in the arena of energy
policy. The current Administration is taking steps to determine how to
focus our efforts. One point that will almost definitely be addressed
is the issue of increased domestic reliability. A continued drastic
decline in domestic production will lead us toward a national security
crisis. Right now we are seeing the beginnings of a domestic crisis,
which if not addressed, will lead to one involving national security.
As such, it is important to recognize that the current sources of
energy, namely fossil fuels, will not be overtaken in the near future
by any alternative energy source. That does not mean we should stop
pursuing research in alternatives. What it does mean, however, is that
we should not abandon these resources. New technologies are being
discovered at an incredible rate that provide cleaner use of
traditional fuels. This is a tremendous step toward ensuring that our
economies continue without feeling any negative impact. In order to
assist in this effort, we must continue to support research efforts in
the fossil fuel sector that will bring these technologies to the
forefront and eventually to the market place.
As I mentioned, we should also be exploring alternative sources for
energy production. There are a number of suggested alternatives that
continue to manifest and others that have been at the forefront for a
number of years. Many of these have been explored and researched to the
point that viability is not a foreseeable option. The emphasis on the
research and pursuit of alternative options should be heavily focused
on those that are viable. For example, wind is an alternative that has
been explored and, while applicable in some local situations, will not
become a viable alternative for the entire nation. Furthermore, little
progress has been achieved recently in improving wind toward becoming a
more viable source. However, there are other sources that show great
promise and have several applications that must receive more emphasis.
I encourage you to highlight viable alternatives in the pursuit of
energy policy funding.
Finally, I would like to close on an issue that Chairman Nussle and
I have worked very closely on and that is healthcare. In many respects,
I am addressing a responsive audience interested in preserving a health
care system in rural America, but I would like to take the opportunity
to highlight a few areas.
The debate on healthcare over the coming years will focus on our
baby boom population as more and more Americans become reliant upon
private and public sources of health care assistance. By and large,
this aging population lives outside of urban settings, mandating our
commitment to a vibrant, growing rural health care delivery system.
Simply stated, rural health care is the most cost-effective health
care delivery system in the country. However, federal, state, and
private reimbursements for care provided in urban/suburban settings
disproportionately out paces that provided to their rural counterparts
compared to their respective costs. This payment variance can often be
nearly as much as two-to-one, as exemplified in managed care
reimbursement rates. I often say that while urban America enjoys access
to Medicare Plus, rural America must make the most of Medicare
``Lite''. But whether it is managed care organizations, hospitals, home
health agencies, nursing homes, assisted living facilities, or
ambulance service providers, rural caregivers are dealing with an
uneven playing field. We must work diligently to right this wrong.
Federal policy must serve to strengthen the viability of our rural
providers. The alternative forces patients to travel long distances
away from friends and family to more costly urban and suburban
settings--both to them and to taxpayers. As such, I am pleased to hear
of the President's budget priority to invest in a safety net by
strengthening Community Health Centers that provide care for our low-
income, uninsured and underinsured rural populations. However, I worry
that this initiative alone will not reach all of rural America, and ask
you to also support other vehicles to assist in meeting this need. Such
vehicles may emerge from a higher funded National Health Service Corps
that would encourage greater practice in rural areas, an enhanced
budget for the Office Of Rural Health Policy to boost research
capabilities or increased funding to the Prospective Payment System
Grant created in the 1999 BBRA, but never funded.
Regardless of the details, the overall mission must be to not only
preserve rural health care, but to ensure that it thrives in every
rural community across the Nation. While our rural providers serve as
the most cost-effective deliverer of care, their viability also serves
as an integral part of their community's economic engine, as one of--if
not the--largest employer in the area, and as a needed incentive to
attract new residents, businesses, and opportunities for economic
growth.
In closing, I would like to thank the Committee for the opportunity
to present the picture of rural America. We are the heart and soul of
much that is good in this country. It is essential that rural
communities remain vibrant and can continue to contribute to the
economic prosperity of this country. When these communities begin to
fail, the impact and burdens are soon felt by the entire country. Thank
you for keeping the rural perspective in mind as you work toward
finalizing a budget outline for fiscal year 2002.
Prepared Statement of Hon. Charles W. Stenholm, a Representative in
Congress From the State of Texas
I appreciate the opportunity to appear before the House Budget
Committee to offer my views on the fiscal year 2002 budget resolution.
