Report text available as:

  • TXT
  • PDF   (PDF provides a complete and accurate display of this text.) Tip ?
                                                        Calendar No. 64
-----------------------------------------------------------------------
106th Congress                                                   Report
  1st Session                    SENATE                          106-27
_______________________________________________________________________




 
              CONCURRENT RESOLUTION ON THE BUDGET FY 2000              

                               __________

                              R E P O R T

                                 of the

                        COMMITTEE ON THE BUDGET

                          UNITED STATES SENATE

                              to accompany

                            S. Con. Res. 20

                             together with

                     ADDITIONAL AND MINORITY VIEWS






Setting forth the congressional budget for the United States Government 
for fiscal years 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 
                                and 2009

                 March 19, 1999.--Ordered to be printed

                               --------

                    U.S. GOVERNMENT PRINTING OFFICE                    
55-486                     WASHINGTON : 1999




                        COMMITTEE ON THE BUDGET

                 PETE V. DOMENICI, New Mexico, Chairman

CHARLES E. GRASSLEY, Iowa            FRANK R. LAUTENBERG, New Jersey
DON NICKLES, Oklahoma                ERNEST F. HOLLINGS, South Carolina
PHIL GRAMM, Texas                    KENT CONRAD, North Dakota
CHRISTOPHER S. BOND, Missouri        PAUL S. SARBANES, Maryland
SLADE GORTON, Washington             BARBARA BOXER, California
JUDD GREGG, New Hampshire            PATTY MURRAY, Washington
OLYMPIA J. SNOWE, Maine              RON WYDEN, Oregon
SPENCER ABRAHAM, Michigan            RUSSELL D. FEINGOLD, Wisconsin
BILL FRIST, Tennessee                TIM JOHNSON, South Dakota
ROD GRAMS, Minnesota                 RICHARD J. DURBIN, Illinois
GORDON SMITH, Oregon

                  G. William Hoagland, Staff Director

              Bruce King, Staff Director for the Minority


                                CONTENTS

                               __________
                                                                   Page
   I. Concurrent Resolution on the Budget: Fiscal Year 2000 and
        Overview.................................................     1
  II. A Budget Resolution: What Is It?...........................     7
 III. Economics..................................................    19
  IV. Spending and Revenues......................................    22
           Baseline..............................................    22
               A. Spending by Function...........................    24
               B. Revenues.......................................    75
   V. Summary Tables.............................................    80
  VI. Budget Resolutions: Enforcement, Other Provisions and 
      Reconciliation.............................................    86
           Enforcement...........................................    86
           Other Provisions......................................    86
           Reconciliation........................................    91
 VII. Committee Views and Estimates..............................    92
VIII. Committee Votes............................................   265

  IX. Additional and Minority Views..............................   276



      I. The Concurrent Resolution on the Budget: Fiscal Year 2000

    The Committee-reported Concurrent Budget Resolution for 
Fiscal Year 2000 represents a fiscal blueprint for the first 
decade of the new 21st century. The latter quarter of the 20th 
century was one marked by federal fiscal imbalances. The fiscal 
deficits of the recent past are now expected to turn into 
surpluses. This heretofore unexperienced outlook provides 
Congress and the President with a unique opportunity to 
structure a fiscal policy that addresses the challenges that 
lie ahead--both domestic and internationally.
    The Committee-reported resolution was constructed following 
these basic principles:
          Preserve and protect the social security trust fund 
        balances.
          Maintain the fiscal discipline of the 1997 Bipartisan 
        Balanced Budget Agreement.
          Return to working Americans tax overpayments.
          Produce non-social security surpluses to reflect the 
        real possibility of unexpected contingencies and 
        possible transition costs for long-term Medicare reform 
        over the next decade or for additional debt reduction.
    All federal spending under the Committee-reported 
resolution will increase from $1.7 trillion in 1999 to over 
$1.9 trillion in 2004. Federal revenues, post tax reductions, 
will increase from $1.9 trillion in 1999 to $2.1 trillion in 
2004. The budget, excluding social security, will maintain 
balance throughout the projection period, and approximately 
$132 billion in federal resources are projected to remain 
available as on-budget surpluses, thereby further reducing debt 
held by the public--if not needed for emergency or contingency 
funding.


      1. preserve and protect social security trust fund balances


    The Committee-reported resolution protects social security 
trust fund balances estimated to total $1.8 trillion over the 
next decade. It assumes that the trust fund balances are used 
to retire debt held by the public and for no other purposes. 
Debt held by the public would decline from $3.6 trillion at the 
end of 1999 to $1.9 trillion by the end of the decade.
    A budget resolution is not statutory law. Advisory levels 
on debt held by the public are included in the reported 
resolution. But it is assumed that separate and apart from the 
budget resolution, a statute will be enacted to enforce these 
advisory levels.
    As estimated by the Congressional Budget Office (CBO), the 
President's budget for 2000 would expend 21 percent of the 
social security surpluses over the next five years for programs 
unrelated to social security. Debt held by the public would 
decline under the President's budget proposal from $3.6 
trillion at the end of 1999 to $2.3 trillion at the end of the 
decade. Compared to the President's budget proposal, the 
Committee-reported resolution would retire $464 billion more 
debt held by the public.


    2. maintain the fiscal discipline of the 1997 bipartisan budget 
                               agreement


    The Committee-reported resolution, as required by law, 
allocates discretionary spending totals to the Committee on 
Appropriations consistent with the statutory levels established 
in the historic 1997 Budget Agreement. Those ``caps'' have 
contributed to the balanced budget today. The reported 
resolution abides by the $536 billion in BA and $571 billion in 
outlay limitations for 2000.
    The Congress would be required to set priorities for 
spending programs within these caps. Final decisions on how 
these priorities will be determined rest with the Committee on 
Appropriations and ultimately the Congress and President. The 
reported resolution, for illustrative purposes only, has 
assumed that spending within the caps can be achieved while at 
the same time increasing funding for national security, 
elementary and secondary education, fully funding the Violent 
Crime Trust Fund programs, funding the President's request for 
the Census, fully funding highway and mass transit programs 
under TEA-21 enacted last year, increasing funding for veterans 
discretionary health programs, and doubling the President's 
request for NIH funding.
    Within these spending limits the Chairman's Mark does not 
assume a continuation of funding for emergency spending 
programs adopted at the end of the last Congress. Although if 
emergency spending becomes necessary in the future, the 
reported resolution contemplates that such designations could 
continue to be made. However, the resolution assumes a change 
in budget procedures that would require a super-majority vote 
to maintain an emergency designation. The Committee-reported 
resolution would adopt, in part, the President's proposals for 
discretionary spending reductions, reductions in lower priority 
spending programs, adoption of mandatory savings and possible 
user fees available to the Appropriations Committee to offset 
spending.
    The Committee-reported resolution assumes that the 
discipline of the spending caps will be maintained in part by a 
thorough review by the Congress of the nearly $102 billion in 
1999 appropriations for programs that had not been authorized.
    The Committee-reported resolution assumes that the 
discipline of the spendingcaps will be maintained by the 
Committees of the Congress by implementing real solutions to long-
standing problems identified in the Comptroller General's January 1999 
``High Risk'' report to Congress. The GAO since 1990 has identified 
high risk government programs and operations because of their 
vulnerabilities to waste, fraud, abuse, and mismanagement.
    The Committee-reported resolution assumes that the 
discipline of the spending caps will be maintained by the 
Committees of the Congress beginning to actively engage in 
oversight and implementation of the ``Government Performance 
and Results Act of 1993'' that was designed specifically to 
identify low performance and ineffective government spending 
programs.
    The Committee-reported resolution assumes the repeal of the 
depression era and arcane Davis Bacon Act and Service Contract 
Act, creating savings that will provide the Congress with 
monies to spend on higher federal priorities such as education 
and health care programs. The resolution assumes the 
President's proposed FSIS fees providing additional resources 
under the caps, and the President's proposed $200 million 
spectrum lease fee for broadcasters.
    The resolution assumes a reduction in funding for political 
appointees now on the federal payroll. The resolution assumes 
that some programs will remain unchanged from their 1999 
funding levels and that others that were one-time funded in 
1999--such as various transportation projects funded outside 
the TEA-21 legislation of last year--will not continue to be 
funded, saving nearly $352 million alone in 2000 and $3.4 
billion over the next decade. The resolution assumes that the 
Committee on Appropriations working in consort with the Banking 
Committee will privatize Ginnie Mae and create resources of 
nearly $2.8 billion to remain within the discretionary caps.
    While the Committee-reported resolution assumes many of the 
proposals in the President's budget, comparing the resolution 
to the President's budget is nonetheless difficult. 
Appropriation levels for discretionary programs in the 
resolution would not exceed the current cap, while CBO has 
estimated that the President's request exceeds the statutory 
cap for budget authority by $22 billion. Of this excess, $17 
billion arises from proposed ``offsets'' in the President's 
budget that cannot, even under current Administration 
scorekeeping, be counted against the discretionary caps.
    Therefore, in function-by-function comparisons of the 
Committee-reported resolution to the President's budget, the 
President's budget appears to allocate more resources in 2000 
than the resolution's suggestions. In truth, however, the 
President's budget could not deliver those funding levels 
because the sum total of the President's proposed levels would 
not be possible under current law. If enacted exactly as 
proposed in the appropriation bills, the President's 
appropriation levels would require sequesters across the board 
to reduce them to the cap levels. The reported resolution hews 
to the caps without changing current budget rules, and because 
of this, necessarily but misleading appears to be less than the 
President's levels on a functional basis.
    The Committee-reported resolution assumes that 
discretionary spending will increase after 2002 through 2009 by 
a rate of growth slightly half the rate of inflation projected 
for that time period.
    The Committee-reported resolution does not assume any of 
the President's proposals for reduction in Medicare spending. 
It does not assume increases in tobacco taxes to fund 
discretionary spending. The resolution assumes an increase in 
mandatory spending of $6.0 billion over the period 2000-2004 
for agriculture income support. Finally, the resolution assumes 
that the current authority for the federal government to recoup 
monies from last fall's State-Tobacco Industry settlement will 
be overturned.
    The resolution assumes that, within the funds made 
available to federal agencies, the historic pay parity between 
federal civilian and military employees will be maintained.

       4. Return to Working Americans projected tax overpayments

    While maintaining the current discipline of the Budget Act 
that has fostered the balanced budget of today, the Committee-
reported resolution assumes that overpayment of taxes not 
needed to fund the general government should be returned to 
them in the form of tax reductions. The exact nature of how 
such overpayments would be returned would be left to the 
Committee of jurisdiction through a reconciliation 
instruction--the Finance Committee. Again, ultimately the 
nature of these tax cuts would be determined by the Congress 
and the President. The resolution would instruct a reduction in 
federal taxes not to exceed a net $142 billion over the next 
five years, and $778 billion over the next ten years. Tax 
reductions over and above these levels would have to be offset 
by the tax writing Committee in order to maintain fiscal 
balance.
    The Committee-reported resolution includes a reserve fund 
in 2000 for an on-budget surplus. The reserve fund allows the 
Chairman of the Budget Committee to adjust revenue, deficit, 
and debt levels in the resolution if CBO revises its forecast 
later this summer to show an on-budget surplus for 2000. This 
revision would also revise reconciliation instructions to the 
tax writing committees to permit additional tax reductions in 
2000 based on the amount of the reestimated on-budget surplus.

                   5. Additional On-Budget Surpluses.

    All budget estimates are subject to change and 
uncertainty--particularly when made over an extended period 
such as ten years. Therefore, the Committee-reported 
resolution, showing caution, assumes that not all of the 
projected on-budget surplus after 2000 would necessarily be 
allocated to tax reductions or spending. It is estimated, at 
this time, that nearly $133 billion in on-budget surpluses 
could result if the resolution were fully implemented. These 
additional funds, if estimates prove accurate, would further 
retire debt held by the public or could be made available to 
assist funding of any transition costs to implement reforms in 
the Medicare programs that would significantly extend the 
solvency of that program through a reserve fund mechanism 
adopted by the Committee. Alternatively, the on-budget surplus 
projected by the resolution could be needed for funding 
unexpected disasters and emergencies over this period.

The on-budget surplus and social security administrative expenses

    The on-budget surplus levels in section 101(4) of the 
budget resolution are $3.1 billion lower in every year as a 
result of a scorekeeping convention dealing with Social 
Security administrative expenses. This is identical to the 
manner in which Social Security administrative expenses have 
been treated in every concurrent resolution on the budget since 
1990.
    Section 13301 of the Omnibus Budget Reconciliation Act of 
1990 provided that the receipts and disbursements of the Social 
Security trust funds are to be excluded from budget totals. The 
$3.1 billion in Social Security administrative expenses are an 
outlay from the Social Security trust fund and are considered 
off-budget.
    Under section 250(c)(4) of the Balanced Budget and 
Emergency Deficit Control Act of 1985, Social Security 
administrative expenses are considered discretionary spending 
for the purposes of the spending limits. The Office of 
Management and Budget (OMB) has determined that for 
scorekeeping purposes only, Social Security administrative 
expenses are considered discretionary spending. As a result, 
the Congressional Budget Office and the Budget Committees score 
Social Security administrative expenses as on-budget 
discretionary spending for Budget Act scorekeeping purposes 
only. In order to conform with OMB's treatment of the 
discretionary spending limits, the budget resolution lowers the 
on-budget surplus by $3.1 billion and increases the Social 
Security surplus by the same amount.
    In its annual reports and updates to Congress on the 
budget, both OMB and CBO treat Social Security administrative 
expenses as off-budget.

                                                                            Committee-Reported Resolution Aggregates
                                                                                    [In billions of dollars]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                1999      2000      2001      2002      2003      2004      2005      2005      2006      2007      2008      2009       2000-
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Discretionary: \1\
  Defense:
    BA......................................................     271.8     290.0     304.8     309.3     319.4     328.1     329.3     330.5     331.8     333.1     334.3   1,551.5     3,210.5
    OT......................................................     269.8     275.8     287.1     292.8     304.7     314.4     317.6     316.0     314.6     318.0     318.9   1,474.8     3,060.0
  Nondefense:
    BA......................................................     266.4     246.3     236.6     241.1     252.4     255.7     255.7     255.7     255.2     255.1     255.3   1,232.0     2,509.1
    OT......................................................     297.4     295.2     283.9     274.2     288.0     289.2     290.4     290.1     289.3     289.0     289.0   1,430.5     2,878.2
  Subtotal:
    BA......................................................     538.2     536.3     541.3     550.4     571.8     583.8     585.0     586.2     587.0     588.2     589.6   2,783.5     5,719.6
    OT......................................................     567.3     570.9     571.0     567.0     592.7     603.6     608.0     606.1     603.9     607.0     607.9   2,905.3     5,938.2
  Mandatory:
    OT......................................................     900.5     946.5     996.2   1,040.8   1,113.6   1,176.8   1,254.3   1,311.2   1,390.5   1,482.5   1,576.6   5,274.0    12,289.4
  Net interest:
    OT......................................................     229.4     217.9     207.4     196.8     186.9     176.9     165.6     153.9     142.2     129.0     115.7     985.9     1,692.3
  Total outlays:
    OT......................................................   1,697.2   1,735.4   1,774.7   1,804.6   1,893.2   1.957.3   2,027.9   2,071.2   2,136.5   2,218.8   2,300.2   9,165.2    19,919.0
  Revenues..................................................   1,814.6   1,870.0   1,923.0   1,961.5   2,058.3   2,134.8   2,225.1   2,283.3   2,363.9   2,459.9   2,549.8   9,947.6    21,829.7
    Unified surplus.........................................     110.4     134.6     148.3     156.8     165.1     177.5     197.2     212.1     227.4     241.1     249.6     782.4     1,909.8
    On-budget \1\...........................................     -16.1      -2.9       3.3       3.5       3.6       6.6      13.6      18.7      23.8      29.0      32.1      14.0       131.2
    Off-budget..............................................     126.5     137.6     144.9     153.4     161.6     171.0     183.6     193.6     203.6     212.1     217.5     768.4     1,778.6
SBC Baseline:
  Unified surplus...........................................     110.5     119.6     140.1     188.9     209.2     254.0     293.6     361.4     411.8     451.0     498.4     911.8     2,928.1
  On-budget.................................................     -16.0     -17.9      -4.9      35.5      47.7      83.0     110.0     168.1     208.2     238.9     280.9     143.4     1,149.5
  Off-budget................................................     126.5     137.6     144.9     153.4     161.6     171.0     183.6     193.3     203.6     212.1     217.5     768.4     1,778.6
  Discretionary.............................................  ........     -14.7     -15.4     -22.0       9.8      24.1      27.3      28.6      29.1      30.1      31.3     -18.3       128.0
  Mandatory:
    BBA extensions..........................................  ........  ........  ........  ........      -0.9      -2.6      -2.9      -3.0      -3.1      -3.3      -3.5      -3.5       -19.4
    Agriculture.............................................  ........  ........       0.7       1.4       1.5       1.6       0.8  ........  ........  ........  ........       5.2         6.0
  Net interest..............................................  ........      -0.3      -0.9      -0.5       1.4       4.3       8.6      14.5      22.7      32.5      43.8       4.0       126.1
  Tax cuts (net)............................................  ........  ........      -7.4     -53.1     -32.3     -49.2     -62.6    -109.3    -135.8    -150.7    -177.2    -142.0      -777.6
  Tax cuts (gross)..........................................      -0.1     -13.1     -16.0     -55.4     -39.2     -53.2     -66.4    -113.1    -139.5    -154.4    -181.0    -177.0      -831.4
  Total change..............................................      -0.1      15.0       8.2     -32.1     -44.1     -76.5     -96.4    -149.4    -184.4    -209.9    -248.7    -129.4    -1,018.3
  Resolution Total:
    Unifired surplus........................................     110.4     134.6     148.3     156.8     165.1     177.5     197.2     212.1     227.4     241.1     249.6     782.4     1,909.8
    On-budget \2\...........................................     -16.1      -2.9       3.3       3.5       3.6       6.6      13.6      18.7      23.8      29.0      32.1      14.0       131.2
    On-budget...............................................     126.5     137.6     144.9     153.4     161.6     171.0     183.6     193.3     203.6     212.1     217.5     768.4     1,778.6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ For 1999, discretionary spending excludes one-time emergency spending and other adjustments.
\2\ The on-budget surplus in the text of the Budget Resolution is $3.1 billion lower every year as a result of a scorekeepng convention dealing with Social Security administrative expenses.

                  II. A Budget Resolution: What Is It?

    A budget resolution is a fiscal blueprint, a guide, a road 
map, that the Congress develops to direct the course of federal 
tax and spending legislation. It is a set of aggregate spending 
and revenue numbers covering the twenty broad functional areas 
of the government, over a long-term fiscal horizon. It is less 
than substantive law, but is much more than a sense of the 
Congress resolution. It is a tool for Congress. A budget 
resolution does not require the President's signature and does 
not become law.
    Nevertheless, a budget resolution can require congressional 
action leading to changes in substantive law that require 
Presidential approval. Conversely, substantive law can affect 
the construction of a budget resolution. For example, 
substantive law changes enacted in 1997 specify parameters that 
must be followed in the 2000 Budget Resolution. The resolution 
is enforceable on Congress and it penalizes committees that 
violate its guidelines. A budget resolution is not a line-item 
detail document, but conversely, line-item assumptions are 
often required to construct the resolutions' aggregate numbers.

The concurrent resolution on the budget for 2000

    Title III of the Congressional Budget Act of 1974 requires 
the Congress to complete action on a concurrent resolution on 
or before April 15 of each calendar year for the fiscal year 
that begins on October 1. Unlike recent past budget 
resolutions, last year's Senate-passed 1999 Budget Resolution 
and this year's 2000 budget, represent a continuum in carrying 
out the Bipartisan Budget Agreement (B.B.A.) announced by 
President Clinton and the Congressional leadership on May 7, 
1997.
    The enacted Balanced Budget Act of 1997 extended 
discretionary spending limits and pay-as-you-go procedures 
through 2002. These procedures were first enacted in the 1990 
Budget Enforcement Act. As the Congress considers and adopts 
the 2000 Budget Resolution and subsequent spending bills, 
fiscal guideposts for discretionary spending have already been 
established for the Administration and Congress. Revisions to 
those guideposts would require, in most instances, changes to 
substantive law, and therefore, agreed-on changes to the 
historic agreement reached in 1997.
    The President's 2000 Budget submitted to Congress in 
February, as reestimated by the Congressional Budget Office, 
was found to have violated the B.B.A. by proposing to spend $33 
billion over the agreed-on spending caps in 2000, and nearly 
$75 billion more than was agreed to over the 2000-2002 period. 
Law binds the Senate Budget Committee, however, not to report a 
budget resolution that exceeds the spending limits established 
in statute. If the resolution exceeded the spending limits, it 
would be out of order in the Senate and only with a 
supermajority vote could the resolution even be considered.

A brief on the federal budget

    The federal budget is: (1) a plan for how the federal 
government disburses and allocates taxpayers dollars among 
various competing public functions, (2) a plan for how the 
federal government collects revenues, (3) a plan for how the 
federal government will finance any deficit spending by 
borrowing from the public, and (4) a tool for formulating macro 
fiscal policy.
    Chart 1 that follows presents the history and the current 
CBO baseline projection of the federal deficit through early in 
the next century. After reaching a peak of $290 billion in 1992 
(4.7 percent of GDP), the unified budget deficit declined to 
reach a surplus in 1998 of $69 billion. For 1999 CBO now 
projects a growing surplus to $111 billion. If current laws and 
policies are left unchanged (discretionary spending caps remain 
in effect and grow at inflation after their authorization 
expires) and real economic growth averages 2.2 percent 
annually, the unified budget surplus is projected to grow to 
$133 billion in 2000 (1.5 percent of GDP) and nearly $383 
billion by 2009 (2.8 percent of GDP). Such a period of 
sustained budget surpluses is unprecedented in the U.S.'s 
economic history.
    The on-budget deficit excludes spending and revenues of the 
two Social Security trust funds and the transactions of the 
Postal Service. This is referred to as the ``rest of 
government.'' Measured this way, the rest of government remains 
in slight deficit through 2000--$30 billion in 1998 (-0.4 
percent of GDP), declining to a $5 billion deficit in 2000 
before beginning to register a surplus in 2001.
    Annual ``off-budget surpluses''--the social security 
program--grow over the next decade. In 1999 these surpluses are 
expected to reach $127 billion and increase annually whereby 
2009 the annual surplus in social security will total $218 
billion. Over the next ten years the cumulative surpluses in 
social security will reach nearly $1.8 trillion. In the past, 
when the rest of government was not in balance, these social 
security surpluses helped to fund general government 
operations. Today, with projections that the rest of government 
will be in surplus, the social security annual surpluses will 
directly retire debt held by the public under current law.





    Debt held by the public is expected to decline from $3.6 
trillion at the end of this year to $1.2 trillion by the end of 
the decade under the assumption that all the social security 
surpluses retire debt as well as any rest of government 
surpluses that develop. Assuming no changes in policies, debt 
held by the public will decline to 8.6 percent of GDP in 2009, 
an unprecedented and level. Historically, it has been estimated 
that the US debt to GDP ratio has averaged 18 percent since the 
beginning of the republic, excluding the periods of war and the 
Great Depression.





    The federal budget consists of more than 1,060 spending 
accounts that fund an estimated 113,000 programs, projects, and 
activities. The federal budget and a Congressional budget 
resolution collapse these accounts into twenty budget 
functions.
    A further simplification of federal spending is depicted in 
Chart 4. This chart categorizes all federal spending (outlays) 
into four major components: (1) entitlements and mandatories, 
(2) defense discretionary, (3) nondefense discretionary, and 
(4) net interest on our public debt. Offsetting receipts are 
excluded from this chart. Offsetting receipts are represented 
in the federal accounts as negative budget authority and 
outlays and are credited to separate receipt accounts. In 1999 
offsetting receipts will total nearly $78 billion, consisting 
primarily of intergovernmental receipts from agencies 
contributions for federal workers' retirement, and Medicare 
premium payments.
    Clearly federal spending has increased dramatically over 
the last twenty years and, left unchanged, will continue to 
grow into the future. Entitlement and mandatory programs which 
represented 35 percent of all federal spending in 1970 will 
exceed 57 percent in 1999. Including current net interest 
payments on previous federal borrowing, the percentage of the 
federal budget today that is either an entitlement or a 
mandatory payment reaches nearly 72 percent.





    Discretionary appropriated accounts that represented 25 
percent of total spending in 1970 have grown to about 33 
percent in 1999. Between 1981 and 1998, all discretionary 
spending, both defense and nondefense, in constant dollars 
(adjusted for inflation) has increased less than 0.2 percent 
annually. Over this period, where there has been growth in 
nondefense spending after accounting for inflation, that growth 
has been targeted in a few specific areas: programs related to 
federal crime fighting activities have increased 112 percent; 
more than a 50 percent increase for space and science programs; 
and a 122 percent increase for housing programs. Other 
nondefense spending has seen significant reductions: energy 
programs down 67 percent; international affairs down 22 
percent; commerce programs down 57 percent; and transportation 
funding flat.
    Annual discretionary defense spending--in constant 
dollars--has declined a total of 17 percent since 1983. Annual 
discretionary nondefense spending, however, in constant dollars 
has increased 4 percent since 1983. In 1999, nondefense 
discretionary spending, even after adjusting for inflation, 
increased over the previous year nearly 4.1 percent. This level 
of increase--resulting from declaring certain spending as an 
emergency outside the statutory caps--had not been experienced 
since 1992 when it increased 5.4 percent.
    Total entitlement and mandatory spending growth is shown in 
Chart 5. It is estimated that in 2000, 73 percent of all 
mandatory spending will fall into three programs: (1) social 
security, (2) Medicare, and (3) Medicaid. Spending for 
mandatory programs as a whole has more than doubled during the 
past decade, rising faster than both nominal growth in the 
economy and the rate of inflation.
    These programs are expected to continue to grow in the 
future, but growth in caseload will account for only about one-
fifth of the growth. Automatic increases in benefits will 
account for more than one-third of growth and nearly 40 percent 
of the growth comes from increased utilization of medical 
services.





    Finally, total federal revenues in 1999 will reach over 
$1.8 trillion. Social insurance taxes contributed 35 percent of 
total revenues, up from 25 percent less than a quarter of a 
century ago. The share of revenues collected from the 
individual income tax has remained steady at close to 45 
percent over the years, while the proportion of revenues from 
corporate and excise taxes have declined from 25 percent in 
1970 to 15 percent today.
    Measured as a share of the total economy, federal revenues 
have grown steadily to where today it is estimated that in 
1999, federal revenues will top 20.7 percent of GDP. Not since 
1944, at the peak of WW II, have federal revenues constituted 
such a take on the national economy. In 1944, federal revenues 
represented 20.9 percent of GDP.


 


                             III. Economics

Economic assumptions

    The Committee-reported resolution is built upon CBO's 
assumptions about the future path of the US economy. CBO 
prepares economic forecasts for 1999 and 2000, which reflect 
the current state of the economy and relative position in the 
business cycle. The out-year projections are based upon longer-
term trends in the economy.

