Wayne Allard

Mr. ALLARD

Mr. ALLARD. I do not know that.

Mr. ALLARD. Mr. Chairman, I thank the gentleman for yielding. I would just remind the gentleman that we are only talking about less than a 4-percent reduction. My phone in already ringing from farmers who say, ``Look, what is happening to us and our programs?'' Yet the bureaucracy in Washington seems to slide along with about the same spending levels. What I am talking about as the chief economist, we are talking about offices here in Washington, not the field offices out there that serve farmers.

Mr. ALLARD. Mr. Chairman, will the gentleman yield?

Mr. ALLARD. Mr. Chairman, I yield myself such time as I may consume. First, Mr. Chairman, I would like to compliment my colleague, the gentleman from New Mexico, for putting together a good bill which makes a firm contribution by achieving a balanced budget by 2002. I appreciate all the hard work he has put into allocating our very scarce resources among the many worthwhile projects covered by this measure. The Committee on Appropriations has made some important cuts in this bill; however, we see no reason for the House to ignore an opportunity to make additional reductions in the bureaucracy, especially here in Washington. I realize that it has been tough for the Members of this House, and particularly the Committee on Agriculture, to struggle with what priorities we should have in the agricultural area. However, Mr. Chairman, we simply need to keep in mind that we cannot go ahead and cut those programs that benefit farmers and not let the bureaucracy here in Washington share in those cuts. Last November, the people spoke clearly about their desire to downsize Federal Government. Taxpayers were tired of sending the hard- earned money to Washington, DC, to pay for larger Federal bureaucracies. Farmers often ask why farm programs continue to get cut while the Department of Agriculture bureaucracy goes untouched. It is time to listen to the voters and start shrinking this huge 110,000 person bureaucracy. It is in this spirit of downsizing that the gentleman from Kansas [Mr. Brownback] and I offer this amendment. In recent years the funding for the bureaucracy of the USDA has been held constant. Without our amendment, this bill would continue this trend, despite the reduced role for agriculture programs assumed in the budget resolution. Appropriations for administration for 1996 would be $313 million. This is slightly above the 1995 level. This number rises to $320 million if the new info share program is included. In times of baseline budgeting, we would have considered this to be a cut, but we have changed the way that Congress does business. Now a cut is only a cut if spending is actually reduced below the prior year's level. Mr. Chairman, our amendment is supported by the National Taxpayers Union and Citizens for a Sound Economy. It cuts 10 percent from the offices of the Secretary, the chief economist, the office of communication, the chief financial officer, the advisory committees, the Assistant Secretary of Administration, and the Undersecretary for Research, Education, and Economics. We have provided for a 5 percent cut for the Economic Research Service, the National Agriculture Statistics Service, the Assistant Secretary for Congressional Relations, and the general counsel. Some offices, such as the Inspector General, have been exempted entirely from this amendment, because they have offered what we consider to be a sufficient justification to retain the funding allocated to them by the Committee on Appropriations. Mr. Chairman, this amendment is consistent with the budget resolution. The House-passed budget resolution assumed that $44 million in savings could be achieved by reduction in the funding for the administrative offices and programs covered by our amendment. We have scaled that back to $12 million in cuts. This is very reasonable in light of the over $320 million available for the Department's administrative expenses. Mr. Chairman, let me now address the Department's reorganization. The National Performance Review states that after reorganization, personnel at the USDA headquarters should be reduced 8 percent, resulting in an annual savings of about $73 million. To date, savings in the higher administrative levels have not appeared to be anywhere near this magnitude. Similarly, the Agriculture Reorganization Act mandated personal reductions of $7,500. However, this is to be accomplished by the year 1999. This is too far away. This amendment would provide the added nudge that is necessary to start the process of downsizing the bureaucracy now. Mr. Chairman, I reserve the balance of my time. parliamentary inquiry

Mr. ALLARD. Mr. Chairman, I offer an amendment.

Mr. ALLARD

Mr. ALLARD. Mr. Chairman, will the gentleman yield?

Mr. ALLARD. Mr. Chairman, I thank the gentleman for yielding. Mr. Chairman, I am speaking on behalf of myself and as a member of the Committee on the Budget. Regretfully, I stand in opposition to the amendment by my friend, the gentleman from Florida, because we worked hard in the Committee on the Budget trying to get to a balanced budget amendment by 2002. The task force which I chaired dealt with natural resources and agriculture and research. We said one thing you do not do when you are going broke is you do not build new buildings, you do not acquire new land. We put some restrictions on this. I would just ask for a ``no'' vote on this amendment that basically earmarks an acquisition of land.