The consideration of the budget resolution is perhaps the most
important debate Congress has each year because the budget establishes
our priorities for the rest of the year. The opportunities presented by
the projected budget surplus will make the budget debate even more
important this year. The manner in which we proceed with the budget
process over the next few weeks will set the tenor and tone for the
remainder of the year.
Last week, President Bush submitted a budget blueprint outlining
how he proposes to fit his tax and spending priorities into an overall
budget framework. We welcome this proposal as the first step in the
budget process. Now it is our responsibility and we look forward to
working with the president and the Congressional leadership to develop
a budget resolution.
Unfortunately, the Congressional leadership has chosen to
shortcircuit the budget process by bringing legislation to the House
floor implementing part of the tax cuts before Congress has had an
opportunity to consider the entire budget. It is ironic and
disappointing that at the very time that Members of this House are
being given our first opportunity to offer our input into the
priorities for our nation's budget on behalf of the people we
represent, we are being asked to vote on a major portion of the
President's budget. Those of us in the Blue Dog Coalition believe that
considering tax cuts before Congress has put in place a budget
resolution is a tremendous mistake that could jeopardize the fiscal
discipline that has produced record surpluses and will put at ask risk
of returning to the era of deficit spending.
No family or business would make a decision that would have a major
impact on their finances for the next 10 years without first sitting
down and working out a budget to figure out what they can afford. We
owe it to our constituents to apply that same common sense principle to
the nation's budget. It would be a disservice to our constituents to
pass these tax cuts before we know if there will be enough money left
to fund other priorities.
The Blue Dogs have repeatedly called for the largest possible tax
cut that fits within the context of a fiscally responsible long-term
budget framework that balances other priorities. Tax cuts must be part
of a responsible budget with realistic spending levels and a serious
commitment to paying down the national debt and strengthening Social
Security and Medicare.
The projections of a budget surplus provide us with a tremendous
opportunity to pay down our national debt, strengthen Social Security
and Medicare for future generations, address unmet needs in defense,
education, health care and other areas and provide substantial tax
relief to all Americans. If we are not careful and manage the budget
surplus responsibly, we will squander this opportunity and return to
deficit spending.
The American people have repeatedly told us that their top priority
for the surplus is paying down our national debt and strengthening
Social Security and Medicare. We should decide how much of the surplus
we will need to strengthen Social Security and Medicare and establish a
plan to pay down our national debt before we consider tax cuts.
In 1981, Congress passed a large tax cut before agreeing on the
spending cuts to pay for the tax cut. The result was a $4 trillion
increase in our national debt. We cannot afford to repeat the mistake
of rushing to cut taxes before first considering how they will fit
within a fiscally responsible budget. I lived through that experience
20 years ago where we allowed ourselves to believe words that sounded
too good to be true. It breaks my heart to think that we may have
learned nothing from our mistakes.
Financial markets will look beyond the short-term impact of fiscal
policy to evaluate the long term consequences of our actions. Policies
that signal to the financial markets a credible long-term commitment to
fiscal discipline will have a positive impact on both short- and long-
term interest rates.
Any benefits from the short-term stimulative effect of a tax cut
will be eliminated if financial markets lose confidence in our
commitment to long-term fiscal discipline. It is critical that any tax
cuts be made in the context of a budget framework that financial
markets view as a serious commitment to fiscal discipline over the
long-term.
RECOGNIZE UNCERTAINTY OF BUDGET PROJECTIONS
Enacting a large tax cut based on 10-year surplus projections that
may not materialize puts us at risk of returning to the days of deficit
spending. We are concerned that the President is placing too much
emphasis on 10-year forecasts that may not come to fruition in order to
justify the size of his tax cut and downplay the amount of debt
reduction that is prudent in the short-term.
Over 70 percent of the projected on-budget surplus over the next 10
years will occur in the second 5 years, when projections are especially
uncertain. It is extremely dangerous to enact tax cuts now based on
projections about the budget and the economy 6 years from now and
beyond.
In 1993, the budget projections for 2001 were approximately 800
billion dollars off the mark. The Congressional Budget Office warned in
their report about the new surplus projections that if today's
estimates are as inaccurate by the average amount they have been off in
the past, then within 5 years our surplus could easily be short $400
billion in 1 year alone.
DEBT REDUCTION
The economic prosperity of recent years was due, in large part, to
the conservative budget policies which turned deficits to surpluses and
allowed us to begin to pay down some of our staggering $5.7 trillion
national debt. By using these surpluses to pay down some of the
national debt and reducing the $240 billion in annual interest paid on
the national debt, we were able to keep individual interest rates low,
saving Americans thousands of dollars annually on mortgage, car loans,
credit cards and college loans--what we consider to be the ultimate tax
cut. Moreover, by paying down the debt, we were able to get the
government out of the credit markets, making capital more accessible
and affordable for American businesses, allowing them to continue to
grow and prosper.