Overview

    The current economic expansion is now the longest on record 
during times of peace. Notwithstanding its age, the economy 
shows no signs of slowing--real GDP grew almost 4 percent last 
year while the unemployment rate fell to its lowest level since 
1970. Furthermore, inflation remains tame at only 1.6 percent, 
despite three years of more than 3 percent growth. This 
favorable price backdrop has been helped by recent productivity 
gains which have helped to offset real wage increases and kept 
unit labor cost rises in check.
    The economy's performance is even more impressive in light 
of the severe emerging market strains that followed Thailand's 
devaluation in July 1997. These strains prompted a sharp 
deterioration in the global growth outlook and a concomitant 
decline in commodity prices. Yet, while US manufacturers/
exporters and commodity producers have suffered greatly, the 
rest of the economy has boomed due to strength in consumer 
spending and business investment. In a perverse sense, the 
crisis seems to have been a net positive for the US economy up 
to this point, in large part due to so-called ``safe-haven 
flows'' into US assets--as foreign money flooded into US 
Treasury bonds, long-term interest rates declined 
precipitously, which ignited the interest rate sensitive 
sectors of the US economy.
    Of course, many factors have contributed to the robust 
growth of the last several years. The Federal Reserve deserves 
an enormous amount of credit--by pursuing a policy of price 
stability, they have enhanced households' and businesses' 
decision-making process and have contributed to the sharp 
decline in long-term interest rates. Fiscal policy has also 
been supportive of this latter trend. Due to improving federal 
government finances, net national savings has roughly doubled 
since the early 1990s. The Federal Reserve's Humphrey-Hawkins 
report notes that prudent fiscal policies have allowed the 
central bank to keep interest rates lower than would otherwise 
have been possible.
    Looking ahead, most economists believe that growth will 
slow in coming months, in deference to growing signs of 
strains, particularly in the labor markets. However, it is 
unclear if this slowdown will result naturally from an easing 
of consumer demand (perhaps linked to a fall in the equity 
market) or whether it will result from Federal Reserve 
tightening.

Comparison of CBO economics versus the administration's

    CBO's and OMB's economic forecasts are extremely similar 
overall and are well within the range of error on these 
forecasts. OMB is slightly more optimistic on inflation and 
interest rates. CBO is slightly more optimistic on income 
shares.
    Growth. CBO and OMB have nearly identical assumptions about 
nominal and real GDP growth. Both expect real GDP growth to 
average 2.2 percent over the five year budget window, slightly 
under their estimates of the economy's long-run, sustainable 
growth rate. Since the economy is now operating above 
potential, a mild, near-term slowdown is needed to bring the 
economy back to potential from 2004-2009.
    The two shops do differ slightly in the timing of their 
slower growth periods. CBO looks for the slowdown to be more 
concentrated in 2000 (when growth slows to 1.7 percent), while 
OMB spreads the slowdown over 2000 and 2001 (with 2.0 percent 
real growth in both years).
    Inflation. CBO and OMB have identical assumptions for the 
GDP price index from 2001-2004. However, CBO looks for CPI 
growth to average 0.3 percent higher than OMB over the five-
year budget window. CBO believes that recent CPI growth has 
been held down bytemporary factors (like lower import prices 
and slow growth in medical care costs), which are likely to ebb in the 
near future. OMB does not believe that these special factors will ebb 
as quickly or completely as CBO.
    Income Shares. Income shares depict the breakdown of 
national income between wages & salaries, benefits, corporate 
profits, proprietors' income, rental income and net interest. 
They are expressed as a share of GDP. Wages and salaries and 
corporate profits are taxed at a higher effective rate--the 
higher they are compared with the other income categories, the 
higher the projected revenue stream.
    Both CBO and OMB look for the combined share of wages & 
salaries and corporate profits to decline over the budget 
window, as the economy slows from its recent torrid growth 
pace. CBO envisions a lesser slowdown than OMB, however.

Implications of fourth quarter growth for the economic assumptions

    Since CBO and OMB compiled their economic forecasts at the 
start of the year, they were not able to incorporate the recent 
pick-up in economic growth that became evident as fourth 
quarter data were released.
    The CBO Director was asked at a Congressional hearing how 
recent data might affect CBO's 1999 economic assumptions. He 
noted that while 1999 real GDP is likely to be stronger than 
CBO forecast, inflation looks to be coming in under 
expectations. As such, nominal GDP (which has greatest budget 
impact) might not be appreciably different from their original 
forecast. He also noted that while lower inflation would tend 
to reduce some outlays, the recent rise in interest rates would 
point to somewhat higher net interest costs than anticipated. 
As such, the Director suggested recent economic data was a 
``mixed bag'' for budget purposes.

Sensitivity to economic changes

    Of course, the budget is highly sensitive to major changes 
in the economic outlook, as recent experience has shown. As 
such, CBO devoted a chapter of its winter report to examining 
how different economic outlooks could affect their budget 
forecasts. They looked at three scenarios: (1) continued strong 
growth, with no slowdown over the budget window, (2) a boom/
bust cycle and (3) an immediate recession due to financial 
turmoil.

     ILLUSTRATIVE ECONOMIC SCENARIOS AND RESULTING FEDERAL SURPLUSES
                        [In billions of dollars]
------------------------------------------------------------------------
                                 1999   2000   2001   2002   2003   2004
------------------------------------------------------------------------
January CBO Baseline..........    107    131    151    209    209    234
Continued Strong Growth.......    115    170    220    290    290    305
Boom/Bust Cycle...............    120    135     85    125    150    215
Immediate Recession...........     85     75    105    195    235   265
------------------------------------------------------------------------
Source: CBO, January 1999.

    In the optimistic case, the 2004 surplus would be $305 
billion, compared to the current $234 billion estimate. The 
boom/bust scenario would halve the 2001 surplus, but would 
leave the 2004 surplus only slightly below its current 
projection. Interestingly, the immediate recession scenario 
would halve the 2000 surplus estimate, but would leave the 2004 
surplus slightly higher than currently projected since the 
economy would be in a recovery phase at that point.
    CBO also examined the impact of changing the trend growth 
rate of the tax base. They found that the 2004 surplus would 
likely be between $140 billion and $330 billion in the 
pessimistic and optimistic tax base growth scenarios.
    As such, CBO's sensitivity analysis shows that yearly 
surplus estimates are quite vulnerable to a major change in 
economic outlook. However, they also show that the projection 
of continued surpluses from 2004-2009 is robust even assuming a 
near-term recession.

Long-term outlook

    CBO has updated its long-term budget estimates to reflect 
the improvement in the near-term fiscal position. While its 
measure of the US' fiscal imbalance halved, the long-term 
fiscal outlook is still unsustainable without entitlement 
reform.
    In CBO's model, the large surpluses of 1999-2009 lead to 
the elimination of publicly held debt by 2012, with the US 
actually building up net assets that total 12 of GDP by 2020. 
Yet, as the demographic backdrop worsens, the US begins to 
issue debt again soon after 2030. By 2060, the debt to GDP 
ratio is almost 130 percent and fiscal meltdown follows. This 
highlights the need for programmatic reform of US entitlement 
programs.
    The Administration tells a different story. Its current 
services baseline indicates that the US fiscal outlook is 
sustainable as is, assuming surpluses are saved. However, this 
stems from two questionable assumptions. (1) They assume that 
discretionary spending is frozen in real terms for the next 70 
years. This would pull discretionary spending down from just 
under 7 percent of GDP to less than 3 percent by 2070. Most do 
not find this credible in light of the US' growing population 
and the need to replace aging defense and other infrastructure. 
(2) OMB does not have any economic feedbacks in their model, 
which means that rising deficits do not boost interest rates 
and slow the economy. OMB does point out that the fiscal 
outlook deteriorates markedly if the two above assumptions are 
relaxed.
    The impact of OMB's optimistic assumptions can be seen 
explicitly in its debt forecasts.Under its current services 
baseline, OMB predicts that the US will have net assets of nearly 40 
percent by 2050. In contrast, both CBO and GAO expect the US net debt 
to exceed 50 percent of GDP in the same year.

                                         ECONOMIC PROJECTIONS COMPARISON
                                         [Level in billions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                           Calendar Years
                                                  --------------------------------------------------------------
                                                     1998    1999    2000    2001     2002      2003      2004
----------------------------------------------------------------------------------------------------------------
Nominal GDP:
    Administration \1\...........................    8,497   8,833   9,200   9,582    10,004    10,456    10,931
    CBO \1\......................................    8,499   8,846   9,182   9,581    10,015    10,476    10,960
                                                  ==============================================================
          PERCENT CHANGE (YEAR TO YEAR)
 
Nominal GDP Growth:
    Administration...............................      4.8     4.0     4.1     4.2       4.4       4.5       4.5
    CBO..........................................      4.8     4.1     3.8     4.3       4.5       4.6       4.6
    Blue Chip \1\................................      4.9     4.5     4.0     4.5       4.7       4.6       4.8
Real GDP Growth:
    Administration...............................      3.7     2.4     2.0     2.0       2.2       2.4       2.4
    CBO..........................................      3.7     2.3     1.7     2.2       2.4       2.4       2.4
    Blue Chip....................................      3.9     3.3     2.2     2.3       2.5       2.5       2.6
Consumer Price Index:
    Administration...............................      1.6     2.2     2.3     2.3       2.3       2.3       2.3
    CBO..........................................      1.6     2.5     2.6     2.6       2.6       2.6       2.6
    Blue Chip....................................      1.6     1.9     2.3     2.5       2.5       2.5       2.5
GDP Price Index:
    Administration...............................      1.0     1.5     2.1     2.1       2.1       2.1       2.1
    CBO..........................................      1.0     1.7     2.0     2.1       2.1       2.1       2.1
    Blue Chip....................................      1.0     1.3     1.8     2.2       2.2       2.1       2.2
 
                   ANNUAL RATE

Unemployment:
    Administration...............................      4.6     4.8     5.0     5.3       5.3       5.3       5.3
    CBO..........................................      4.5     4.6     5.1     5.4       5.6       5.7       5.7
    Blue Chip....................................      4.5     4.4     4.6     5.0       5.1       5.1       5.1
Three-Month T-Bill:
    Administration...............................      4.8     4.2     4.3     4.3       4.4       4.4       4.4
    CBO..........................................      4.8     4.5     4.5     4.5       4.5       4.5       4.5
    Blue Chip....................................      4.8     4.5     4.6     4.8       4.7       4.6       4.7
Ten-Year T-Note:
    Administration...............................      5.3     4.9     5.0     5.2       5.3       5.4       5.4
    CBO..........................................      5.3     5.1     5.3     5.4       5.4       5.4       5.4
    Blue Chip....................................      5.2     5.0     5.2     5.4       5.5       5.4       5.5
Share of GDP: Corporate Profits (Book Profits) +
 Wages and Salaries:
    Administration...............................     57.3    57.4    57.2    57.1      56.8      56.7      56.7
    CBO..........................................     57.3    57.4    57.1    57.2      57.0      57.0     57.0
----------------------------------------------------------------------------------------------------------------
\1\ Administration is from President's FY 2000 Budget. CBO is from CBO's ``Economic and Budget Outlook: Fiscal
  Years 2000-2009.'' Blue Chip Economic Indicators, March 1999.

                       III. Spending and Revenues

                          Baseline Assumptions

    The ``baseline'' is the starting point required to 
construct any budget resolution. Alternative baselines can be 
constructed. The baseline described in this markup book has 
been developed by the Committee Majority Staff with the 
assistance of the Congressional Budget Office (CBO) and is 
called the `` SBC Baseline''.
    The SBC baseline is calculated in the general manner 
prescribed by the BEA, except that discretionary appropriated 
accounts are ``frozen'' at the 1999 enacted level and include 
no increase for inflation. This is the same as CBO's updated 
February WODI (without discretionary inflation) baseline, with 
several adjustments. For discretionary spending, the baseline 
has been adjusted downward to exclude funding that is outside 
the caps, pursuant to Section 251 of the Balanced Budget and 
Emergency Deficit Control Act and Section 314 of the 
Congressional Budget Act. These adjustments include:
          Emergency appropriations;
          Continuing disability reviews (CDRs);
          An increase in the U.S. quota as part of the IMF 
        Eleventh General Review of Quotas (U.S. Quota);
          An increase in the maximum amount available to the 
        Secretary of the Treasury, pursuant to section 17 of 
        the Bretton Woods Agreement Act, as amended (New 
        Arrangements to Borrow);
          Arrearages for international organizations, 
        peacekeeping, and multilateral development banks;
          Adoption assistance; and
          An IRS initiative to improve EITC compliance.
    In addition, the baseline assumes that funding for the 
Highway, Mass Transit, and Violent Crime Trust Fund (VCRTF) 
categories will be at the statutory caps levels.
    Estimates for direct spending, which is all spending 
authority provided by law other than appropriations acts, 
assume full funding of current law, including cost-of-living 
adjustments. Direct spending includes entitlements and other 
mandatory programs such as social security, medicare, and 
federal retirement, where spending levels are controlled by 
eligibility rules, benefit calculations, participation levels, 
and other non-discretionary cost factors. The baseline assumes 
that all programs greater than $50 million a year will 
continue, even if their authorization expires. Net interest 
spending, which is another subset of direct spending, is driven 
by the size of the annual and cumulative cash deficits and 
interest rates and is rarely affected directly by Congressional 
action.
    The SBC baseline is the same as the CBO February baseline 
for direct spending programs, except that the SBC baseline 
assumes the Federal government will not recover any amount from 
the states' settlement with the tobacco industry.
    The SBC baseline assumes the CBO February baseline for both 
on- and off-budget revenues. The baseline takes into account 
that some provisions are scheduled to change or expire during 
the 2000-2009 period. Overall, the baseline assumes that those 
changes and expirations occur on schedule. One category, excise 
taxes dedicated to trust funds, is the sole exception to this 
rule. The baseline assumes that those taxes will be extended to 
be consistent with the spending assumptions (in this baseline, 
there are three such cases: excise taxes for the Highway Trust 
Fund, the Airport and Airway Trust Fund, and the Leaking 
Underground Storage Tank Trust Fund.)
    CBO projects that revenues will grow faster than the 
overall economy in 1999, slightly slower than GDP over the 
2000-2004 period, and at about the same rate as GDP for the 
2005-2009 period. Revenues will reach a post-WWII high of 20.7 
percent in 1999 and then fall gradually to flatten out at 20.2 
percent of GDP for the projection period beyond 2002.

                        A. Spending by Function

                     Function 050: National Defense

                            Function Summary

    Function 050, National Defense, totaled $270.7 billion in 
BA and $268.7 billion in outlays for 1999, excluding one-time 
emergencies enacted in the 105th Congress. This budget function 
includes funding for the Department of Defense (95 percent of 
function total), defense activities of the Department of Energy 
(5 percent), and small amounts expended by the Selective 
Service, the General Services Administration, the Departments 
of Transportation and Justice, and other federal agencies.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $290.0 billion in BA and 
$275.8 billion in outlays for 2000. This represents an increase 
of $18.1 billion in BA and $5.9 billion in outlays over the 
1999 level, excluding emergency spending adopted in the fall of 
1998. If 1999 emergency spending is included, spending would 
increase in 2000 by $9.9 billion in BA and $1.5 billion in 
outlays. The Committee-reported resolution is also an increase 
of $14.6 billion in BA and $6.7 billion in outlays over the 
amounts assumed by the Balanced Budget Act for 2000.
    In hearings before the Senate Budget Committee, former 
Secretary of Defense James Schlesinger and the President of the 
Center for Strategic International Studies, Robert Zoellick, 
both pointed out the need for a dramatic increase in defense 
spending to support the national security policy now being 
pursued by President Clinton. Moreover, in additional hearings 
with Secretary of Defense Cohen and the Chairman of the Joint 
Chiefs of Staff, General Shelton, both agreed that substantial 
increases are required above the amounts previously approved 
for national defense and that important requirements identified 
by the Joint Chiefs of Staff are unaddressed by President 
Clinton's proposed defense budget.
    The Committee-reported resolution assumes that the proposed 
spending for National Defense complies with the aggregate 
discretionary spending cap for 2000, established in the 
Balanced Budget Act of 1997 and adjusted as required by law. 
Congress will be required to identify offsets to increase 
defense spending and make appropriate decisions on allocating 
discretionary spending among all programs in order to maintain 
the discipline of the 2000 spending cap.
    The Committee-reported resolution does not hold hostage our 
National Security to securing reforms in social security.
    The Committee-reported resolution assumes the following 
major program changes:
     Fully fund the $17.5 billion requested by the 
Joint Chiefs of Staff for the next five years. This additional 
spending would be devoted to restoring military readiness 
(training, repairs, spare parts, recruitment, retention, etc.) 
to acceptable military standards (such as the readiness levels 
of 1991 when U.S. Armed Forces fought successfully in Operation 
Desert Storm). This funding would also redress, at least in 
part, the modernization of currently aging U.S. weapons 
inventories and priority military construction and family 
housing programs.
     Fully fund major modifications to the 1986 reform 
of military pension benefits, known as ``Redux,'' large across-
the-board pay raises, additional pay raises for mid-career 
military personnel in specialties where retention is below 
military requirements, extensive re-enlistment and other 
bonuses, and an additional monthly supplement to all enlisted 
personnel who qualify for food stamps.
     Fully fund overseas military contingencies at $2.9 
billion in 2000 and thereafter, rather than to declare 
``emergencies'' for contingencies that are both foreseeable and 
foreseen.
     Approve modifications to existing DoD financial 
management programs and policies to redress the failure of the 
Defense Department, as noted by GAO,1 to meet the 
goals of the Chief Financial Officers Act and, thereby, to 
produce auditable financial statements for each military 
service and major DoD component by the year 2000. The 
Committee's concerns regarding this important issue are stated 
at greater length at the end of the description of this budget 
function.
---------------------------------------------------------------------------
    \1\ See High Risk Series: An Update, U.S. General Accounting 
Office, GAO/HR-99-1, January 1999, pp. 82-94, and Major Management 
Challenges and Program Risks: Department of Defense, U.S. General 
Accounting Office, GAO/OGC-99-5, January, 1999.
---------------------------------------------------------------------------
     For Department of Energy Defense Activities, fully 
fund the President's request for 2000 and the Department's 
legal agreements to perform various nuclear restoration and 
clean-up activities, such as those at Hanford, for 2000 and 
beyond.
    Historically, CBO and OMB have differed in their scoring 
estimates of outlay rates; these differences distort 
comparisons of the President's budget with congressional 
action. These shortcomings result from both technical and 
fundamental accounting differences addressed below.

Mandatory program reductions assumed in the discretionary category

    The Committee-reported resolution assumes such National 
Defense Stockpile asset sales that have been approved in 
previous years.

The need for DoD financial reforms

     The Committee is concerned about the longstanding 
breakdown of discipline in financial management at the 
Department of Defense. Reports by the DoD Inspector General and 
General Accounting Office consistently show that DoD's 
financial accounts and inventories are vulnerable to theft and 
abuse. These vulnerabilities persist for two reasons: (1) 
internal controls are weak or nonexistent; and (2) financial 
transactions are not accurately recorded in the books of 
account--as they occur. While some progress has been made to 
improve the financial accounting systems within DoD, it remains 
a fact that DoD does not observe the age-old principles of 
separation of duties and double-entry bookkeeping, and attempts 
to make critical bookkeeping entries weeks, months, and even 
years after the fact. These unprofessional practices have 
produced billions of dollars of unreconciled financial 
mismatches, leaving the department's books of account 
inaccurate and unreliable.
    The Committee believes that these deficiencies must be 
corrected.
     Under the Government Management Reform Act (GMRA) of 1994, 
which expanded the Chief Financial Officers (CFO) Act of 1990, 
the DoD Inspector General is required to audit DoD's financial 
statements, and the General Accounting Office is required to 
audit the government's consolidated financial statements. This 
is done annually. Unfortunately, each year the DoD audit 
agencies issue a disclaimer of opinion. In layman's terms, this 
means they could not audit the books. And there is nothing on 
the drawing board to suggest that a ``clean'' audit opinion is 
feasible in the foreseeable future. DoD has lost control of the 
money at the transaction level. With no control at the 
transaction level, it is physically impossible to roll up all 
the numbers into a top-line financial statement that can stand 
up to audit scrutiny. The numbers do not add up. DoD resorts to 
``unsupported adjustments'' and multi-billion dollar ``plug'' 
figures to force the books into balance. The IG and GAO reject 
these practices as unacceptable.
    Even though DoD's efforts to prepare an auditable financial 
statement have been unsuccessful so far, the Committee believes 
that the annual CFO audits constitute a very authoritative and 
independent assessment of the department's financial management 
procedures. They function like a critical indicator or 
barometer. They help to pinpoint the underlying weaknesses in 
DoD's bookkeeping procedures. The Committee believes that DoD 
must move in a decisive way to correct these problems. So long 
as DoD continues to ignore them, the vast audit effort 
dedicated to the financial statements will continue to result 
in disclaimers of opinion--an overall indictment of DoD's 
financial management operations.
    For these reasons, a plan that is designed to bring the 
Defense Department into compliance with the CFO and GMRA Acts 
would be supported by the Committee. These reforms would 
position DoD to prepare auditable financial statements within 
two years. The main ingredients of such a plan follow:
    (1) Double-entry Bookkeeping: The preparation of reliable 
financial statements is literally impossible without double-
entry bookkeeping. A standard accounting procedure in the 
western world for centuries, double-entry bookkeeping records 
both the debits and credits appropriate to each transaction. A 
cash purchase of an asset would add the value of that asset to 
the inventory balanced by the reduction in cash. If DoD did 
this for each transaction, the books would ``balance,'' that 
is, debits would equal credits, the books would accurately 
reflect the cost of operations, and the taxpayers would be 
assured that something of value was actually received for the 
money spent. Under current law, the military services are 
supposed to have ``asset management systems'' in place today 
that would provide an accurate and complete accounting for the 
quantity, cost and location of all inventory items. No such 
system is in existence, however. DoD must adopt a double-entry 
bookkeeping system in order to generate reliable financial 
statements.
    (2) Recording Transactions Promptly: Financial transactions 
must be accurately recorded in the books of account--as they 
occur. Under current DoD policies, billions of dollars of 
transactions are not posted until long after the fact, if ever. 
In many cases, it takes DoD weeks, months, and even years to 
make necessary accounting entries. In other documented cases, 
DoD policies authorize the posting of transactions to the wrong 
accounts with the idea of avoiding negative liquidated 
obligations or correcting errors at ``contract close-out'' 
years later. Attempting to reconcile contracts with payment 
records years after-the-fact usually proves to be a futile and 
very costly task. As long as the department's books of account 
fail to accurately reflect obligations and expenditures, 
Congress can not be sure that DoD is spending the money as 
specified in law or that costs reflected in DoD's financial 
statements are accurate. DoD must record all transactions in 
the books of account immediately--as they occur.
    (3) Transaction-driven General Ledger: To help ensure 
reliable financial management information, Congress passed the 
Federal Financial Management Improvement Act of 1996 (FFMIA). 
This law required all federal agencies to activate a Standard 
General Ledger at the transaction level that complied with 
accepted accounting standards. According to GAO, DoD'sfinancial 
systems are non-compliant with the FFMIA requirements.2
---------------------------------------------------------------------------
    \2\ See GAO-AIMD-98-268, Financial Management: Federal Financial 
Management Improvement Act Results for Fiscal Year 1997, US General 
Accounting Office, September 1998, Washington, D.C.
---------------------------------------------------------------------------
    Had DoD implemented the required Standard General Ledger 
chart of accounts, as other agencies have, practiced double-
entry bookkeeping, and recorded transactions promptly and 
accurately, all transactions should naturally roll up through 
subsidiary accounts into general ledger accounts.
    Moreover, if DoD accounting systems were up to accepted 
standards, auditors could verify the accuracy of the general 
ledger accounts by tracing the accumulation of costs back down 
to the original entries for each transaction. This, in turn, 
should provide a management accounting system that has 
integrity--one the taxpayers deserve and one that is necessary 
for completion of reliable financial statements. A transaction-
driven general ledger would be a powerful management tool for 
evaluating DoD's financial performance. While DoD has general 
ledger accounts, they lack integrity because of massive gaps 
and the use of ``plug'' figures. Transactions are simply not 
recorded in the books of account in a timely and accurate 
manner. Given these continuing shortcomings, it is impossible 
to follow the audit trail back down to each original 
transaction. Until this problem is remedied, and DoD develops 
reliable controls and integrated financial management systems, 
DoD financial information will be unreliable and its financial 
statements will be unauditable.
    (4) Separation of Duties: Organizational and functional 
independence must be achieved at each major step in the cycle 
of transactions. This key internal control helps to detect and 
prevent theft, inhibits collusive fraud and offers greater 
efficiencies in organizations that are large enough to 
accommodate specialized operations. For instance, if truly 
independent entities perform the separate functions of store-
keeping or warehousing and accounting for stores transactions, 
fraud in either function could be discovered by comparing what 
the store keepers show as on hand to what accounting records 
show was purchased, used, and should be on hand. With adequate 
separation of duties, successful fraud would require collusion 
by not only the store-keepers and accountants but also by 
organizationally independent managers of those separate 
functional areas. IG and GAO reports repeatedly show that DoD 
does not consistently adhere to the age-old principle of real 
separation of duties--both organizationally and functionally.
    Last year, the GAO uncovered a prime example of how DoD 
does not observe the separation of duties doctrine. The Defense 
Finance and Accounting Service (DFAS), which performs 
disbursing and accounting functions for the entire department, 
is authorized to routinely alter remit addresses on checks. A 
remit address is the address to which a check is sent. Allowing 
DFAS to alter remit addresses is a violation of the separation 
of duties principle that leaves the door open to fraud. The 
office that processes bills for payment should never be allowed 
to change a remit address on a check. Such changes should be 
made through an independent verification process. Remit 
addresses should be tightly controlled in a central registry 
and only altered at request of the vendor--in writing.
    (5) Accountability: The DoD CFO and the Financial Managers 
(FM's) for each of the three military services have been 
granted the full spectrum of authority under the law. However, 
these four officials appear to have delegated much of their 
authority for payment and accounting to DFAS, which disburses 
over $22 billion a month and employs about 20,000 persons.
    Despite the authority that has been passed down the chain 
of command to DFAS, this organization does not exist--at least 
in law. There is no specific provision in the U.S. Code 
granting such authority to DFAS. The Committee fears that the 
military services could use DFAS as a bureaucratic mechanism to 
deflect responsibility for ongoing financial mismanagement. 
DFAS can be blamed, but there is no accountability. In fact, 
there is nothing in law that requires personal financial 
accountability anywhere in DoD--from the top CFO down the 
lowest technician at DFAS. Even DoD disbursing officials have 
been exempted from the law that makes all other government 
disbursing officials ``pecuniarily liable'' for erroneous or 
fraudulent payments.
    If no one at DoD is held accountable for the continuing 
pattern of financial mismanagement and ``unclean'' CFO audit 
opinions, then the department may never succeed in producing 
reliable financial statements.
    The CFO and service FM's may delegate authority to DFAS but 
not personal responsibility. The service FM's must police those 
to whom they have delegated authority, but the final 
responsibility resides in their offices with them. They alone 
should be held accountable for the completion of reliable 
financial statements.
    These goals should be achieved with the financial statement 
for 2000. The 1998 statements are under review at the present 
time. If the IG and GAO identify deficiencies that preclude the 
completion of a satisfactory financial statement for 1998 and 
1999, then the FM's should be responsible for making the 
necessary adjustments and corrections.
    The Committee fully supports actions in Congress to achieve 
these five financial management initiatives because they are 
specifically designed to bring the department into compliance 
with the CFO and FFMIA Acts and to lead to the preparation of 
reliable financial statements. In the months ahead, it is 
expected that these initiatives will be converted into a 
legislative reform package and introduced before consideration 
of the 2000 defense authorization bill or other appropriate 
legislation. The Committee intends to work closely with the 
Armed Services Committee and other appropriate committees of 
Congress to enact legislation that addresses in a meaningful 
manner the goals articulated here.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                (In billions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               1999    2000    2001    2002    2003    2004    2005     2006     2007     2008     2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Budget Authority........................................   270.7   288.8   303.6   308.2   318.3   327.2   328.4    329.6    330.9    332.2    333.5
    Outlays.................................................   268.7   274.6   285.9   291.7   303.6   313.5   316.7    315.1    313.7    317.1    318.0
President's Budget:
    Budget Authority \1\....................................   278.1   280.5   300.2   302.0   312.4   321.2   332.6    344.4    357.0    370.0    383.5
    Outlays.................................................   273.1   283.3   285.0   293.7   303.8   313.8   326.1    335.7    346.5    362.1    374.7
SBC Baseline:
    Budget Authority........................................   270.7   271.5   271.7   271.8   271.8   271.9   271.9    272.0    272.0    272.1    272.1
    Outlays.................................................   268.7   274.6   270.4   271.6   271.1   271.1   273.4    270.9    268.6    271.0    271.0
Res. compared to:
    Presidents Budget:
    Budget Authority........................................    -7.4     8.3     3.4     6.2     5.9     5.9    -4.2    -14.8    -26.1    -37.9    -50.1
    Outlays.................................................    -4.4    -8.7     1.0    -2.0    -0.2    -0.3    -9.4    -20.6    -32.8    -45.0    -56.7
SBC Baseline:
    Budget Authority........................................  ......    17.3    31.9    36.4    46.5    55.3    56.4     57.6     58.8     60.1     61.3
    Outlays.................................................  ......  ......    15.5    20.1    32.5    42.4    43.3     44.2     45.1     46.1     47.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

