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 # 9 - August 31, 1995 * David A. Ridenour and Karen Kerrigan, Editors

Waste Patrol: Where the Government Can Slim Down

Welfare for Lobbyist Spurs Growth in Government Spending and the Deficit

Each year, the federal government hands out more than $39 billion in grants to groups that may lobby either directly or indirectly. The result: Taxpayers unwittingly contribute to a "culture of spending," financing much of the political activity that makes it difficult for Congress to say no to new spending programs -- and more difficult to balance the federal budget. Among the recent grant recipients is Families USA, an advocacy group that received $250,000 from the Department of Health and Human Services in 1993 for "Special Programs for the Aging." But Families USA is best known for its support of the Clinton health care plan. It was Families USA that organized a health care bus tour during the Summer of 1994 in a last ditch effort to save the President's plan that would have resulted in a government take-over of one-seventh of the economy. Among recommendations for stopping such abuses in the future: Requiring witnesses before congressional committees to divulge whether or not they receive government grants, and barring organizations that receive taxpayer dollars from all lobbying activity. Before the recess, the House approved a measure sponsored by Representatives David McIntosh (R-IN), Ernest Istook (R-OK) and Robert Ehrlich (R-MD) to restrict federal taxpayer funds to advocacy groups. For more information, contact Marshall Wittmann at (202)546-4400.

Hill Watch: Update on Hill Efforts for a Balanced Budget

Saved by the Bulls

According to a recent Washington Times op-ed, the "revolution" has been temporarily put on hold by powerful Appropriations Committee chairmen and members who helped save 80%-90% of the 300 government programs slated for termination by the House Budget Committee. Among the programs saved by the House's old bulls were the Appalachian Regional Commission, the Tennessee Valley Authority, the National Biological Service, the National Endowment for the Arts, and the Manufacturing Extension Program, among others. And, on a more discouraging note, "...the Senate -- where political courage is even scarcer than in the House -- has not even acted on many of these budget bills yet." For more information, contact Steve Moore at (202)842-0200.

Tax Cut Myths: What Class Warfare Mongers and Their Critics Say About Taxes

Middle Class Would Gain the Most From Capital Gains Tax Cut

With no economic growth plan to call their own, liberals who oppose cutting taxes continue to use class warfare in the hope of defeating tax relief proposals. Reducing and indexing the capital gains tax is on such cut which has been pegged as a "tax cut for the rich." IRS records, however, tell a different story. Based on 1992 federal income tax returns, 56% of returns claiming capital gains were from those with incomes of $50,000 or less (including the capital gain). Eighty-three percent of returns with capital gains were from those with incomes of less than $100,000. As rates declined during the 1980s, upper-income individuals paid a greater share of total income taxes and revenues to the treasury vastly increased. The House's capital gains tax cut proposal would reduce the capital gains tax rate from 28% to 19.8%, index it to inflation and provide for a 50% exclusion on capital gains income. For further information, call Ray Keating 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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