Mr. ALLARD

Mr. ALLARD. Mr. Speaker, I am joined today by the gentleman from South Dakota [Mr. Johnson] in introducing a bill to provide regulatory relief to institutions of the Farm Credit System, the cooperative lender to America's farmers, ranchers, and member-owned service and supply cooperatives. I should point out that the Farm Credit Administration [FCA], the System's regulator, has acted diligently in reducing, as safety and soundness considerations allow, the regulatory and cost burdens on System institutions. This legislation in no way reflects on FCA's ability or willingness to carry out the Farm Credit Act efficiently with an eye on the costs and benefits of its regulatory program. Since assuming the chairmanship of the conservation subcommittee, I have made it a priority to reduce wherever possible the regulatory burden on farmers and ranchers. While the subcommittee, as well as the full Committee on Agriculture, has been looking more at the burdens of environmental regulations, we also must examine, within the full range of our legislative responsibilities, the provision of credit services to agricultural producers. This bill requires FCA to continue its comprehensive review of regulations in order to identify and eliminate, consistent with safety and soundness, all regulations that are unnecessary, unduly burdensome or costly, or not based on statute. The bill contains 14 sections, including the bill title and a section of findings and regulatory review requirements. Section 4 amends the act to provide for institution examinations, except for Federal land bank associations, at least every 18 months. Current law requires examinations at least once a year, which is unduly burdensome. Under the amendment, FCA retains authority to examine institutions more frequently than 18 months should that be necessary. Section 5 deals with the operations of the Farm Credit System Insurance Corporation [FCSIC]. The section authorizes FCSIC to allocate to System banks excess earnings of the insurance fund. Current law requires FCSIC to assess premiums until such time as the aggregate amount in the insurance fund equals the secure base amount. That number is equal to 2 percent of the insured liabilities of System institutions or such other amount FCSIC determines is actuarially sound. FCSIC assumes the secure base amount to be reached in early 1997, but current law provides no authority to deal with interest earnings once the secure base amount is attained. This section provides for the rebate of excess interest earnings as well as authorizing the reduction of insurance premiums as the insurance fund approaches the secure base amount. Section 6 of the legislation requires FCSIC to use the least costly approach should a System institution need assistance instead of the current requirement that any assistance provided must be less costly than liquidation. Section 7 repeals provisions of the 1992 Safety and Soundness Act that require a new, full-time board to govern FCSIC. This is an unnecessary and costly requirement. The amendment would retain the status quo with the FCA board, a full-time, presidentially appointed panel, responsible for insurance fund activities. Section 8 authorizes FCSIC to act as either a conservator or receiver. Section 9 empowers FCSIC to prohibit or limit any golden parachute or indemnification payment by a System institution in troubled condition. This legislative language conforms to similar provisions contained in the Federal Deposit Insurance Act. Section 10 extends authorizations currently enjoyed by System banks to other System institutions. These authorities would provide for the formation of administrative service entities but does not extend to the offer or sale of credit or insurance services to System institution borrowers. Section 11 removes borrower stock requirements for any loan originated for sale into the secondary market. Current law requires System institution borrowers to purchase and maintain stock or participation certificates in the institution which originated a loan even though the loan was intended to be sold into the secondary market. Section 12 removes or changes paperwork requirements currently in place, including disclosure requirements, compensation of certain System institutions' personnel and procedures for the approval of joint management agreements, as well as allowing for a borrower to finance more than 85 percent of the value of real estate if the borrower obtains private mortgage insurance. Section 13 removes the certification requirement by the Rural Utilities Service [RUS] administrator for the private sector financing of loans or loan guarantees to borrowers who otherwise would be eligible to borrow from the RUS. Finally, Section 14 provides the flexibility for evolving cooperative structures, including dealing with such issues as dividend, member business and voting practices. Current law requires rigid procedures to maintain borrowing eligibility from a System bank for cooperatives. The language would allow coops to adapt their operations, with the continued traditional farm relationships, so they may continue as a borrower of banks for cooperatives. Mr. Speaker, the cooperative Farm Credit System has made great strides since the 1987 Agricultural Credit Act brought the System back to its feet. Institutions have provided for the repayment of the assistance received from the 1987 act. System institutions have consolidated and reformed their operations much as the 1987 act contemplated. The System is to be congratulated for these improvements and their diligence in fulfilling the agreements they made with the Congress and each other. FCA has provided sound and efficient regulation; FCSIC will assure the System continues to move forward into the next century. This bill will assist the System institutions in moving forward, and I would hope the House could adopt this bill at its earliest opportunity. Thank you, Mr. Speaker.

Mr. ALLARD

Mr. ALLARD. Mr. Chairman, I rise in support of the Interior appropriations legislation. I would like to begin by first of all complimenting the gentleman from Ohio [Mr. Regula], chairman of the House Subcommittee on the Interior of the Committee on Appropriations, for his hard work on the National Biologic Service issue. I would like to especially thank him for working closely with members of the Western Caucus, who have a very keen interest in this issue. The Interior appropriations legislation is an important move in the right direction. The independent Biological Research Agency is eliminated. There is no longer a National Biological Survey, a National Biological Service, or a Life Science Research Service. This is a significant victory for taxpayers. Fifty-four million dollars is saved. The overhead of a separate agency is eliminated. Objective science is promoted. The 1995 funding level for the NBS was $167 million. The Interior appropriations bill eliminates this agency and account entirely. The bill provides $113 million to the U.S. Geological Survey for resources research. The USGS already has an authorized research mission. Further, research will be confined to public land and will be conducted by trained professionals. Equally important, the legislation will provide for greater peer review throughout the research process. An option is to privatize or contract out more of the research being done by the Interior Department. One of the most important points to make is that the Interior appropriations bill language states that when authorizing legislation is finally passed and signed by the President, it will supersede the current proposal. We all agree research must be based on sound science. Therefore, it is up to the authorizing committee to determine how to guarantee that quality science is used and to include appropriate guidelines and restrictions concerning private property and the use of volunteers in an authorization bill. Mr. Chairman, I think this is a wise step toward balancing the budget.