                  Function 150: INTERNATIONAL AFFAIRS

                            Function Summary

    Function 150, International Affairs, totaled about $13.7 
billion in BA and $14.4 billion in outlays for 1999, excluding 
emergencies and other one-time spending increases including 
contributions to the Internaitonal Moneterary Fund and arrears 
to international or-

ganizations. This function includes funding for operation of 
the foreign affairs establishment including embassies and other 
diplomatic missions abroad, foreign aid loan and technical 
assistance activities in developing countries, security 
assistance to foreign governments, activities of the Foreign 
Military Sales Trust Fund, U.S. contributions to international 
financial institutions, Export-Import Bank and other trade 
promotion activities, and refugee assistance.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $18.1 billion in BA and 
$18.5 billion in outlays for 2000, adjusted for arrearages. 
This represents a decrease of $0.9 billion in BA and $0.2 
billion in outlays from the 1999 level excluding arrearages.
    The Committee-reported resolution assumes payment of the 
arrearages to the United Nations. Section 314(b)(3) of the 
Budget Act provides an adjustment to increase the 
Appropriations Committee 302(a) allocation and the 
discretionary spending limits upon an appropriation for 
arrearages to the United Nations and other international 
organizations until 2000 in an amount not to exceed $1.884 
billion. An adjustment of $410 million remains for further 
expenditure in 2000.
    The President's Request for 2000 reduces funding levels for 
P.L. 480 Title II and Title III programs, the Overseas Private 
Investment Corporation (OPIC), and historical levels of foreign 
aid for Israel and Egypt. The Committee-report assumes these 
reduced funding levels.
    The Committee-reported resolution assumes savings beginning 
in 2002 as a result of the Foreign Affairs Reform and 
Restructuring Act, which requires the consolidation of the 
functions of the Arms Control and Disarmament Agency (ACDA) and 
the US Information Agency (USIA) into the State Department. 
Consolidation will be completed prior to the start of fiscal 
year 2000.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
increases or decreases in this function.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Budget Authority......................      13.7      12.5      12.7      12.0      13.6      14.5      14.7      14.8      14.9      15.0      15.0
    Outlays...............................      14.4      14.9      15.4      14.8      14.4      14.1      13.8      13.5      13.4      13.2      13.1
President's Budget:
    Budget Authority \1\..................      35.3      16.1      16.4      15.5      17.4      18.6      19.1      18.5      18.7      18.9      19.0
    Outlays...............................      15.2      16.7      17.5      17.8      17.4      17.6      17.7      17.5      17.3      17.1      17.0
SBC Baseline:
    Budget Authority......................      13.7      13.5      13.9      13.3      15.1      16.2      16.5      16.8      17.0      17.2      17.3
    Outlays...............................      14.4      15.1      15.9      15.7      15.5      15.5      15.4      15.3      15.3      15.2      15.3

             Res. compared to
President's Budget:
    Budget Authority......................     -21.6      -3.6      -3.7      -3.5      -3.9      -4.1      -4.4      -3.6      -3.8      -3.9      -4.0
    Outlays...............................      -0.8      -1.9      -2.1      -3.0      -3.0      -3.5      -3.9      -4.0      -4.0      -3.9      -3.9
SBC Baseline:
    Budget Authority......................  ........      -0.9      -1.1      -1.4      -1.5      -1.7      -1.8      -1.9      -2.1      -2.2      -2.3
    Outlays...............................  ........      -0.2      -0.6      -0.9      -1.2      -1.4      -1.6      -1.8      -1.9      -2.1      -2.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

          Function 250: GENERAL SCIENCE, SPACE AND TECHNOLOGY

                            Function Summary

    Function 250, General Science, Space & Technology, totaled 
$18.8 billion in BA and $18.2 billion in outlays for 1999. This 
function includes the National Aeronautics and Space 
Administration (NASA) civilian space program and basic research 
programs of the National Science Foundation (NSF) and 
Department of Energy (DOE).

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $17.9 billion in BA and 
$18.2 billion in outlays for 2000. Over the next five years the 
Committee-reported resolution would provide nearly $90 billion 
for programs in this function. The 2000 assumption represents a 
decrease of $0.9 billion in BA and a freeze in outlays from the 
1999 adjusted level.
    The Committee-reported resolution assumes that the 
aggregate discretionary spending cap for 2000, established in 
the Balanced Budget Act of 1997 and adjusted as required by 
law, remains in effect. Congress will be required to set 
priorities, identify offsets to spending, and make decisions on 
allocating discretionary spending among programs in order to 
maintain the discipline of the 2000 spending cap.
    Since before the Second World War, the Department of 
Energy's (DOE) research complex as a whole has been the primary 
provider of the basic research upon which our larger pursuit of 
innovation has been based. This larger endeavor it produces has 
been, in turn, the basis of our nation's competitive edge and 
the vehicle for achieving our unrivaled standard of living.
    A number of DOE science programs urgently await additional 
funding, such as the Spallation Neutron Source (SNS) which 
represents an integral and necessary next step in the 
Department of Energy's basic research and science endeavor. It 
is in support of this larger national endeavor that the 
Committee supports construction of the Spallation Neutron 
Source at Oak Ridge National Laboratory and encourages the 
appropriate committees to continue funding for this initiative.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................      18.8      18.0      17.9      17.9      17.9      17.9      17.9      17.9      17.9      17.9      17.9
    Outlays...............................      18.2      18.2      17.9      17.9      17.8      17.8      17.8      17.8      17.8      17.8      17.8
President's Budget:
    Budget Authority \1\..................      18.8      19.3      19.5      19.4      19.4      19.4      19.4      19.4      19.4      19.4      19.4
    Outlays...............................      18.2      18.8      19.1      19.3      19.1      19.2      19.2      19.2      19.2      19.2      19.2
SBC Baseline:
    Budget Authority......................      18.8      18.9      18.8      18.8      18.8      18.8      18.8      18.8      18.8      18.8      18.8
    Outlays...............................      18.2      18.6      18.7      18.7      18.7      18.7      18.7      18.7      18.7      18.7      18.7

             Res. compared to:

President's Budget:
    Budget Authority......................  ........      -1.3      -1.5      -1.5      -1.5      -1.5      -1.4      -1.4      -1.4      -1.4      -1.4
    Outlays...............................  ........      -0.6      -1.2      -1.4      -1.4      -1.4      -1.4      -1.4      -1.4      -1.4      -1.4
SBC Baseline:
    Budget Authority......................  ........      -0.9      -0.9      -0.9      -0.9      -0.9      -0.9      -0.9      -0.9      -0.9      -0.9
    Outlays...............................  ........      -0.4      -0.8      -0.9      -0.9      -0.9      -0.9      -0.9      -0.9      -0.9     -0.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

                          Function 270: ENERGY

                            Function Summary

    Function 270, Energy, totaled about $1.1 billion in BA and 
$0.7 billion in outlays for 1999. This function includes 
civilian activities of the Department of Energy, the Rural 
Utilities Service, the power programs of the Tennessee Valley 
Authority (TVA), and the Nuclear Regulatory Commission (NRC). 
Mandatory spending in this function contains large levels of 
offsetting receipts, resulting in net mandatory spending of 
-$1.8 billion in BA and -$2.6 billion in outlays for 1999. 
Congress provided $3.0 billion in discretionary BA for 1999.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $1.8 billion in BA and 
$2.6 billion in outlays for 2000. Over the next five years, 
discretionary spending in this function will total $8.0 billion 
in BA and $9.3 billion in outlays. The resolution represents a 
decrease of $1.1 billion in BA and $0.6 billion in outlays from 
the 1999 level by assuming reductions proposed by the 
President, and other reforms. The Committee-reported resolution 
also assumes that the aggregate discretionary spending cap for 
2000, established in the Balanced Budget Act of 1997 and 
adjusted as required by law, remains in effect. Congress will 
be required to set priorities, identify offsets to spending, 
and make decisions on allocating discretionary spending among 
programs in order to maintain the discipline of the 2000 
spending cap.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes mandatory savings 
of $0.5 billion in BA and outlays over the ten-year period, 
2000-2009, from asset sales assumed to occur at the end of 
2001.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
increases or decreases in this function.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................       1.1       (*)      -1.4      -0.2      -0.1      -0.3      -0.4      -0.5      -0.5      -0.2      -0.1
    Outlays...............................       0.7      -0.7      -3.1      -1.1      -1.2      -1.4      -1.5      -1.5      -1.4      -1.1      -1.1
President's Budget:
    Budget Authority \1\..................       1.1       1.2       1.3       1.1       1.1       0.8       0.7       0.7       0.6       0.9       1.1
    Outlays...............................       0.7       0.1      -0.6       0.1       (*)      -0.2      -0.2      -0.2      -0.2       0.1       0.1
SBC Baseline:
    Budget Authority......................       1.1       1.2       1.1       1.0       1.0       0.8       0.7       0.6       0.6       0.9       1.0
    Outlays...............................       0.7      (-*)      -0.8      -0.1      -0.1      -0.3      -0.4      -0.4      -0.3      -0.1       (*)

             Res. compared to:

President's Budget:
    Budget Authority......................  ........      -1.1      -2.8      -1.2      -1.2      -1.2      -1.2      -1.2      -1.2      -1.2      -1.2
    Outlays...............................  ........      -0.8      -2.5      -1.2      -1.2      -1.2      -1.2      -1.2      -1.2      -1.2      -1.2
SBC Baseline:
    Budget Authority......................  ........      -1.2      -2.5      -1.1      -1.1      -1.1      -1.1      -1.1      -1.1      -1.1      -1.1
    Outlays...............................  ........      -0.6      -2.3      -1.0      -1.1      -1.1      -1.1      -1.1      -1.1      -1.1     -1.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.
* DEPT SUPPLY?

                    Function 300: NATURAL RESOURCES

                            Function Summary

    Function 300, Natural Resources, totaled about $23.9 
billion in BA and $23.3 billion in outlays for 1999, excluding 
emergency and other one-time spending items. This function 
includes funding for water resources, conservation and land 
management, recreation resources, and pollution control and 
abatement. Agencies with major program activities within the 
function include the Environmental Protection Agency (EPA), the 
Army Corps of Engineers, the National Oceanic and Atmospheric 
Administration (NOAA), the Forest Service (within the 
Department of Agriculture), and the Department of the Interior, 
including the National Park Service, the Fish and Wildlife 
Service, the U.S. Geological Survey, the Bureau of Land 
Management and the Bureau of Reclamation, among others.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $20.7 billion in BA and 
$21.5 billion in outlays for 2000. Over the next five years, 
the resolution assumes an allocation of nearly $110 billion for 
programs in this function. For 2000, a decrease of $2.3 billion 
in BA and $0.9 billion in outlays from the 1999 level is 
assumed from spending restraints required to meet the 
discretionary caps. Congress will be required to set priorities 
for natural resource spending, identify offsets to spending, 
and make decisions on allocating discretionary spending among 
programs in order to maintain the discipline of the 2000 
spending cap.
    The resolution accepts the President's proposed elimination 
of the Forest Incentives Program, reduction in the Army Corps 
of Engineers, and a portion of his proposed reductions within 
EPA. A number of Army Corps projects urgently await additional 
funding, such as the flood control project for the levee in Ft. 
Fairfield, Maine, which has experienced severe flooding over 
the last several years, during one of which water exceeded the 
100-year flood plain. Completion of this project to protect the 
town from flood waters would enable it to embark on a 
redevelopment project.
    Legislation reauthorizing EPA's Superfund has not yet been 
passed by the Congress. As the Senate Environment and Public 
Works Committee noted last year, ``Superfund is a seriously 
flawed program that needs significant legislative improvement 
before any increase in funding is appropriate. Several peer-
reviewed EPA studies have found Superfund sites, at best, 
represent a mid-range threat to human health and the 
environment as compared to other more pressing threats.''
    Given constraints on spending, the resolution recognizes 
the importance of maintaining and managing existing national 
parks and federal lands, of acquiring key inholdings and other 
priority lands that become available on a willing seller basis, 
and of responsibly investing in the public lands. The 
resolution assumes increased funding for Pacific Northwest 
salmon recovery that is efficiently and expeditiously directed 
to local communities and salmon restoration organizations.
    The Bureau of Reclamation provides an important role in 
water management and delivery in seventeen Western states. The 
Bureau's ability to meet increasing construction needs has been 
limited by a declining budget during most of the this decade. 
In light of these declining budgets, the resolution assumes a 
modest increase in the Bureau's budget in 2000 to help address 
the current and future demands facing the Bureau.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes mandatory user 
fees and other offsets totalling $0.7 billion in BA and outlays 
in 2000 and $8 billion in BA and outlays over the ten-year 
period, 2000-2009, including the President's proposed sale of 
BLM surplus land.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
increases or decreases in this function.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   1999    2000    2001    2002    2003    2004    2005    2006    2007    2008    2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Budget Authority............................................    23.9    21.5    21.2    20.7    22.5    22.5    22.5    22.6    22.7    22.7    23.0
    Outlays.....................................................    23.3    22.2    21.7    21.0    22.6    22.5    22.4    22.5    22.4    22.4    22.7
President's Budget:
    Budget Authority \1\........................................    24.2    24.6    24.0    23.9    24.0    24.0    24.0    24.0    24.0    24.0    24.4
    Outlays.....................................................    23.4    24.1    24.2    24.0    24.1    24.0    23.9    23.9    23.8    23.8    24.1
SBC Baseline:
    Budget Authority............................................    23.9    24.1    23.8    23.7    23.8    23.7    23.7    23.7    23.7    23.7    24.1
    Outlays.....................................................    23.3    23.8    23.9    23.7    23.9    23.8    23.6    23.6    23.5    23.4    23.8
Res. compared to:
President's Budget:
    Budget Authority............................................    -0.3    -3.1    -2.8    -3.1    -1.5    -1.5    -1.5    -1.4    -1.4    -1.3    -1.2
    Outlays.....................................................    -0.1    -1.8    -2.5    -3.0    -1.5    -1.5    -1.5    -1.4    -1.4    -1.4    -1.3
SBC Baseline
    Budget Authority............................................  ......    -2.6    -2.6    -3.0    -1.3    -1.2    -1.2    -1.2    -1.1    -1.1    -1.0
    Outlays.....................................................  ......    -1.6    -2.2    -2.6    -1.3    -1.2    -1.2    -1.2    -1.1    -1.1   -1.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

                       Function 350: AGRICULTURE

                            Function Summary

    Function 350, Agriculture, totaled about $16.8 billion in 
BA and $14.9 billion in outlays for 1999, excluding one-time 
emergency spending provided for natural disasters and export 
market losses. This function includes funding for federal 
programs intended to promote the economic stability of 
agriculture through direct assistance and loans to food and 
fiber producers, provide regulatory, inspection and reporting 
services for agricultural markets, and promote research and 
education in agriculture and nutrition.
    Farm income support programs operated by the Commodity 
Credit Corporation (CCC), and risk management programs under 
the Federal Crop Insurance Corporation (FCIC) make up most of 
the spending in this function. Over the past 25 years, CCC 
spending has ranged from $0.6 billion in 1975 to a record $26 
billion in 1986. This year, total outlays for the CCC are 
expected to be $17.2 billion, and FCIC outlays are expected to 
be $1.7 billion.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $3.9 billion in BA and 
$4.0 billion in outlays for 2000. Over the next five years, 
discretionary spending in this function would total $18.6 
billion in BA and $18.7 billion in outlays. The resolution 
represents a decrease of $0.3 billion in BA and $0.2 billion in 
outlays from the 1999 level by assuming reductions proposed by 
the President. The Committee-reported resolution also assumes 
that the aggregate discretionary spending cap for 2000, 
established in the Balanced Budget Act of 1997 and adjusted as 
required by law, remains in effect. Congress will be required 
to set priorities, identify offsets to spending, and make 
decisions on allocating discretionary spending among programs 
in order to maintain the discipline of the 2000 spending cap.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes the President's 
proposals for mandatory savings of $0.1 billion in BA and 
outlays in 2000 and $1.8 billion in BA and outlays over the 
ten-year period, 2000-2009.

Mandatory PAYGO

    The Committee-reported resolution recognizes that 
legislation may be enacted to help agricultural producers 
manage risk or to provide them with income assistance. For 
these purposes, the resolution provides for a mandatory 
spending allocation of $6.0 billion in this function for the 
2000-2004 period upon the reporting of such legislation by the 
Committee on Agriculture, Nutrition, and Forestry. The 
resolution also provides that any mandatory spending increases 
for these purposes in 2000 must be offset by savings achieved 
in other mandatory programs, and that the on-budget deficit 
will not be increased. The Committee assumes that the $0.5 
billion cost for 2000 will be offset by accelerating sale of 
Governor's Island.

Committee-reported resolution compared to the President's budget

    As compared to the President's Budget over the five-year 
period from 2000 through 2004, the Committee-reported 
resolution provides a total of over $4.0 billion more in budget 
authority, and $3.5 billion more in outlays for mandatory 
programs under this function.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................      16.6      14.8      13.5      11.3      12.0      12.1      10.6      10.6      10.7      10.8      10.9
    Outlays...............................      14.7      13.7      11.3       9.5      10.2      10.5       9.9       9.1       9.1       9.2       9.4
President's Budget:
    Budget Authority \1\..................      22.5      15.2      13.0      11.2      11.5      11.5      11.5      11.6      11.7      11.7      11.8
    Outlays...............................      20.4      13.6      11.4       9.5       9.8      10.0      10.1      10.1      10.1      10.1      10.2
SBC Baseline:
    Budget Authority......................      16.6      14.6      12.5      10.8      11.0      11.0      11.1      11.1      11.3      11.3      11.4
    Outlays...............................      14.7      13.3      10.9       9.0       9.3       9.5       9.6       9.6       9.7       9.7       9.8
Res. compared to:
    President's Budget:
        Budget Authority..................      -5.9      -0.8       0.5       0.5       0.5       0.6      -1.0      -1.0      -1.0      -1.0      -1.0
        Outlays...........................      -5.7      -0.4      -0.1       0.5       0.5       0.5      -0.2      -1.0      -1.0      -1.0      -1.0
    SBC Baseline:
        Budget Authority..................  ........      -0.3       1.0       1.0       1.0       1.1      -0.5      -0.5      -0.5      -0.5      -0.5
        Outlays...........................  ........      -0.2       0.3       1.0       1.0       1.0       0.3      -0.5      -0.5      -0.5     -0.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

               Function 370: COMMERCE AND HOUSING CREDIT

                            Function Summary

    Function 370, Commerce and Housing Credit, totaled about 
$1.9 billion in BA and $0.8 billion in outlays for 1999. This 
function includes funding for discretionary housing programs, 
such as subsidies for single and multifamily housing in rural 
areas and mortgage insurance provided by the Federal Housing 
Administration; net spending by the Postal Service; 
discretionary funding for commerce programs, such as 
international trade and exports, science and technology, the 
census, and small business; and mandatory spending for deposit 
insurance activities related to banks, savings and loans, and 
credit unions.

Discretionary

    The Committee-reported resolution assumes gross 
discretionary spending in this function would total $5.1 
billion in BA and $5.2 billion in outlays for 2000. Over the 
next five years, the Committee-reported resolution assumes an 
allocation of over $11 billion for discretionary programs in 
this function. For 2000, the Committee-reported resolution 
represents an increase of $1.5 billion in BA and $2.1 billion 
in outlays from the 1999 level, due almost entirely to 
providing funding at the President's request level for 
conducting the decennial census in 2000. The Committee-reported 
resolution assumes that the aggregate discretionary spending 
cap for 2000, established in the Balanced Budget Act of 1997 
and adjusted as required by law, remains in effect. Congress 
will be required to set priorities, identify offsets to 
spending, and make decisions on allocating discretionary 
spending among programs in order to maintain the discipline of 
the 2000 spending cap.
    One of the priorities the Committee would like for the 
appropriations committee to give special attention to is the 
initiatives of the Bureau of Economic Analysis (BEA) to improve 
national economic statistics. Given the Budget Committee's 
mission to set overall economic and budget policy for the 
Congress, it is crucial that the Congress have the best data 
available for enhancing our understanding of how the economy is 
working, but this goal is increasingly more difficult to 
achieve as the economy becomes more service oriented. BEA's 
National Accounts Enhancement program would address some of 
these data problems and would yield benefits to the federal 
government, the Federal Reserve, and the private sector in 
improved understanding of the economy.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes savings in 
mandatory programs of $1.3 billion in BA and outlays in 2000 
and $8.5 billion in BA and outlays over the ten-year period, 
2000-2009.

Mandatory PAYGO

    The Committee-reported resolution assumes no significant 
mandatory increases or decreases in this function. However, the 
resolution does assume enactment of a provision in S. 576, the 
Financial Regulatory Relief and Economic Efficiency Act, that 
would repeal the requirement that the Savings Association 
Insurance Fund (SAIF--which is the deposit insurance fund for 
savings and loan, or thrift, institutions) maintain a special 
reserve fund. CBO estimates that elimination of the reserve 
fund would cost less than $500,000 in any one year. Because the 
resolution assumes this repeal in the committee's allocation, 
no 302(a) point of order would apply against this provision 
when considered by the Senate.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Budget Authority......................       1.9       9.7      10.3      13.8      14.5      13.9      12.7      12.6      12.7      12.6      13.4
    Outlays...............................       0.8       4.3       5.4       9.5      10.9      10.4       9.4       9.1       8.9       8.5       8.8
President's Budget:
    Budget Authority \1\..................       2.0      10.9      11.5      14.9      15.6      15.0      13.8      13.8      14.0      13.9      13.7
    Outlays...............................       0.8       5.6       6.6      10.6      11.9      11.5      10.4      10.1      10.0       9.6       8.9
SBC Baseline:
    Budget Authority......................       1.9       9.8      12.0      15.9      16.7      15.9      14.7      14.7      14.7      14.7      14.5
    Outlays...............................       0.8       4.4       6.9      11.5      12.9      12.5      11.5      11.2      10.9      10.5       9.9
Res. compared to:
    President's Budget:
        Budget Authority..................        -*      -1.2      -1.2      -1.1      -1.1      -1.2      -1.1      -1.1      -1.3      -1.3      -0.3
        Outlays...........................        -*      -1.3      -1.2      -1.1      -1.0      -1.1      -1.0      -1.0      -1.1      -1.1      -0.1
    SBC Baseline:
        Budget Authority..................  ........      -0.2      -1.7      -2.1      -2.1      -2.1      -2.1      -2.1      -2.1      -2.1      -1.1
        Outlays...........................  ........      -0.2      -1.4      -1.9      -2.0      -2.1      -2.1      -2.1      -2.1      -2.1      -1.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

                      Function 400: TRANSPORTATION

                            Function Summary

    Function 400, Transportation, totaled $50.8 billion in BA 
and $43.8 billion in outlays for 1999, excluding one-time 
emergency spending provided for the Federal Aviation 
Administration and the Coast Guard. This function includes 
ground transportation programs, such as the federal-aid highway 
program, mass transit, and the National Rail Passenger 
Corporation (Amtrak); air transportation through the Federal 
Aviation Administration (FAA) airport improvement program, 
facilities and equipment program, and operation of the air 
traffic control system; water transportation through the Coast 
Guard and Maritime Administration; the Surface Transportation 
Board; the National Transportation Safety Board; and related 
transportation safety and support activities within the 
Department of Transportation.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $12.2 billion in BA and 
$43.4 billion in outlays for 2000. This represents a decrease 
of $1.8 billion in BA and an increase of $1.5 billion in 
outlays from the 1999 adjusted level.
    The Committee-reported resolution does not make any changes 
to the obligation limits or programs under the recently enacted 
Transportation Equity Act for the 21st Century (TEA-21). The 
Committee-reported resolution does not assume the President's 
proposal to change the distribution of additional Highway Trust 
Fund revenues under TEA-21. The Committee-reported resolution 
assumes the elimination of 1999 highway demonstration projects 
and mass transit spending provided by the Appropriations 
Committee above TEA-21 enacted levels.
    The Committee-reported resolution assumes funding for Child 
Passenger Protection Education Grants, authorized under Section 
2003 of TEA-21.
    The Committee-reported resolution assumes that the 
aggregate discretionary spending cap for 2000, established in 
the Balanced Budget Act of 1997 and adjusted as required by 
law, remains in effect. Congress will be required to set 
priorities, identify offsets to spending, and make decisions on 
allocating discretionary spending among programs in order to 
maintain the discipline of the 2000 spending cap. As an 
example, the President's Budget proposed various reductions and 
fees that would offset discretionary spending.

