[House Report 114-470]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-470
_______________________________________________________________________
CONCURRENT RESOLUTION
ON THE BUDGET--
FISCAL YEAR 2017
----------
R E P O R T
of the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
to accompany
H. Con. Res. 125
ESTABLISHING THE BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL
YEAR 2017 AND SETTING FORTH APPROPRIATE BUDGETARY LEVELS FOR FISCAL
YEARS 2018 THROUGH 2026
together with
MINORITY VIEWS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
March 23, 2016.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-470
_______________________________________________________________________
CONCURRENT RESOLUTION
ON THE BUDGET--
FISCAL YEAR 2017
__________
R E P O R T
of the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
to accompany
H. Con. Res. 125
ESTABLISHING THE BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL
YEAR 2017 AND SETTING FORTH APPROPRIATE BUDGETARY LEVELS FOR FISCAL
YEARS 2018 THROUGH 2026
together with
MINORITY VIEWS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
March 23, 2016.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
99-437 WASHINGTON : 2016
COMMITTEE ON THE BUDGET
TOM PRICE, Georgia, Chairman
TODD ROKITA, Indiana, Vice Chairman CHRIS VAN HOLLEN, Maryland,
SCOTT GARRETT, New Jersey Ranking Minority Member
MARIO DIAZ-BALART, Florida JOHN A. YARMUTH, Kentucky
TOM COLE, Oklahoma BILL PASCRELL, Jr., New Jersey
TOM McCLINTOCK, California TIM RYAN, Ohio
DIANE BLACK, Tennessee GWEN MOORE, Wisconsin
ROB WOODALL, Georgia KATHY CASTOR, Florida
VICKY HARTZLER, Missouri JIM McDERMOTT, Washington
MARLIN A. STUTZMAN, Indiana BARBARA LEE, California
FRANK GUINTA, New Hampshire MARK POCAN, Wisconsin
MARK SANFORD, South Carolina MICHELLE LUJAN GRISHAM, New Mexico
STEVE WOMACK, Arkansas DEBBIE DINGELL, Michigan
DAVE BRAT, Virginia TED LIEU, California
ROD BLUM, Iowa DONALD NORCROSS, New Jersey
ALEXANDER X. MOONEY, West Virginia SETH MOULTON, Massachusetts
GLENN GROTHMAN, Wisconsin
GARY J. PALMER, Alabama
JOHN R. MOOLENAAR, Michigan
BRUCE WESTERMAN, Arkansas
JAMES B. RENACCI, Ohio
BILL JOHNSON, Ohio
Professional Staff
Richard E. May, Staff Director
Thomas S. Kahn, Minority Staff Director
C O N T E N T S
Page
Introduction..................................................... 3
Summary Tables--Spending and Revenue:
Table 1. Fiscal Year 2017 Budget Resolution Total Spending
and Revenue................................................ 19
Table 2. Fiscal Year 2017 Budget Resolution Discretionary
Spending................................................... 22
Table 3. Fiscal Year 2017 Budget Resolution Mandatory
Spending................................................... 25
Comparison With the President's Budget........................... 29
Table 4. Summary of Fiscal Year 2017 Budget Resolution....... 34
Table 5. Fiscal Year 2017 House Budget Resolution vs. the
President's Budget......................................... 34
The Economy and Economic Assumptions............................. 37
Table 6. Economic Projections: Administration, CBO, and
Private Forecasters........................................ 43
Table 7. Economic Assumptions of the Fiscal Year 2017 Budget
Resolution................................................. 44
Table 8. Tax Expenditure Estimates by Budget Function, Fiscal
Years 2015-2019............................................ 45
Macroeconomic Feedback Effects of Pro-Growth Policies............ 55
Functional Presentation.......................................... 57
Principal Federal Responsibilities........................... 61
National Defense......................................... 61
International Affairs.................................... 66
Overseas Contingency Operations/Global War on Terrorism.. 72
Veterans Benefits and Services........................... 73
Administration of Justice................................ 81
General Government....................................... 84
Government-Wide Policy................................... 86
Domestic Priorities.......................................... 91
General Science, Space, and Technology................... 91
Energy................................................... 93
Natural Resources and Environment........................ 97
Agriculture.............................................. 101
Commerce and Housing Credit.............................. 101
Transportation........................................... 104
Community and Regional Development....................... 112
Education, Training, Employment, and Social Services..... 115
Health................................................... 120
Income Security.......................................... 123
Other Discretionary Spending............................. 125
Direct Spending.............................................. 127
Social Security.......................................... 127
Medicare................................................. 131