Mr. ALLARD

Mr. ALLARD. Mr. Speaker, the most important act of this Congress over the next 3 months will be the reform of Medicare. I would like to take a few minutes this morning to talk about what is at stake for America's seniors. The Medicare Program is in trouble. In April, the trustees of the Social Security and Medicare trust funds issued an alarming report. The report concluded that next year the trust fund that finances Medicare will begin spending more than it takes in and will be bankrupt in 7 years. This will put the health care of 36 million Americans in jeopardy. Remarkably, this report received almost no coverage by the media. Uncomfortable as it might be, the trustee's report cannot be ignored. The trustees include the Secretaries of Health and Human Services, Labor, and Treasury, as well as the Social Security Commissioner and two other public trustees, one Republican and one Democrat. The reason for the crisis is clear. Medicare spending is growing at an alarming rate. This year alone, it will increase from $176 billion to $196 billion, a growth of 11 percent. This will be nearly three times the level of spending in 1986. It is obvious that any Federal program that triples its level of spending in a decade is headed for trouble. [[Page H 6741]] Doing nothing might be the easiest course politically, but in my view that is not an option. The crisis must be addressed now. If Medicare goes bankrupt, by law, no payments can be made for hospital care for Medicare beneficiaries or for any other trust fund-paid services. This means that anyone age 58 or older today will be immediately impacted in 2002. And if the system is not then made solvent, millions of Americans who are much younger will be hurt. Medicare can be fixed right now. And if we do it now, we can make the trust fund solvent without reducing current Medicare expenditures. Those who oppose reform will make wild charges of draconian cuts. But when you hear those charges ask yourself what opponents of reform are proposing as a solution. The only other options are to either postpone the crisis a few more years, or substantially raise payroll taxes. While three members of the President's Cabinet are Medicare trustees and signed onto the trustees report, the President's first budget included no reforms. The only response the President and his Democrat colleagues gave to this problem was criticism. However, the new Clinton budget has changed all that. President Clinton has admitted that a balanced budget is best for our Nation--though his budget falls close to $1 trillion short of the amount actually needed to achieve a balanced budget. But most importantly for our seniors and soon to be seniors, the President admits that Medicare must be reformed and saved from bankruptcy. Still, even with this, many of his Democrat colleagues still only criticize. In order to reform the Medicare system, we have slowed the rate of growth from over 10 percent to 6.5 percent a year--a rate that will still exceed private-sector health care spending increases and inflation rate increases. Even with this level of reform, the country's annual Medicare spending will still rise from the current $4,700 per beneficiary to $6,400 per beneficiary in 7 years. Similarly, in my own State of Colorado, overall Medicare spending between 1995 and 2002 will increase 60 percent, which results in an increase of $1,385 per beneficiary. Much of the reform can be accomplished with more private sector involvement in the program, and by giving seniors more choices and more power over the way their health care dollars are spent. Currently, Medicare beneficiaries are given only one option--the bureaucratic, outdated, 30-year-old, one-size-fits-all program. It is time to bring Medicare into the 1990's. No longer should the Government interfere in the relationship between patients and their doctors. We should ensure that Medicare beneficiaries and soon to be beneficiaries are able to continue their existing coverage--including their choice of doctors and hospitals, or choose new coverage that better fits their health care needs--such as coverage for prescription drugs, dental, or even to establish a medical savings account. The goal is to save Medicare. It will not be easy or painless, but it will be much less painful if we do it now, rather than pass the buck one more time. My hope is that reform can be accomplished in a serious manner, without a high level of misinformation and distortion. Congress is now working carefully on a reform plan. Many organizations, such as the American Medical Association, and individuals are providing helpful proposals. The final plan will be available in early fall. Two things in particular should be kept in mind as the debate progresses. First, no one is proposing any cuts in Medicare, only a slower rate of growth. Second, those who decry the proposed reforms should be challenged to present their solution. Strengthening Medicare is too important to be left to politics as usual. Doing nothing is not an option.

Mr. ALLARD

Mr. ALLARD. Mr. Speaker, included in the House budget resolution Report 104-120 is a statement by Budget Committee member Earl Pomeroy that the majority party intends to privatize the dismantlement of nuclear weapons, a function presently performed by the Department of Energy [DOE]. This is inaccurate. The House Republican Energy Department task force recommendation calls for elimination of the DOE over several years. This will save taxpayers billions of dollars and begin the process of downsizing the Federal Government. The task force recommendation includes the creation of an independent civilian agency within the Department of Defense to manage the dismantlement of nuclear weapons and the cleanup of nuclear waste. This independent agency would be called the Defense Nuclear Programs Agency, and there would be consultation with the Environmental Protection Agency on cleanup activities.