Mandatory PAYGO

    The Committee-reported resolution assumes that one 
provision of the 1997 Balanced Budget Act expiring after 2002 
will be extended through 2009. This assumption would extend 
vessel tonnage fees, raising $49 million annually from 2003 
through 2009.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  1999      2000      2001      2002      2003      2004      2005      2006     2007     2008     2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Committee-reported resolution
    Budget Authority..........................      50.8      51.3      51.1      51.5      52.5      52.6      52.6     52.6     52.7     52.7     52.7
    Outlays...................................      43.8      45.3      47.7      47.8      46.7      46.2      46.0     46.0     46.0     46.0     46.0
President's Budget:
    Budget Authority\1\.......................      51.3      54.2      54.5      55.6      57.8      59.0      60.3     61.6     63.0     64.4     65.8
    Outlays...................................      44.0      48.1      50.4      50.7      52.7      53.8      55.0     56.4     57.8     59.3     60.7
SBC Baseline:
    Budget Authority..........................      50.8      52.8      52.3      52.8      54.3      54.3      54.4     54.4     54.4     54.5     54.5
    Outlays...................................      43.8      46.4      48.7      48.8      48.7      48.3      48.1     48.1     48.1     48.1     48.1
Res. compared to:
    President's Budget:
        Budget Authority......................      -0.5      -2.9      -3.4      -4.0      -5.3      -6.5      -7.7     -9.0    -10.3    -11.7    -13.1
        Outlays...............................      -0.2      -2.7      -2.7      -3.0      -6.0      -7.6      -9.0    -10.4    -11.8    -13.2    -14.7
    SBC Baseline:
        Budget Authority......................  ........      -1.5      -1.2      -1.2      -1.8      -1.8      -1.8     -1.8     -1.8     -1.8     -1.8
        Outlays...............................  ........      -1.0      -1.0      -1.0      -1.9      -2.1      -2.1     -2.1     -2.1     -2.1     -2.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

   Function 450: COMMUNITY AND REGIONAL DEVELOPMENT FUNCTION SUMMARY

    Function 450, Community and Regional Development, totaled 
about $8.8 billion in BA and $11.7 billion in outlays for 1999, 
excluding emergency funding and other one-time appropriations. 
This function includes funding for community and regional 
development and disaster relief. The function includes the 
Appalachian Regional Commission (ARC), non-power programs of 
the Tennessee Valley Authority (TVA), the Federal Emergency 
Management Agency (FEMA), the Economic Development 
Administration (EDA) within the Commerce Department, and 
portions of the Department of Housing and Urban Development 
(most notably the Community Development Block Grant program), 
the Bureau of Indian Affairs, and the Department of 
Agriculture.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $5.3 billion in BA and 
$10.3 billion in outlays for 2000. This represents a decrease 
of $3.5 billion in BA and $1.4 billion in outlays from the 1999 
level, due to the assumed reduction of low-priority federal 
programs. The resolution assumes that the aggregate 
discretionary spending cap for 2000, established in the 
Balanced Budget Act of 1997, and adjusted as required by law, 
remains in effect. Congress will be required to set priorities, 
identify offsets to spending, and make decisions on allocating 
discretionary spending among community and regional development 
programs in order to maintain the discipline of the 2000 
spending cap.
    The resolution assumes additional funding for Indian school 
construction of $200 million above the President's budget 
request in 2000.

Mandatory used for Discretionary offsets

    The Committee-reported resolution assumes mandatory savings 
by excluding certain repetitively flooded properties from the 
flood insurance program and eliminating the flood insurance 
subsidy for pre-FIRM structures. Over the next five years this 
policy, if enacted, would reduce outlays $2.6 billion.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
increases or decreases in this function.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                (In billions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         1999     2000     2001     2002     2003     2004     2005     2006     2007     2008     2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Budget Authority.................................      8.8      5.3      2.7      1.9      2.0      2.0      2.0      2.0      2.0      2.0      2.0
    Outlays..........................................     11.3     10.3      7.5      4.7      3.0      2.1      1.2      0.9      0.8      0.7      0.7
President's Budget:
    Budget Authority \1\.............................     10.2     11.9      9.1      9.1      9.2      9.2      9.2      9.2      9.2      9.2      9.2
    Outlays..........................................     11.4     10.9     10.9     10.9     10.2      9.7      9.1      8.8      8.8      8.7      8.7
SBC Baseline:
    Budget Authority.................................      8.8      8.7      8.7      8.6      8.8      8.7      8.7      8.7      8.7      8.7      8.7
    Outlays..........................................     11.3     10.7     10.0      9.7      9.0      8.8      8.3      8.2      8.2      8.2      8.2
Res. compared to:
    President's Budget:
        Budget Authority.............................     -1.4     -6.5     -6.4     -7.2     -7.2     -7.2     -7.2     -7.2     -7.2     -7.2     -7.2
        Outlays......................................     -0.1     -0.6     -3.4     -6.3     -7.3     -7.6     -7.9     -7.8     -8.0     -8.0     -8.0
    SBC Baseline:
        Budget Authority.............................       --     -3.4     -6.0     -6.7     -6.7     -6.7     -6.7     -6.7     -6.7     -6.7     -6.7
        Outlays......................................       --     -0.4     -2.5     -5.0     -6.0     -6.7     -7.1     -7.3     -7.4     -7.5     -7.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

   Function 500: EDUCATION, TRAINING, EMPLOYMENT AND SOCIAL SERVICES

                            Function Summary

    Function 500, Education, Training, Employment and Social 
Services, totaled about $61 billion in BA and $59.8 billion in 
outlays for 1999, excluding one-time emergency spending items. 
This function includes funding for elementary and secondary, 
vocational, and higher education; job training; children and 
family services programs; adoption and foster care assistance; 
statistical analysis and research related to these areas; and 
funding for the arts and humanities.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $52.2 billion in BA and 
$49.0 billion in outlays for 2000. Over the next five years, 
the Reported Resolution assumes over $271 billion is allocated 
to programs within this function. The 2000 level for this 
function represents an increase of $5.6 billion in BA and $3.0 
billion in outlays from the 1999 level, due mainly to 
emergencies and advance appropriations. The Committee-reported 
resolution rejects the President's request for an additional 
advance appropriation of $1.9 billion for the Individuals with 
Disabilities Education Act (IDEA).
    The Committee-reported resolution assumes net discretionary 
spending increases for elementary and secondary education of 
$3.3 billion in 2000, $28 billion over five years, and $82 
billion over the next ten years relative to the President's 
request (Subfunction 501, table follows). For overall 
discretionary spending for the Department of Education, the 
Committee-reported resolution assumes a net increase of $2.4 
billion in 2000, double the President's Budget and an increase 
of $31 billion over the next five years, five times the 
President's request for Department of Education programs.
    The Committee-reported resolution assumes that increased 
funding for elementary and secondary education will be made 
available for programs within a newly reauthorized Elementary 
and Secondary Education Act which introduces greater 
flexibility in the delivery of hundreds of elementary and 
secondary education programs and places more funding and 
decisionmaking into the hands of states, localities, and 
families. Such legislation should help states and localities 
emphasize academic achievement and accountability. Congress is 
scheduled to act on such a reauthorization during this 
Congress. In addition, the budget resolution assumes that 
within the increase for subfunction 501, over the next five 
years an additional $2.5 billion will be dedicated to funding 
our federal commitment under IDEA.
    The Committee-reported resolution assumes that the 
aggregate discretionary spending cap for 2000, established in 
the Balanced Budget Act of 1997 and adjusted as required by 
law, remains in effect. Congress will be required to set 
priorities, identify offsets to spending, and make decisions on 
allocating discretionary spending among programs in order to 
maintain the discipline of the 2000 spending cap.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes no mandatory 
savings in 2000 and $6.8 billion in BA and $6.6 billion in 
outlay savings over the ten-year period, 2000-2009. The 
Committee-reported resolution rejects all student loan program 
cuts proposed in the President's Budget.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
increases or decreases in this function for pay-as-you-go 
purposes.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................      61.0      67.4      66.5      67.3      73.3      76.6      77.5      78.2      79.1      80.1      80.1
    Outlays...............................      59.8      64.3      65.4      66.0      68.5      72.5      75.9      77.2      78.1      79.1      79.1
President's Budget:
    Budget Authority \1\..................      60.5      67.4      69.3      68.9      70.5      70.8      71.6      72.5      73.4      74.3      75.3
    Outlays...............................      59.3      64.3      68.7      69.1      70.4      70.4      70.9      71.7      72.5      73.4      74.4
SBC Baseline:
    Budget Authority......................      61.0      66.3      66.5      66.3      67.8      68.1      68.9      69.7      70.6      71.6      72.6
    Outlays...............................      59.8      64.4      66.2      66.0      67.2      67.5      68.0      68.7      69.6      70.7      71.5
Resolution compared to:
    President's Budget:
        Budget Authority..................       0.5        --      -2.8      -1.6       2.8       5.8       5.9       5.7       5.7       5.8       4.8
        Outlays...........................       0.5        --      -3.3      -3.1      -1.9       2.1       5.0       5.5       5.6       5.7       5.6
    SBC Baseline:
        Budget Authority..................        --       1.1        --       1.0       5.5       8.5       8.5       8.5       8.5       8.5       8.5
        Outlays...........................        --      -0.1      -0.8        --       1.4       5.0       7.9       8.5       8.5       8.5       8.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.


                                   COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET SUBFUNCTION 501
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................      16.8      24.1      25.1      26.1      30.6      33.6      33.6      33.6      33.6      33.6      33.6
    Outlays...............................      17.8      20.5      23.5      25.1      26.6      30.2      33.0      33.5      33.6      33.6      33.6
President's Budget:
    Budget Authority \1\..................      16.8      20.8      22.7      22.7      22.7      22.7      22.7      22.7      22.7      22.7      22.7
    Outlays...............................      17.8      20.0      21.9      22.7      22.8      22.8      22.7      22.6      22.6      22.6      22.6
Resolution compared to:
    President's Budget:
        Budget Authority..................        --       3.3       2.3       3.3       7.8      10.8      10.8      10.8      10.8      10.8      10.8
        Outlays...........................        --       0.5       1.6       2.5       3.8       7.4      10.3      10.9      11.0      11.0      11.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

                          Function 550: HEALTH

                            function summary

    Function 550, Health, totaled about $147.3 billion in BA 
and $140.6 billion in outlays for 1999, excluding one-time 
emergency spending. This function covers all health spending 
except that for Medicare, military health, and veterans' 
health. The major programs include Medicaid, the State 
Children's Health Insurance Program, health benefits for 
federal workers and retirees, the National Institutes of 
Health, the Food and Drug Administration, the Health Resources 
and Services Administration, Indian Health services, the 
Centers for Disease Control and Prevention, and the Substance 
Abuse and Mental Health Services Administration.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $29.3 billion in BA and 
$28.7 billion in outlays for 2000. Over the next five years, 
the resolution assumes $139.7 billion in BA is allocated to 
programs in this function. The level of funding in 2000 
represents a decrease of $0.6 billion in BA and an increase of 
$2.0 billion in outlays from the 1999 level. The Committee-
reported resolution assumes a $0.6 billion increase in BA for 
the National Institutes of Health (NIH) in 2000. This increase 
is nearly double the increase provided for NIH in the 
President's budget.

Mandatory used for discretionary offsets

    Beginning in 2001, the Committee-reported resolution 
assumes reforms in federal funding for administration of 
welfare programs, building upon the proposal in the President's 
budget to reduce administrative costs in the Medicaid program. 
The resolution assumes total savings of $4.9 billion in outlays 
over the period 2001-2004.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
increases or decreases in this function.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         1999     2000     2001     2002     2003     2004     2005     2006     2007     2008     2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Budget Authority.................................    147.3    156.2    164.1    173.3    184.7    197.9    212.8    228.4    246.3    265.2    285.5
    Outlays..........................................    140.6    153.0    162.4    173.7    185.3    198.5    212.6    228.3    245.5    264.4    284.9
President's Budget:
    Budget Authority \1\.............................    147.5    157.7    166.8    176.3    188.4    202.0    217.5    233.6    252.3    271.8    292.9
    Outlays..........................................    140.7    153.6    165.4    177.2    189.4    202.8    217.5    233.7    251.5    271.1    292.4
SBC Baseline:
    Budget Authority.................................    147.3    156.6    165.9    175.3    186.8    200.3    215.5    231.4    249.7    268.8    289.4
    Outlays..........................................    140.6    153.3    164.0    175.7    187.4    200.9    215.3    231.3    248.8    268.0    288.8
Res. compared to:
    President's Budget:
        Budget Authority.............................     -0.2     -1.5     -2.7     -3.0     -3.8     -4.1     -4.6     -5.3     -6.0     -6.6     -7.4
        Outlays......................................     -0.1     -0.6     -3.0     -3.4     -4.1     -4.3     -4.8     -5.4     -6.0     -6.7     -7.4
    SBC Baseline:
        Budget Authority.............................  .......     -0.4     -1.8     -2.0     -2.2     -2.4     -2.7     -3.0     -3.3     -3.6     -3.9
        Outlays......................................  .......     -0.3     -1.6     -1.9     -2.1     -2.4     -2.7     -3.0     -3.3     -3.6    -3.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

                         Function 570: MEDICARE

                            Function Summary

    Function 570, Medicare, totaled about $195.2 billion in BA 
and $194.6 billion in outlays for 1999.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $3.0 billion in BA and 
$3.0 billion in outlays for 2000. This represents an increase 
of $0.2 billion in outlays from the 1999 level. The Committee-
reported resolution assumes funding at the baseline level.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
increases or decreases in this function.
    The Committee notes that the Medicare policy changes in the 
Balanced Budget Act have produced budget savings in excess of 
those estimated at the time of its enactment in some areas. 
While the Committee recognizes the value of these savings to 
Medicare solvency, the Committee is concerned about effect of 
these policy changes' on Medicare beneficiaries' access to 
services. Particular areas of concern include access to skilled 
nursing, outpatient therapy, and payment rates for 
Medicare+Choice plans. This Committee urges the Committee on 
Finance to examine access to Medicare services, and if problems 
are found, this Committee pledges to assist in identifying 
resources to address such problems in a manner consistent with 
this Committee-reported resolution.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Budget Authority......................     195.2     208.7     222.1     230.6     250.7     268.6     295.6     306.8     337.6     365.6     394.1
    Outlays...............................     194.6     208.7     222.3     230.2     250.9     268.7     295.2     306.9     337.8     365.2     394.2
President's Budget:
    Budget Authority\1\...................     195.2     207.3     220.0     228.8     248.9     266.7     293.6     304.8     335.4     363.3     391.5
    Outlays...............................     194.6     207.3     220.1     228.4     249.0     266.9     293.2     305.0     335.6     362.9     391.7
SBC Baseline:
    Budget Authority......................     195.2     208.7     222.1     230.6     250.7     268.6     295.6     306.8     337.6     365.6     394.1
    Outlays...............................     194.6     208.7     222.3     230.2     250.9     268.7     295.2     306.9     337.8     365.2     394.2
Res. compared to:
    President's Budget:
        Budget Authority..................  ........      +1.3      +2.1      +1.8      +1.9      +1.9      +2.0      +2.0      +2.2      +2.4      +2.6
    Outlays...............................  ........      +1.4      +2.2      +1.8      +1.9      +1.9      +2.0      +2.0      +2.2      +2.4      +2.6
    SBC Baseline:
        Budget Authority Outlays..........  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........
        Outlays...........................  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

                     Function 600: INCOME SECURITY

                            function summary

    Function 600, Income Security, totals $234.6 billion in BA 
and $237.8 billion in outlays for 1999, excluding spending 
which requires a cap adjustment or is for an emergency. This 
function contains: (1) major cash and in-kind means-tested 
entitlements; (2) general retirement, disability, and pension 
programs excluding Social Security and Veterans'' compensation 
programs; (3) federal and military retirement programs; (4) 
unemployment compensation; 5) low- income housing programs; and 
6) other low-income support programs. Function 600 is the third 
largest functional category after Social Security and defense. 
Mandatory programs account for 86 percent of total spending in 
this function.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $28.7 billion in BA and 
$39.4 billion in outlays for 2000. Over the next five years, 
nearly $200 billion in spending would be allocated to 
discretionary programs. The resolution represents a decrease of 
$3.8 billion in BA and $0.8 billion in outlays from the 1999 
level. Despite this change, the resolution assumes sufficient 
additional funding to renew annually all Section 8 contracts in 
place at the end of 1999. A reduction in appropriations for 
2000 is possible because of about $10 billion in balances the 
Department of Housing and Urban Development has available and 
because of the one-time increases certain programs received for 
1999. In addition, part of this decline in discretionary 
spending is due to mandatory offsets assumed in the resolution 
(see next section).
    The Committee-reported resolution assumes that the 
aggregate discretionary spending cap for 2000, established in 
the Balanced Budget Act of 1997 and adjusted as required by 
law, remains in effect. Congress will be required to set 
priorities, identify offsets to spending, and make decisions on 
allocating discretionary spending among programs in order to 
maintain the discipline of the 2000 spending cap.

Mandatory used for discretionary offsets

    Under the Committee-reported resolution, mandatory spending 
in Function 600 will total $1.2 trillion over the next five 
years. The resolution assumes mandatory savings of $1.2 billion 
in BA and outlays in 2000, a reduction of 0.5 percent. The 
President has proposed several technical changes to mandatory 
programs, such as disallowing the transfer of assets in order 
to become eligible for Supplemental Security Income. Other 
reforms to mandatory programs that currently amount to $216 
billion annually could also be enacted.

Mandatory PAYGO

    The Committee-reported resolution assumes no other 
mandatory increases or decreases in this function.

Committee-reported resolution compared to the President's budget

    The President's request for Function 600 is substantially 
above both the baseline and the Committee-reported resolution. 
The Administration's Budget contains $136.2 billion in new 
spending over ten years for new ``USA accounts'' for low-income 
recipients. An additional $136.2 billion over ten years for the 
USA accounts is counted as a revenue loss. According to the 
President's Budget, the USA accounts will absorb over 10 
percent of the surplus. The President also proposes to increase 
the Child Care entitlement by $24.6 billion over ten years. 
Together, these two expansions account for 86 percent of the 
difference between the Committee-reported resolution and the 
President's Budget.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Budget Authority......................     234.6     244.4     250.9     263.6     276.4     285.6     297.9     304.2     310.0     323.3     333.6
    Outlays...............................     237.8     248.1     257.0     266.6     276.2     285.4     298.1     304.6     310.9     324.8     335.1
President's Budget:
    Budget Authority \1\..................     235.2     256.6     268.8     282.1     291.1     301.7     315.1     324.1     331.7     346.5     358.5
    Outlays...............................     238.2     259.6     271.8     285.3     295.1     304.0     315.6     324.7     332.7     347.9     360.1
SBC Baseline:
    Budget Authority......................     234.6     248.1     254.9     265.0     274.1     282.6     294.5     300.2     305.5     318.4     327.9
    Outlays...............................     237.8     249.8     259.8     270.5     275.9     282.5     294.7     300.6     306.4     319.6     329.3
Res: compared to:
    President's Budget:
        Budget Authority..................      -0.7     -12.2     -18.0     -18.4     -14.7     -16.2     -17.1     -19.9     -21.6     -23.2     -25.0
        Outlays...........................      -0.4     -11.5     -14.7     -18.7     -19.0     -18.6     -17.5     -20.1     -21.8     -23.2     -25.0
    SBC Baseline:
        Budget Authority..................  ........      -3.7      -4.0      -1.4       2.3       2.9       3.5       4.0       4.5       5.0       5.7
        Outlays...........................  ........      -1.7      -2.8      -3.9       0.3       2.9       3.4       4.0       4.6       5.2       5.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

                     Function 650: SOCIAL SECURITY

                            Function Summary

    Function 650, Social Security, totaled about $390.6 billion 
in BA and $390.8 billion in outlays for 1999. This function 
includes Social Security benefits and administrative expenses.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $3.2 billion in BA and 
$3.3 billion in outlays for 2000. This represents level funding 
compared to the 1999 level.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
increases or decreases in this function. The resolution does 
not include the President's budget proposal to invest a portion 
of the trust fund assets in private sector investments.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution
    Budget Authority......................     390.6     407.2     426.0     445.9     467.0     489.8     514.6     540.9     568.7     599.0     633.6
    Outlays...............................     390.8     407.3     426.0     445.9     467.0     489.7     514.5     540.8     568.7     599.0     633.6
President's Budget
    Budget Authority \1\..................     390.6     425.1     440.9     465.1     486.3     512.9     540.1     573.0     606.3     642.2     682.8
    Outlays...............................     390.8     452.2     440.9     465.1     486.2     512.9     540.1     573.0     606.3     642.2     682.8
SBC Baseline:
    Budget Authority......................     390.6     407.2     426.0     445.9     467.0     489.8     514.6     540.9     568.7     599.0     633.6
    Outlays...............................     390.8     407.3     426.0     445.9     467.0     489.8     514.5     540.8     568.7     599.0     633.6
Res compared to:
    President's Budget:
    Budget Authority......................  ........     -17.9     -14.9     -19.3     -19.3     -23.2     -25.6     -32.1     -37.5     -43.2     -49.1
    Outlays...............................  ........     -17.9     -14.9     -19.3     -19.3     -23.2     -25.6     -32.1     -37.5     -43.2     -49.1
    SBC Baseline:
    Budget Authority......................  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........
    Outlays...............................  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

              Function 700: VETERANS BENEFITS AND SERVICES

                            function summary

    Function 700, Veterans Benefits, totaled $43.0 billion in 
BA and $42.9 billion in outlays for 1999. This budget function 
includes income security needs of disabled veterans, indigent 
veterans, and survivors of deceased veterans through 
compensation benefits, pensions, and life insurance programs. 
Major education, training, and rehabilitation and readjustment 
programs include the Montgomery GI Bill, the Veterans 
Educational Assistance Program, and the Vocational 
Rehabilitation and Counseling program. Veterans can also 
receive guarantees on home loans. Roughly half of all spending 
in this function is for the Veterans Health Administration, 
which is comprised of over 700 hospitals, nursing homes, 
domiciliaries, and outpatient clinics.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $20.2 billion in BA and 
$20.4 billion in outlays for 2000. This represents an increase 
of $0.9 billion in BA and $1.4 billion in outlays from the 1999 
level. The Committee-reported resolution is also an increase 
over the President's Budget for 2000 by $0.9 billion in BA and 
$1.1 billion in outlays.
    The Committee-reported resolution assumes that the proposed 
increased spending for Veterans Benefits fits within the 
aggregate discretionary spending cap for 2000, established in 
the Balanced Budget Act of 1997 and adjusted as required by 
law. Congress will be required to identify offsets to increase 
Veterans' spending and make appropriate decisions on allocating 
discretionary spending among all programs in order to maintain 
the discipline of the spending cap in 2000.
    The Committee-reported resolution assumes two major program 
changes.
     Increasing funds for medical care by $1.1 billion 
in 2000 to provide relief to veterans' hospitals and quality 
medical care to veterans in all regions of the country and to 
help address Hepatitis C among veterans.
     As proposed by the President, reducing funds for 
construction of major projects and for construction of state 
extended care facilities, to save $0.4 billion over five years. 
A declining veteran population and unused inpatient hospital 
capacity in many parts of the country has reduced the need for 
new construction projects.

Mandatory PAYGO

    The Committee-reported resolution assumes that provisions 
of the 1997 Balanced Budget Act expiring after 2002 will be 
extended through 2009. These provisions include:
     Extending the VA's authority to round-down monthly 
compensation benefits to the nearest dollar after applying the 
annual COLA in each year. The practice of rounding down monthly 
benefit checks is consistent with all other major pension 
programs including military and civilian retirement benefits.
     Extending the VA's authority to match income 
information submitted by pension beneficiaries with the 
Internal Revenue Service and the Social Security 
Administration.
     Extending the VA's authority to limit pension 
benefits to Medicaid-eligible recipients in nursing homes. 
Under this provision, veterans can keep a monthly benefit of 
$90 but the full cost of the beneficiaries' nursing home care 
would be paid by the Medicaid program.
     Extending the VA's authority to guarantee VA 
securities issued in the secondary market directly, thereby 
enhancing their value.
     Extending certain fees paid by veterans who obtain 
a government-guaranteed housing loan.
    In total spending, the Committee-reported resolution is an 
increase over the President's Budget: in 2000 by $0.9 billion 
in BA and $1.1 billion in outlays. It is also an increase over 
the next five years (by $0.5 billion in BA and $1.1 billion in 
outlays) and over the next ten years (by $0.1 billion in BA and 
$0.8 billion in outlays).

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Committee-reported resolution:
    Budget Authority......................      43.0      44.7      44.3      44.7      45.5      45.9      48.3      46.8      47.4      48.0      48.6
    Outlays...............................      42.9      45.1      45.0      45.1      46.0      46.3      48.8      47.4      45.8      48.5      49.1
President's Budget:
    Budget Authority \1\..................      43.0      43.8      44.4      45.0      45.5      45.9      48.4      46.9      47.5      48.1      48.7
    Outlays...............................      42.9      43.9      44.9      45.3      45.9      46.3      48.8      47.4      45.8      48.6      49.2
SBC Baseline:
    Budget Authority......................      43.0      43.8      44.4      44.9      46.4      46.7      49.3      47.8      48.3      49.0      49.7
    Outlays...............................      42.9      44.1      44.9      45.2      46.7      47.2      49.8      48.3      46.7      49.5      50.2
Committee-reported resolution compared to:
    President's Budget:
        Budget Authority..................  ........       0.9      -0.2      -0.3        +*        -*        -*      -0.1      -0.1      -0.1      -0.1
        Outlays...........................  ........       1.1       0.1      -0.2        +*        +*        -*        -*      -0.1      -0.1      -0.1
    SBC Baseline:
        Budget Authority..................  ........       1.0      -0.1      -0.2      -0.8      -0.9      -1.0      -1.0      -1.0      -1.0      -1.1
        Outlays...........................  ........       1.0       0.1      -0.1      -0.8      -0.9      -1.0      -1.0      -1.0      -1.0      -1.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

                Function 750: ADMINISTRATION OF JUSTICE

                            function summary

    Function 750, Administration of Justice, totaled about 
$26.3 billion in BA and $24.8 billion in outlays for 1999. This 
function includes funding for federal law enforcement 
activities, including criminal investigations by the Federal 
Bureau of Investigation (FBI) and the Drug Enforcement 
Administration (DEA), border enforcement and the control of 
illegal immigration by the Customs Service and Immigration and 
Naturalization Service (INS), as well as funding for prison 
construction, drug treatment, crime prevention programs and the 
federal Judiciary.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $23.1 billion in BA and 
$25.1 billion in outlays for 2000. Over the next five years, 
the resolution provides nearly $125 billion for federal law 
enforcement and related activities. This resolution fully funds 
Violent Crime Reduction Trust Fund programs in 2000. Total 
funding for this function in 2000 represents a decrease of $2.9 
billion in BA, but an increase of $0.5 billion in outlays from 
the 1999 level. Reductions in BA are due mainly to declining 
levels previously legislated for the Crime Trust Fund in its 
final year, emergencies or other one-time spending increases. 
The increase in outlays reflects the Trust Fund's spend-out 
rates.
    The resolution assumes the aggregate discretionary spending 
cap for 2000, established in the Balanced Budget Act of 1997, 
and adjusted as required by law, remains in effect. Congress 
will be required to set priorities, identify offsets to 
spending, and make decisions on allocating discretionary 
spending among federal law enforcement programs in order to 
maintain the discipline of the 2000 spending cap.
    The resolution rejects the President's proposed 15 percent 
increase for the anti-trust activities within the Department of 
Justice, thereby assuming funding at current law levels. The 
resolution rejects the President's proposed reductions in anti-
drug programs. Funding for the proposed Drug Free Century Act 
and/or the Western Hemisphere Drug Elimination Act could be 
accommodated within the aggregate caps.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes no new mandatory 
offsets for discretionary spending in 2000.

