John Spratt

Mr. SPRATT

Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentleman from Minnesota [Mr. Minge].

Mr. SPRATT. Mr. Speaker, having no further requests for time, I will close for our side. Mr. Speaker, this is the last lap in a long race. I came here in 1983, and we were just beginning to recognize and struggle with the long-term implications of the deficit then. There was Gramm-Rudman- Hollings, there was a budget summit in 1990, there was a Deficit Reduction Act in 1993. And in every one of those cases, which I supported deficit reduction, the best that we could say, the best that we could reach for was a partial effort. We did not even pretend in any of those cases to have a solution in the short term for the deficit we face down the road. Today we are able to say credibly to the country and to our colleagues in the Congress, we are within reach of a balanced budget. Within the next 5 years, we can get it done, because today in truth we stand on the shoulders of those who came before us and acted before us in 1990. It cost us some of the people who supported what we did then. The results were largely eclipsed by a recession, but it was significant. Among other things, we put on the statute book to this country two rules: the pay-go rule, which essentially says, if we want to expand or liberalize entitlements, we either have to pay for it or identify commensurate spending cuts elsewhere in another entitlement program; and the discretionary spending caps, which have worked. They have not been breached since 1991. In 1993 we came back, because in 1990 the budget summit had not really yielded measurable significant results. We laid out a 5-year plan to cut the deficit, we hoped, by half; we barely claimed we would do that much. We extended the discretionary spending caps for 5 years, we reduced entitlement spending, and we were brazen enough, brave enough, some would say, to raise taxes. The result was not, as some predicted, a disaster in the economy. The economy took note of what we did, the financial markets were pleased, revenues began picking up, interest rates started down, the inflation rates stabilized; and guess what? The revenues of the Federal Government began to pick up again. We restored the revenue basis of this Government. For example, corporate income taxes have risen by $71 billion between 1992 and 1996, up more than 70 percent, and that is part of the reason, at the end of the last fiscal year, fiscal year 1996, the deficit was $107.8 billion, down 65 percent from the deficit predicted in 1993 when President Bush left office. That is substantial progress, and that is why I say we have come several laps, and we are not at the last lap. We are really talking about an effort today that is only partially the same size as the two previous efforts in 1990, and particularly in 1993. Because we are within reach, and because we did this in a bipartisan way, this is as much a budget agreement as a balanced budget agreement. We have set this goal realistically and conservatively, and I think credibly before us, and I think we will achieve it if the economy does not go south on us. But at the same time, we have recognized that the country has other problems and the Government has other pressing priorities than just balancing the budget. And we do not make a lot of room for these other priorities, but we do recognize, for example, that middle income American families are struggling with the way and whether or not they can pay for their children's education. We are going to bring them more tax relief in the bill that we are authorizing in this budget resolution and anything that has been done in the last 20 to 25 years. A couple of years ago we tried to enact universal health care, and we bit off more than we could chew. We have decided to back up and take it step by step, incrementally. We did Kennedy-Kassebaum last year. This year in this bill we set aside $16 billion over the next 5 years in order to implement measures so that America's children, mostly in working families who do not enjoy the benefit and security of health insurance coverage, can have health insurance coverage, another incremental step toward providing health insurance coverage by Americans who need it. We went back to welfare reform. We took some of the hard and harsh edges off, particularly as they impact legal immigrants in this country. We did some things that needed to be done and could not have been done unless we did it in a bipartisan way. I am proud of the fact that these accomplishments can be accounted for by this agreement. A lot of people, some commentators, some editorial writers, have said, can all of this be done? Can you really go after these ends and other policy goals and at the same time balance the budget? What about this $25 billion a year in extra revenues that you added at the last minute to make this agreement possible? In truth if we look, as the gentleman from Ohio [Mr. Kasich] said, at the underlying economic assumptions, the economic forecast that underlies this budget, most of the premises are very basic and very conservative. For example, in no year over the next 5 years do we assume growth exceeding 2.3 percent. Compared to what is happening now, that is a very conservative assumption. This agreement has not come easily. We have been at work at it for the last 4 months, long days, late nights, weekends, some bitter dissension. But I will say this: Throughout all of the negotiation, we have maintained a spirit of common purpose, cordiality, and civility which will serve us well now that we go into the implementation phase. The gentleman from Ohio was correct to anticipate that there will be struggles, there will be problems as we deal with the authorizing committee and the Committee on Appropriations and try to bring them to fruition in the form it is conceived in this budget resolution. That is the big challenge before us. But if we maintain that same spirit of civility, cordiality, and common purpose, we can do it. We can put them to bed. We can carry it out as intended, and we can balance the budget in 5 fiscal years. Mr. Speaker, I urge my colleagues to support this bill. Mr. Speaker, I include for the Record a letter from Senator Roth, chairman of the Finance Committee, and the gentleman from Texas, [Mr. Archer], the chairman of the Committee on Ways and Means, with respect to the tax bill. The letter referred to is as follows: Congress of the United States, Washington, DC, June 4, 1997. Hon. Pete V. Domenici, Chairman, Senate Budget Committee, Washington, DC. Hon. John R. Kasich, Chairman, House Budget Committee, Washington, DC. Dear Pete and John: Our Committees will soon begin marking up tax legislation to meet the reconciliation directives of the 1998 Budget Resolution. We will meet the Resolution's instructions of reducing revenues by $85 billion over the five year period 1998-2002 and by no more than $20.5 billion in 2002. Furthermore, we can assure you that, consistent with the May 15, 1997 letter from the Speaker of the House and the Majority Leader of the Senate to the President which stated, ``It was agreed that the net tax cut shall be $85 billion through 2002 and not more than $250 billion through 2007,'' the ten year net revenue loss in the tax reconciliation bill will not exceed $250 billion. Sincerely, William V. Roth, Chairman, Finance Committee. Bill Archer, Chairman, Ways and Means Committee. Mr. Speaker, I yield back the balance of my time.