Medicaid, the Affordable Care Act, and Related Programs.. 142
Income Support, Nutrition, and Related Programs.......... 156
Farm Support and Related Programs........................ 162
Banking, Commerce, Postal Service, and Related Programs.. 163
Student Loans, Social Services, and Related Programs..... 167
Federal Lands and Other Resources........................ 171
Other Direct Spending.................................... 173
Financial Management......................................... 175
Net Interest............................................. 175
Allowances............................................... 176
Undistributed Offsetting Receipts........................ 176
Revenue and Tax Reform........................................... 179
Direct Spending Trends and Reforms............................... 183
Table 9. Historical Means-Tested and Non-Means-Tested Direct
Spending................................................... 186
Table 10. Projected Means-Tested and Non-Means-Tested Direct
Spending................................................... 187
The Long-Term Budget Outlook..................................... 189
Budget Process Reform............................................ 191
Regulatory Budgeting............................................. 199
Section-by-Section Description................................... 201
The Congressional Budget Process................................. 223
Table 11. Allocation of Spending Authority to House Committee
on Appropriations.......................................... 225
Table 12. Resolution by Authorizing Committee (On-budget
Amounts)................................................... 226
Reconciliation................................................... 229
Statutory Controls Over the Budget............................... 231
Enforcing Budgetary Levels....................................... 237
Accounts Identified for Advance Appropriations................... 243
Votes of the Committee........................................... 245
Other Matters Under the Rules of the House....................... 285
Minority Views................................................... 287
Concurrent Resolution on the Budget--Fiscal Year 2017
(legislative text)............................................. 289
114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-470
======================================================================
CONCURRENT RESOLUTION ON THE BUDGET--
FISCAL YEAR 2017
_______
ESTABLISHING THE BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL
YEAR 2017 AND SETTING FORTH APPROPRIATE BUDGETARY LEVELS FOR FISCAL
YEARS 2018 THROUGH 2026
_______
March 23, 2016.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Tom Price of Georgia, from the Committee on the Budget, submitted
the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H. Con. Res. 125]
INTRODUCTION
----------
The budget this year faces two significant hurdles.
First, due to continued delays in tackling the government's
growing fiscal problems, the budget outlook has predictably
worsened. Since just last August, the projected 10-year budget
deficit has swollen by $1.5 trillion. That is how much
additional savings the Budget Committee has had to identify,
compared with a year ago, to achieve balance within a decade.
It will require a greater number of policy changes, and swifter
implementation, than before. These difficulties will continue
to grow as long as Congress fails to take substantial action
changing the Federal Government's fiscal course. In time the
problem will become insurmountable.
Second, this budget resolution gets no help from the
economy. The policies of the current administration--excessive
government spending, regulation, Obamacare, and all the rest--
are weighing down the economy. Growth is anemic, real household
incomes are stagnant, labor force participation is low, many
workers are underemployed. Debt stands at historically high
postwar levels, and continues rising. For the past several
years, the Congressional Budget Office [CBO] has been lowering
its projections of average annual economic growth (see further
discussion in the economics section of this report). A better
economy would produce more revenue and put less strain on the
government's safety net programs, easing the policy changes
needed to attain fiscal sustainability. A stronger economy
would generate greater revenue, and lower deficits, through
growth, not tax hikes. CBO reports that an increase in real
economic growth of just 0.1 percentage point would yield $327
billion in deficit reduction--of which $286 billion would be
from revenue.\1\ Under the President's policies, however, the
recovery is historically weak, adding to the fiscal burdens. In
the absence of stronger growth, the budget has to rely entirely
on spending restraint.
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\1\Congressional Budget Office, The Budget and Economic Outlook:
2016 to 2026, January 2016, Table B-1, p. 119.