Mr. ALLARD

Mr. ALLARD. Mr. Speaker, I thank the gentleman for yielding time to me. Mr. Speaker, I rise in support of the conference report. First of all, Mr. Speaker, I would like to thank the committee and thank the chairman for their great work. We have been on track from the very start, right through the conference committee. That was that we have a balanced budget by 2002. We have kept our word. We have dealt with real numbers. We have said, ``Okay, we can create a good balance in this particular budget proposal by saying we need tax cuts. If we keep more of the revenue at home we can create more opportunity by cutting spending, so people lean more on their own shoulders instead of having to lean on the shoulders of government.'' I really, honestly believe this is an opportunity budget. We are creating more opportunity and more freedoms for Americans. Mr. Speaker, we heard testimony in committee that said that the one thing we could do to really create confidence in America would be to balance our budget. It was Alan Greenspan who said that. We are doing that. We are putting us on track to restore confidence in this country, and to make people more responsible for their own lives.

Mr. ALLARD

Mr. ALLARD. Mr. Speaker, I thank the gentleman from Ohio [Mr. Kasich] for yielding, and I would like to address some of the concerns that were raised from the distinguished ranking member on the Committee on this Budget. These tax reductions that we have in the budget plan are part of a total package, and let me explain to my colleagues how that works. We have looked very hard in the Committee on the Budget on the subsidies that business receives, whether it is agriculture, small business, dealing with housing, or whether it is even airports; that is in the entitlement and mandatory spending area. We said, Look, if you're going to lean less on the shoulders of government, we have got to give you an opportunity to retain more of your earnings within your business. I say to my colleagues, Let's take, for example, agriculture. There have been reductions in the agricultural program since 1986, gone from $26 billion down to somewhere around $11 or $12 billion, where we are today, and farmers and ranchers are saying that we have to have regulatory relief. We're willing to step back as far as the subsidies, but give us regulatory relief, give us some breaks on the tax side. This is not wealthy people. These are hard-working Americans that have gone back on a year-to-year basis and accumulated some wealth in their business, whether it is a small businessman or an agricultural person, and then, when they get around to that stage in their life when they want to retire, then they have all of this income that comes in in 1 year, but it is income that is accumulated over years and years of hard work, and in each individual year that has not amounted to an awful lot, but over a period of 20 to 30 years it amounts to their whole retirement. So, Mr. Speaker, that is why it is important that we have something like a reduction in capital gains. That is why it is important that we do something with the inheritance tax so that these particular businesses can pass on and remain in the family. If we want to continue to say that the individual in this country has got to take responsibilities for his own actions, save for his retirement, provide for his own family, we have got to say that the Government takes less and we let the individual keep more, and that is what we are talking about, less Government. That is what the Republican budget is about. As the opposition will say, they want more Government. They think the answer is here in Washington. This is not where the real answers are. The answers are back in our districts, back with families, back with local elected officials.