Mr. SPRATT. Mr. Speaker, I would also like to ask about targets for spending and tax cuts. The budget agreement and budget resolution call for $85 billion in net tax cuts over the 5-year period 1998 to 2002 to be enacted in the second reconciliation bill. The first reconciliation bill includes entirely spending items, with two small exceptions, the increase in Federal employee retirement contributions, as technically a revenue increase, and the administration's proposal to tighten compliance with the earned income credit is actually scored as generating a small revenue increase as well as reduction in outlays. Some have suggested that section 310(c) of the Congressional Budget Act could allow the first bill to include tax cuts offset by spending reductions that are deeper than those specified in the reconciliation directive. If so, tax cuts in the first bill, with $85 billion of tax cuts in the second bill, could bring net tax reduction to more than the $85 billion agreed upon in the first 5 years. However one interprets section 310(c), I would maintain that it would breach the terms of the budget agreement to include tax cuts in the first reconciliation bill or to include tax cuts exceeding $85 billion over 5 years in the second bill. This would also breach the revenue floor set by this resolution and trigger a point of order. Does the chairman agree that the budget agreement calls for $85 billion in net tax cuts over 5 years and that any greater amount would violate the agreement?

Mr. SPRATT. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from North Dakota [Mr. Pomeroy].

Mr. SPRATT. Mr. Speaker, the Committee on the Budget leadership, the congressional leadership, and the White House have negotiated in earnest over the past 4 months. Our negotiations culminated in a document called the Bipartisan Budget Agreement of 1997, which is incorporated by reference in the committee report. In issuing reconciliation directives, what the resolution seeks is compliance with this agreement, and compliance is critical if we are to implement in good faith the bipartisan budget agreement of 1997. To that end, I would like to engage the chairman of the Committee on the Budget in a colloquy to confirm his understanding of this bipartisan budget agreement and this budget resolution. First, does the chairman remain committed to House consideration of two separate reconciliation bills, first, the spending bill, second, the bill providing for $85 billion in net tax reduction from 1998 to 2002? I raise this question because the House reconciliation directive allows either two bills or a single omnibus bill, and on May 19, 1997, Chairman Kasich sent me a letter to clarify that provision. In that letter the gentleman from Ohio [Mr. Kasich] stated: The procedural obstacles in the Senate may preclude the consideration of two separate reconciliation bills. For that reason, the committee reported budget resolution includes a contingency for the consideration of a single bill. I remain firmly committed to considering and presenting to the President two separate reconciliation bills, as envisioned in the Bipartisan Budget Agreement, and will work in good faith with all parties to achieve that end. I understand that the other body has now resolved the major procedural problem by granting unanimous consent to waive the so-called Byrd rule, a provision that might otherwise have precluded consideration of a separate tax reconciliation bill. Mr. Speaker, I include for the Record the letter just referred to. House of Representatives, Committee on the Budget, Washington, DC, May 19, 1997. Hon. John Spratt, Ranking Minority Member, Committee on the Budget, House of Representatives, Washington, DC. Dear Mr. Spratt: This letter is a follow-up to my comments at last Friday's