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As was demonstrated in the 1990s, the formula for balancing
the budget is a combination of fiscal restraint, solid economic
growth, and limited regulation. Throughout that decade,
Congress actually reduced annually appropriated
``discretionary'' spending after adjusting for inflation. In
1997, following 2 years of confrontation, President Clinton
finally joined the Republican Congress in striving to surpass
the timid and unsuccessful pursuit of mere deficit reduction,
and commit to eliminating deficits--and to do so entirely
through spending restraint. The Balanced Budget Act of 1997 was
paired with tax cuts then estimated at $95.3 billion over 5
years and $275.4 billion over 10 years.\2\ Perhaps not
surprisingly, economic growth surged: Growth in real gross
domestic product [GDP] exceeded 4 percent annually in the
latter part of the decade. With this combination, the plan to
reach balance in 5 years actually produced surpluses in 1
year--surpluses that continued to grow.
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\2\See the Conference Report on the Taxpayer Relief Act of 1997
(H.R. 2014), p. 807.
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To address today's fiscal problems, and to create a
foundation for robust growth, this resolution retains
longstanding convictions about budgeting and governing. It
reverses the drift toward ever higher spending and larger
government; it reinforces the innovation and creativity
stirring in the myriad institutions and communities across the
country; and it revitalizes the prosperity that creates ever-
expanding opportunities for all Americans to pursue their
destinies. Like any good budget resolution, this one expresses
a vision of governing, and of America itself. As described
further in this report, this fiscal blueprint does the
following:
LBalances the budget within 10 years without
raising taxes, and places the government on a path to paying
off the debt.
LEnsures a strong national defense, the highest
priority of the Federal Government, through robust funding of
troop training, equipment, and compensation.
LRestores the principle of federalism, to
encourage the innovation and creativity of State and local
governments.
LCalls for a fairer, simpler tax code to promote
job creation and a healthy economy--an economy that ensures all
Americans can prosper and achieve their goals.
LSaves, strengthens, and secures Medicare,
Medicaid, and other income security programs.
LRepeals Obamacare, clearing the way for real,
patient-centered health care reform.
LReforms welfare and other automatic spending
programs.
LCreates reconciliation to advance solutions
through Congress and to the President's desk.
The guiding principles of the resolution follow in this
introduction.
Balancing the Budget
While some ``experts'' dismiss the balanced budget standard
as a kind of quaint anachronism, nothing has come to replace it
as a consensus norm for budgeting. As a result, fiscal policy
is adrift, and increasingly unsustainable. Some--including the
current administration--have tried to substitute intellectually
sophisticated concepts, such as trying to limit deficits or
debt as a share of the economy--yet there is no agreement on
what the acceptable upper limits might be. Others have
suggested allowing ``counter-cyclical'' policies in the near
term while striving for ``long-term fiscal sustainability''--
with no sound definition of what the latter means. This
formula, of course, merely rationalizes spending now while
putting off restraint until later--so the restraint never
happens.
The current President's cavalier attitude about deficit
spending adds to the problem. He has contended that deficits in
the range of 3 percent of gross domestic product [GDP] are
acceptable, as long as they remain relatively stable. The
inevitable result: deficits are growing, inexorably. Only a
firm commitment to balancing the budget will deliver a truly
sustainable fiscal outlook.
Until the early 1960s, policymakers broadly accepted the
aim of balancing the Federal budget in peacetime. For many, the
conviction was practical, uncomplicated common sense:
Government simply should not outspend its resources. For
others, such as Nobel Laureate James M. Buchanan, balancing
budgets was an ethical commitment.
Politicians prior to World War II would have
considered it to be immoral (to be a sin) to spend more
than they were willing to generate in tax revenues,
except during periods of extreme and temporary
emergency. To spend borrowed sums on ordinary items for
public consumption was, quite simply, beyond the pale
of acceptable political behavior. There were basic
moral constraints in place; there was no need for an
explicit fiscal rule in the written constitution.\3\
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\3\James M. Buchanan, ``Clarifying Confusion About the Balanced
Budget Amendment,'' National Tax Journal, Vol. 48, No. 3, September
1995, page 347.
With his alternative views of deficit financing, John
Maynard Keynes upended the norm of budgeting and challenged its
ethical underpinnings. As James Q. Wilson put it, Keynes was
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more than an important economist:
[H]e was a moral revolutionary. He subjected to
rational analysis the conventional restraints on
deficit financing, not in order to show that debt was
always good but to prove that it was not necessarily
bad. Deficit financing should be judged, he argued, by
its practical effect, not by its moral quality.\4\
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\4\James Q. Wilson, ``The Rediscovery of Character: Private Virtue
and Public Policy,'' On Character (Washington DC: The AEI Press, 1995),
p. 18.