Mandatory PAYGO

    The Committee-reported resolution assumes that the customs 
user fees enacted in the 1997 Balanced Budget Act but scheduled 
to expire after 2002, will be extended through Fiscal 2009.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Budget Authority......................      25.0      23.5      24.7      24.7      24.6      24.5      24.4      24.3      24.1      24.0      23.8
    Outlays...............................      25.2      25.4      25.2      25.0      24.5      24.4      24.3      24.2      24.0      21.9      21.7
President's Budget:
    Budget Authority\1\...................      26.7      26.6      27.0      27.2      26.9      26.9      26.8      26.7      26.6      26.6      26.3
    Outlays...............................      25.1      26.6      27.2      27.1      27.0      27.0      26.8      26.7      26.6      26.5      26.3
SBC Baseline:
    Budget Authority......................      25.0      24.8      26.0      26.0      25.9      27.5      27.7      27.7      27.7      27.8      27.8
    Outlays...............................      25.2      25.8      25.8      26.0      25.7      27.4      27.5      27.6      27.6      27.7      27.7
Res. compared to:
    President's Budget:
        Budget Authority..................      -1.7      -3.2      -2.3      -2.5      -2.3      -2.5      -2.5      -2.5      -2.5      -2.6      -2.5
        Outlays...........................      +0.1      -1.3      -2.1      -2.2      -2.6      -2.6      -2.6      -2.6      -2.6      -2.6      -2.5
    SBC Baseline:
        Budget Authority..................      -1.7      -1.3      -1.3      -1.3      -1.3      -3.1      -3.3      -3.5      -3.6      -3.8      -3.9
        Outlays...........................      +0.1      -0.4      -0.7      -1.0      -1.3      -3.1      -3.3      -3.5      -3.6      -3.8      -3.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

                    Function 800: GENERAL GOVERNMENT

                            Function Summary

    Function 800, General Government, totals $15.2 billion in 
BA and $14.8 billion in outlays for 1999, excluding spending 
which requires a cap adjustment or is for an emergency. This 
function consists of the activities of the Legislative Branch, 
the Executive Office of the President, U.S. Treasury fiscal 
operations (including the Internal Revenue Service), personnel 
and property management, and general purpose fiscal assistance 
to states, localities, and U.S. territories. Discretionary 
spending represents 93 percent of total spending in this 
function. The Internal Revenue Service accounts for 62 percent 
of the discretionary total.

Discretionary

    The Committee-reported resolution assumes discretionary 
spending in this function would total $11.4 billion in BA and 
$11.6 billion in outlays for 2000. Over the next five years, 
the resolution would provide $58 billion for discretionary 
programs. The resolution represents a decrease of $0.9 billion 
in BA and $0.4 billion in outlays from 1999.
    The Committee-reported resolution assumes that the 
aggregate discretionary spending cap for 2000, established in 
the Balanced Budget Act of 1997 and adjusted as required by 
law, remains in effect. Congress will be required to set 
priorities, identify offsets to spending, and make decisions on 
allocating discretionary spending among programs in order to 
maintain the discipline of the 2000 spending cap.
    The Committee-reported resolution assumes the following 
major discretionary changes:
     $462 million for new courthouses in 2000. This 
proposal would provide enough funds to construct or site and 
design over ten new courthouses from the Judicial Conference's 
2000 construction plan.
     $145 million for the Payment in Lieu of Taxes 
(PILT) program in 2000. This proposal would increase funding 
for PILT by $270 million over five years. PILT compensates 
local governments for losses to their tax base when the federal 
government occupies land within their boundaries. Under the 
current Administration, economic activity on federal land has 
decreased markedly, placing added stress on the local 
communities.
     $313 million for the District of Columbia in 2000, 
a reduction of $241 million. The Balanced Budget Act of 1997 
included a federal bailout worth over $10 billion to the 
District. This dramatic increase in federal funding propelled 
the city to a surplus of over $400 million in 1998. The bailout 
increased mandatory spending and tax breaks, based partly on 
the assumption that discretionary spending would be scaled 
back. This proposal, which is supported by the President, would 
end all discretionary spending not related to the federal 
bailout.

Mandatory used for Discretionary offsets

    The Committee-reported resolution assumes mandatory savings 
and increased receipts of $61 million in BA and $46 million in 
outlays in 2000.

Mandatory PAYGO

    The Committee-reported resolution assumes no other 
mandatory increases or decreases in this function. Under the 
baseline, mandatory spending declines by $1.9 billion from 1999 
to 2000 due primarily to decreased spending from the Treasury 
Claims Fund and the Federal Financing Bank.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Budget Authority......................      15.2      12.3      11.9      12.1      12.1      12.1      12.1      12.1      12.2      12.2      12.2
    Outlays...............................      14.8      13.5      12.6      12.3      12.2      12.2      11.9      11.8      11.9      12.1      11.9
President's Budget:
    Budget Authority \1\..................      17.2      13.8      14.6      14.3      14.4      14.4      14.4      14.4      14.5      14.5      14.4
    Outlays...............................      15.7      14.9      14.7      14.4      14.3      14.4      14.2      14.2      14.3      14.5      14.2
SBC Baseline:
    Budget Authority......................      15.2      13.9      13.9      13.9      13.9      13.9      14.0      14.0      14.0      14.0      14.0
    Outlays...............................      14.8      14.4      14.0      13.8      13.8      13.9      13.7      13.7      13.7      13.9      13.7
Res. compared to:
    President's Budget:
        Budget Authority..................      -2.0      -1.4      -2.7      -2.2      -2.3      -2.3      -2.3      -2.3      -2.3      -2.4      -2.2
        Outlays...........................      -0.9      -1.4      -2.1      -2.1      -2.1      -2.2      -2.3      -2.4      -2.4      -2.4      -2.3
    SBC Baseline:
        Budget Authority..................  ........      -0.9      -1.3      -1.2      -1.2      -1.2      -1.2      -1.2      -1.2      -1.2      -1.1
        Outlays...........................  ........      -0.5      -0.8      -0.9      -0.9      -1.1      -1.1      -1.2      -1.2      -1.2      -1.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

                       Function 900: NET INTEREST

                            Function Summary

    Function 900, Net Interest, totaled $229.4 billion in BA 
and outlays in 1999. Net interest is a mandatory payment; there 
are no discretionary programs in Function 900. Net interest 
includes interest on the public debt after deducting the 
interest income received by the federal government.
    Interest on the public debt, or gross interest, is the cost 
of financing the entire public debt of the U.S. government. 
Gross interest costs, however, are not a comprehensive measure 
of government borrowing costs because the government holds much 
of the debt itself, which generates interest income. In 1998, 
nearly $1.8 trillion (about 32 percent) of the total public 
debt was held by the government, mostly by trust funds such as 
Social Security and federal civilian and military retirement. 
The government both pays and collects interest on these 
securities, resulting in no net cost. In addition, the federal 
government lends money outside the government through credit 
programs. These activities result in real interest income to 
the federal government. Since net interest reflects both the 
interest paid and interest earned by the government, it 
provides the best measure of the costs of federal borrowing.
    The Committee-reported resolution saves all of the off-
budget surplus and $133 billion of the on-budget surplus. The 
President's budget spends part of the off-budget surplus and 
all of the on-budget surplus. Consequently, the Committee-
reported resolution has higher surpluses over the ten-year 
period covered by the resolution. Compared to the President's 
budget, the reported resolution spends $32.7 billion less in 
interest payments over the five years 2000-2004, and $126 
billion less over the ten years 2000-2009.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Budget Authority......................     229.4     217.9     207.4     196.8     186.9     176.9     165.6     153.9     142.2     129.0     115.7
    Outlays...............................     229.4     217.9     207.4     196.8     186.9     176.9     165.6     153.9     142.2     129.0     115.7
President's Budget:
    Budget Authority \1\..................     229.4     219.0     211.3     203.4     196.1     188.8     180.1     170.7     160.8     149.6     138.5
    Outlays...............................     229.4     219.0     211.3     203.4     196.1     188.8     180.1     170.7     160.8     149.6     138.5
SBC Baseline:
    Budget Authority......................     229.4     218.2     208.4     197.3     185.5     172.6     157.1     139.4     119.4      96.5      71.9
    Outlays...............................     229.4     218.2     208.4     197.3     185.5     172.6     157.1     139.4     119.4      96.5      71.9
Resolution compared to:
    President's Budget:
        Budget Authority..................  ........      -1.1      -3.9      -6.6      -9.2     -11.9     -14.5     -16.8     -18.6     -20.6     -22.8
        Outlays...........................  ........      -1.1      -3.9      -6.6      -9.2     -11.9     -14.5     -16.8     -18.6     -20.6     -22.8
    SBC Baseline:
        Budget Authority..................  ........      -0.3      -1.0      -0.5       1.4       4.3       8.5      14.5      22.8      32.5      43.8
        Outlays...........................  ........      -0.3      -1.0      -0.5       1.4       4.3       8.5      14.5      22.8      32.5      43.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

                        Function 920: ALLOWANCES

                            Function Summary

    Function 920, Allowances, usually displays the budgetary 
effects of proposals that cannot be easily distributed across 
other budget functions. In past years, Function 920 has 
included total savings or costs from proposals associated with 
emergency spending or proposals contingent on certain events 
that have uncertain chances of occurring, such as the 
President's proposal for increased discretionary spending from 
the Social Security Surplus contingent on Social Security 
reform.

Discretionary

    The Committee-reported resolution assumes discretionary 
savings in this function would total $8.0 billion in BA and 
$8.1 billion in outlays for 2000. Such savings are possible by 
reducing the total number of political appointees in all 
federal agencies, privatizing Ginnie Mae, and by reducing 
federal costs in certain programs that appear throughout all 
budget functions. The Committee-reported resolution assumes 
that the aggregate discretionary spending cap for 2000, 
established in the Balanced Budget Act of 1997 and adjusted as 
required by law, remains in effect. Congress will be required 
to set priorities, identify offsets to spending, and make 
decisions on allocating discretionary spending among programs 
in order to maintain the discipline of the 2000 spending cap.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes various user fees 
in this function that would apply to discretionary caps.

Mandatory PAYGO

    The Committee-reported resolution assumes no mandatory 
increases or decreases in this function.

Committee-reported resolution compared to the President's budget

    In order to comply with the caps, the Committee-reported 
resolution assumes illustrative reductions in each budget 
function, as well as certain across-the-board policies in 
function 920 that affect programs in all other budget 
functions. In contrast, the President's Budget, while claiming 
offsets that do not actually count against the discretionary 
cap for 2000, includes appropriation levels that CBO says 
exceeds the budget authority cap by $22 billion. But the 
request does not assume any of the offsets in the allowances 
function for 2000. For subsequent years, the President's Budget 
still does not assume any savings in function 920. Rather, the 
President would use about $0.4 trillion of federal budget 
surpluses, some derived from the Social Security trust fund, 
for increased discretionary spending over 2001-2009, with most 
of that spending occurring in specific programmatic functions. 
Of this amount, however, the Budget does not specifically 
allocate about $95 billion in additional appropriated 
resources, holding them instead in a ``reserve for priority 
initiatives'' in function 920. That is why the comparison in 
this function shows the President's Budget increasing spending 
each year, from the Social Security trust fund and other 
surpluses, while the Committee-reported resolution shows 
savings to comply with the caps (or to hold down the growth in 
spending for years in which there are not yet caps).

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Budget Authority......................  ........      -8.0      -8.5      -5.9      -4.4      -4.5      -4.5      -4.6      -5.2      -5.3      -5.3
    Outlays...............................  ........      -8.4     -12.9     -20.0      -4.8      -5.0      -5.1      -5.2      -5.8      -5.9      -5.9
President's Budget:
    Budget Authority \1\..................       3.3  ........       3.0       6.0       9.0      12.0      12.3      12.7      13.0      13.4      13.8
    Outlays...............................       0.9       1.4       2.3       4.4       7.0       9.9      11.5      12.3      12.7      13.2      13.5
SBC Baseline:
    Budget Authority......................  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........
    Outlays...............................  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........  ........

Res. compared to:

President's Budget:
        Budget Authority..................      -3.3      -8.0     -11.5     -11.9     -13.4     -16.5     -16.8     -17.3     -18.2     -18.7     -19.1
        Outlays...........................      -0.9      -9.7     -15.2     -24.4     -11.8     -14.9     -16.6     -17.5     -18.5     -19.1     -19.4
    SBC Baseline:
        Budget Authority..................  ........      -8.0      -8.5      -5.9      -4.4      -4.5      -4.5      -4.6      -5.2      -5.3      -5.3
        Outlays...........................  ........      -8.4     -12.9     -20.0      -4.8      -5.0      -5.1      -5.2      -5.8      -5.9      -5.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

            Function 950: UNDISTRIBUTED OFFSETTING RECEIPTS

                            Function Summary

    Function 950, Undistributed Offsetting Receipts, totaled 
about $40.1 billion in receipts (BA and outlays) for 1999. This 
function records offsetting receipts (receipts, not federal 
revenues or taxes, that the budget shows as offsets to spending 
programs) that are too large to record in other budget 
functions. Such receipts are either intrabudgetary (a payment 
from one federal agency to another, such as agency payments to 
the retirement trust funds) or proprietary (a payment from the 
public for some type of business transaction with the 
government). The main types of receipts recorded as 
``undistributed'' in this function are: the payments federal 
agencies make to retirement trust funds for their employees, 
payments made by companies for the right to explore and produce 
oil and gas on the Outer Continental Shelf, and payments by 
those who bid for the right to buy or use the public property 
or resources, such as the electromagnetic spectrum.

Discretionary

    The Committee-reported resolution includes no discretionary 
assumptions in this function.

Mandatory used for discretionary offsets

    The Committee-reported resolution assumes no mandatory 
changes in this function that would affect discretionary caps.

Mandatory PAYGO

    The Committee-reported resolution assumes offsetting 
receipts in this function would total $42.2 billion for 2000. 
This represents an increase of $1.9 billion in receipts over 
the 1999 level, due entirely to expected baseline changes in 
spectrum auction receipts, asset sale receipts, and federal 
agencies'' retirement contributions. The Committee-reported 
resolution assumes that certain provisions of the 1997 Balanced 
Budget Act expiring after 2002 will be extended through 2009. 
In this function, these extensions include maintaining the 
current contribution rates of federal agencies towards their 
employees' retirement funds.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Budget Authority......................     -40.1     -42.2     -45.3     -52.8     -47.2     -48.0     -49.8     -51.2     -53.2     -54.9     -56.7
    Outlays...............................     -40.1     -42.2     -45.3     -52.8     -47.2     -48.0     -49.8     -51.2     -53.2     -54.9     -56.7
President's Budget:
    Budget Authority \1\..................     -40.1     -43.0     -47.9     -52.2     -48.0     -49.0     -51.0     -52.8     -55.1     -57.1     -59.2
    Outlays...............................     -40.1     -43.0     -47.9     -52.2     -48.0     -49.0     -51.0     -52.8     -55.1     -57.1     -59.2
SBC Baseline:
    Budget Authority......................     -40.1     -42.2     -45.3     -52.8     -46.8     -47.6     -49.4     -50.8     -52.8     -54.6     -56.4
    Outlays...............................     -40.1     -42.2     -45.3     -52.8     -46.8     -47.6     -49.4     -50.8     -52.8     -54.6     -56.4
Res. Compared to:
    President's Budget:
        Budget Authority..................  ........       0.8       2.5      -0.5       0.8       0.9       1.2       1.5       1.9       2.2       2.5
        Outlays...........................  ........       0.8       2.5      -0.5       0.8       0.9       1.2       1.5       1.9       2.2       2.5
    SBC Baseline:
        Budget Authority..................  ........  ........  ........  ........      -0.5      -0.5      -0.4      -0.4      -0.4      -0.3      -0.3
        Outlays...........................  ........  ........  ........  ........      -0.5      -0.5      -0.4      -0.4      -0.4      -0.3      -0.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Since CBO's estimate of the President's request exceeds the statutory cap for budget authority by $22 billion in 2000, the President's Budget
  appears to allocate more funding in individual functions than allowed by current law (see Summary section for full discussion). Therefore, comparisons
  of the President's Budget to alternative proposals will be misleading. Further, the 1999 figures for the President's Budget include one-time emergency
  and other appropriations that are not reflected in the SBC baseline and the Committee-reported resolution.

                              B. Revenues

    Federal revenues are taxes and other collections from the 
public that result from the government's sovereign or 
governmental powers. Federal revenues include individual income 
taxes, corporate income taxes, social insurance taxes, excise 
taxes, estate and gift taxes, custom duties and miscellaneous 
receipts (which include deposits of earnings by the Federal 
Reserve System, fines, penalties, fees for regulatory services, 
and others).
    The Committee-reported resolution assumes a net tax cut of 
$142 billion over the next five years (2000-2004) and a net tax 
cut of $778 billion over the next ten years (2000-2009), 
relative to the CBO/SBC baseline. The reported resolution could 
fund a gross tax cut of up to $15 billion in 2000. The reported 
resolution assumes that any tax cut adopted by Congress would 
not return the federal government to an unbalanced federal 
budget.
    The net tax cut in the Committee-reported resolution can 
accommodate a substantial tax cut package (the contents of 
which will be determined by the tax-writing committees), which 
may include across-the-board cuts in tax rates, marriage 
penalty relief, extensions of expiring provisions, either 
temporarily or permanently, a repeal of transportation deficit 
reduction fuel taxes, an acceleration of full deductibility of 
the costs of health insurance for the self-employed, and tax 
relief for the oil and gas industry.
    The Committee-reported resolution assumes that the Finance 
Committee will adopt revenue offsets in order to fund tax cuts 
in the initial years covered by the resolution. These revenue 
offsets may include several of the President's proposed 
loophole closers, Superfund taxes (in anticipation of or in 
conjunction with fundamental reform legislation), and other 
taxes and fees that could be extended beyond their scheduled 
expiration date.
    The Committee-reported resolution does not assume extension 
of the BBA-mandated increases in federal employee retirement 
contributions past the January 2003 expiration date.
    The CBO reestimate of the President's Budget contains a net 
tax increase of $96 billion due the tax proposals in his budget 
excluding USA accounts (which are part of the President's 
Social Security framework). If the revenue loss from USA 
accounts is included (as in the numbers for the President's 
Budget in the table below), the President's Budget reduces net 
taxes by $40 billion over ten years. USA accounts are estimated 
by CBO to reduce revenues by $136 billion over ten years, and 
increase outlays by $136 billion over ten years (for a total 
cost of $272 billion).
    Over ten years, the Committee-reported resolution reduces 
taxes by $737 billion more than the President's Budget 
including his Social Security framework.

Federal Reserve

    Given the tight nature of the discretionary caps and the 
resulting pressure over the past few years to find ``offsets'' 
that are not painful in order to increase spending, it is worth 
reiterating a scoring principle stated in the conference report 
on the 1997 budget resolution (H. Con. Res. 178, House Report 
104-612).
    Although the Committee-reported resolution does not direct 
authorizing committees to produce savings for reconciliation, 
the Budget Committee discourages both appropriations and the 
authorizing committees from attempting to offset spending in 
their bills with legislative changes that only appear to 
produce savings (such as timing shifts) rather than with 
changes that have real economic effects.
    One proposed ``offset'' that periodically appears is to 
require the Federal Reserve to transfer funds from its surplus 
capital account to the Treasury. In fact, the 1993 
reconciliation bill included a provision directing the Federal 
Reserve to transfer $213 million in surplus capital to the 
Treasury over 1997 and 1998. Because the Federal Reserve is not 
included in the unified budget, the Budget Committees (under 
Democratic control) in 1993 allowed the Banking Committees to 
count the directed transfer as savings for reconciliation 
purposes, even though there was then (and still is now) general 
agreement that the transfer was a timing gimmick, acts like an 
intragovernmental transfer, and leaves the private sector and 
the rest of the economy unaffected. The Congressional Budget 
Office concurs with the Budget Committee that such a transfer 
has no real economic impact on the budget.
    Taking money from the Federal Reserve's surplus capital 
account to pay for a federal spending program would not provide 
real resources--the spending would be real but the offset would 
not. Reducing the surplus capital account would simply take 
funds that the Federal Reserve invests in Treasury securities 
and transfers those funds to part of the private sector 
(whatever the target of the spending program is). That 
transaction would increase the amount of borrowing that the 
federal government would have to undertake from the private 
sector (the Treasury would have to pay interest to whoever in 
the private sector buys the Treasury securities that the 
Federal Reserve would have to sell to raise the cash to 
transfer to Treasury), just like a transaction in which money 
was paid directly out of the Treasury for federal purposes.
    Therefore, the Committee (using the authority provided to 
the Budget Committees for estimating outlays and revenues by 
section 312(a) of the Congressional Budget Act) continues to 
direct the Congressional Budget Office on the following points: 
do not score savings for any new legislation that might affect 
the Federal Reserve's transfer of the surplus capital account 
to the Treasury, but do score as a cost any legislation that 
directs spending from the Federal Reserve surplus account for 
some purpose.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1999      2000      2001      2002      2003      2004      2005      2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Revenues..............................   1,814.6   1,870.0   1,923.0   1,961.5   2,058.3   2,134.8   2,225.1   2,283.3   2,363.9   2,459.9   2,549.8
President's Budget
    Revenues..............................   1,814.2   1,874.0   1,933.1   2,014.2   2,090.1   2,181.7   2,285.0   2,384.0   2,489.1   2,600.2   2,715.5
SBC Baseline:
    Revenues..............................   1,814.6   1,870.0   1,930.4   2,014.6   2,090.6   2,184.0   2,287.7   2,392.5   2,499.7   2,610.6   2,727.0
Resolution compared to: President's Budget
        Revenues..........................       0.4      -4.0     -10.1     -52.8     -31.8     -46.9     -59.9    -100.7    -125.2    -140.3    -165.7
    SBC Baseline:
    Revenues..............................  ........  ........      -7.4     -53.1     -32.3     -49.2     -62.6    -109.3    -135.8    -150.7    -177.2
--------------------------------------------------------------------------------------------------------------------------------------------------------

                             C. Debt Levels

    The following table compares debt held by the public levels 
and debt subject to limit levels associated with the Committee-
reported resolution, the President's Budget and the SBC 
baseline.
    Under the reported resolution, debt held by the public 
declines by nearly $1.8 trillion over the next ten years. Debt 
held by the public under the President's Budget declines by 
about $1.3 trillion over the next ten years. After ten years, 
debt held by the public is $463 billion higher under the 
President's Budget than under the Committee-reported 
resolution.
    The statutory debt limit, which now stands at $5.95 
trillion, would not have to be increased until 2004 under the 
reported resolution. Under the President's Budget, the 
statutory debt limit would have to be raised in 2001.