Mr. ALLARD

Mr. ALLARD. Mr. Chairman, as a member of the Budget Committee I can say we worked tirelessly to produce a budget that is fair and equitable. The result is a balanced budget in 2002--just as we promised. To those who oppose this plan I say, what is your alternative? Contrary to what many opponents would like to have you believe, the Republican budget is a very Senior friendly budget. First, as we promised, Social Security is off the table. No cuts at all to Social Security. This is the only area of the budget we exempt from cuts. And with Medicare, we simply slow the growth to 5 percent a year. This means we will increase Medicare spending over 7 years, from $4,700 per beneficiary today to $6,300 per beneficiary in 2002. This preserves the solvency of Medicare. Now lets look at the rest of the budget. We freeze defense, and make clear that defense spending will continue to undergo the kind of scrutiny of other aspects of the budget. Third, we reduce all discretionary spending, including foreign aid. We abolish three Cabinet agencies: Commerce, Energy, and Education. This plan also eliminates 283 programs, 14 agencies, and 68 commissions. Overall this budget simply slows the growth in spending to just over 2 percent a year. The difference is that under current forecasts we grow over 5 percent a year. Now, what does all this mean to American families. It means a higher standard of living. It means families will pay less for their home mortgage because of lower interest rates. It means more families will be able to afford college for their children. This week's Time magazine has an excellent article on this topic. It explains how balancing the budget can help revive the American Dream. The article talks about how lower deficits mean lower interest rates, and therefore more job creation by U.S. business. The article provides one very specific example of a young couple who are considering a new home. Under a mortgage rate of 8 percent, they would pay $734 a month on a $100,000 mortgage. If interest rates are 1 percent lower, this payment is cut to $665. This would save $28,000 over the life of the mortgage. This would be enough to put one of their future children through a year of college. Similarly, I have been using the example of farmers, because there are reductions in agriculture subsidies in this budget. However, it is estimated that a 1.5-percent reduction in interest rates would save the farm sector over $10 billion in interest payments on their debate over 5 years. This more than offsets the reduction. These are examples of what it means to balance the budget. This is not just an exercise in accounting. It really matters. It will make a difference in the lives of every American. It will particularly, make a difference in the lives of our children and grandchildren. I urge my colleagues to join me in supporting the first balanced budget in 33 years. Mr. Chairman, recently, I received a letter from a young father in Denver. He wrote on behalf of his 1-week-old daughter and asked that I address my response to her. His letter spoke of the massive debt she is inheriting. He spoke of how our generation is spending now, and hoping that later she, and the rest of our children and grandchildren will pay the bills. Dear Mr. Allard: Last week my daughter was born to my wife and I. As I understand it, she is now responsible for at least a $20,000 share of our national debt. As the recent commemoration of the fiftieth anniversary of D-Day demonstrates, our nation has long been mindful and thankful of the sacrifices born by past generations. Sacrifices which preserved and made possible the liberties and benefits of today. My daughter, in contrast, faces the opposite. Instead she must sacrifice in the future, to pay for the liberties and benefits of the past generation. I ask you this question because she will look to me for the answer: Which benefits enjoyed by past generations should she keep in mind as she toils to pay their costs? What entitlements, what projects enjoyed by your generation will make her sacrifice noble and worth it all? What should I tell her? What would you tell her? In 2002, this child will be 7 years old. I hope by then we can guarantee her a balanced budget and secure future. Tomorrow this House will decide the answer. Mr. Chairman, I rise in strong support of this historic budget document. Throughout the process I had the privilege of heading up the Natural Resources--Science Task Force. I was joined in this effort by Sam Brownback, and Bob Walker. This task force included Agriculture, Interior, Energy, and science programs. Obviously, many of the issues impact the West, including my constituents in Colorado. This is a good budget for the West. Sure, we make a contribution to the reductions, but that is fair. I meet with constituents almost every weekend. They want a balanced budget and they are willing to do their part. This is a balanced budget. Urban and rural areas are both called on to contribute. The payoff will be substantial. This budget produces a balanced budget in 2002--just as we promised. This will be the first balanced budget in 33 years. That's right, 1969 was the last year the Federal Government balanced its books. Let me go over the highlights of our working group's proposals: Agriculture We phase down farm subsidies, this is already a declining baseline. To offset we reduce regulation, this will be done in the Farm bill and elsewhere, we are also reducing the tax burden on farmers with the capital gains tax cut and estate tax relief. I think it is very important to note that farmers will benefit greatly from a decline in interest rates that will result from this balanced budget. It is estimated that a 1.5-percent reduction in interest rates means that farmers will save over $10 billion in interest payments on their debt over the next 5 years. This more than offsets any reduction in subsidies. Energy Both the Energy Department and the Commerce Department are eliminated. The power marketing Administrations are privatized, but they are sold only to the preference power customers, giving more power to our constituents and protecting against any rate increase. The naval petroleum reserves at Elk Hills are also sold, this is the 10th largest oil field in the country and there is no reason for the Federal Government to own it. Reseach functions are privatized, and all nuclear cleanup activities will continue at current levels. Interior There will be a moratorium on new Federal land purchases. We own enough land already. In many States out West, more than one-third of the land is owned by the Federal Government. This map shows why we don't need to have the Federal Government buying more land. As you can see, vast portions of the West are already owned by the Federal Government. All of the area colored in is owned by the Government. These are a few examples of the highlights of our budget. Make no mistake, we call on every aspect of the Federal budget to contribute to the savings in this budget. The only exception is Social Security, which we do not touch at all. I ask my colleagues to support this historic budget. May 9, 1995. Memo To: Arnie Christenson Re: the balanced budget amendment and interest savings to farmers. Attached is a very rough estimate of the impact of 1.5 percent reduction in interest rates on farmers costs. In 1993, Farmers had $141.9 Billion in Outstanding Debt. If we assume interest rates of 8 and 7 percent for long term and short term respectively then: Net Savings from a 1.5 percent reduction: $2.13 billion or a 5 year very conservative estimate of savings of $10.65. It is interesting to note the Agriculture Committee is debating over whether to save $12 billion or $9 billion or $5 billion. If we don't balance the Federal budget then: Interest rates won't go down by 1.5 percent and farmers will spend an additional $10.65 in interest cost over 5 years.

Mr. ALLARD

Mr. ALLARD. Mr. Speaker, I ask unanimous consent that my name be removed as a cosponsor of H.R. 995.