Although Keynes published his theory in the 1930s, it was
not until three decades later that deficit financing became
politically acceptable. Even then, President Johnson insisted
on balancing his final budget, notwithstanding the costs of the
Vietnam War and his ambitious Great Society programs. After
that, however, policymakers increasingly found deficits to be
tolerable, then acceptable--and then, predictably, deficit
spending became chronic.
The practical effect has been devastating. For a time in
the early 1990s, it appeared the structural gap between outlays
and revenues was so entrenched it could not be overcome. As
noted previously, the balanced budgets later in that decade
resulted from a sustained stretch of spending restraint and an
unexpected boost in economic output. In January 2001, CBO was
projecting budget surpluses totaling $5.6 trillion over 10
years. Following 9-11, as Congress of necessity boosted
resources for national defense and homeland security, lawmakers
also gave up restraints on other spending. The tolerance for
deficits returned, and the government has not seen a balanced
budget since. In recent years, the red ink exceeded $1 trillion
annually, so that nearly 40 percent of the government's
spending was financed with borrowed money.
It is noteworthy that the loss of surpluses and growth in
deficits was not the result of tax cuts. In August 2001, and
again in January 2002, CBO reported that the projected 10-year
revenue impact of the 2001 tax relief package was about $1.3
trillion, leaving $3.4 trillion in surpluses (economic and
technical factors, as well as debt service, accounted for most
of the remainder).\5\ In January 2002, well after the events of
9-11, when CBO reported a steeper decline in surpluses, the
estimated revenue effects of the tax relief package remained at
$1.3 trillion; roughly $2.7 trillion of the change in the
surplus/deficit outlook resulted from spending increases and
economic and technical factors.\6\ Subsequent data show that
from 2002 through 2011, of the $11.7-trillion total surplus
reduction/deficit increase, only $1.5 trillion resulted from
the tax cuts of 2001 and 2003.
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\5\Congressional Budget Office, The Budget and Economic Outlook: An
Update, August 2001, Table 2, p. x.
\6\Congressional Budget Office, The Budget and Economic Outlook:
Fiscal Years 2003-2012, January 2002, Summary Table 1, p. xiv.
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Today, in the absence of the balanced budget principle, the
only fiscal guideline is the modern, relativistic pay-as-you-go
concept, which merely ratifies existing deficits as the measure
of budgetary rectitude--no matter how large those deficits
might be. Thus, the proponents of the Affordable Care Act could
boast the health care program was fiscally ``responsible''
because it did not increase deficits--which already exceeded a
trillion dollars a year--while it recklessly added trillions
more to government spending.
The durability of the balanced budget principle is
demonstrated even by the Keynesian-leaning Congressional Budget
Office itself. Every time the CBO publishes its regular updates
of budget and economic conditions, the first item it reports is
the magnitude of the deficit or surplus--that is, the
relationship between total outlays and total tax revenue. It is
the very same measure that underlies the balanced budget
principle. Further, CBO's clear implication is that the more
spending exceeds revenue, and the more rapidly the two diverge,
the more unstable is the government's fiscal condition.\7\
There is simply no more straightforward measure of the
government's fiscal health and stability.
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\7\For example, the first three sentences of the summary in the
recent The Budget and Economic Outlook: 2016 to 2026 (p. 1) read: ``In
2016, the Federal budget deficit will increase, in relation to the size
of the economy, for the first time since 2009, according to the
Congressional Budget Office's estimates. If current laws generally
remained unchanged, the deficit would grow over the next 10 years, and
by 2026 it would be considerably larger than its average over the past
50 years, CBO projects. Debt held by the public would also grow
significantly from its already high level.''
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CBO's projections make clear the temporary decline in
deficits over the past few years is over; as predicted,
deficits are now rising again (see Figure 1). Some details
about that trend include the following:\8\
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\8\Congressional Budget Office, The Budget and Economic Outlook:
2016 to 2026, January 2016.
LThe deficit in the current year--fiscal year
2016--will rise to $544 billion, an increase of $105 billion
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from the prior year ($439 billion).
LDeficits will continue to rise in subsequent
years and reach $1.4 trillion in 2026, CBO estimates. At these
levels, the deficit would rise from 2.9 percent of GDP in
fiscal year 2016 and to 4.9 percent in fiscal year 2026--well
above the 50-year historical average of 2.7 percent of GDP.
