stitutional question which there may have been over the sequestra-
tion of the Gramm-Rudman and subsequent budget enforcement
Section 4, in acknowledging that there may be times either of
war, of depression, or whatever, and we do not state in the amend-
ment itself a reason which may bring the Congress and the Presi-
dent to the conclusion that we cannot, for the good of the country,
balance the budget in that particular fiscal year, section 4 states
that "the provisions of this article may be waived for any fiscal
year only if Congress provides by law by a majority of the whole
number of each House, and such waiver shall be subject to a veto
of the President."
That means that if the Congress wishes to waive the balanced
budget requirement itself, it must override a veto of the President;
that if in fact it is so detrimental to our economy or we could not
function appropriately with national security, we must waive the
balanced budget requirement, we could so do.
Section 5, simply in defining receipts and outlays, states that
"total receipts shall include all receipts of the U.S. Government ex-
cept those derived from borrowing." We cannot borrow our way out
of the problem. "Total outlays shall include all outlays of the U.S.
Government except for those for repayment of debt principal."
Finally, section 6 states that "this article shall take effect begin-
ning with fiscal year 2000 or with the second fiscal year beginning
after its ratification," whichever is later.
I personally believe that it is time. I believe that in order to place
upon this Government, the Congress and the President, to place
fiscal responsibility upon us, to force us to balance our own budget,
I believe that it is necessary to require us to do so in that very doc-
ument which creates and controls the operation of this Govern-
ment, the Constitution.
Therefore, I would urge my colleagues to support and vote for
this balanced budget amendment, which I believe does make the
statement required but does not so restrict the Government from
being able to act.
N^w, there are many of my colleagues who would disagree with
me, who would say that we should not place into our Constitution
such a fiscal provision. We have argued on the floor of this House
in previous years, most recently last July, that in fact we could and
should balance the budget by statute, and in fact that balanced
budget amendment will not balance the budget. It only says in the
Constitution that we must do it.
How do we do it? We must change the budget process by statute
in order to provide the mechanism whereby we can balance the
budget. Therefore, I do beUeve that an amendment is necessary,
but even without a constitutional amendment the second bill which
I am filing today would in fact provide the statutory framework,
the process, the mechanism for arriving at the balanced budget it-
I have prepared, in Ross Perot-type flow charts, an explanation
of our current budget process, and to graphically illustrate the
changes that this amendment would entail, a second flow chart to
show the changes in red.
First of all, let us outline the current budget process which we
in our Government are currently using to arrive at the money
which we will appropriate and spend in any given fiscal year.
To start with, the President comes to this body in his State of
the Union Message, addresses the body, and at that time or shortly
thereafter submits to the Congress his budget request. That budget
request is typically based upon projections set forth by the Office
of Management and Budget. Those projections are developed within
the executive branch.
When he submits that budget request to the Congress there is
absolutely no action required by this or the other body of Congress
on his budget request. We have our own budget process wherein we
developed a concurrent budget resolution. In order to develop the
concurrent budget resolution we rely upon the â€” rather than the Of-
fice of Management and Budget, we rely upon the Congressional
Historically, if you will look over the past decade, the average of
both of these different bodies or entities, analyzing the budget, they
have averaged an error of $45 billion annually in either over-esti-
mated revenues or underestimated expenditures. We in Congress,
once we ignore the President's budget and establish our own con-
current budget resolution, use that budget resolution for the most
part to guide our authorizations and appropriations.
However, we oftentimes even waive the budget agreement itself
or we waive the budget law, the Budget Enforcement Act, and we
simply ignore our own budget to pass emergency spending bills
which we pretend simply do not exist within the budget because it
is an emergency.
The President, with regard to our budget process, since we often-
times ignore his, the President is forced to use one of only two
other resources which he has to counter what the Congress chooses
to do in spending. He may veto an authorization or appropriation
bill, but he must veto it in total. We have only 13 appropriation
bills whereby we appropriate all the money for the operation of the
Government, the appropriated funds. We do have unappropriated
funds which we simply do not even deal with, for the most part,
in our resolution process.
The President seldom uses this veto power for appropriations, al-
though he has it. He has one other tool which he also seldom uses
but is also somewhat ineffectual in that he can request a rescission
of appropriated funds.