                                  COMPARISON OF COMMITTEE-REPORTED RESOLUTION WITH PRESIDENT'S BUDGET AND SBC BASELINE
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Debt                   1999      2000      2001       2002       2003       2004       2005       2006       2007       2008       2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Resolution:
    Held by Public................    3628.3    3510.0    3377.7     3236.9     3088.2     2926.0     2742.9     2544.2     2329.1     2099.5     1861.1
    Subject to Limit..............    5545.2    5635.9    5716.1     5801.0     5885.0     5962.2     6029.4     6088.1     6138.9     6175.1     6203.5
President's Budget:
    Held by Public................   3,629.5   3,564.9   3,491.0    3,395.8    3,302.4    3,188.5    3,055.4    2,891.1    2,709.7    2,522.1    2,323.6
    Subject to Limit..............   5,546.3   5,778.6   5,999.8    6,243.0    6,498.4    6,765.1    7,042.9    7,337.9    7,661.1    8,018.6    8,409.0
SBC Baseline:
    Held by Public................    3628.3    3525.0    3400.9     3228.1     3035.2     2796.5     2517.1     2168.9     1769.5     1329.9      842.8
    Subject to Limit..............    5545.2    5650.9    5739.3     5792.2     5832.0     5832.8     5803.5     5712.9     5579.3     5405.5     5185.2
Resolution compared to:
    President's Budget:
        Held by Public............      -1.2     -54.9    -113.3     -158.9     -214.2     -262.5     -312.5     -346.9     -380.6     -422.6     -462.5
        Subject to Limit..........      -1.1    -142.7    -283.7    -442.00     -613.4     -802.9    -1013.5    -1249.8    -1522.2    -1843.5    -2205.5
    SBC Baseline:
        Held by Public............  ........     -15.0     -23.2        8.8       53.0      129.5      225.8      375.3      559.6      769.6     1018.3
        Subject to Limit..........  ........     -15.0     -23.2        8.8       53.0      129.5      225.8      375.3      559.6      769.6     1018.3
--------------------------------------------------------------------------------------------------------------------------------------------------------

                           IV. Summary Tables

                                                     FUNCTION SUMMARY--COMMITTEE-REPORTED RESOLUTION
                                                                [In billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
             Function                                   1999      2000     2001     2002     2003     2004     2005     2006     2007     2008     2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
050...............................  BA..............     279.0    288.8    303.6    308.2    318.3    327.2    328.4    329.6    330.9    332.2    333.5
                                    OT..............     273.1    274.6    285.9    291.7    303.6    313.5    316.7    315.1    313.7    317.1    318.0
Discr.............................  BA..............     280.1    290.0    304.8    309.3    319.4    328.1    329.3    330.5    331.8    333.1    334.3
                                    OT..............     274.2    275.8    287.1    292.8    304.7    314.4    317.6    316.0    314.6    318.0    318.0
Mand..............................  BA..............      -1.1     -1.2     -1.1     -1.1     -1.1     -1.0     -0.9     -0.9     -0.9     -0.9     -0.9
                                    OT..............      -1.1     -1.2     -1.2     -1.1     -1.1     -1.0     -0.9     -0.9     -0.9     -0.9     -0.9
150...............................  BA..............      34.4     12.5     12.7     12.0     13.6     14.5     14.7     14.8     14.9     15.0     15.0
                                    OT..............      14.8     14.9     15.4     14.8     14.4     14.1     13.8     13.5     13.4     13.2     13.1
Discr.............................  BA..............      39.4     17.7     17.5     17.2     17.0     16.9     16.8     16.7     16.5     16.4     16.3
                                    OT..............      18.7     18.5     19.0     18.2     17.7     17.3     16.9     16.6     16.5     16.3     16.2
Mand..............................  BA..............      -5.0     -5.2     -4.7     -5.2     -3.5     -2.4     -2.1     -1.8     -1.6     -1.4     -1.3
                                    OT..............      -3.9     -3.7     -3.6     -3.4     -3.3     -3.2     -3.1     -3.1     -3.1     -3.1     -3.1
250...............................  BA..............      18.8     18.0     17.9     17.9     17.9     17.9     17.9     17.9     17.9     17.9     17.9
                                    OT..............      18.2     18.2     17.9     17.9     17.8     17.8     17.8     17.8     17.8     17.8     17.8
Discr.............................  BA..............      18.8     17.9     17.9     17.9     17.9     17.9     17.9     17.9     17.9     17.9     17.9
                                    OT..............      18.2     18.2     17.8     17.8     17.7     17.7     17.7     17.7     17.7     17.7     17.7
Mand..............................  BA..............       0.1      0.1      0.1      0.0      0.0      0.0      0.0      0.0      0.0      0.0      0.0
                                    OT..............       0.0      0.1      0.1      0.1      0.0      0.0      0.0      0.0      0.0      0.0      0.0
270...............................  BA..............       1.1      0.0     -1.4     -0.2     -0.1     -0.3     -0.4     -0.5     -0.5     -0.2     -0.1
                                    OT..............       0.7     -0.7     -3.1     -1.1     -1.2     -1.4     -1.5     -1.5     -1.4     -1.1     -1.1
Discr.............................  BA..............       3.0      1.8      0.5      1.9      1.9      1.9      1.9      1.9      1.9      1.9      1.9
                                    OT..............       3.2      2.6      0.8      2.0      1.9      1.9      1.9      1.9      1.9      1.9      1.9
Mand..............................  BA..............      -1.8     -1.8     -1.9     -2.1     -2.0     -2.2     -2.3     -2.4     -2.4     -2.1     -2.0
                                    OT..............      -2.6     -3.2     -3.9     -3.2     -3.2     -3.3     -3.4     -3.4     -3.4     -3.1     -3.0
300...............................  BA..............      24.2     21.5     21.2     20.7     22.5     22.5     22.5     22.6     22.7     22.7     23.0
                                    OT..............      23.4     22.2     21.7     21.0     22.6     22.5     22.4     22.5     22.4     22.4     22.7
Discr.............................  BA..............      23.5     20.7     20.7     20.3     22.0     22.0     22.1     22.1     22.2     22.2     22.2
                                    OT..............      22.7     21.5     21.1     20.6     22.1     22.1     22.1     22.1     22.0     22.0     22.1
Mand..............................  BA..............       0.7      0.8      0.5      0.5      0.5      0.5      0.5      0.5      0.5      0.5      0.8
                                    OT..............       0.8      0.8      0.7      0.4      0.5      0.4      0.3      0.4      0.4      0.3      0.7
350...............................  BA..............      22.5     14.8     13.5     11.3     12.0     12.1     10.6     10.6     10.7     10.8     10.9
                                    OT..............      20.4     13.7     11.3      9.5     10.3     10.5      9.9      9.1      9.1      9.2      9.2
Discr.............................  BA..............       4.3      3.9      3.7      3.7      3.6      3.6      3.6      3.6      3.6      3.6      3.6
                                    OT..............       4.3      4.0      3.8      3.7      3.6      3.6      3.6      3.6      3.6      3.6      3.6
Mand..............................  BA..............      18.1     10.9      9.8      7.6      8.3      8.4      6.9      7.0      7.1      7.1      7.2
                                    OT..............      16.1      9.6      7.5      5.8      6.7      6.9      6.3      5.5      5.5      5.6      5.6
370...............................  BA..............       1.9      9.7     10.3     13.8     14.5     13.9     12.7     12.6     12.7     12.6     13.4
                                    OT..............       0.8      4.3      5.4      9.5     10.9     10.4      9.4      9.1      8.9      8.5      8.8
Discr.............................  BA..............       3.5      3.7      2.1      1.7      1.8      1.8      1.8      1.8      1.8      1.8      2.8
                                    OT..............       3.2      3.9      2.2      1.7      1.8      1.7      1.7      1.7      1.8      1.7      2.7
Mand..............................  BA..............      -1.6      6.0      8.1     12.1     12.7     12.1     10.9     10.8     10.9     10.8     10.7
                                    OT..............      -2.3      0.4      3.2      7.8      9.1      8.7      7.7      7.4      7.1      6.7      6.2
400...............................  BA..............      51.3     51.3     51.1     51.5     52.5     52.6     52.6     52.6     52.7     52.7     52.7
                                    OT..............      44.0     45.3     47.7     47.8     46.7     46.2     46.0     46.0     46.0     46.0     46.0
Discr.............................  BA..............      14.4     12.2     11.9     11.3     11.2     11.2     11.2     11.2     11.2     11.2     11.2
                                    OT..............      42.0     43.4     45.4     45.8     44.9     44.5     44.3     44.3     44.3     44.3     44.3
Mand..............................  BA..............      36.8     39.1     39.2     40.2     41.3     41.4     41.4     41.4     41.5     41.5     41.5
                                    OT..............       1.9      1.9      2.3      2.0      1.9      1.7      1.7      1.7      1.7      1.7      1.7
450...............................  BA..............      10.2      5.3      2.7      1.9      2.0      2.0      2.0      2.0      2.0      2.0      2.0
                                    OT..............      11.4     10.3      7.5      4.7      3.0      2.1      1.2      0.9      0.8      0.7      0.7
Discr.............................  BA..............      10.1      5.3      2.7      2.0      2.0      2.0      2.0      2.0      2.0      2.0      2.0
                                    OT..............      11.8     10.7      8.0      5.2      3.5      2.6      1.8      1.5      1.4      1.3      1.3
Mand..............................  BA..............       0.1      0.0     -0.0     -0.1      0.0      0.0      0.0      0.0      0.0      0.0      0.0
                                    OT..............      -0.4     -0.5     -0.5     -0.5     -0.5     -0.5     -0.6     -0.6     -0.6     -0.6     -0.6
500...............................  BA..............      61.0     67.4     66.5     67.3     73.3     76.6     77.5     78.2     79.1     80.1     80.1
                                    OT..............      59.8     64.0     65.4     66.0     68.5     72.5     75.9     77.2     78.1     79.1     79.1
Discr.............................  BA..............      46.6     52.2     51.2     52.2     56.7     59.7     59.7     59.7     59.7     59.7     58.6
                                    OT..............      46.0     48.7     49.6     50.9     52.3     55.9     58.7     59.2     59.3     59.3     58.3
Mand..............................  BA..............      14.4     15.2     15.4     15.1     16.7     17.0     17.8     18.6     19.5     20.5     21.4
                                    OT..............      13.8     15.3     15.8     15.1     16.3     16.6     17.2     18.0     18.8     19.8     20.7
550...............................  BA..............     147.5    156.2    164.1    173.3    184.7    197.9    212.8    228.4    246.3    265.2    285.5
                                    OT..............     140.7    153.0    162.4    173.8    185.3    198.5    212.6    228.3    245.5    264.4    284.9
Discr.............................  BA..............      30.1     29.3     27.9     27.7     27.5     27.3     27.0     26.7     26.4     26.1     25.8
                                    OT..............      26.8     28.3     27.4     27.3     27.2     26.9     26.6     26.3     26.0     25.7     25.4
Mand..............................  BA..............     117.4    126.9    136.2    145.6    157.2    170.6    185.8    201.7    219.9    239.1    259.7
                                    OT..............     114.0    124.7    135.0    146.4    158.1    171.6    186.0    202.0    219.5    238.7    259.5
570...............................  BA..............     195.2    208.7    222.1    230.6    250.7    268.6    295.6    306.8    337.6    365.6    394.1
                                    OT..............     194.6    208.7    222.3    230.2    250.9    268.7    295.2    306.9    337.8    365.2    394.2
Discr.............................  BA..............       3.0      3.0      3.0      3.0      3.0      3.0      3.0      3.0      3.0      3.0      3.0
                                    OT..............       2.8      3.0      3.0      3.0      3.0      3.0      3.0      3.0      3.0      3.0      3.0
Mand..............................  BA..............     192.2    205.7    219.1    227.6    247.8    265.6    292.6    303.8    334.6    362.7    391.1
                                    OT..............     191.8    205.7    219.3    227.2    247.9    265.8    292.2    303.9    334.8    362.2    391.3
600...............................  BA..............     235.2    244.4    250.9    263.6    276.4    285.6    297.9    304.2    310.0    323.3    333.6
                                    OT..............     238.2    248.1    257.0    266.6    276.2    285.4    298.1    304.6    310.9    324.8    335.1
Discr.............................  BA..............      33.1     28.7     28.3     30.9     34.6     35.2     35.7     36.2     36.7     37.2     37.9
                                    OT..............      40.6     39.4     39.4     39.4     39.3     39.4     39.7     40.0     40.4     40.9     41.4
Mand..............................  BA..............     202.1    215.7    222.6    232.7    241.8    250.4    262.2    267.9    273.3    286.1    295.7
                                    OT..............     197.6    208.7    217.6    227.2    236.8    246.0    258.4    264.6    270.6    283.9    293.7
650...............................  BA..............     390.6    407.2    426.0    445.9    467.0    489.8    514.6    540.9    568.7    599.0    633.6
                                    OT..............     390.8    407.3    426.0    445.9    467.0    489.7    514.5    540.8    568.7    599.0    633.6
Discr.............................  BA..............       3.2      3.2      3.2      3.2      3.2      3.2      3.2      3.2      3.2      3.2      3.2
                                    OT..............       3.3      3.3      3.1      3.1      3.1      3.1      3.1      3.1      3.1      3.1      3.1
Mand..............................  BA..............     387.5    404.1    422.9    442.7    463.8    486.6    511.4    537.7    565.6    595.8    630.5
                                    OT..............     387.5    404.1    422.9    442.7    463.8    486.6    511.4    537.7    565.6    595.8    630.5
700...............................  BA..............      43.0     44.7     44.3     44.7     45.5     45.9     48.3     46.8     47.4     48.0     48.6
                                    OT..............      42.9     45.1     45.0     45.1     46.0     46.3     48.8     47.4     45.8     48.5     49.2
Discr.............................  BA..............      19.3     20.2     19.1     19.0     19.0     19.0     19.0     18.9     18.9     18.9     18.9
                                    OT..............      19.1     20.4     19.5     19.1     19.1     19.0     18.9     18.9     18.8     18.8     18.8
Mand..............................  BA..............      23.8     24.5     25.1     25.7     26.5     26.9     29.4     27.9     28.5     29.1     29.7
                                    OT..............      23.9     24.6     25.5     26.0     26.9     27.4     29.9     28.5     27.0     29.7     30.4
750...............................  BA..............      26.7     23.4     24.7     24.7     24.6     24.5     24.4     24.2     24.1     24.0     23.8
                                    OT..............      25.1     25.3     25.1     24.9     24.4     24.4     24.2     24.1     24.0     23.9     23.7
Discr.............................  BA..............      26.1     23.1     24.4     24.4     24.4     24.4     24.4     24.3     24.3     24.3     24.3
                                    OT..............      24.3     25.1     25.0     24.8     24.4     24.4     24.4     24.3     24.3     24.3     24.3
Mand..............................  BA..............       0.5      0.3      0.2      0.2      0.2      0.1     -O.0     -O.1     -O.2     -O.3     -O.4
                                    OT..............       0.7      0.2      0.1      0.1      0.0     -O.0     -O.1     -O.2     -O.3     -O.4     -O.5
800...............................  BA..............      17.2     12.3     11.9     12.1     12.1     12.1     12.1     12.1     12.2     12.2     12.2
                                    OT..............      15.7     13.5     12.6     12.3     12.2     12.2     11.9     11.8     11.9     12.1     11.9
Discr.............................  BA..............      14.3     11.4     11.0     11.1     11.1     11.1     11.1     11.1     11.1     11.1     11.1
                                    OT..............      12.9     12.3     11.7     11.4     11.2     11.0     10.9     10.9     10.9     10.9     10.9
Mand..............................  BA..............       2.9      0.9      0.9      1.0      1.0      1.0      1.0     1.01      1.0      1.0      1.0
                                    OT..............       2.9      1.2      0.9      0.9      1.0      1.1     1.10      0.9      1.0      1.2      1.0
900...............................  BA..............     229.4    217.9    207.4    196.8    186.9    176.9    165.6    153.9    142.2    129.0    115.7
                                    OT..............     229.4    217.9    207.4    196.8    186.9    176.9    165.6    153.9    142.2    129.0    115.7
Discr.............................  BA..............  ........  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......
                                    OT..............  ........  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......
Mand..............................  BA..............     229.4    217.9    207.4    196.8    186.9    176.9    165.6    153.9    142.2    129.0    115.7
                                    OT..............     229.4    217.9    207.4    196.8    186.9    176.9    165.6    153.9    142.2    129.0    115.7
920...............................  BA..............  ........     -8.0     -8.5     -6.4     -4.4     -4.5     -4.5     -4.6     -5.2     -5.3     -5.3
                                    OT..............  ........     -8.1     -1.9     -2.0     -4.8     -5.0     -5.1     -5.2     -5.8     -5.9     -5.9
Discr.............................  BA..............  ........     -8.0     -8.5     -6.4     -4.4     -4.5     -4.5     -4.6     -5.2     -5.3     -5.3
                                    OT..............  ........     -8.1    -12.9    -20.0     -4.8     -5.0     -5.1     -5.2     -5.8     -5.9     -5.9
Mand..............................  BA..............  ........  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......
                                    OT..............  ........  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......
950...............................  BA..............     -40.1    -42.2    -45.3    -52.8    -47.2    -48.0    -49.8    -51.2    -53.2    -54.9    -56.7
                                    OT..............     -40.1    -42.2    -45.3    -52.8    -47.2    -48.0    -49.8    -51.2    -53.2    -54.9    -56.7
Discr.............................  BA..............  ........  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......
                                    OT..............  ........  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......
Mand..............................  BA..............     -40.1    -42.2    -45.3    -52.8    -47.2    -48.0    -49.8    -51.2    -53.2    -54.9    -56.7
                                    OT..............     -40.1    -42.2    -45.3    -52.8    -47.2    -48.0    -49.8    -51.2    -53.2    -54.9    -56.7
Total.............................  BA..............    1749.3   1754.0   1795.8   1837.0   1922.7   1987.5   2055.3   2102.0   2173.2   2251.9   2333.5
                                    OT..............    1704.1   1735.4   1774.7   1804.6   1893.2   1957.3   2027.9   2071.2   2136.5   2218.8   2300.2
Discr.............................  BA..............     572.8    536.3    541.3    550.4    571.8    583.8    585.0    586.2    587.0    588.2    589.6
                                    OT..............     574.1    570.9    571.0    567.0    592.7    603.6    608.0    606.1    603.9    607.0    607.9
Mand..............................  BA..............    1176.5   1217.7   1254.4   1286.6   1350.9   1403.7   1470.3   1515.8   1586.2   1663.7   1743.8
                                    OT..............    1129.9   1164.4   1203.6   1237.6   1300.5   1353.7   1419.9   1465.1   1532.6   1611.8   1692.2
Revenues..........................  ................    1814.6   1870.0   1923.0   1961.5   2058.3   2134.8   2225.1   2283.3   2363.9   2459.9   2549.8
Surplus...........................  ................     110.5    134.6    148.3    156.8    165.1    177.5    197.2    212.1    227.4    241.1    249.6
    On-budget.....................  ................     -19.3     -6.3      0.0      0.0     -0.0      2.9      9.8     14.8     19.8     24.8     27.8
    Off-budget....................  ................     129.8    140.9    148.3    156.8    165.1    174.6    187.4    197.2    207.7    216.3    221.8
--------------------------------------------------------------------------------------------------------------------------------------------------------


  SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET
                                           ACT--BUDGET YEAR TOTAL 2000
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                       Direct spending       Entitlements funded
                                                                        jurisdiction              in annual
                                                                 --------------------------  appropriations act
                            Committee                                                      ---------------------
                                                                     Budget      Outlays      Budget
                                                                   authority                authority   Outlays
----------------------------------------------------------------------------------------------------------------
Appropriations:
    General Purpose Discretionary...............................     531,771      536,700           0          0
    Violent Crime Reduction Trust Fund..........................       4,500        5,554           0          0
    Highways....................................................           0       24,574
    Mass Transit................................................           0        4,117
    Mandatory...................................................     321,502      304,297           0          0
                                                                 -----------------------------------------------
      Total.....................................................     857,773      875,242           0          0
                                                                 ===============================================
Agriculture, Nutrition, and Forestry............................      10,843        7,940      26,696      9,419
Armed Services..................................................      49,327       49,433           0          0
Banking, Housing, and Urban Affairs.............................       4,676       (1,843)          0          0
Commerce, Science, and Transportation...........................       8,420        5,774         721        717
Energy and Natural Resources....................................       2,336        2,258          40         63
Environmental and Public Works..................................      36,532        2,041           0          0
Finance.........................................................     683,333      676,384     159,910    157,096
Foreign Relations...............................................       9,354       11,976           0          0
Governmental Affairs............................................      59,501       57,941           0          0
Judiciary.......................................................       4,759        4,235         234        234
Labor and Human Resources.......................................       9,023        8,363       1,309      1,309
Rules and Administration........................................         114          289           0          0
Veterans' Affairs...............................................       1,106        1,381      23,667     23,540
Indian Affairs..................................................         151          150           0          0
Small Business..................................................           0         (155)          0          0
Unassigned to Committee.........................................    (310,317)    (293,117)          0          0
                                                                 -----------------------------------------------
      Total.....................................................   1,426,931    1,408,292     209,577    192,378
----------------------------------------------------------------------------------------------------------------


  SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET
                                          ACT--5-YEAR TOTAL: 2000-2004
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                       Direct spending       Entitlements funded
                                                                         jurisdiction             in annual
                                                                  -------------------------  appropriations acts
                            Committee                                                      ---------------------
                                                                     Budget      Outlays      Budget
                                                                    authority               authority   Outlays
----------------------------------------------------------------------------------------------------------------
Agriculture, Nutrition, and Forestry.............................      46,012      29,869     100,467     52,240
Armed Services...................................................     263,769     263,577           0          0
Banking, Housing, and Urban Affairs..............................      31,606      (2,456)          0          0
Commerce, Science, and Transportation............................      65,503      50,347       3,887      3,868
Energy and Natural Resources.....................................      11,023      11,009         200        236
Environment and Public Works.....................................     179,132       8,214           0          0
Finance..........................................................   3,589,523   3,570,816     905,958    909,007
Foreign Relations................................................      42,596      52,913           0          0
Governmental Affairs.............................................     316,771     308,444           0          0
Judiciary........................................................      23,791      22,792       1,170      1,170
Labor and Human Resources........................................      48,269      45,687       6,784      6,784
Rules and Administration.........................................         488         660           0          0
Veterans' Affairs................................................       4,350       6,361     125,438    125,110
Indian Affairs...................................................         716         717           0          0
Small Business...................................................           0        (625)          0          0
----------------------------------------------------------------------------------------------------------------


  SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET
                                          ACT--10-YEAR TOTAL: 2000-2009
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                     Direct spending      Entitlements funded in
                                                                       jurisdiction        annual appropriations
                                                                -------------------------          acts
                           Committee                                                     -----------------------
                                                                   Budget      Outlays      Budget
                                                                  authority                authority    Outlays
----------------------------------------------------------------------------------------------------------------
Agriculture, Nutrition, and Forestry...........................      81,410      51,523      198,127     117,538
Armed Services.................................................     574,119     573,458            0           0
Banking, Housing, and Urban Affairs............................      88,649      (2,399)           0           0
Commerce, Science, and Transportation..........................     146,837     115,670        8,558       8,519
Energy and Natural Resources...................................      21,822      22,406          400         436
Environment and Public Works...................................     339,303      13,501            0           0
Finance........................................................   7,745,497   7,723,734    2,237,130   2,239,681
Foreign Relations..............................................      81,782      93,179            0           0
Governmental Affairs...........................................     694,369     675,609            0           0
Judiciary......................................................      41,315      39,775        2,336       2,340
Labor and Human Resources......................................     101,790      96,528       14,180      14,180
Rules and Administration.......................................         950       1,140            0           0
Veterans' Affairs..............................................       5,465      10,744      269,182     266,592
Indian Affairs.................................................       1,407       1,403            0           0
Small Business.................................................           0        (820)           0           0
----------------------------------------------------------------------------------------------------------------

V. Budget Resolutions: Enforcement, Other Provisions and Reconciliation

    A budget resolution does not become law and cannot amend 
law. However, a budget resolution's miscellaneous provisions 
can affect the consideration of legislation to implement and 
enforce the underlying policy assumptions contained in such 
budget resolution. The Committee-reported resolution contains a 
number of provisions which implement policies assumed in this 
resolution while maintaining a balanced budget excluding the 
Social Security surplus.
    Title I of the Committee-reported resolution contains two 
provisions to address the fact that Congress never adopted a 
fiscal year 1999 budget resolution and to focus attention on 
debt held by the public levels. Section 1(a)(2) of the 
Committee-reported resolution contains language that 
incorporates the levels in the deeming resolution passed by the 
Senate at the end of the 105th Congress as the fiscal year 1999 
budget resolution. Section 101(6) provides advisory debt held 
by the public levels in the budget resolution. These debt held 
by the public levels reflect the fact that the resolution 
devotes the entire Social Security surplus to the reduction of 
debt held by the public.
    Title II of the Committee-reported resolution contains nine 
sections that either modify budget procedures for consideration 
of legislation or authorize the Chairman of the Budget 
Committee to alter the levels in the budget resolution to 
accommodate Senate consideration of certain legislation.
    Each of these sections are discussed in more detail below. 
Many of these sections make reference to the terms ``on-
budget'' and ``deficit.'' The Office of Management and Budget 
and the Congressional Budget Office generally distinguish 
between on-budget and off-budget activities in the federal 
budget. ``On-budget'' means the receipts and disbursements of 
all Federal government accounts, funds, and functions except 
the receipts and disbursements of the two Social Security trust 
funds and the Postal Service.
    The whole premise of this resolution is to ensure that the 
on-budget deficit is eliminated and to prohibit consideration 
of legislation resulting in an on-budget deficit in the future. 
In addition, the resolution produces a $133 billion on-budget 
surplus over the next 10 years. The Committee does intend that 
on-budget surpluses may be made available for tax relief, up to 
$6 billion in targeted agriculture spending, and for a 
prescription drug benefit if it is part of legislation that 
significantly extends the solvency of the Medicare Hospital 
Insurance Trust Fund that does not rely on general fund 
transfers.
    Some interpret a surplus to be a ``negative deficit.'' The 
Committee does not intend that this interpretation apply for 
the purposes of this resolution. More specifically, for the 
purposes of title II, a reduction in the on-budget surplus is 
not considered an increase in the on-budget deficit.

Section 201: Reserve fund for a fiscal year 2000 surplus

    The Committee-reported resolution adopts a proposal by 
Senator Grams to allow any windfall that might result from a 
revision of the budget forecast to be devoted to additional tax 
relief. The Committee-reported resolution calls on CBO to 
complete its update of the economic and budget forecast for the 
2000 budget by July 15. Next, if CBO's revised projection shows 
an on-budget surplus for 2000, this reserve fund requires the 
Chairman to adjust the revenue level, the pay-as-you-go 
balance, and the revenue reconciliation instruction by the 
amount of the on-budget surplus for 2000.

Section 202: Reserve fund for agriculture

    The spending levels in the Committee-reported resolution 
incorporate Senators Grams and Grassley's proposal for $6 
billion in additional spending for agriculture. The Committee-
reported resolution ensures that up to $6 billion is made 
available for legislation that addresses risk management and 
income assistance to agriculture producers through a reserve 
fund. If the Senate Agriculture Committee reports legislation 
that provides risk management and income assistance to 
agriculture producers, then the Chairman of the Budget 
Committee is authorized to increase the Agriculture Committee's 
allocation of budget and outlays to accommodate this additional 
spending. The reserve fund provides that this legislation 
cannot cause an on-budget deficit.
    The Committee adopted an amendment by Senators Conrad, 
Grassley, and Grams that would allow an additional $500 million 
in agriculture spending in fiscal year 2000, but this 
additional spending must be offset by reductions in direct 
spending.

Tax reduction reserve fund

    The Committee-reported resolution provides a reserve fund 
that allows the Chairman of the Budget Committee to adjust the 
spending and revenue limits for legislation that reduces 
revenues as long as the legislation does not cause an on-budget 
deficit for the first year, the sum of the first five years 
covered by the budget resolution, and the sum of the ten years 
covered by the resolution.

Section 204: Clarification of the Senate's pay-as-you-go rule

    The Committee-reported resolution includes language that 
clarifies that the Senate pay-as-you-go rule still applies 
until the budget is balanced excluding the transactions of the 
Social Security trust fund. This change would prohibit the 
expenditure of Social Security surpluses, but would allow on-
budget surpluses to be used to offset tax reductions or 
spending increases. As amended by the resolution, the pay-go 
point of order (section 202 of H. Con. Res. 67 104th Congress) 
would read as follows (new language is indicated by italic):

SEC. 202 EXTENSION OF PAY-AS-YOU-GO POINT OF ORDER

    (a) Purposes.--The Senate declares that it is essential 
to--
          (1) ensure continued compliance with the balanced 
        budget plan set forth in this resolution; and
          (2) continue the pay-as-you-go enforcement system.
    (b) Point of Order.--
          (1) In general.--It shall not be in order in the 
        Senate to consider any direct spending or revenue 
        legislation that would increase the on-budget deficit 
        or cause an on-budget deficit for any one of the three 
        applicable time periods as measured in paragraphs (5) 
        and (6).
          (2) Applicable time periods.--For purposes of this 
        subsection the term ``applicable time period'' means 
        any one of the three following periods:
                  (A) The first year covered by the most 
                recently adopted concurrent resolution on the 
                budget.
                  (B) The period of the first five fiscal years 
                covered by the most recently adopted concurrent 
                resolution on the budget.
                  (C) The period of the five fiscal years 
                following the first five fiscal years covered 
                by the most recently adopted concurrent 
                resolution on the budget.
          (3) Direct-spending legislation.--For purposes of 
        this subsection and except as provided in paragraph 
        (4), the term ``direct-spending legislation'' means any 
        bill, joint resolution, amendment, motion, or 
        conference report that affects direct spending as that 
        term is defined by and interpreted for purposes of the 
        Balanced Budget and Emergency Deficit Control Act of 
        1985.
          (4) Exclusion.--For purposes of this subsection the 
        terms ``direct-spending legislation'' and ``revenue 
        legislation'' do not include--
                  (A) any concurrent resolution on the budget; 
                or
                  (B) any provision of legislation that affects 
                the full funding of, and continuation of, the 
                deposit insurance guarantee commitment in 
                effect on the date of enactment of the Budget 
                Enforcement Act of 1990.
          (5) Baseline.--Estimates prepared pursuant to this 
        section shall--
                  (A) use the baseline used for the most 
                recently adopted concurrent resolution on the 
                budget; and
                  (B) be calculated under the requirements of 
                subsection (b) through (d) of section 257 of 
                the Balanced Budget and Emergency Deficit 
                Control Act of 1985 for fiscal years beyond 
                those covered by that concurrent resolution on 
                the budget.
          (6) Prior surplus.--If direct spending or revenue 
        legislation increases the on-budget deficit or causes 
        an on-budget deficit when taken individually, then it 
        must also increase the on-budget deficit or causes an 
        on-budget deficit when taken together with all direct 
        spending and revenue legislation enacted since the 
        beginning of the calendar year not accounted for in the 
        baseline under paragraph (5)(A), except that the direct 
        spending or revenue effects resulting from legislation 
        enacted pursuant to the reconciliation instructions 
        included in that concurrent resolution on the budget 
        shall not be available.
    (c) Waiver.--This section may be waived or suspended in the 
Senate only by the affirmative vote of three-fifths of the 
Members, duly chosen and sworn.
    (d) Appeals.--Appeals in the Senate from the decisions of 
the Chair relating to any provision of this section shall be 
limited to 1 hour, to be equally divided between, and 
controlled by, the appellant and the manager of the bill or 
joint resolution, as the case may be an affirmative vote of 
three-fifths of the Members of the Senate, duly chosen and 
sworn, shall be required in the Senate to sustain an appeal of 
the ruling of the Chair on a point of order raised under this 
section.
    (e) Determination of Budget Levels.--For purposes of this 
section, the levels of new budget authority, outlays, and 
revenues for a fiscal year shall be determined on the basis of 
estimates made by the Committee on the Budget of the Senate.
    (f) Conforming Amendment.--Section 23 of House Concurrent 
Resolution 218 (103d Congress) is repealed.
    (g) Sunset.--Subsections (a) through (e) of this section 
shall expire September 30, 2002.