LCBO has increased its 10-year deficit projection
by $1.5 trillion compared with estimates as recently as last
August, to $9.4 trillion. That increase is largely due to the
anemic Obama economy: CBO projects $771 billion less tax
revenue over 10 years due to ``slower growth in economic output
over the 10-year projection period.''\9\ This is the result of
a weakening economic outlook, not because of any tax changes
legislated by the Congress.
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\9\Ibid., p. 11.
FIGURE 1
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
CBO also blames $425 billion of the deficit
increase on reduced revenue due to Congress's recent extension
of certain tax provisions that were scheduled to expire. That,
however, is merely an artifact of CBO's scoring conventions.
These are not new tax cuts; Congress merely continued tax
relief policies that already existed. By law, CBO is required
to compare the extension of such tax relief provisions with the
higher revenue levels that would have occurred if the policies
had expired as scheduled.\10\ Putting it differently, Congress
chose not to raise taxes, which would have resulted from
failing to extend these provisions.
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\10\See section 257 of the Balanced Budget and Emergency Deficit
Control Act of 1985 (Public Law 99-177).
While the President claims some deficit reduction in his
own budget--largely from $3.4 trillion in new taxes over 10
years--he never tries to reach balance. In fact, deficits under
the President's budget increase starting in 2019, and approach
$800 billion in 2026. This is largely due to $2.5 trillion in
spending increases over the decade. This is not a fiscal
policy; it is an abandonment of sound fiscal norms.
The chronic and growing deficits that will result will push
up debt from its already historically high levels. Due to
profligate spending--and the President's resistance to working
with Congress on controlling spending--total debt on Obama's
watch has almost doubled, to nearly $19 trillion. CBO projects
that debt held by the public will reach $14.0 trillion, or 75.6
percent of GDP, at the end of fiscal year 2016, up $861 billion
from its $13.1 trillion level (73.6 percent of GDP) at the end
of fiscal year 2015.\11\ By the end of fiscal year 2026, CBO
estimates debt held by the public will reach $23.8 trillion, or
86 percent of GDP--a $9.8 trillion increase over the next 10
years. This is by far the highest level of debt since just
after World War II. A significant difference, however, is that
the post-war debt resulted from large but temporary surges of
spending to save the free world. Today's deficits and debt are
the product of permanent automatic spending programs, and these
trends are occurring even as the government has reduced its
spending for military and diplomatic activities overseas.
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\11\Debt held by the public increased about $300 billion in 2015
and is projected to rise by $861 billion in 2016.
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Gross Federal debt, which includes funds owed to the Social
Security Trust Fund and other Federal accounts, is projected to
rise from $18.1 trillion at the end of 2015 to $29.3 trillion
in 2026--an $11.2 trillion increase.
A rising debt level is ultimately unsustainable because its
growth eventually begins to exceed that of the overall economy.
As a result, debt service costs absorb an increasing share of
national income and the country must borrow an increasing
amount each year--likely in the face of gradually higher
interest rates--to both fund its ongoing services and make good
on its previous debt commitments. Ultimately, this dynamic
leads to a decline in national saving and a ``crowding out'' of
private investment, sapping economic output and diminishing the
country's standard of living. In a worst-case scenario, this
dynamic could also lead to a full-blown debt crisis, which
would not only be devastating at the macroeconomic level, but
would also inflict acute pain upon families and businesses.
Investors and businesses make decisions on a forward-
looking basis. They know that today's large debt levels are
simply tomorrow's tax hikes, interest rate increases, or
inflation--and they act accordingly. This debt overhang, and
the uncertainty it generates, can therefore weigh on growth,
investment, and job creation.
Interest payments on the debt (the ``legacy cost'' of
deficit spending) will sum to a staggering $5.6 trillion over
the next decade according to CBO. These payments threaten to
overwhelm other spending priorities in the budget. In 2012,
Deloitte LLP--a tax, audit, and consulting firm--discussed the
ways in which debt will hamper U.S. competitiveness in the
years ahead.
[A] great variety of meaningful investments will
almost certainly be left undone simply because interest
payments will push them out of the budget. This is the
silent cost of prior debts that, unless explicitly
recognized, crucially leads policymakers to
underestimate the effect that prior deficits have
already had on this decades planned expenditures.\12\
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\12\Deloitte LLP, The Untold Story of America's Debt, June 2012.