Like the budget message that the President submits us, we have
no requirement to act upon the President's rescission, and if we do
not act within 45 days it simply goes away. We then, from appro-
priated money â€” ^the executive branch spends that money. Actual
receipts and outlays historically have resulted in deficits growing
higher and higher every year, between slightly over $300 billion for
this fiscal year, and our response to that is to turn around, as we
will in March of this year, and vote to increase the limitation on
public debt to allow the country to continue to borrow more and
We now are over $4 trillion of debt for our children and our
grandchildren. We do go through a budget reconciliation process,
but that process is not designed to determine what we did in actu-
ality and fix it. That process is used to revise our next year's pro-
jections and targets for our concurrent budget resolution in the fol-
That is our current budget process. What the bill would do that
I have filed today is outlined in this chart in red. Let me briefly
go through these steps and then explain in somewhat more detail
each of the specific titles or provisions of this legislation.
First of all, when the President submits his budget request this
legislation would require that that budget be balanced in outlays
and expenditures, or outlays and receipts. He submits a balanced
budget request to the Congress. The other new part is we must
vote on that budget request without substantial change.
The President deserves the vote. We do not have to adopt the
President's budget request. We still would retain the authority to
amend or substitute our own budget as we develop a concurrent
budget resolution. But our concurrent budget resolution would also
have to set forth a balanced budget wherein outlays do not exceed
There are several other changes that this bill would make to the
process. It would shift from a 1-year cash budget to a 2-year bien-
nial budget where we budget on a 2-year cycle rather than one. We
would go to an operating and capital budget rather than a cash
budget. We would create zero-based budgeting or incremental
budgeting whereby we eliminate current services budget where you
simply start with what we spent last year and add to it.
We would also, through the authorization and oversight process,
establish sunset laws which would require us at least once every
10 years to analyze, oversee and reauthorize all Federal programs.
In order to make that analysis through the reauthorization or over-
sight process, we would also create what are called performance
standards that would set forth criteria. It would set forth goals and
criterias whereby we can judge those programs to determine
whether they are effectively operating and whether or not we
should reauthorize those.
From our budget resolution, therefore, we continue with an au-
thorization and an appropriation process. There are some, by the
way, and let me divert for one moment, who would suggest that we
eliminate the appropriation process. That could be done under this
bill. It is not eliminated in this bill because that creates a turf bat-
tle inside the House and the Senate in taking away power which
Members of the House and the other body have acquired through
their position and seniority. So rather than fighting that battle,
this process leaves the appropriation committees intact, although
under this process it would not be necessary to continue a separate
appropriation process. The authorization and oversight process
could in fact appropriate the money as well. The appropriation
process would still be subject to a veto by the President with the
requirement of a two-thirds override.
But this legislation would create another new provision, en-
hanced or expedited rescission for the President. Many people have
called for a line-item veto. I, among others, believe that a line-item
veto would be unconstitutional as currently considered. I also am
concerned that a line-item veto as such may in fact shift too much
of the balance of power, the power of the purse, from the Congress
where the Constitution places it, to the President. Therefore, we
have sought to find an alternative which would be as effective but
still be constitutional.
The alternative we selected is the expedited rescission process.
The difference between this and the current rescission process is
that the President could line item any portion within the appro-
priations bills and request a specific rescission of that item, any
portion of it or all of it, send it back to us, and we would be re-
quired to vote on that rescission request, each separate rescission
request. That would give the President the opportunity to line item
those areas of pork, those areas of inefficient spending, send it back
to us, and we would have to stand up and cast our vote in favor
of continuing to pay for the individual who is paid $75,000 a year
to watch catsup run down a board. So this would effectively elimi-
nate those kinds of pork barrel and inefficient programs.
At this point there are some other significant changes, and those
changes, by the way, are substantive changes of the process which
provide us the mechanisms to analyze and evaluate the most ap-
propriate areas. We have a very difficult decision in this govern-
ment, and that is to determine how to spread very scarce resources.
What is the highest priority for those scarce resources? That is
what these provisions are designed for, to allow us the mechanism
to set those priorities.
Assuming that we do not properly estimate our income and our
outlays and we find that at the end of the year that our total re-
ceipts and outlays have created a real deficit, what do we do? This
brings the President and the Congress together in resolving that
deficit through true look-back and real budget reconciliation. The
President, through the 0MB, would submit to us on a regular basis
reports of actual receipts and outlays throughout the current oper-
ation of the fiscal year. Using that information, we will know at
any given period of time whether we are ahead of or behind those
projected revenues and outlays or outlays and income. So we will
have an idea as we go what the deficit is. It does not occur all at
once on October 1 when we find out we spent more than we
What happens if we do spend more than we brought in? First of
all, the President is required under this new statutory scheme to
recommend to the Congress where to cut additional spending or
where to raise revenues in order to resolve that actual deficit for
the fiscal year which just ended. So he submits his recommenda-
tions. Or the President may say golly, we are in a war, or we are
in a depression, or for some reason we cannot balance the budget;
therefore, I recommend that you, Congress, waive the requirement
to balance the budget. So the President would lay on the table to
us his recommendation of whether you cut additional spending, you
raise additional taxes, or you waive the requirement.