Mr. ALLARD

Mr. ALLARD. Mr. Speaker, I am very proud of the budget that the Republicans on the House Budget Committee have produced. It produces a balanced budget in 2002--just as we promised. This will be the first balanced budget in 33 years. That is right, 1969 was the last year the Federal Government balanced its books. As a member of the Budget Committee, I can say we have worked tirelessly since January to produce a plan that is fair and honest. The plan has the unanimous support of the committee Republicans, as well as Democrat Mike Parker of Mississippi. Opponents are already attacking this plan, and distorting what it To those who oppose this plan I say, what is your alternative? Where's the Beef? How would you balance the budget? The President's plan produces $200 billion deficits as far as the eye can see. He never balances the budget. Now, let us talk about this budget. First, as we promised, Social Security is off the table. Second, we freeze defense, and make clear that defense spending will continue to undergo the kind of scrutiny of other aspects of the budget. Third, we reduce all discretionary spending, including foreign aid. We abolish three Cabinet agencies: Commerce, Energy, and Education. This plan also eliminates 283 programs, 14 agencies, and 68 commissions. Overall this budget simply slows the growth in spending to just over 2 percent a year. The difference is that under current forecasts we grow over 5 percent a year. This plan is not perfect. But it is far superior to other options, and far superior to doing nothing. This is the best plan that has been put on the table in years. It produces a balanced budget. It is a budget for our children. Now let me talk about health care. This is important because it will be the source of much distortion in the coming days. First, we do not cut Medicare or Medicaid, both grow under our plan. Let us look at this chart. It shows why we have to slow the rate of growth in Medicare and Medicaid. Both programs are growing at over 10 percent a year. The rest of the Government is growing at much slower rates. This is not sustainable. In fact, the Medicare Trustees Report, released in April, and signed by three members of the President's Cabinet, says that Medicare will go broke in 7 years if we do nothing. That is why we slow the growth in both programs. Let me focus on Medicare. We slow the growth to 5 percent a year. This means we will increase Medicare spending over 7 years, from $4,700 per beneficiary today to $6,300 per beneficiary in 2002. This preserves the solvency of Medicare. Now, enough statistics. Why are we doing this? Why is a balanced budget so important for our children and grandchildren? Alan Greenspan, Chairman of the Federal Reserve, summed it up very well when he testified before the Budget Committee earlier this year. Let us go down the list on the chart. If we balance the Budget: One, our children will have a higher standard of living than their parents. Two, there will be improvement in the purchasing power of incomes. Three, a rise in productivity. Four, reduction in inflation. Five, strengthening of financial markets. Six, acceleration of long-term economic growth. And most important, seven, a significant drop in long term interest rates. Now, what does all this mean to American families. It means a higher standard of living. It means families will pay less for their home mortgage because of lower interest rates. It means more families will be able to afford college for their children. It means lower car payments. This week's Time magazine has an excellent article on this topic. It explains how balancing the budget can help revive the American dream. The article talks about how lower deficits mean lower interest rates, and therefore more job creation by U.S. business. The article provides one very specific example of a young couple who are considering a new home. Under a mortgage rate of 8 percent, they would pay $734 a month on a $100,000 mortgage. If interest rates are 1 percent lower, this payment if cut to $665. This would save $28,000 over the life of the mortgage. This would be enough to put one of their future children through a year of college. Similarly, I have been using the example of farmers, because there are reductions in agriculture subsidies in this budget. However, it is estimated that a 1.5-percent reduction in interest rates would save the farm sector over $10 billion in interest payments on their debt over 5 years. This more than offsets the reduction. These are examples of what it means to balance the budget. This is not just an exercise in accounting. It really matters. It will make a difference in the lives of every American. It will particularly, make a difference in the livers of our children and grandchildren. I urge my colleagues to join me in supporting the first balanced budget in 33 years.

Mr. ALLARD

Mr. ALLARD. Mr. Chairman, I thank the gentleman for yielding time. Mr. Chairman, I would just comment, if this bill would pass, the average Colorado family would pay $1,534 in fewer taxes. Mr. Chairman, I join in strong support of the Contract With America tax relief package. It is time to give American families back some of their hard earned money. Two years ago, President Clinton raised our taxes, today the Republicans fulfill their contract and cut taxes. We are keeping our word. The American people want lower taxes, and less government spending. This package delivers. Every nickel of this tax cut is paid for with spending cuts, and an additional $90 billion in spending cuts are applied to deficit reduction. In May, we will return with a budget resolution that builds on this legislation and puts the government on a glide-path to a balanced budget by 2002. This will necessitate us capping the rate of growth in spending at 2 percent a year. The difference is that now the Federal Government grows at over 5 percent a year. I would like to take the time to comment on one provisions in this tax bill that I am particularly pleased with. That is the home office tax deduction. In the last Congress I introduced home office deduction legislation which was cosponsored by 79 colleagues. This Congress I have introduced H.R. 40, which has been cosponsored by 82 of our colleagues. This legislation is designed to restore the home office tax deduction, which was narrowed a great deal by a 1993 Supreme Court decision. With April 15, fast approaching the last thing most Americans want to think about is taxes. In fact, the average American must now work the first 125 days of the year to pay all Federal, State, and local taxes. The bulk of the family tax bill consists of income taxes, payroll taxes, and property taxes. However, one factor which adds to the growing tax bill of many self-employed and small business owners are the new rules governing the home office tax deduction. Increasingly, it is the little guy who gets squeezed by the tax system. While large corporations can rent space and deduct office and virtually all other expenses, many taxpayers who work out of their home are no longer able to deduct their office expenses. Traditionally, the tax code has permitted individuals who operate businesses within their homes to deduct a portion of the expenses related to that home. However, over the past 20 years Congress, the courts, and the IRS have reduced the scope and usefulness of the deduction. The most serious blow came 2 years ago when a Supreme Court decision and subsequent IRS action eliminated the home office deduction for many. Under the Supreme Court's new interpretation of principal place of business a taxpayer who maintains a home office, but also performs important business related work outside the home is not likely to pass IRS scrutiny. This change effectively denies the deduction to taxpayers who work out of their home but also spend time on the road. Those impacted include sales representatives, caterers, teachers, computer repairers, doctors, veterinarians, house painters, consultants, personal trainers and many more. Even though these taxpayers may have no office other than their home, the work they perform will often deny them a deduction. According to the IRS, 1.6 million taxpayers claimed a home office tax deduction in 1991. While not all of these taxpayers were affected by the change, many will. Clearly, any taxpayers who operate a business out of their home must review their tax situation. There are many reasons why a broad home office tax deduction is important. The deduction is pro-family. It helps taxpayers pursue careers that enable them to spend more time with their children. The deduction helps cut down on commuting and saves energy. The deduction recognizes the advances of technology--computer and telecommunication advances mean that more and more individuals will be able to work for themselves and maintain a home office. The deduction is a boost to women and minorities who are increasingly starting their own businesses. In fact, over 32 percent of all proprietorships are now owned by women entrepreneurs, and Commerce Department data reveals that 55 percent of these women business owners operate their firms from home. Minorities are making similar advances. There are now well over 1 million minority-owned small businesses and a good number of these are operated out of the home. Finally, the home office tax deduction helps our economy. It benefits small businesses and entrepreneurs who develop new ideas, and create jobs. Many of America's most important businesses originated out of a home office. Small business is increasingly the engine which drives our economy. With large firms downsizing, entrepreneurs must pick up the slack. The importance of this trend is demonstrated by the job shift that occurred during the slow recovery from the most recent recession. During the period of October 1991 to September 1992 large businesses cut 400,000 jobs while small business created 178,000 new jobs. During the boom years of the 1980s, the vast majority of the 20 million new jobs created were in the small business sector. It is critical that recent assaults on the home office tax deduction be reversed. That is why I introduced legislation to fully restore the deduction. I was pleased when similar language was included in the Contract With America, and now in this tax bill. With passage of this bill today, we move one giant step closer to restoring the home office tax deduction.