mark up on the structure of the reconciliation process. As you know, the budget resolution, as reported, establishes a structure for the consideration of two separate reconciliation bills in the House, the first for entitlement reform due on June 12 and the second for tax relief due on June 13. The two-bill structure is consistent with the Bipartisan Budget Agreement which noted that ``It is the intention of the Leaders that Congress shall present the revenue reconciliation bill to the President after the spending reduction reconciliation bill. This assumes a good faith effort by all parties to enable such a legislative process to succeed.'' Unfortunately, procedural obstacles in the Senate may preclude the consideration of two separate reconciliation bills. For that reason, the committee-reported budget resolution includes a contingency for the consideration of a single omnibus bill. I remain fully committed to considering and presenting to the President the two separate reconciliation bills, as envisioned in the Bipartisan Budget Agreement, and will work in good faith with all parties to achieve that end. Sincerely, John R. Kasich, Chairman, Committee on the Budget.

Mr. SPRATT. I believe in order to be effective, it has to be read aloud.

Mr. SPRATT. Mr. Speaker, will the gentleman yield?

Mr. SPRATT. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from California [Mr. Sherman]. (Mr. SHERMAN asked and was given permission to revise and extend his remarks.)

Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentleman from Texas [Mr. Bentsen]. (Mr. BENTSEN asked and was given permission to revise and extend his remarks.)

Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentleman from Maryland [Mr. Cardin].

Mr. SPRATT. Mr. Speaker, is it understood that we are evenly dividing the time between us?

Mr. SPRATT. Mr. Speaker, I yield myself such time as I may consume. I would simply like to say that the gentleman stated as well as possibly could be stated the spirit of this agreement. I walked us through a tedious colloquy about compliance with different fine points in the agreement and important points in the agreement, but the gentleman stated it well when he stated that we all have to work together, Democrats and Republicans alike, to see that this agreement is fulfilled in the form that it is intended as we pass a budget resolution. Mr. Speaker, I yield 2 minutes to the gentlewoman from North Carolina [Mrs. Clayton]. (Mrs. CLAYTON asked and was given permission to revise and extend her remarks.)

Mr. SPRATT. Mr. Speaker, there is one final issue that bears repetition even though you and I have been very clear on the matter. The budget agreement and the budget resolution both include funds for five Presidential initiatives, $16 billion for children's health care coverage, to which we were just referring, $9.7 billion over 5 years to restore SSI and Medicaid benefits to legal immigrants already in the country who are or may become disabled, $1.5 billion for food stamps, $1.5 billion to ease the impact of increasing Medicare premiums on low- income beneficiaries, and $3 billion for welfare to work. In each case, amounts have been allocated to the committees of jurisdiction and netted into the reconciliation targets for each committee. Although these committees have been given directives and targets that would allow them to spend these amounts, the agreement specifically provides additional resources solely for the stated purposes. The agreement in no way contemplates that this spending can be diverted to another program within a committee's jurisdiction or that it can be withheld to meet spending reductions that that committee is called upon to make. This is my view. Is it also the view of the gentleman from Ohio [Mr. Kasich]?