We would be required in Congress to provide, by law, for either
spending cuts or tax increases to resolve that true budget deficit.
That law, if we do something the President does not agree with,
that law would be subject to a Presidential veto. In other words,
we are going to have to vote on it, the other body is going to have
to vote on it, and the President is going to have to sign it. Or, we
can provide by law for a waiver of this statutory requirement,
which again is subject to a veto by the President. If he disagrees,
if he says no, do not waive that requirement, I recommend you cut
additional spending here or raise revenues there, he can veto it,
and we would have to override that veto by a two-thirds majority.
So again it brings the President and the Congress together in iden-
tifying how to provide for a repayment of that deficit, either
through cuts or taxes or exempting from a waiver. If we exempt
ourselves and say we will waive it, then and only then do we get
to an increase of the public debt limitation.
Finally, if in fact, as many of the people out there believe, that
this city is in gridlock, that this government is in gridlock, that we
cannot act, that they simply say it is too hard for us to agree, we
cannot make these tough choices, if that occurs and we decide to
go home without either resolving the deficit through additional cuts
or taxes, or waiving it based upon some national emergency cri-
teria, we would then face a sequester. Fifteen days after we ad-
journ there would be a hard cut, a hard sequester to cover the
amount by which we exceeded in expenditures the revenues that
we brought in in that prior fiscal year.
That is the outline. Let me briefly explain several of these spe-
cific provisions beginning with the budget enforcement which we
have just spoken about. A significant cause of our enormous budget
deficit is that attention is focused almost exclusively on budget pro-
jections instead of the level of deficits actually incurred. This al-
lows the President and Congress to appear to be making progress
on bringing down the deficit by looking at previous years' expendi-
tures, by rosy forecasts and scenarios of next year's revenues when,
in fact, the deficit continues to increase year after year.
A related problem is that any balanced-budget amendment or
Gramm-Rudman t3T)e deficit target will probably fail due to manip-
ulation of projected outlays and receipts, if you do not have true
reconciliation with an enforcement mechanism.
To overcome these problems, title I of this bill provides that the
budget must be balanced in actuality, not just in the projection, by
fiscal year 2000. If there is an actual deficit. Congress and the
President are required to enact reconciliation legislation to make
up for the shortfall or provide by law for a waiver of the balanced
If no such action is taken, then sequestration takes place auto-
matically in an amount to equal the actual deficit incurred in the
previous fiscal year. This is the section of the bill which requires
the President to submit a balanced budget, requires the Congress
to enact a concurrent budget resolution providing for a balanced
budget, requires the Office of Management and Budget to give us
statements of monthly or quarterly projections of actual receipts
and outlays, and a statement of the actual deficit at the end of the
fiscal year, and requires for a repa5rment through either cuts in
spending or tax increases through the reconciliation process or a
waiver, both of which are subject to Presidential veto.
This lookback enforcement, backed up by the hard sequester,
would, indeed provide us the mechanism necessary to make those
hard choices and to actually balance the budget.
Now, the second title of the bill dealing with biennial budgets
deals with the problem wherein our annual budget and appropria-
tion process is unduly repetitive and so dominates congressional
time and energy that insufficient attention is paid to authorization
and oversight functions. By use of a biennial budget, a 2-year budg-
et, we would overcome much of this problem. Confining budget and
appropriations actions to the first term of Congress would encour-
age greater long-term budget planning and would allow more time
for a thorough congressional reevaluation of the effectiveness of
Federal programs and agencies.
Midcourse tax and spending corrections are allowed in the second
fiscal year to adapt to changing economic and policy conditions.
This also helps us eliminate the yearend binge spending which has
become so prevalent throughout Federal agencies where, at the end
of the fiscal year, you have to spend everything in your budget be-
cause next year we are starting fresh with what you spent last
year plus, and this, combined with our incremental budgeting,
would eliminate that binge spending. So this is the title of the bill
that provides for a 2-year budget cycle, the biennium.
During the first session of Congress in that 2-year cycle. Con-
gress receives the President's budget suggestions. They enact a con-
current budget resolution. They enact all 13 appropriation bills,
and they complete reconciliation legislation that year. The budget
resolution and appropriation bills are adopted for a 2-year period
of time, and during the second session of Congress, the Congress
would enact all necessary reauthorization legislation, and here we
will incorporate the sunset laws that we get to in a moment.
They would conduct oversight hearings. They would also revise
the congressional budget resolution, if necessary, and would be al-
lowed to pass supplemental appropriations and rescissions in order
to truly make the best decisions in each fiscal year so that at the
end of the biennium we actually have a balanced budget.