Mr. ALLARD

Mr. ALLARD. Mr. Speaker, we are going to hear a lot from the limousine liberals on the Democrat side of the aisle this week about fairness. Well, let me ask them a few questions. It is fair to penalize senior citizens who want to remain productive? It is fair to working Americans that the cost of capital in the United States is so much higher than in the rest of the industrialized world? It is fair that married couples are penalized just because they are married? There is nothing fair about the current tax system. It penalizes work, saving, and investment. But this week we begin the job of restoring fairness to our tax system. We will start by restoring the $25 billion in Social Security cuts engineered by the Clinton White House and the old Democratic Congress. I think it is important to note that these cuts did not have the support of one Republican Member in either Chamber. America's seniors should not be asked to pay higher taxes to solve a problem that was made in Washington. We will fix that this week.

Mr. ALLARD

Mr. ALLARD. Mr. Speaker, yesterday was a historic day. For the first time in history, the House of Representatives debated and voted on term limits for its Members. I have and continue to be a strong supporter of term limits. Term limits would help to deter Members from acting in a career-oriented, self interested manner and would promote decisions for the public good. In short, term limits would make legislators more responsive to the people. The support for term limits has been demonstrated by the 22 State term limits initiatives and polls showing 70 percent or more approval by the public. My State of Colorado was the first State to enact limits in 1990 with a 12-year limit and in 1994 with a 6-year House limit. Four versions of term limits were offered yesterday. In the end, it was the Colorado law that I voted in favor of. I voted against the Dingell-Peterson 12-12 years amendment because it was retroactive, which has been rejected by States, and also because it would supersede all State term limit laws. I voted in favor of the Inglis 6-12 yeas amendment because it was the same as the Colorado provision, 6 years for House Members and 12 years for Senators. I also voted in favor of the Van Hilleary 12-12 year amendment because it would not supersede any State term limit law. This amendment would have kept the Colorado term limit law in place. I voted against the McCollum 12-12 years version because it would have superseded all other State term limit laws. I believe the voters of Colorado who voted for 6 years in the House and 12 years in the Senate know best. The Federal Government should respect the desires of each State. The McCollum amendment was flawed because it would have nullified all other State limits. If either the Inglis or Hilleary amendments had made it to final passage I would have enthusiastically voted yes. In my view, they were the only acceptable term limits proposals the House debated.

Mr. ALLARD

Mr. ALLARD. Mr. Chairman, I rise to say it is about time. Since President Johnson declared a war on poverty 30 years ago, we have spent over $5 trillion and created 336 programs to fight this war. So, who won? No one. Not the welfare recipient or the taxpayer. The amount we spend in a year on welfare is roughly three times the amount needed to raise the incomes of all poor Americans above the income thresholds. My constituents tell me that the current welfare system does not work, they want reform. Those who oppose reform continue to say that the number of people on welfare will grow and thus more money is needed. If that is the case then this system can only be called a massive failure. Misguided policy incentives have resulted in a program that encourages economic dependence rather than independence. Welfare is supposed to help people become responsible and self sufficient. The Personal Responsibility Act will give the decisionmaking back to the States. State officials know what will work best. The ``one size fits all'' approach of the Federal Government has not worked. The States have consistently been the places where new ideas have been allowed to grow and work. It is time to allow the States to have the flexibility and resources to get people back to work and off the dependence treadmill. This bill has a tough work requirement, it is tough on illegitimacy, and tough on deadbeat parents. No longer will alcoholics and drug addicts get cash payments to help them continue their addiction with taxpayer money. Contrary to what the other side is saying, this bill will not cut off assistance to kids. Low-income children will still receive school lunch and WIC benefits, but no longer will the money be micromanaged by the Federal Government middle man. This means that more money will make it to women and children in need, instead of Federal bureaucrats. Reforming the welfare system should not cost more money or add more people to the rolls. It should save money and be more efficient than the current system. The Personal Responsibility Act saves $66.3 billion over 5 years by slowing the growth of welfare spending--without eliminating the safety net for those who truly need it. We should not measure compassion for the poor by how much the Government spends on welfare or the number of people collecting checks. We should measure compassion by how few people are trapped in welfare and dependent on the Government. If we want to protect our children, then we must reduce Government spending, balance the budget, and foster an economy that will create opportunities and jobs. That is why I am supporting H.R. 4, the Personal Responsibility Act.