Mr. SPRATT. Mr. Speaker, I thank the gentleman for yielding. Mr. Speaker, this budget resolution in order to balance the budget in 5 years caps discretionary spending and issues reconciliation directives to a number of House and Senate committees. These directives simply set forth targets that each committee must meet, but behind these reconciliation directives are major policy and procedural agreements.

Mr. SPRATT. Mr. Speaker, with respect to expanding health insurance coverage for uninsured children, I would like to note the following: First, the budget agreement specifies the $16 billion provided as outlay increases and refers to it as funding. Neither term implies a tax cut. Second, the budget resolution treats the entire $16 billion provided as an outlay increase. And third, the phrase ``mutually agreeable'' refers to the parties who negotiate the agreement, the White House, the congressional leadership, the Committee on the Budget leadership. Does the chairman understand the phrase ``mutually agreeable'' to mean these parties?

Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentleman from Texas [Mr. Stenholm]. (Mr. STENHOLM asked and was given permission to revise and extend his remarks.)

Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentleman from California [Mr. Filner].

Mr. SPRATT

Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentleman from New Jersey [Mr. Menendez].

Mr. SPRATT. Mr. Speaker, I yield back the balance of my time, and I move the previous question on the motion to instruct. The previous question was ordered.

Mr. SPRATT. So the gentleman supports the motion to instruct conferees?

Mr. SPRATT. Mr. Speaker, I yield myself such time as I may consume. I thought the gentleman was calling for a vote by acclamation to endorse this resolution. I did not hear him say anything that disagreed with the motion to instruct conferees. Is that the gentleman's request? I would like to ask the gentleman, do I correctly understand what the gentleman just said, that he supports this particular motion to instruct conferees, then?

Mr. SPRATT. Mr. Speaker, I yield myself 2 minutes to explain the purpose of the motion. As I said at the outset when the gentleman from Ohio [Mr. Kasich], the chairman, introduced his motion to go to conference, our purpose here is to see that what comes out of the pipeline resembles in its essential details what we are putting into the pipeline in the form of this budget resolution, and in particular on our side we are concerned that after spending years in restoring the revenue base of the Federal Government to the point where we have got the deficit down to $107.8 billion last September, projected to be below $90 billion, well below it, this coming September, we do not want to make the mistake made in 1981 and undo all the progress that has brought us to this point where we can truthfully say we are within reach of a balanced budget. No. 1, we want to make sure that the tax writing committees, when they undertake to fulfill the reconciliation instructions, will strictly keep to the dictates of this resolution and see to it that the net revenue loss in the first 5 fiscal years from 1998 to 2002 is no more than $85 billion, and in the years 2003 to 2007 is no more than $250 billion. That was the agreement. We want to see it observed. Fundamentally, we are simply reiterating what is the agreement reached among all the parties. Second, in distributing the tax benefits, the tax cuts, we want to say to the tax writers, as the other body has said in its resolution, be fair to hardworking Americans, see to it that they get at least a significant part of the tax benefit bill that we are about to write. Those are the two fundamental things that we stress here today. We do not see how anybody in this House, Democrat or Republican, could differ or disagree with it. We hope that everybody, seeing the merit of this motion to instruct, will join in supporting it. Mr. Speaker, I reserve the balance of my time.

Mr. SPRATT. Mr. Speaker, I offer a motion to instruct.

Mr. SPRATT. Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.

Mr. SPRATT. Mr. Speaker, I yield 1 minute to the gentlewoman from Connecticut [Mrs. Kennelly].