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, D.C. 20002 (202) 543-4110, Fax (202) 543-5975, and the Small Business Survival Foundation, 1320 18th St. NW, Washington, D.C. 20036 (202) 785-0238, Fax (202) 822-8118.
Issue # 13 - October 4, 1995 * David A. Ridenour and Karen Kerrigan, Editors
Beware of the "Five-Year Plan": Senate Pursues a Temporary Tax Cut
Republicans in the Senate possibly open themselves up to charges of "budget gimmickry" as they pursue a "Five-Year" temporary tax cut option. Tax cut provisions, including family and senior tax relief and business/economic growth provisions, would sunset after five years. The unofficial "cost" of the five-year plan being floated on Capitol Hill is $209.5 billion. The plan assumes that a total overhaul of the tax system will inevitably be pursued after the 1996 elections. Senator Phil Gramm (R-TX) immediately blasted the temporary tax cut concept because spending would rise in remaining years of their seven-year effort to balance the budget by 2002. The rise in spending would almost ensure that tax cuts indeed remain temporary.
Cut the Budget, Save the Environment
Eliminating federal farm programs may not only make good budget sense, but good environmental sense.
When Congress approved the 1990 farm bill, it projected that U.S. Department of Agriculture expenditures between 1991 and 1994 would be $34.6 billion. These expenditures turned out to be $46.2 billion, $11.6 billion more -- or almost a third more -- than anticipated. But the billions of dollars the farm program adds to the national debt each year are only the tip of the iceberg.
According to the Competitive Enterprise Institute in a recently-released study, current farm policy creates environment havoc by, among other things, encouraging farmers to use more pesticides and fertilizers than they would otherwise. This occurs because the federal government places restrictions on the number of acres planted whenever it wishes to reduce agricultural surpluses. With fewer acres to plant, farmers increase their use of chemicals and fertilizers in the hope of increasing their yields -- and therefore their profits -- per acre. The complete elimination of subsidies could reduce chemical use per acre by up to 35% and fertilizer use by up to 29% per acre, according to CEI. Agricultural runoff is now the number one source of pollution in our lakes, streams and rivers. For more information, contact Jonathan Tolman of the Competitive Enterprise Institute at (202)331-1010.
Representative Jack Metcalf (R-WA) is leaving no stone unturned -- or in this case, painted -- to balance the budget. The Congressman recently discovered that the U.S. Forest Service spends hundreds of thousands of dollars each year painting rocks along scenic highways. The rocks, you see, take too long to weather naturally for the Forest Service's taste, so the agency sends painters out to give the rocks that rugged, lived-in look. Contact John Dutton at (202)225-2605.
Next week, House and Senate conferees will decide whether or not to release $368 million worth of military supplies to Pakistan -- part of a deal reportedly worth $1.4 billion. Since 1990, the equipment has been impounded under the terms of the 1985 Pressler Amendment, which bars such transfers unless the President can certify that Pakistan does not possess nuclear weapons. Not only has the government refused to release the arms, but it has so far refused to refund the money Pakistan paid to U.S. defense contractors for the weapons. An amendment sponsored by Senator Hank Brown (R-CO) and approved by the Senate last month would allow release of $368 million worth of the equipment and provide for the return of the rest of Pakistan's money once a buyer is found for the other equipment, which includes F-16 aircraft. If a buyer can't be found for the aging aircraft, presumably U.S. taxpayers will have to pick up the tab. Had the impoundment served a useful purpose, this cost might have been worth it, but even Secretary of Defense William Perry admits that "our ability to work with Pakistan to achieve nonproliferation goals is eroding." Contact the American Security Council at (202)296-9500.
On September 20, "Justice for Janitors," a project of the AFL-CIO's Service Employees International Union (SEIU) used a school bus to block traffic on the Theodore Roosevelt Bridge, a vital road link between the District and Northern Virginia. Motorists weren't the only ones who paid for what the AAA calls "traffic terrorism." It seems the union received $137,000 from taxpayers between July 1993 and June 1994, pointing to the need for grant reform. SEIU Chairman John Sweeney has used "Justice for Janitors" to bolster his campaign to become president of the AFL-CIO, which receives more than $1.3 million in federal grants. Is this a preview of what's to come? Contact Marshall Wittmann at (202)546-4400.
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