Mr. ALLARD

Mr. ALLARD. Mr. Speaker, early this year, I introduced H.R. 791, legislation to eliminate supplemental security income [SSI] disability payments for drug addicts and alcoholics. This legislation currently has 48 cosponsors. I am pleased to note that this proposal has been incorporated into the Personal Responsibility Act--the Republican welfare reform plan. Over the years many of my constituents have complained about the fact that drug addiction and alcoholism are considered disabilities under Federal law. This classification entitles these individuals to hundreds of dollars of disability payments each month. Until last year, they were even entitled to large lump sum payments. In essence, hard working taxpayers are required to subsidize addicts. We all have compassion for people with a substance abuse problem, but giving cash benefits to addicts is not the way to deal with the problem. This approach does far more harm than good, often providing the very resources for addicts to continue their abuse and avoid treatment. A General Accounting Office study found that between 1988 and 1994 the number of drug addicts and alcoholics receiving SSI disability payments rose almost 700 percent from 12,694 to 100,771. GAO expects a continued increase to over 200,000 by 1997 if nothing is done. This would be grossly unfair for the hard working Americans who pay the bills. Under the Personal Responsibility Act, drug addicts and alcoholics lose SSI payments and Medicaid. The total savings to taxpayers is $1.7 billion over 5 years--$400 million of this is used to fund additional drug treatment and to taxpayers, and requires substance abusers to face up to their problems and get real help.

Mr. ALLARD

Mr. ALLARD. I thank the gentleman for yielding. Mr. Chairman, I rise in support of H.R. 1058 and the Cox amendment. Mr. Chairman, abuses of securities litigation are particularly excessive. This act restricts the filing of frivolous suits by imposing stricter conditions. The act requires class action suits to have plaintiff steering committees to ensure that the interests of the lawyers to do dominate those of the plaintiffs. It equalizes individual plaintiff awards in a class action suit and restricts named plaintiffs from filing more than five suits in a 3-year period. The act also allows the court to order the ``lower pays'' rule in unjustified cases. The plaintiff has a greater burden of proof under this act, which allows the defendant to avoid liability if there is no intentional deceit. Also, the plaintiff must prove that loss was incurred because of reliance on a fraudulent statement. Finally, the act protects publishers of market predictions if the forecasts are well-reasoned but do not hold true. Without these reforms, plaintiff lawyers can file securities cases with few restraints. They routinely pounce on companies following a chance drop in stock. They have good reason to take, and in fact promote these suits. The plaintiff's counsels generally spend little time determining the facts of the case, yet receive a considerable amount of money for their involvement. Such practices are fostered by so-called professional plaintiffs who are sometimes recruited by lawyers with the promise of easy money. H.R. 1058 removes the incentives to file unfounded claims. Mr. Speaker, it is time we restore the notion that a capitalist economy, there are risks. The process is simple. Stocks rise, you win, stocks drop, you lose. Each person making an investment knows that it is a risk, still certain investors have been encouraged by counsel to fault companies for their inability to predict earnings. We can no longer afford to operate this way. Risk is an important element in the market. In Colorado alone it is estimated that frivolous securities litigation unjustly costs tens of millions of dollars every year. The assailed companies feel like they are dealing with a terrorist. Following a simple shift in stock price or a particular corporate decision, they find that their company is suddenly held hostage and they are compelled to negotiate a ransom payment. The cost of these suits is even more outrageous when you consider that the filing parties never see the bulk of the payment, it is the plaintiff attorneys who reap most of the benefits. When the law provides such incentives for greed, the law should be revised. H.R. 1058, the Securities Litigation Reform Act, will effectively limit unreasonable law suits. I strongly support this legislation.

Mr. ALLARD. Mr. Chairman, will the gentleman yield?

Mr. ALLARD

Mr. ALLARD. The Colorado Water Congress sets a policy and makes it available to all of our offices, and I have not seen any poll stating, and I do not believe one has been put out from the Colorado Water Congress that says this particular bill is going to interfere with interstate commerce or the Colorado River Compact, and certainly I would suspect that they would probably very strongly support what is in this bill.

Mr. ALLARD. Am I further correct in stating that section 9, paragraph (5), subparagraph (D) or H.R. 925 as amended, that the word ``only'' referred to in that subparagraph is a limitation on the Reclamation Acts, the Federal Land Policy Management Act, and section 6 of the Forest and Rangeland Renewable Resources Planning Act of 1974, and not a limitation on enactments in subparagraphs (A), (B), and (C)?