Federal Reserve Chairman Alan Greenspan has repeatedly reported to
Congress that devoting budget surpluses to paying down the debt held by
the public is the most important action we could take to maintain a
strong and growing economy. There is a broad consensus among economists
increasing national savings by reducing the national debt continues to
be the best long-term strategy for the U.S. economy. Reducing our
national debt will provide an immediate tax cut for millions of
Americans by restraining interest rates which will reduce the cost of
home, student or business loans and other capital goods, while
protecting our children and grandchildren from bearing the burden of
the debts we have incurred.
We were pleased to see that President Bush emphasized the
importance of debt reduction, which he has not done in the past. His
emphasis on debt reduction is further evidence of the wisdom of the
Blue Dog message of debt reduction. However, we were disappointed that
the President's plan would only pay off slightly more than $2 trillion
of the $3.4 trillion debt held by the public over the next 10 years,
leaving more than $1.2 trillion in debt outstanding. The administration
believes that it is not possible to pay off any more debt than that.
Only in Washington would people be worried about paying off the
$3.4 trillion debt held by the public too quickly. Having ``too much''
money available from the budget surplus is a ``problem'' that we would
like to have.
Independent experts believe we can go much further in paying off
the debt than the President proposes if we use prudent debt management
tools to maximize debt reduction. Estimates prepared by the non-
partisan Congressional Budget Office and General Accounting Office
indicate that the debt could be reduced by $400 billion more than the
Bush administration claims, for a minimum of $818 billion in 2011
through prudent debt management such as not issuing any new ten and
thirty year Treasury notes. Federal Reserve Board Chairman Alan
Greenspan estimated that the debt held by the public could be reduced
to $750 billion without creating any problems. Former Treasury
Undersecretary Gary Gensler estimates that a concerted effort to
eliminate the debt could bring it down below $500 billion in 10 years.
That is more than $700 billion lower than the amount of debt reduction
proposed by the President.
It will be easier for a future Congress to reduce future surpluses
if we end up paying off the debt too quickly than it would be to change
policies to put the budget back on a debt reduction glidepath if the
surpluses are not as large as projected.
Congress should take time to make sure we are doing everything we
can to use our current surpluses to pay off the debt as aggressively as
possible before accepting the position that reducing the publicly held
debt to $1.2 trillion is the best we can do.
protecting medicare and social security trust fund surpluses
The President's budget does not set aside the Medicare trust fund
surplus, despite the fact that the House overwhelmingly passed a
Medicare lockbox which would require the entire Medicare HI trust fund
surplus be set aside just 3 weeks ago. In fact, the Medicare trust fund
surplus makes up half of the so-called ``contingency fund'' that is
available to meet other needs.
PROVIDE RESOURCES TO STRENGTHEN SOCIAL SECURITY AND MEDICARE
The Congressional Budget Office has warned that, while the budget
outlook is positive over the next 10 years, demographic tensions will
begin after 2011 with the retirement of baby boomers that will create
``budgetary pressures . . . (which) can easily reverse the favorable
fiscal forces that are operating today.'' In particular, there is a
bipartisan recognition that Social Security and Medicare will face
serious financial challenges in the near future.
The budget surplus provides us with the opportunity to make sure
those programs continue to be strong for current and future
generations. If we squander this opportunity, we run the risk of having
to dramatically cut benefits or raise payroll taxes in order to keep
the programs solvent.
I commend the President for making reforms to deal with the long-
term problems facing the Social Security and Medicare programs a
priority for your administration, and look forward to working with you
to achieve this goal. Although the Blue Dogs have not proposed specific
Social Security or Medicare reforms, we have taken the position in our
budgets and elsewhere that dealing with the long-term challenges facing
these two programs should be our first priority in allocating the
projected surplus. While there are differences about specific Social
Security and Medicare reform proposals, there is a widespread
recognition that any Social Security or Medicare reform package will
need to rely on some additional resources from the on-budget surplus.
I personally agree with the President that we should allow
individuals to invest a portion of their payroll taxes in individual
accounts. Having worked on this issue for several years, I realize that
creating individual accounts while meeting the President's goal of not
reducing benefits for those currently retired or approaching retirement
will result in transition costs that will require additional resources
from general revenues in order to keep the program solvent until the
benefits of individual accounts begin to accrue.
