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, 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 # 7 - August 1, 1995 * David A. Ridenour and Karen Kerrigan, Editors

The House Budget Committee will hold hearings on President Clinton's budget proposal this Thursday, August 3 beginning at 10:30 A.M. in 210 Cannon House Office Building. Office of Management and Budget Director Alice Rivlin and Congressional Budget Office Director June O'Neill will testify. Republicans plan to take issue with the President's plan on the following grounds:

1. It fails to achieve balance. According to the Congressional Budget Office, which the Clinton Administration has accepted as an "impartial arbiter" on budgetary matters, the President's plan would continue to produce budget deficits in the $200 billion range well beyond the year 2005.
2. The plan lacks detail about "savings." The President's plan calls for Medicare savings of $295 billion but provides few details on how these savings would be achieved. Similarly, it calls for savings of $63 billion from "poverty programs," but provides no details.
3. The few details on specific spending programs that are included in the plan are those areas in which the President wants to increase spending. The President's plan outlines some $40 billion in new social spending that the President wants, including an additional $1.5 billion for Head Start and $3.4 billion for the student Pell Grants. Under the plan, total discretionary spending -- that portion of the federal budget that is not expended on entitlements, debt service or other "mandatory" spending programs -- would drop to $542 billion next year from this year's $548 billion, but rise to $582 billion by 2002. By contrast, under the budget agreement approved by the House and Senate last month, discretionary spending would drop to $534 billion next year and to $515 billion by 2002.
4. The President's plan assumes that 10 years (or 9 years) is a more reasonable time frame for balancing the budget than seven years. According to CBO estimates, the rate of deficit spending will increase under the President's plan after 2002. Extending the time for achieving balance, they will argue, will only make the task more difficult.

For more information on the Budget Committee's hearings contact the Budget Committee at (202)226-7270.

Representative David McIntosh (R-IN), Chairman of the Subcommittee on National Economic Growth, Natural Resources and Regulatory Affairs, held a second round of hearing on his amendment to end "welfare for lobbyists" on Friday, July 28. The amendment, co-sponsored by Representatives Ernest Istook (R-OK) and Robert Ehrlich (R-MD) and attached to Labor/HHS appropriations bill (H.R. 2127) would bar federal grants to organizations that engage in political advocacy. "If you want to do good deeds, we will support you in whatever way is appropriate," said McIntosh, explaining his initiative. Among those testifying at the hearings were House Majority Whip Tom DeLay (R-TX), Arianna Huffington of the Progress and Freedom Foundation; Paul Hewitt of the National Taxpayers Union Foundation, Richard Kirk of the Association of Retarded Citizens and William Dulany, representing the American Heart Association, among others. The hearing will resume at 2:00 P.M. tomorrow (August 2) in Room 2154 Rayburn House Office Building. For more information, contactthe Subcommittee on National Economic Growth at (202)225-4407.

ABC, NBC, CBS and Fox have a plan to double their share of the nation's airwaves and boost profits in the process -- all at the expense of smaller broadcasters, telecommunications firms and the taxpayer. Several years ago, the Federal Communications Commission gave the media giants free access to spectrum (the range of broadcast frequencies) free-of-charge so that they could shift from their current analog service to High Definition Television (HDTV). At the time, HDTV was believed to be the wave of the future, but there has been little demand due to HDTV's enormous price tag. So the networks now want to use their free spectrum access for other types of services -- services smaller broadcasters and telecommunications firms have been forced to pay for -- and the FCC is inclined to grant their request. Auctioning-off spectrum would level the playing field for telecommunications firms, generate billions in revenues to reduce the deficit and end an insidious form of corporate welfare. For more information, contact the Campaign for Broadcast Competition at (707)739-5920 or (800)536-5920.

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 eptf@nationalcenter.org

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

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