Now, the third title of this bill is the title which creates a unified
operating and capital budget. Adoption of a capital budgeting re-
quirement would allow budgeting and appropriations decisions to
reflect more accurately the long-term value of capital expenditures.
It would also promote more efficient lease-versus-purchase deci-
sions for capital items by requiring a net-present-value comparison
between the options of leasing equipment or real property and ac-
quiring that equipment or real property. So this is the title of the
bill which provides for a unified budget consisting of an operating
and capital budget.
Those budgets would be presented separately for total funds,
Federal funds, and trust funds. It would define capital and physical
assets, and it creates an asset consumption charge which is equal
to the cost of the asset allocated out over the useful life of the
asset. This simply is amortizing the cost of assets with a useful life
more than the fiscal year, allocating that cost over the actual use-
Outlays for capital assets in this balanced budget requirement
would be calculated by using only the asset consumption charge
and an allocated portion of the net Federal debt for the acquisition
of that asset. This simply acknowledges the typical budgeting proc-
ess that every home uses. You do not go out and buy a house for
cash. You mortgage your home, and then you budget into your
monthly payments the cost of paying off that mortgage which in-
cludes both the cost of the principal that you borrowed and the in-
terest attributed to that particular month or year. This would do
the same thing in our budget.
Each department would be required to analyze the efficiency of
leasing or purchasing all proposed real estate and equipment cap-
ital expenditures over $10 million, again, designed to help us both
account more appropriately for expenditures of funds for assets
that last more than 1 year, more than 3 years actually, and also
to more appropriately determine whether to acquire by purchase or
simple lease those very expensive long-term assets.
In title IV, we create sunset authority to provide for automatic
congressional review at least once every 10 years of most Govern-
ment spending programs. It would also provide for mandatory re-
authorization of major tax expenditures at least once every 10
years. The goal is determination of obsolete or underperforming
programs. This is the section where we require each Government
program to be reauthorized at least once every 10 years, and we
provide an exception only for interest on the debt. We cannot avoid
that, the administration of justice, which we need to continue to
ensure justice and the administration of justice, the third body of
government, and payments of IRS refunds.
This sunset authority would limit authorization periods for any
program to 10 years and would bar appropriation of any program
which has not been reauthorized during the reauthorization cycle.
It sets up a specified schedule of sunset dates so that in the sec-
ond year of each biennium we would be conducting our authoriza-
tion and oversight activities wherein we would be looking at each
area of Government spending to determine whether or not it justi-
fies reauthorization. This also requires us not only to look at spend-
ing programs but tax-expenditure programs such as investment tax
credit, et cetera, which are oftentimes made permanent in the code
but oftentimes permanent expenditures are difficult to analyze the
Therefore we would require an inventory of all tax expenditures
with a cost of at least $1 billion and require reauthorization of
those expenditures at least once every 10 years. Title V deals with
the expedited rescission authority to provide a new congressional
procedure for handling Presidential rescission requests. This forces
Congress to take an affirmative vote on each Presidential spending
rescission request within a specified timetable. It requires a sepa-
rate vote on each item of proposed Presidential rescission.
As a result, individual spending items are more likely to be con-
sidered on their merit instead of being lumped together with a
broad appropriations bill. At the same time, this approach avoids
the minority rule which would result from a line-item veto and a
two-thirds' override provision.
This title allows the President to propose rescissions of specific
spending items within appropriation bills. Each such request may
be for all or any part of any budget authority approved in an ap-
propriation bill. The President would be required to submit any
such rescission request within 10 days of signing an appropriation
bill. Each rescission request would require a separate message
from the President. Within 10 days, each rescission request would
be required to be reported out of the Appropriations Committee of
the House where that bill initiated. Within 10 days after it came
out of committee, a final floor vote would be required on each re-
If approved by the House of Congress wherein that particular bill
originated, the rescission request would be referred to the other
House, where you would follow the same procedure, and amend-
ments to Presidential rescission requests would be prohibited. I be-
lieve this would accomplish the same beneficial purposes of the
line-item veto without the constitutional questions and without the
supermajority and, therefore, the minority rule on spending issues.
Title VI requires performance based budgeting. With increasing
pressure to cut spending, it is critical to evaluate the success of ex-
isting programs to determine which could be most easily elimi-
nated. This title provides for the establishment and evaluation of
performance standards and goals for expenditures, including tax
expenditures, in the Federal budget to be prepared by the executive
0MB would be required to promulgate regulations requiring each
department and agency to establish a performance standard and
goals for each major expenditure category. That plan would include