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 # 8 - August 16, 1995 * David A. Ridenour and Karen Kerrigan, Editors

Hill Watch: Update on Hill Efforts for a Balanced Budget

Another Chrysler Bailout?

Commerce Department sympathizers have found a "heartstring" issue to create another government agency -- international trade. While the trade function at Commerce represents only 6% of the department's budget, the Chrysler-Mica bill in the House would establish a new Department of International Trade. Seems like the momentum to dismantle Commerce is losing ground, while the creation of another government agency is gaining support. Contact Joe Cobb at (202)546-4400.

Administration Watch: Where the Clinton Administration Stands on Budget Issues

President Clinton's "Volunteers" No Longer to be Paid

One of President Clinton's prized programs -- AmeriCorps, a national "volunteer" service program that costs taxpayers plenty -- was not spared from the budget-cutting axe before the House recessed. According to the General Accounting Office (GAO), AmeriCorps cost taxpayers between $26,000 and $31,500 per year per "volunteer" to run. "Volunteers" receive good pay, plus a $4,700 voucher for college. President Clinton has vowed to veto the offending appropriations bill.

Waste Patrol: Where the Government Can Slim Down

Valuable Program Money to be Blown in $1.5 Million U.S. Forest Service Office Move

The Southern Region office of the U.S. Forest Service in Atlanta has been housed for many years in privately-owned office space at a cost that is now about $12 per square foot. The General Services Administration (GSA) wants to move this office in late 1996 or early 1997 to a location that will cost about $26 per square foot. The annual difference in rent will be nearly $1.5 million! This wasn't the Forest Service's idea -- it would rather stay where it is. The Senate Appropriations Committee has made it clear in its just-released report on the FY96 Interior Appropriations bill that such moves will have to be paid for out of a region's operating funds -- there's no magic kitty to pay such costs. The report also tells the Forest Service -- and the GSA should be reading this too -- that: "When considering such a major move, the Forest Service should consider its mission, what is good for the agency, and how the move fits into the declining budget situation." So, will the Forest Service have to move to expensive new space it doesn't want and pay for that space by lopping $1.5 million from reforestation, recreation and other programs? The appropriators should lean hard on the GSA to make sure that doesn't happen -- and they should get some support from the users of Forest Service programs that will be diminished if funds are wasted on high-cost offices. For more information, contact Dick Barnes at (202)628-1700.

Financially-Troubled Social Security System "Lines Pockets of America's Wealthiest," New Study Says

According to government projections, Social Security will go broke by 2030 absent significant reform. In a recent study, the Third Millennium, a non-partisan organization of young Americans dedicated to finding answers to some of the nation's most pressing problems, identified a big part of Social Security's problem -- the system is lining the pockets of some of the nation's wealthiest Americans. According to the study, each retiree residing in the 10 wealthiest congressional districts received an average Social Security benefit of $769.75 per month. By contrast, each retiree living the nation's 10 poorest districts received an average monthly benefit of just $602.51. "Despite the popular perception that Social Security protects poor retirees, wealthy seniors receive benefits worth billions annually. For the latter group, Social Security is not a safety net, but a golden hammock in which they can enjoy a leisurely retirement subsidized by a regressive payroll tax on low-and middle-income workers," said Deroy Murdock, a co-founder of the Third Millenium. Contact Richard Thau at (212)979-2001.

The FDA: Paying More For Less

Taxpayers are spending more to get less from the Food and Drug Administration (FDA). Between 1989 and 1994, real FDA budget authority increased by 52.6%, an average annual rate of growth of more than 10.5%. Between 1970 and 1994, the FDA's budget authority increased in real terms by 221.1% and since 1955, its budget has risen by 2,978% -- an average annual hike of 76%. This budget growth has enabled the FDA staff to grow by 933% since 1955 -- now employing close to 9,000 people. With a double digit -- and close to triple digit -- average annual budget growth rate, one would expect that the FDA's performance has improved proportionately, right? Wrong. It now takes the FDA 437 to 840 days to approve new medical devices and 173 to 213 days to approve alterations to existing products. The median approval time for new drugs now tops three years -- 38 months in 1993 compared to 12 months in 1986. The time it takes to develop a new drug and gain the FDA's approval has risen from an average of 8.1 years in the 1960s to 14.5 days today. As a reward for this stunning performance, the Clinton Administration apparently wants to give the agency a significant new responsibility -- regulating tobacco. Contact Karen Kerrigan at (202)785-0238.

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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