Prudence dictates that we set aside a significant portion of the
on-budget surplus for Social Security and Medicare reform until
Congress and the President have reached agreement on legislation to
strengthen these programs and we know how much of the surplus will be
needed to make those reforms succeed.
MEDICARE PRESCRIPTION DRUGS
There is a bipartisan commitment to enacting a meaningful
prescription drug benefit for all seniors. Congress should enact a
Medicare prescription drug benefit that is available, affordable,
dependable and voluntary for all beneficiaries. I strongly encourage
this committee to take time to seriously consider how much money we
need to set aside in the budget in order to put in place a meaningful
Medicare prescription drug benefit.
New estimates from the Congressional Budget Office suggest that
drug spending for the elderly and the disabled in the next decade will
be much higher--perhaps 33 percent higher--than the agency predicted
just 10 months ago. The Republican Chairman of the Senate Finance
Committee, which will have responsibility for putting together a
Medicare prescription drug plan, has indicated that as a result of
these new estimates Congress will have to put more money into the
budget for prescription drug coverage than the President proposed.
STRENGTHENING THE AGRICULTURAL SAFETY NET
American farmers continue to face tremendous economic problems.
Members on both sides of the aisle agree that we need to strengthen our
farm programs to deal with the crisis facing rural America instead of
resorting to ad hoc emergency packages each year.
As you know, a coalition of groups representing a cross-section of
agricultural groups wrote to this Committee stressing the importance of
including additional agricultural budget authority for each of the
years remaining in the Budget Resolution (FY2003-FY2011) to avoid
continued requests for ad hoc assistance packages. They suggested that
we consider at least $12 billion per year in additional funding needs
for each of the remaining years of the Budget Resolution. Such a
commitment would provide the necessary funds to cover the options
currently being evaluated by the Senate and House Agriculture
Committees as essential elements of the new Farm Bill.
ESTABLISH REALISTIC SPENDING CAPS THAT PROVIDE ROOM TO RESPONSIBLY FUND
BIPARTISAN PRIORITIES
A responsible budget framework must check the growth in spending
while providing room to meet these priorities without relying on
unspecified or unrealistic spending cuts that may not materialize.
Unrealistic spending levels in recent budget resolutions have resulted
in a chaotic process that dragged on well beyond established deadlines
and produced irresponsibly high spending. The President talked about
the areas where he proposes to increase spending at great length, but
did not provide much information about where he would reduce spending
in order to pay for these initiatives as well as his tax cut.
We share the President's commitment to restraining government
spending. We are willing to work with the administration and this
committee to address excessive or wasteful spending. We encourage the
President to submit to Congress recommendations to eliminate specific
areas of waste, fraud, abuse or pork within the current budget which
might reduce the overall spending levels in the future. A budget which
controls spending will restore sorely needed budgetary discipline. If
we can reach agreement on tough but realistic spending levels, the Blue
Dogs are committed to help you hold the line against additional
spending.
At the same time, we also share the President's support for
investing in priority areas such as defense, education, health care and
other areas. We are very interested in working with the new
administration on issues such as education reform and strengthening our
military. It is critical that we ensure that there will be resources
available this year and in the future to back up our rhetoric with
funding to accomplish these goals without relying on promises of
unrealistic spending cuts that may never materialize. Promises about
reforming education and strengthening our military will be hollow if we
enact large tax cuts that don't leave room to fund these areas.
The President has proposed education reforms to improve our
nation's educational system and establish greater accountability for
public schools. Calling on our schools to meet increased standards
without providing resources to help schools meet these standards will
result in another unfunded mandate.
The budget blueprint submitted by the President did not include
increased funding to address our unmet needs in national defense. The
President has indicated that he will wait until the Department of
Defense has completed a strategic review before proposing more money
for defense. However, there may not be money left to increase defense
spending when the review is completed if we enact tax cuts without
putting together a budget that leaves room for increased defense
spending.
CONCLUSION
Budgeting requires making choices. This Committee faces some tough
choices in balancing several worthwhile priorities within a fiscally
responsible budget framework. We should create a budget framework that
commits the budget surpluses that materialize over the next 10 years to
our important priorities, but does not lock us in to policies that
depend on uncertain 10-year budget estimates.
Chairman Nussle. We appreciate people's attendance here
today, and we are adjourned.
[Whereupon, at 3:40 p.m., the committee was adjourned.]