Section 205: Emergency designation point of order

    The Committee-reported resolution would curb the abuse of 
spending the Social Security surplus on so-called 
``emergencies.'' Under sections 251(1)(b)(2)(A) and 252(e) of 
the Balanced Budget and Emergency Deficit Control Act of 1985, 
if Congress and the President designate a provision of 
legislation an emergency, it is exempt from the statutory 
limits on appropriations legislation and the pay-as-you-go 
requirement for all other legislation.
    The Committee-reported resolution makes language 
designating a provision of legislation as an ``emergency'' 
subject to a 60 vote point of order in the Senate. If a point 
of order was raised and sustained against such language, that 
language would be stricken from the measure. The committee 
intends that this point of order be comprehensive in nature. It 
intends that it apply to provisions in House legislation and 
provisions in amendments that make emergency designations as 
provided in the Balanced Budget and Emergency Deficit Control 
Act of 1985. If a point of order was sustained against a 
provision making an emergency designation, that language would 
be removed from the bill, resolution, motion, amendment or 
conference report. The language providing the spending or 
revenue change would remain in the measure and it would be up 
to the Senate to decide whether to strike the language, offset 
its cost, or risk a sequester order once it was enacted into 
law.

Section 206: Authority to provide committee allocations

    Section 302 of the Budget Act requires the statement of 
managers accompanying a conference report on a budget 
resolution to include an allocation of spending authority to 
committees. Since this budget resolution may not go to 
conference, the Committee-reported resolution requires the 
Chairman of the Budget Committee to file allocations that are 
consistent with the budget resolution.

Section 207: Reserve fund for use of OCS receipts

    This section provides a reserve fund that would allow 
committee allocations to be adjusted for legislation providing 
new direct spending for historic preservation, recreation and 
land, water, fish, and wildlife conservation efforts to support 
coastal needs and activities. The Committee intends that this 
reserve fund accommodate an increase in spending for these 
programs if they are offset by reductions in direct spending. 
It would not allow revenue increases to offset spending 
increases.

Section 208: Reserve fund for Medicare managed plans

    This section provides a reserve fund that would allow 
committee allocations to be adjusted for legislation providing 
new direct spending for Medicare managed plans agreeing to 
serve elderly patients for at least 2 years and whose 
reimbursement was reduced because of risk management 
regulations. The Committee intends that this reserve fund 
accommodate an increase in spending for these programs if they 
are offset by reductions in direct spending. It would not allow 
revenue increases to offset spending increases.

Section 209: Reserve fund for Medicare and prescription drugs

    This section provides a reserve fund as proposed by Senator 
Snowe that would allow committee allocations and spending 
aggregates to be adjusted for legislation that significantly 
extends the solvency of the Medicare Hospital Insurance (HI) 
Trust Fund without the use of transfers of new subsidies from 
the general fund. Subsection (a) reserve fund is designed to 
accommodate legislation that reforms the Medicare program and 
extends the solvency of the HI trust fund. It would not allow 
revenue increases to offset spending increases.
    While the Committee-reported resolution did not set a 
specific time period for the extension of the solvency of the 
HI trust fund, this section would require that the HI trust 
fund's solvency must be extended ``significantly'' before this 
reserve fund could be triggered. The National Bipartisan 
Commission on the Future of Medicare considered a plan to 
extend the solvency of the HI trust fund by 9 years and the 
President's budget claims to extend solvency be extended by 12 
years. The Committee notes that the plan considered by the 
Commission, and supported by ten of its 17 members, would 
increase spending slightly in the first three years but would 
reduce spending by $6 billion over ten years, according to 
Commission staff estimates.
    The Committee-reported resolution would not allow this 
reserve fund to be triggered if the Medicare reform legislation 
extends the solvency of the HI trust fund with the use of new 
intergovernmental transfers such as those proposed in the 
President's fiscal year 2000 budget. The President's budget 
proposes to extend the solvency of this trust fund to 2020 with 
transfers of $900 billion from the general fund. This transfer 
is a new subsidy from the general fund that will increase the 
public debt by $900 billion, put a huge tax burden on future 
generations, and does nothing to reform the Medicare program or 
the fiscal challenges this program presents to the country in 
coming years.
    Subsection (b) provides that if legislation meets the 
requirements to extend the solvency of the HI trust fund as 
discussed above, then this reserve fund provides that 
adjustments to committee allocations and aggregates may be made 
to address the cost of prescription drugs. In this instance, 
the Committee intends that this adjustment could be made out of 
the on-budget surplus as long as it does not cause or increase 
an on-budget deficit for the first year, the sum of the first 
five years, or the sum of the second five years covered by this 
resolution.

Section 210: Rulemaking authority

    This section contains language regarding the rulemaking 
authority of each of the Houses of Congress.
    Title III of the resolution contains the following non-
binding language that expresses the will or intent of either or 
both Houses of the Congress:
          Sense of the Senate on Marriage Penalty;
          Sense of the Senate on Improving Security for 
        Diplomatic Missions;
          Sense of the Senate on Access to Medicare Home Health 
        Services;
          Sense of the Senate on Deductibility of Health 
        Insurance for Self-Employed;
          Sense of the Senate on Tax Reductions and Working 
        Families;
          Sense of the Senate on the National Guard;
          Sense of the Senate on Social Security Reform and 
        Women;
          Sense of the Senate on NIH funding;
          Sense of the Congress on Funding for Kyoto Protocol 
        Implementation;
          Sense of the Senate on Federal Research and 
        Development;
          Sense of the Senate on Counter-Narcotics Funding;
          Sense of the Senate on Tribal Colleges;
          Sense of the Senate on the Social Security Surplus;
          Sense of the Senate on the Sale of Governor's Island; 
        and
          Sense of the Senate on Pell Grants.

                             reconciliation

    The Committee-reported resolution contains reconciliation 
instructions to the tax-writing committees to reduce revenues 
by $142.034 billion for the sum of the first five years covered 
by the resolution and by $777.587 billion for the sum of the 
ten years covered by the resolution.
    Debt subject to limit currently stands at $5.5 trillion, 
well below the current limit of $5.95 trillion. The President's 
budget proposes to increase the debt subject to limit by $3 
trillion over the ten year period. The Committee rejected the 
President's proposed debt increase and is concerned with the 
amount by which the statutory limit exceeds current levels of 
debt. As a result, the Committee- 
reported resolution contains a reconciliation instruction to 
temporarily reduce this statutory debt limit to $5.865 to 
ensure the President's proposal to increase the debt cannot be 
accommodated.
    The Committee-reported resolution directs the House Ways 
and Means Committee to report reconciliation legislation by 
June 11, 1999. The Senate Finance Committee would be required 
to report reconciliation legislation by June 18, 1999.

                     Committee Views and Estimates

    Section 301(c) of the Congressional Budget Act requires the 
committees of the Senate to report to the Budget Committees the 
views and estimates of budget requirements for matters within 
their jurisdictions to assist the Budget Committees in 
preparing the budget resolution.
    Following are the views and estimates received from the 
various committees:





                   VII. Additional and Minority Views

                              ----------                              


                   ADDITIONAL VIEWS OF SENATOR GORTON

    The budget resolution passed by the Committee presents 
clear differences between Senate Republicans and the President, 
the Vice President and their supporters in Congress on saving 
Social Security, Medicare, tax relief, and abiding by the 
spending caps. Each of these distinctions received a great deal 
of attention during Committee consideration, rightfully so, and 
will likely generate further debate on the Senate Floor, in 
which I intend to actively participate. I especially look 
forward to the discussing Republican's plans to return non-
Social Security surpluses to American taxpayers by tax 
reductions of $142 billion over five years and $778 billion 
over ten years versus the President's plan to increase taxes 
$96 billion and spend the surplus, creating 81 new government 
programs. The difference is clear: tax relief or more spending 
and more government programs.
    My intent in filing Additional Views is to focus attention 
and elaborate on two of my top priorities: (1) the need to make 
a fundamental shift from the current federal education system 
that is focused on regulation and paperwork to one that makes 
learning the first priority and directs dollars and decision-
making authority to the local level; and (2) standing up for 
and providing for my home state of Washington.

                      making education a priority

    This resolution clearly reflects my view that new federal 
education funding should not be directed into our current 
system where taxpayer dollars fund federal and state 
bureaucracies. Instead we need to ensure that the taxpayers' 
investment makes it to the classroom and funds the education of 
our children, not simply the perpetuation of institutions. 
Education dollars and decision-making authority should be sent 
back where it belongs: our local schools. Parents, teachers and 
school officials in our local communities and states are in a 
better position to improve education for our children than 
federal bureaucracies. It is equally important that we ensure 
new funding does not add to the existing regulatory burden. Our 
teachers should be spending time in the classroom, not filling 
out paperwork. This progressive change from a system of one-
size-fits-all federal programs focused on procedure and 
paperwork to one that is centered on children and learning 
first is my top priority. I am very pleased this budget 
resolution reflects the reality that true innovation in our 
education system will never happen in federal office buildings, 
that it will only happen when it's driven by parents and 
educators who look our children in the eye every day of the 
week and think about their families.

                      washington state priorities

New funding for salmon recovery
    The resolution assumes increased funding for salmon 
recovery efforts in the Pacific Northwest. The resolution also 
clearly states that these funds should be ``efficiently and 
expeditiously directed to local communities and salmon 
restoration organizations.''
    I am pleased the resolution not only recognizes the need 
for additional federal funds for salmon recovery, but that it 
reflects my view that local communities and restoration 
organizations, and not federal agency officials, are in the 
best position and will make the best decisions regarding salmon 
restoration. For too long, the federal government has adhered 
to a ``top-down'' approach to salmon recovery. The result has 
been no more fish and $3 billion wasted.
    Following the March 16th endangered and threatened species 
listings of nine salmon species in the Pacific Northwest, it is 
time for the federal government to let those who will be 
affected by these decisions make the recovery decisions. Salmon 
are a critical part of the Northwest way of life, so 
Northwesterners should decide how to fix this problem without 
being told how to do it from Washington, DC. A fundamental 
shift must be made from the current federal salmon restoration 
effort that is focused on dictates from Washington, DC, more 
bureaucrats, no accountability and money wasted to one that 
spends our tax dollars wisely, gets more fish into streams and 
has clear and measurable goals.
    By establishing Northwest salmon recovery as a priority in 
this budget resolution, we have taken a significant step toward 
the appropriation of new funds for salmon restoration and 
conservation efforts at the local level.
Full funding for Hanford
    The budget resolution includes language important to the 
Department of Energy's continuing mission at the Hanford 
Nuclear Reservation. The resolution assumes that the DOE's 
Environmental Management program is fully funded at the 
President's request level for FY 2000 and ensures that 
sufficient funds are provided in FY2000 and beyond to comply 
with cleanup agreements governing DOE sites, such as the Tri-
Party Agreement on Hanford that was jointly entered into by the 
DOE, EPA and Washington state Department of Ecology.
    Inclusion of this language represents the beginning of my 
efforts to ensure the Tri-Party Agreement is fully funded for 
FY2000. As a member of the Senate Appropriations Energy and 
Water Subcommittee, I will continue to work toward achieving 
full funding.
Rejecting the President's Antitrust Division spending increase
    The budget resolution rejects the President's request for a 
15 percent increase in funding for the Antitrust Division of 
the Department of Justice. I am pleased that the resolution 
reflects my view that additional spending by the Antitrust 
Division is unwarranted given the Division's unwillingness to 
provide a full accounting of current spending on the antitrust 
suit against Microsoft. As a member of the Senate 
Appropriations Committee, I will continue to oppose the 
President's requested increase unless the Attorney General 
provides satisfactory answers to questions I have submitted 
concerning the Antitrust Division's FY1999 spending.
New Seattle courthouse
    The budget resolution maintains the FY1999 commitment made 
by the Congress to the construction/site-and-design of federal 
courthouses. The funding assumed in the resolution would 
provide the funds necessary for the construction of the long-
awaited and much-needed new courthouse facility in Seattle. Now 
that this priority has been set, I will continue to work, as a 
member of the Appropriations Committee, for passage of real 
funding in FY2000 to construct the Seattle Courthouse on-
schedule and without costly delay.

                                                      Slade Gorton.

                  ADDITIONAL VIEWS OF SENATOR ABRAHAM

    This budget represents the priorities our country needs to 
make as we embark upon a new era, one in which we have the 
fortunate problem of determining how best to utilize budget 
surpluses. The question now is, what shall we do with these 
surpluses? Well, we've seen the President's plan: Over $200 
billion in new taxes, fees and other revenue raisers; at least 
77 spending increases; a plan to trade IOUs back and forth to 
make it look like the Social Security system is being saved 
without instituting needed reforms; and a massive expansion of 
the Medicare entitlement without reforming the system first to 
make certain it can protect the people who now depend on it.
    That program will not serve the public's best interests. It 
will not save Social Security, will not save Medicare, will not 
help the American people make ends meet and invest for their 
future. So it is with some relief that I turn to the Republican 
budget plan. As I see it, through this budget we accomplish 
four important goals:
     First, we preserve and protect Social Security and 
Medicare.
     Second, we reinvest in our national defense.
     Third, we increase and reform education spending.
     Finally, we secure economic growth into the next 
century by returning tax overpayments to the American people.
    On the first goal, protecting Social Security, I have had 
the honor of working with the Chairman in crafting the Social 
Security Surplus Protection and Deficit Reduction Act. The bill 
creates a lock-box mechanism to ensure that Social Security 
funds are used to fix Social Security and only to fix Social 
Security. It further strengthens the off-budget treatment of 
the Social Security Trust Fund. It reduces debt held by the 
public by more than the President's Framework Proposal, and 
sets absolute limits on how on the levels of that debt. More 
importantly, it provides important statutory protection against 
raiding of the Social Security Trust Fund. It does this by 
forcing a 60 vote point of order against any bill or budget 
resolution that would raid the Social Security surplus.
    This budget supports that bill and ensures that all of the 
Social Security surplus is protected for future Social Security 
benefits and any necessary reform. Unlike the President's 
budget that would spend almost $160 billion of the Social 
Security surpluses on new, non-Social Security programs, this 
budget makes sure every dollar of that surplus is protected 
from such raiding. In fact, I was proud to cosponsor an 
amendment to this budget, offered by Senator Snowe, that 
specifically stated the Congress should reject any budget that 
attempted to spend the surplus as did the President's. I am 
pleased that the vast majority of the Democrats on the 
Committee joined with Senator Snowe and myself, as well as the 
entire Republican membership, in supporting this amendment and 
rejecting the President's raiding of the Social Security 
system.
    Many opposed to this budget because they did not believe it 
provided adequate protection for the future solvency of 
Medicare. However, considering a majority of the members of the 
Bipartisan Commission on Medicare Reform proposed a reform plan 
that would have saved over $100 billion in Medicare 
expenditures, the solution to Medicare's growing problems is 
not to throw more money at the problem, or to willy-nilly 
expand benefits. Rather, we must take a critical eye at how the 
program is currently structured to find ways to control the 
explosion in program costs we have suffered over the years, 
judiciously restructure the program to meet the critical needs 
faced by our seniors, and remember that simply pouring more 
money into the system will undermine any efforts we have to 
protect the Medicare system for current and future 
beneficiaries by taking away any incentive for reform.
    I wish to point out that neither of the amendments offered 
by Senators Hollings and Conrad to shift over $380 billion of 
income tax revenue to some unspecified ``Medicare Reserve 
Fund'' would have done anything to extend Medicare's solvency 
past it's expected insolvency date of 2008. In fact, by serving 
as an impetus for more new spending and benefits expansion, it 
may very well have hastened the Medicare system's bankruptcy. 
This budget, however, provides over $300 billion more than the 
President's budget as well as setting aside an additional $132 
billion that is available for Medicare should responsible 
reform legislation be presented. However, I supported the 
amendment offered by Senator Snowe to provide a reserve fund to 
allow for Medicare reform legislation, that could include 
prescription drug programs for lower- and moderate-income 
beneficiaries, while still maintaining the fiscal discipline 
for which we have fought so hard.
    Next, our second goal is to rebuild and improve our 
military deterrent. This budget will accomplish that goal by 
increasing defense spending $445 billion over the next 10 
years. Despite the end of the Cold War, the world remains a 
dangerous place. We face an increasingly powerful regime in 
communist China. We face a regime in North Korea that allows 
its own people to starve as it strives to develop nuclear 
weapons and the means to use them against Japan and even the 
American mainland. We face a number of threats around the globe 
even as this Administration has allowed our armed forces to 
fall into disrepair. Specifically, despite the increasing 
threat of ballistic missile proliferation, it is only this week 
that we have overcome the Administration's objections to 
constructing a viable missile defense, which will now need 
funds for it's completion.
    Furthermore, since 1989 the defense budget has been cut 
literally in half as a share of national income. In concrete 
terms this means that the total size of our army has been 
reduced by 650,000 troops--that's more than the number of 
American troops it took to win the Battle of the Bulge. 
Further, our Air Force has lost more than half its aircraft, 
going from 1700 to 800. And the number of front-line, combat 
ships has shrunk by almost half since 1988, falling from its 
peak of 600 to only 327 today.
    The equipment that remains is increasingly out of date. For 
example, many of our B-52 bombers were built over 40 years ago, 
and this Administration has no plans to replace them for 
another 40 years. So by 2040 we will have pilots flying planes 
older than their grandfathers. And it isn't just the equipment 
that is nowsub-standard. This Administration has ruined our 
troops' way of life. Military pay has fallen so far behind that 
according to a report by Senator McCain released last October, 11,000 
of our troops must go on food stamps just so their families can make 
ends meet.
    Our military is desperately in need of additional funds, 
and that is why I opposed the amendment offered by Senator 
Durbin to cut defense spending. Our national security cannot 
afford additional cuts in defense. Likewise, considering this 
budget already allowed for an additional $1 billion in funds 
for the Department of Veterans Affairs health care system, I 
did not believe Senator Johnson's amendment to cut defense 
spending by $2 billion and shift it to Veterans health care was 
either prudent or necessary. However, considering we have now 
removed the ``firewalls'' between defense and non-defense 
discretionary spending, we can readdress defense spending 
levels in the future as necessary.
    The third goal achieved with this budget is to improve 
education. It does so by spending $28 billion more on primary 
and secondary education. And, unlike the President's proposals, 
it does so without attaching ``Washington-knows-best'' strings 
to this funding. We will distribute the dollars through block 
grants so that states and districts can decide for themselves 
how to spend it, based on their local needs. That is why I 
opposed the amendments offered by Senator Murray and Boxer to 
provide education funds with significant strings attached. 
Telling one community that needs to build schools that they can 
only use the federal funds for after-school programs, while 
telling another community that needs to develop after-school 
programs that it instead has to build schools does not help our 
students.
    So, after protecting Social Security and Medicare, we must 
assure economic growth into the next century. Right now many 
people don't have the money to save. But this amendment 
provides the means to address this situation. Without using a 
single dollar from Social Security, over the next 10 years this 
budget will produce a $1.15 trillion surplus. That means 
Washington will be collecting $1.15 trillion in non-payroll 
taxes--beyond what even the biggest liberal spenders in 
Washington anticipated. I believe that is a tax overpayment. 
And those people who are making these overpayments, the 
taxpayers, ought to get a refund, a tax cut.
    This budget envisions returning the bulk of that surplus--
$778 billion--to the people. We have a number of options to 
choose from in delivering this tax cut or refund. We could cut 
marginal rates 10% across-the-board, expand the lower 15% rate 
so middle class people are not bumped into the higher 28% 
bracket, cut capital gains and death taxes, and we could expand 
tax incentives for savings and investment. Furthermore, I 
believe it is very important that we address the problems faced 
by our seniors with the onerous costs imposed by both the 1993 
increase in Social Security benefits taxation imposed by the 
Clinton Administration, as well as the earnings test which 
forces able-bodied Seniors to stop working of force losing 
their benefits. It is my hope that we will seriously consider 
each of these proposals and pass a substantive, broad-based tax 
cut to give relief to the American people and our economy.
    Finally, this budget positively addresses numerous 
initiatives I have pursued since I came to Congress. First, it 
provides the resources necessary to allow for full funding of 
the Drug Free Century Act and the Western Hemisphere Drug 
Elimination Act of 1998. This act and proposed legislation will 
put the fight back in our war on drugs. Furthermore, it 
specifically rejects the President's proposed redistribution of 
highway funding. The President's budget would divert $1.1 
billion of extra highway funds to his own favored uses, costing 
Michigan over $31 million in lost federal funds. I appreciate 
the Chairman's steadfastness in keeping to the original TEA-21 
distribution formulas. It is also important to point out that 
this budget provides the resources necessary to fully fund the 
Payment in Lieu of Taxes program at the authorized levels. This 
will ensure that local communities will not be unfairly 
burdened by the loss of their tax base when the federal 
government buys property. The demands these facilities place 
upon the local community are no different than owners that pay 
local taxes, and these communities need to be supported.
    I am also pleased this budget rejects the President's 
attempted seizure of almost 60% of the states' tobacco 
settlement. Michigan would lose $776 million over the next five 
years, money to be used on scholarships for disadvantaged 
youths if this proposal were adopted. This budget resolution 
does not rely on these funds, and ensures the government 
operates on it's own money, not that stolen from the States. As 
the father of three young children I greatly appreciate the 
Committee's support in including full funding for state 
incentive grants for programs to educate and inspect the proper 
installation of child passenger safety seats.
    There are a number of tax issues on this budget that I also 
want to address. I wish to personally thank the Chairman for 
removing any assumption of reinstating the onerous ``luxury'' 
tax on passenger vehicles. This tax imposes huge federal excise 
taxes on automobiles many of us would consider standard family 
vehicles, such as sports utility vehicles and light trucks that 
now represent about half of the domestic auto sales market. 
Likewise, I wish to thank the Committee for crafting a budget 
that rejects the Administration's ill-thought attempt to impose 
over $700 million in cargo taxes on America's maritime shipping 
industry through a ``Navigation Assistance Fee.'' These taxes 
would have fallen disproportionately on Great Lake vessels 
putting our region's producers and manufacturers at an unfair 
disadvantage. However, I am concerned about the President's 
proposed tax on television broadcasters for simply 
broadcasting, and do not believe that this budget should be 
used as a vehicle for establishing this fee.
    Overall, I believe we have put together a budget of which I 
am proud--one which shows our determination to do the people's 
business in the most efficient and least intrusive manner 
possible.

                                                   Spencer Abraham.

