Budget Watch

A newsletter covering budget reform and the latest news and views on the federal budget, published by The National Center for Public Policy Research, 501 Capitol Court, N.E., Washington, DC 20002 (202) 543-4110, Fax (202) 543-5975, and the Small Business Survival Foundation, 1320 18th St. NW, Washington, DC 20036 (202) 785-0238, Fax (202) 822-8118.

Issue # 10 - September 13, 1995 * David A. Ridenour and Karen Kerrigan, Editors

Hill Watch: Update on Hill Efforts for a Balanced Budget

A Budget "Train Wreck" Without Passengers

President Clinton and his allies in the media have latched onto a "train wreck" metaphor to describe what would happen if the GOP Congress and the White House fail to reach an accord on the budget. By so doing, they hope to evoke images of death and mayhem and put pressure on the GOP to make significant concessions. But if the budget train is about to experience a wreck, at least its a train without passengers.

Contrary to common perception, if the President and Congress fail to reach an agreement on the budget or a continuing resolution by October 1 -- the beginning of the new fiscal year -- "mandatory" government programs would continue without interruption. It is only discretionary, nonessential programs that would shut down. Among those federal employees who would stay on the job during a shutdown: 1) Personnel involved in protection of human life and property such as air traffic controllers, FBI agents, meat inspectors, border control, Customs agents, personnel involved with commodities and futures exchanges, etc.; 2) personnel needed to ensure that mandatory government programs continue without interruption (including those responsible for the check writing and distribution functions of Social Security); and 3) personnel necessary for the discharge of the President's constitutionally-enumerated powers, including his duties as Commander-in-Chief of the Armed Forces. Also contrary to conventional wisdom, government shutdowns -- or "train wrecks" -- are nothing new: Nine have occurred since 1981 (see chart) and the sky did not fall -- retirees continued to receive their social security checks and meat continued to be inspected. For big government advocates, the real "train wreck" may come after a government shutdown -- when the public realizes it doesn't need so many government programs. To help the public distinguish between the fact and fiction surrounding a possible government shutdown, the House Budget Committee has produced "A Primer on Continuing Resolutions and the Ceiling on the Public Debt." For copies, contact Adrien MacGillivray of the Committee at (202) 226-7270.

More Smoke and Mirror Cuts in the House

According to a story in the Congressional Quarterly, House Agriculture Committee Chairman Pat Roberts (R-KS) has figured out a way to meet the requirements of the budget resolution while actually increasing farm spending. The "Freedom to Farm Act," sponsored by Roberts, appears to cut farm spending by $13.4 billion -- or 25%. The problem is that the cut is based on projections made last winter by the CBO and changes in commodity prices since then have made farmers less dependent on subsidies. According to the Congressional Quarterly, farm spending over the next seven years would be $42.4 billion without changes in policy. Chairman Roberts' bill, however, would require $43.2 billion in such expenditures, a $800 million increase.

Waste Patrol: Where Government Can Slim Down

Republicans' Farm Bill Plan for Sugar is No Favor for Taxpayers

Here's a deal that's not so sweet. Congress is getting ready to take the already huge Farm Bill with its price-fixing, anti-free market sugar provisions and dump it into the boiling brew of the budget reconciliation bill. If you thought you had a hard time spotting the evils of the sugar program in normal times, just wait until it dissolves from view amidst the mega-politics of reconciliation, the issue that will dominate the autumn legislative calendar. What's at stake here? Right now, hard working Americans and their families pay a hidden, highly regressive sugar tax on most of the food they buy. U.S. consumers pay $1.4 billion a year more for overpriced sugar and products containing sugar than they would if the world market price prevailed in this country. The U.S. price is bloated because of a complex, New Deal subsidy and market allotment program that mostly rewards sugar farm giants. To help the subsidy takers even more, the government limits how much sugar can come into the U.S. This benefits those fortunate few foreign producers who get an extra $200 million a year in foreign aid that we never hear about. The House and Senate Agriculture Committees know all about this, but don't plan to do anything more about this sticky mess of government price fixing and regulation than make a slight, but meaningless, bow in the direction of reform. True reform -- substantially reduced subsidies and fewer market controls on both the domestic and imported sides --remains illusive for now. Contact Amy Moritz of The National Center for Public Policy Research at (202) 543-4110.

Small Business Survival Foundation
1320 18th Street, N.W.
Washington, D.C. 20036
(202)785-0238
Fax: (202)822-8118

The National Center for Public Policy Research
501 Capitol Ct NE
Washington, D.C. 20002
(202) 543-4110
Fax: (202)543-5975
E-mail [email protected]

Nothing written here should be construed as an attempt to help or hinder legislation before the U.S. Congress.

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