                  MINORITY VIEWS OF SENATOR LAUTENBERG

    I strongly oppose this resolution for four primary reasons.
    First, and most importantly, it fails to guarantee a single 
extra dollar for Medicare. Instead, it diverts funds needed for 
Medicare to pay for tax cuts, which probably will go 
disproportionately to the wealthy.
    Second, it does nothing to extend the solvency of the 
Social Security Trust. In fact, it could block President 
Clinton's proposed transfer of surplus funds to help extend 
solvency.
    Third, it is fiscally dangerous. The resolution proposes 
tax cuts that begin small, but that explode in the future, just 
when the baby boomers will begin to retire.
    And fourth, it proposes extreme and unrealistic cuts in 
domestic programs. These could devastate public services if 
enacted. More likely, Congress will be unable to pass 
appropriations bills, and we will face a crisis at the end of 
this year that could lead to a complete government shutdown.
    Let me address each of these problems in turn.
    Medicare's Hospital Insurance Trust Fund is now expected to 
become insolvent in 2008. It is critical that we address this 
problem, and soon. We need to modernize and reform the program, 
to make it function more efficiently. But it is clear we also 
will need additional resources.
    As part of an overall solution, President Clinton proposed 
allocating 15 percent of projected unified budget surpluses for 
Medicare. This would extend the solvency of the Trust Fund for 
another 12 years. Unfortunately, the budget resolution rejects 
that proposal. Instead of using projected surpluses for 
Medicare, it uses almost all of them for tax cuts, most of 
which probably will go to wealthier Americans.
    The budget resolution does not specify the details of the 
tax cuts, which will be drafted later in the Finance Committee. 
However, the Chairman of the Finance Committee, Senator Roth, 
said recently that he wants to provide a 10 percent cut in tax 
rates. Under that proposal, the top one percent of Americans, 
those with incomes over $300,000--and average incomes of more 
than $800,000--would get a tax cut of more than $20,000. 
Meanwhile, those in the bottom 60 percent, with incomes under 
$38,000, would get $99. Other major GOP proposals for tax cuts, 
which involve estate taxes and capital gains taxes, are 
similarly regressive and unfair.
    Giving away disproportionate tax breaks to the wealthy 
would be bad enough. But the GOP tax breaks would come at the 
direct expense of Medicare. And that's wrong.
    Under the Republican plan, not one penny of projected 
surpluses is guaranteed for Medicare. The resolution does 
reserve about $100 billion for unspecified uses over ten years. 
However, that is far less than the $350 billion the President 
wants for Medicare over ten years. And, more importantly, none 
of the $100 billion is actually reserved for Medicare. In fact, 
the Chairman indicated that this amount may be used for 
unexpected emergencies or contingencies, and those alone could 
easily use up all this money. Emergency spending averages $9 
billion per year, and could be expected to consume about 90 
percent of this reserve.
    The Republicans' refusal to provide additional resources 
for Medicare would have a direct impact on the millions of 
Americans who will depend on Medicare for their health care in 
the future. The resolution almost certainly would mean higher 
health care costs, higher copayments, higher deductibles, lower 
quality health care services, and probably fewer hopsitals--all 
because the Republicans insist on providing huge tax breaks for 
wealthier Americans.
    During markup, I proposed an amendment that would have 
eliminated tax breaks for the wealthy and reserved these funds 
for Medicare, to put the program on a path toward solvency 
through 2020. The amendment posed a clear choice between 
Medicare and tax breaks benefitting those earning more than 
$200,000. Unfortunately, the Republicans sided with the wealthy 
and against Medicare, rejecting my amendment on a party line 
vote.
    I also offered another amendment that simply would have 
deferred the GOP tax breaks until Medicare's solvency was 
extended for at least 12 years, and Social Security's long-term 
solvency was ensured. That amendment, too, was defeated on a 
party line vote. Again, the Republicans insisted that tax 
breaks for the wealthy should come first, before saving Social 
Security and Medicare.
    Similarly, Senator Conrad and I developed an amendment to 
establish a Social Security and Medicare lock box, to protect 
these two programs. This amendment also was defeated on a party 
line vote. The amendment would have reserved all Social 
Security surpluses, and 40 percent of non-Social Security 
surpluses, to reduce the debt and help save Social Security and 
Medicare. The amendment was similar in many ways to a Social 
Security lock box proposed by the Republicans. However, the 
Republican lock box provides no protection for Medicare. In 
addition, the GOP scheme relies on a risky enforcement 
mechanism that could threaten a government default and block 
issuance of Social Security checks.
    Beyond Medicare, the second major problem with the 
Republican resolution is that it does nothing to extend the 
solvency of the Social Security Trust Fund.
    Currently, Social Security is projected to become insolvent 
by 2032. President Clinton is determined to extend solvency 
until 2075, and has proposed specific policies to get us to 
2055, ascertified by the Social Security actuaries.
    Republicans have been critical of the President's proposals 
to invest in the private market, and to transfer debt held by 
the public to the Trust Fund. Unfortunately, they have proposed 
nothing in their place to increase the resources available to 
Social Security. In fact, their resolution is specifically 
designed to block the President's proposed transfer of surplus 
funds for Social Security.
    The bottom line when it comes to Social Security is clear. 
President Clinton's budget extends solvency through the year 
2055. The Republican plan does not add a single day.
    The third major problem with the resolution is that it is 
fiscally dangerous.
    The resolution calls only for small tax cuts in the first 
year or two. But the costs of those tax cuts explode in the 
future. By 2009, when the baby boomers will begin retiring, the 
tax cuts would drain the Treasury of more than $180 billion. 
That is not fiscally responsible.
    The final problem with the Republican plan is that it 
includes extreme cuts in programs for Americans here at home.
    Total nondefense discretionary programs would be cut in the 
first year from $266 billion this year, $246 billion in 2000. 
That looks like a 7.5% cut. But the real cut in most programs 
would be much deeper. Keep in mind that the resolution claims 
to increase or maintain funding for a handful of favored 
programs, like new courthouses, TEA-21, the census, the 
National Institutes of Health, and some crime and education 
programs. That leaves other unprotected programs facing cuts of 
more than 12% in the first year. Unprotected programs include, 
for example, environmental protection, national parks, the 
Federal Aviation Administration, Coast Guard, INS border 
patrol, the Federal Bureau of Investigation, NASA, job 
training, and Head Start.
    What will cuts of this magnitude actually mean? Here are 
just a few examples, based on Administration estimates:
          2700 FBI agents, 725 Border Patrol agents, and 780 
        DEA agents would be lost
          102,400 fewer dislocated workers would receive 
        training, job search assistance and support services.
          34,000 low-income children would lose child care 
        assistance.
          1.2 million low income women, infants and children 
        would lose nutrition assistance each month.
          The Federal Aviation Administration would be cut by 
        $679 million, leading to travel delays, weakend 
        security, and lack of critical modernization 
        technologies.
          Roughly 21 Superfund toxic waste sites could not be 
        cleaned up, needlessly jeopardizing public health.
          Up to 100,000 children would lose the opportunity to 
        benefit from Head Start.
          About 70,000 training and summer job opportunities 
        for youth would be lost.
    These types of cuts are unacceptable. And yet, under this 
resolution, the problem gets dramatically worse in later years. 
By 2004, the nondefense reductions, relative to a freeze at 
1999 spending levels, grow to about 28 percent.
    Some Republicans have argued that these cuts are required 
because of the discretionary spending caps, which remain in 
effect through 2002. That is not true. Much of the problem for 
domestic programs is created because the resolution increases 
military spending by $18.2 billion over last year's level. 
Since all discretionary spending is now under a single cap, 
that extra money must come directly from domestic programs.
    President Clinton also has made it clear that we should 
increase funding for high priority discretionary programs, such 
as education and the military, once we save Social Security 
first. By contrast, the Republican plan establishes 
unrealistically low discretionary spending levels that would 
apply regardless of whether we approve Social Security reform 
legislation. This would leave discretionary programs at 4.5 
percent of GDP by 2009, down from 8.8 percent in 1990.
    Clearly, the GOP's cuts in domestic programs are draconian 
and extreme. And they are not realistic. When it comes time to 
cut specific programs, Congress almost certainly will not 
follow through. The votes will not be there.
    In other words, this budget resolution is a recipe for 
gridlock. The results could be disastrous. If we cannot pass 
appropriations bills, we face the prospect of yet another 
government shutdown. Nobody wants that, of course, but it could 
well happen.
    Why, then, are we considering a budget resolution that even 
some Republicans admit cannot be implemented?
    The answer is simple. The Republicans are desperate to 
claim that they are for tax cuts. But they just do not know how 
to pay for them. They know they do not want to guarantee 
Medicare a single new dollar. But they still are not even close 
to identifying sufficient offsetting savings.
    And so we are left with a fantasy budget. A budget that 
everybody knows is not worth the paper it's written on.
    In the end, there is only one way out. The Republican Party 
has to get real. They cannot continue to insist on huge tax 
cuts if they are not willing to pay for them.
    So, in sum, let me quickly recount the four reasons why I 
oppose this budget.
    First, it does not guarantee a single additional penny for 
Medicare. Instead, it takes money needed for Medicare and uses 
it for tax cuts that will benefit the wealthy.
    Second, it does nothing for Social Security. In fact, it 
doesn't extend Social Security's solvency by a single day.
    Third, it is fiscally dangerous. It calls for huge tax cuts 
whose costs explode in the future, just when the baby boomers 
will be retiring.
    And, finally, its cuts in domestic programs are extreme. If 
they were ever enacted, the would seriously disrupt important 
public services. But, more likely, Congress will never really 
approve them, and we will again be facing the disastrous threat 
of a government shutdown.
    For all the reasons, I am deeply disappointed by this 
budget resolution. And I look forward to working with my 
colleagues to make badly needed improvements on the floor.

                   MINORITY VIEWS OF SENATOR HOLLINGS

    With all the fevered talk of ``surplus'' from the White 
House and both sides of the aisle in Congress, it's apparent 
Washington is drunk on unified budget moonshine. To sober-up 
the debate, I have repeatedly criticized the Republicans' 
irresponsible tax cut proposals and my own party's spending 
proposals. But the ``goodtime'' crowd continues to party on, 
dodging the truth and the fact that our federal government 
continues to run a deficit.
    The root of the problem, of course, is Washington's 
insistence on masking the deficit's true size by spending 
Social Security, Medicare, military and civilian retirement, 
and other trust funds on the government's daily operations. 
Only in Washington do people borrow money to create a surplus 
and expect praise.
    The simplest way to understand what's going on is to 
imagine a man who borrows on his Mastercard to pay down his 
Visa debt. He hasn't changed his total debt at all; he's just 
shifted debt from one part of his budget to another. That's 
exactly the shell game the White House and the Republicans are 
playing with Social Security, using it to finance their free-
spending ways and their irresponsible tax cuts. They claim 
their plans will pay down the national debt, but they actually 
will leave the Social Security trust fund high and dry and 
increase the national debt.
    I'm not against spending money on good programs and giving 
Americans a tax cut, but not when our debt is increasing. In 
fact, I propose today to give Americans a $357 billion tax cut. 
How? By decreasing the national debt and the ruinous interest 
we pay on it. This year, interest on the national debt will 
total almost $1 billion a day. With that wasted money, I could 
save Social Security and Medicare and give the Republicans 
their tax cut and the Democrats their spending programs.
    On March 17, I proposed an amendment to start us on the 
path to a balanced budget. By maintaining the 1998 budget plan, 
my amendment would have achieved a truly balanced budget by 
2006. This is achieved by applying the surpluses to the debt 
and not for tax cuts or spending increases. Under my bill, 
beginning in 2006, the debt would decrease for the first time 
in decades--then, I would keep my word and jump off the Capitol 
dome. Sadly, the Republicans on the Committee voted against my 
amendment because it would have prevented them from looting the 
trust funds for their tax cuts.
    Ask anyone in my state how to define a balanced budget, and 
he will tell you very simply, ``spending no more than one 
earns.'' According to this simple and correct definition of a 
balanced budget, this year's budget is nowhere near balanced. 
Take away Social Security and other trust funds and you see 
that spending exceeds revenues this year by $100 billion. So in 
fact, although everyone is crying ``surplus!,'' the national 
debt really increases $100 billion this year, sending interest 
costs even higher.
    In addition to the fiscal policies contained in the budget 
resolution, I also am troubled by the process the Republican 
majority wants to use in this year's budget. The reconciliation 
process have been used sparingly in the past to improve the 
fiscal health of the budget. It was created to give the Senate 
a process for making difficult fiscal decisions--decisions that 
often required cutting popular programs and increasing taxes to 
balance the budget.
    That is not the case this year. The Republicans want to use 
the reconciliation process to dramatically reduce revenues over 
the next ten years and impair the progress we have made so far 
in reducing the deficit and beginning to pay down the debt.
    The budget resolution also would modify the pay-go point of 
order. Pay-go was required to insure the Senate would provide 
offsets to reduce taxes or increase spending. The modified 
budget resolution now will make it possible to cut taxes 
without a fiscal off-set. By making it easier to use future 
surpluses to cut taxes instead of paying down the debt, this 
will eliminate the fiscal discipline that has reduced the 
deficit and contribute to the fiscal cancer eating away at 
America.
    The only way to protect Social Security and prevent 
politicians from using the trust fund as a slush fund is to 
restore truth in budgeting. The only way to achieve a truly 
balanced budget is to stay the course we began in 1993. Neither 
the President's budget nor the Chairman's mark does these 
things.

                                                Ernest F. Hollings.

                    MINORITY VIEWS OF SENATOR CONRAD

    I opposed the Republican budget resolution for FY 2000 
because it contains the wrong priorities for our nation. On the 
brink of the 21st century and in a new era of fiscal 
prosperity, this Republican budget looks to the past and 
repeats a failed fiscal policy--it slashes funding for 
important domestic priorities while providing tax cuts for the 
wealthy at the expense of Medicare. Those are the wrong 
priorities for our nation and they should be rejected.
    Our nation's current economic prosperity has been 
painstakingly built over the last six years with tough fiscal 
choices. Through comprehensive deficit reduction packages in 
1993 and 1997, we have put out nation's fiscal house in order. 
In 1993, President Clinton put forward an economic plan 
designed to begin the job of getting our deficit under control. 
A Democratic Congress passed that historic deficit reduction 
plan, and it worked. Six years later, the federal budget is 
balanced on a unified basis. The budget is also near true 
balance, without counting Social Security trust fund surpluses. 
I have strongly supported that policy since coming to the 
Senate, and offered an amendment during the markup of the 
budget resolution to ensure that the entire Social Security 
trust fund surplus in saved for Social Security, not for new 
spending or tax cuts.
    Not only did the 1993 deficit reduction plan succeed in 
reducing the deficit, it allowed the Federal Reserve to pursue 
an accommodative monetary policy. Fiscal restraint and monetary 
policy have created a virtuous cycle in the US economy, which 
is entering its eighth year of the current economic expansion.
    Business investment continues to fuel our economic 
expansion. In addition, real GDP growth during 1998 was 4.3%, 
the strongest in more than a decade. Debt held by the public is 
projected to decline dramatically under current law and federal 
spending as a share of the economy is at its lowest level in 25 
years. The unemployment rate is at its lowest peacetime level 
in 41 years and the inflation rate is at its lowest level in 33 
years.
    The challenge before us now is to look to the long term, to 
strengthen and protect Social Security and Medicare for future 
generations. Unfortunately, the Republican resolution does not 
guarantee one extra penny for Medicare over the next ten years. 
I offered an amendment during the markup to reserve $376 
billion of non-Social Security surpluses over the next ten 
years for Medicare. That amendment would have provided Medicare 
with the resources it needs to stay solvent and help support 
reform; it put Social Security and Medicare first, not tax cuts 
for the wealthy.
    In terms of our nation's budget priorities, Congress has an 
important decision to make. Should we give away the surplus in 
tax cuts for the wealthy? Or should we save the surplus to buy 
down the Federal debt, extend the solvency of Medicare, and 
still provide room for targeted tax cuts and investments in 
education, health care, the environment and other priorities? 
To me, the choice is clear. We must honor our commitment to the 
seniors of America.
    That does not mean we don't need to reform Medicare. I 
think everybody understands that we need to take action to put 
Medicare on a sound financial footing. I have cast tough votes 
to improve the long term solvency of Medicare in the past, and 
I am prepared to do so in the future. But we must ensure that 
whatever we do to put Medicare on a sound financial footing 
also preserves affordable access to high quality health care. 
Our seniors deserve nothing less.
    Despite the misplaced priorities contained in the FY 2000 
budget resolution, I must point out that the resolution does 
make a down payment on providing resources that are necessary 
for agriculture. I was pleased to work on a bipartisan basis to 
ensure a portion of the funding necessary for our farmers was 
included in the budget.
    Many of my colleagues know that we face a virtual 
depression in American agriculture. We need a significant 
increase in federal agricultural spending this year if we are 
to maintain a stable rural America and a cheap, quality food 
supply for this nation.
    When we considered the 1996 Farm Bill, prices were high--
many believed we had entered an era of permanently high prices. 
But quite the contrary is true. In fact, we've entered not an 
era of high prices, but an era of low ones. We're now in the 
second year of an economic crisis in American agriculture.
    Last year farmers received historically low prices for 
their commodities. Crop prices hit the lowest levels in 50 
years. As a result, farm machinery manufacturers closed plants 
and laid off workers. Lenders reported severe financial stress 
in rural communities. No agricultural sector was immune from 
the troubled farm economy.
    Part of the reason we passed an agricultural relief bill 
last year and established programs to assist farmers and 
ranchers suffering from repeated years of disaster was that a 
flaw in the crop insurance system was discovered and became 
painfully clear. Since we engaged in major crop insurance 
reform in 1994, some areas, including regions in my own State 
of North Dakota, experienced an unprecedented series of natural 
disasters. Our farmers saw the worst winter storm in 50 years, 
followed by the worst flood in 500 years, followed by 
widespread agricultural field flooding, followed by the worst 
outbreak of crop disease in recent memory.
    During the last five years, many farmers have seen their 
crop yields drop below normal every year and as a result, their 
Actual Production Histories--the basis of crop insurance 
coverage--has dwindled to practically meaningless levels. Crop 
insurance has begun to fail as a risk management tool. 
Legislation recently introduced by Senators Kerrey and Roberts, 
which I cosponsored, the ``Crop Insurance for the 21st Century 
Act,'' S. 529, will solve some of the problems with our current 
crop insurance system.
    I am pleased that the FY 2000 budget resolution provides $6 
billion for agriculture, and that the Budget Committee 
unanimously adopted an amendment I offered to ensure that $500 
million will be available for crop insurance reform in FY 2000. 
But fixing the crop insurance system is not enough. We must 
also take bipartisan action to restore some form of a farm 
income safety net. I would argue that we're several billion 
dollars short from a system that adequately manages risk.
    I hope we can work in a bipartisan way during this year's 
budget process to reform crop insurance and restore an adequate 
farm safety net for our nation's producers.
                                                       Kent Conrad.

                   MINORITY VIEWS OF SENATOR JOHNSON

    I oppose the Republican Budget Resolution because it 
supports the wrong priorities.
    1998 was an exceptional year in this country's modern 
economic history. We enjoyed the first budget surplus in 29 
years and the economy exceeded expectations and continued to 
expand in the face of international instability--unemployment 
remained low; wages continued to increase; welfare recipients 
declined; home ownership increased; and interest rates remained 
low. All of this good news has allowed the White House, the 
Congress, and the American people to begin debating how to use 
future surpluses which are projected for the foreseeable 
future.
    As a Member of Congress who arrived in Washington when the 
annual federal budget deficit was over $220 billion and still 
growing, I am extremely pleased and a little amazed that we 
have gotten to where we are today. That said, I think it is 
extremely important that Congress proceed carefully in the 
coming years to ensure we make wise choices that will keep this 
country's budget running in the black for years to come.
    Writing the FY 2000 budget is our first test of how we will 
handle existing and future surpluses to ensure long-term 
economic growth and stability, and it is a test too important 
to coming generations for us to fail. I believe that this 
year's budget resolution should follow four principles: first, 
we must save Social Security and Medicare; second, we should 
pay down the national debt; third, we should support targeted 
tax relief to low and middle-income Americans; and finally, we 
should identify and support critically needed discretionary 
priorities.
    Unfortunately, the Republican Budget Resolution doesn't 
follow these principles, which I believe are critical to 
balancing the many pressing needs of this nation. First, the 
Republican Budget Resolution does nothing to preserve Medicare. 
Second, while I support targeted tax cuts, I cannot support the 
use of essentially all future on-budget surpluses for tax cuts 
at the expense of Medicare solvency and other critical 
discretionary investments such as veterans health care. Third, 
the Republican budget resolution reduces non-defense 
discretionary spending by $20 billion in FY 2000. Finally, 
while the resolution increases funding for some programs and 
protects others from cuts, the bottom line is that 
discretionary programs such as agriculture, head start, law 
enforcement, and many other critically important programs could 
be cut by more than 12% under the Republican Budget Resolution. 
I support preserving the discretionary caps and acknowledge 
that the caps force many tough decisions on discretionary 
spending priorities. However, I firmly believe that we can do a 
better job of balancing discretionary priorities than what is 
included in the Republican Budget Resolution.

                                veterans

    I have great concern regarding an injustice to our nation's 
veterans that I believe demands serious attention by Congress 
and the Clinton Administration.
    For the fourth consecutive year, the Clinton Administration 
has proposed a flat-line appropriation for veterans' health 
care in its FY 2000 budget request. In a memo to Secretary of 
Veterans Affairs Togo West, Under Secretary for Health Dr. 
Kenneth Kizer expressed concern that the Administration's FY 
2000 requested budget ``poses very serious financial challenges 
which can only be met only if decisive and timely actions are 
taken.'' He indicates that cuts must be made now to preclude 
even deeper cuts such as ``mandatory employee furloughs, severe 
curtailment of services or elimination of programs, and 
possible unnecessary facility closures.'' Dr. Kizer also states 
that ``. . . changes are absolutely essential if we are to 
prepare ourselves for the limitations inherent in the proposed 
FY 2000 budget.''
    I have met with several representatives of South Dakota's 
veterans' organizations who have expressed their concern that 
the VA's flat-lined health care budget is causing mandatory 
reductions in outpatient and inpatient care and VA staff 
levels. Additional funding for VA health care is imperative to 
keep up with medical inflation, COLAs for VA employees, new 
medical initiatives that the VA wants to begin (Hepatitis C 
screenings, emergency care services), long term health care 
costs, and funding for homeless veterans.
    I was pleased that the Chairman's Mark includes an 
additional $1 billion for veterans health care and commend 
Chairman Domenici for his commitment to our nation's veterans. 
Although Chairman Domenici's proposed funding increase will 
help relieve some of the VA's budgetary constraints, I believe 
that more needs to be done. The veterans community has 
requested that VA health care needs to be augmented by $3 
billion over last year's funding levels to ensure the provision 
of accessible and high quality services to veterans. That is 
why I offered an amendment that would raise VA health care by 
an additional $2 billion. My amendment would have offset this 
increase in VA health care by utilizing elevated funding levels 
in military spending above and beyond what the Clinton 
Administration has requested--I support an increase in defense, 
but I also support a much-needed increase in veterans health 
care and believe that we need to do both. The nation's top 
veterans groups (AMVETS, Blinded Veterans Association, Disabled 
American Veterans, Paralyzed Veterans of America, Veterans of 
Foreign Wars and Vietnam Veterans of America) voiced their 
strong support for my amendment in a letter that I have shared 
with members of the Committee.
    Although my amendment failed on an 11-11 vote, I remain 
dedicated to providing adequate funding for VA health care. I 
will continue to live up to my obligation to South Dakota's 
veterans and ensure that they are treated with the respect and 
honor that they so richly deserve.

                              agriculture

    I want to express my appreciation to Chairman Domenici for 
attempting to provide some relief to agriculture in his mark. 
Farmers and ranchers are struggling to survive in a crumbling 
rural economy where the value of crops are expected to be 24 
percent lower in 1999 than they were in 1996, while production 
expenses continue to increase. The prospects for improvement in 
major crop prices during 1999 are dim according to both the 
Congressional Budget Office and the Food and Agricultural 
Policy Research Institute. Agricultural producers are also 
facing severe limitations on their ability to compensate for 
low crop prices through the sale of other farm commodities. 
Beef, pork, and sheep producers have been suffering losses for 
a long period of time and face continuing low livestock prices 
in a market that is neither free nor fair. The global financial 
crisis has seriously limited U.S. agricultural exports and 
exacerbated a glut of commodities in the world market. Notably, 
farm exports, commodity prices and farm income are all 
significant below the levels predicted when the ``Freedom to 
Farm Bill'' was enacted in 1996.
    As the key assumptions underlying the 1996 farm bill have 
not been borne out by real world developments, the lack of 
adequate farm income protection has become painfully evident.
    I am pleased that this Committee addressed one part of the 
all important safety net for our family farmers. The Chairman 
included a reserve fund for agriculture in his mark and the 
Committee approved a bipartisan amendment which I cosponsored 
to the budget resolution which provides $500 million for the 
crop insurance program in 2000. Improved crop insurance 
coverage is necessary for farmers in the future. It plays an 
increasingly important role in securing credit from a lender. 
It also resembles the only tool an individual farmer has in 
managing risk and realizing a safety net.
    When Congress reformed crop insurance in 1994, the 
underlying goal was to avoid the need for both crop insurance 
and ad hoc disaster programs. This dual-track program caused 
fiscal and political problems. The need for Congress to enact a 
crop loss disaster program last year uncovered some 
shortcomings in the ability for crop insurance to provide 
adequate protection for farmers, especially when multiple years 
of natural disasters combined with low crop prices to create an 
agricultural crisis in the heartland. The funding provided in 
this budget resolution for crop insurance improvements 
represent a commitment to maintaining a strong crop insurance 
program, a goal which I support.
    However, improvements to crop insurance must also coincide 
with improvements to the overall farm program. Crop insurance 
is part of that program, but not a substitute for it. I look 
forward to working on reforming our nation's farm program to 
provide greater marketing flexibility to farmers.

                       indian school construction

    Equitable education for Indian children on and off the 
reservation is one of my highest priorities and I know that the 
chairman shares my commitment to addressing this problem. I 
want to give credit where credit is due and commend the 
Chairman for his inclusion of funding for Indian school 
construction in his mark. I have focused on this issue 
throughout my service in Congress and am pleased that we have 
made modest progress in recent years.
    The BIA schools are in a unique situation since they are 
federal property and are therefore the responsibility of the 
federal government. Of the 173 BIA-maintained school facilities 
nationwide, 23 are located in South Dakota. In January of 1998, 
the General Accounting Office confirmed the backlog in BIA 
school repair and replacement at $754 million. The GAO found 
that Indian school facilities operated by the BIA are generally 
in poorer physical condition compared to other schools 
nationally, even inner-city schools. In fact, 62 percent of BIA 
schools have at least one building in need of extensive repair 
or replacement, compared to 33 percent of all schools 
nationally and 38 percent of central-city schools.
    Allowing the continued deterioration and decay of tribal 
schools through lack of funding would violate the government's 
commitment and responsibility to Indian nations, and would only 
slow the progress of self-sufficiency. I continue to believe 
that the federal obligation to tribes must be maintained, and 
that the most fundamental of all of our treaty and trust 
responsibilities is equitable education for Indian children. 
Consequently, I am extremely pleased that Chairman Domenici 
included generous assumptions for Indian school construction 
efforts in his mark. I look forward to working with him to 
ensure the funding becomes a reality.

                            tribal colleges

    I strongly supported the amendment offered by Senator 
Conrad regarding the importance of tribal colleges and the 
inadequate funding levels for these important institutions. The 
tribal colleges do not receive state funds for their core 
operations and are the most poorly funded higher education 
institutions in the United States. Funding for these 
institutions has failed to keep pace with their rising 
enrollment. Nonetheless, the colleges have proven themselves to 
be successful educators playing a pivotal role in their 
communities. They have succeeded in educating Native Americans 
where mainstream colleges have failed. Tribal Colleges' track 
records on student retention, matriculation, ongoing education 
and job placement are unparalleled, and their training and 
academic curricula have contributed considerably to the 
economic base of their reservations.
    With welfare reform and its resulting implications, the 
tribal colleges will take on a new importance in helping 
welfare recipients on our nation's reservations attain long-
term self-sufficiency. Likewise, the children of those students 
moved from welfare to work will themselves be more likely to 
finish high school and pursue post-secondary programs.

                              environment

    We have an opportunity this year to reach a bipartisan 
agreement to increase funding for several land, water, and 
wildlife conservation programs. Several proposals to establish 
mandatory funding for conservation programs using Outer 
Continental Shelf receipts are under bipartisan discussion on 
Capitol Hill. All propose significant steps to support the 
restoration, preservation and conservation of our natural 
resources, and I truly think that bipartisan agreement to 
address some of the critical needs of our environment exists.
    However, the authorizing communities have acknowledged that 
the discussions and efforts to reach a compromise on the 
different conservation proposals will not go very far if the 
Budget Committee does not take action on this issue. 
Consequently, I am extremely pleased that the Committee 
approved an amendment offered by Senator Boxer and myself, to 
establish a reserve fund for OCS receipts which could be used 
for increased conservation efforts. As a member of the Energy 
and Natural Resources Committee, I am optimistic that the 
Budget Committee's action will provide an incentive for 
Senators to seek a compromise on the various legislative 
proposals. I look forward to working with my colleagues to find 
a workable compromise which will help ensure the long-term 
preservation and restoration of our nation's natural resources.

                         bureau of reclamation

    I would also like to commend Chairman Domenici for his 
willingness to work with me to include Committee Report 
language that recognizes the need to increase the Bureau of 
Reclamation's construction budget. The Bureau has been faced 
with deep cuts in its construction budget in recent years, 
forcing the Bureau to drag out construction of badly needed 
water projects and costing the federal government much more in 
the long run. This inefficient and costly approach must end. I 
will continue to work with Chairman Domenici and my colleagues 
on the Appropriations Committee to commit the necessary 
resources to the Bureau of Reclamation's construction budget so 
the Bureau can move forward in a cost efficient manner to 
complete the critically important water projects that are 
currently under construction, as well as meet the future needs 
facing the Bureau of Reclamation.