Debt service is already projected to dominate the budget.
Within a decade, the government will reach a point at which it
spends more on interest payments that it does on national
defense, Medicaid, Federal education spending, and
infrastructure, among others (see Figure 2). Interest on the
debt will become the government's third largest program,
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following only Social Security and Medicare.
FIGURE 2
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
All these factors point to the need for returning to the
balanced budget standard. It is also the soundest principle for
limiting government. A balanced budget commitment establishes
real-time restraint on the expansion of the public sector: The
size and scope of government, as measured by its spending, may
not exceed the amount that taxpayers provide and the economy
will sustain. This empowers the people, on an ongoing basis, to
hold their government in check.
The pursuit of balance also has distinct economic and
fiscal benefits. Nearly all economists, including those at the
CBO, explain that reducing budget deficits (thereby bending the
curve on debt levels) increases the pool of national savings
and boosts investment, thereby raising economic growth and job
creation.
The greater economic output that stems from a large deficit
reduction package would have a sizeable impact on the Federal
budget. For instance, higher output would lead to greater
revenues through the increase in taxable incomes. Lower
interest rates, and a reduction in the stock of debt, would
lead to lower government spending on net interest expenses.
Former Federal Reserve Chairman Bernanke has said that putting
in place a credible plan to reduce future deficits ``would not
only enhance economic performance in the long run, but could
also yield near-term benefits by leading to lower long-term
interest rates and increased consumer and business
confidence.''\13\
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\13\Bernanke speech at the Committee for a Responsible Federal
Budget Fiscal Accountability conference, 14 June 2011.
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For all these reasons, this budget resolution restores the
balanced budget standard, and then maintains it--putting the
government on a path to paying off the debt.
Automatic Spending Programs
Just as important as pursuing balance is the way in which
lawmakers achieve it. Some experts and policymakers advocate a
mix of spending restraint and tax increases--the so-called
``balanced'' approach--as if the two were merely opposite sides
of the same coin. That sterile, policy-neutral concept,
however, masks the fundamental cause and effect of government
budgeting: Spending comes first. Spending--one of the best
measures of the size and scope of government--is how government
does what it does. Government's programs and activities exist
only if government spends money to implement them. ``In a
fundamental sense,'' writes longtime budget expert Allen
Schick, ``the Federal Government is what it spends.''\14\ It is
because of spending that the government taxes and borrows.
Spending is the root cause of all other fiscal consequences.
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\14\Allen Schick, The Federal Budget: Politics, Policy, Process
(Washington DC: The Brookings Institution Press, 2007), page 2.
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CBO's own figures further demonstrate that spending control
is the indispensable element of controlling the budget. In its
most recent long-term projections, CBO shows that even
excluding interest payments, government programs will outspend
revenue persistently over the next 25 years. Indeed, while CBO
projects tax revenue to rise to historically high levels--19.4
percent of GDP by 2040, well above the 17.4-percent average of
the past 50 years--spending will still persistently outpace
revenue (see Figure 3). The inevitable debt service will drive
total spending above 25 percent of GDP, generating relentlessly
deepening deficits. Only by controlling spending can Congress
alter this disastrous course.\15\
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\15\Congressional Budget Office, The 2015 Long-Term Budget Outlook,
June 2015, Summary Table 1.
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That requires controlling automatic, or direct, spending.
Unlike the government's ``discretionary'' spending, in which
Congress sets fixed limits on total budget authority, direct
(or ``mandatory'') spending is open-ended and flows from
effectively permanent authorizations. Programs funded this
way--typically called ``entitlements''--pay benefits directly
to groups and individuals without an intervening appropriation.
They spend without limit. Their totals are determined by
numerous factors outside the control of Congress: caseloads,
the growth or contraction of GDP, inflation, and many others.
To put it simply, spending in these programs is uncontrolled
and uncontrollable--because it is designed to be.
The list of these programs is long and broad. It includes
the social insurance programs, Social Security and Medicare;
other health spending, such as Medicaid and the Affordable Care
Act; income support, nutrition assistance, unemployment
compensation, disability insurance, student loans, and a range
of others.
FIGURE 3
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
In 1965, as President Johnson's Great Society programs were
being enacted, net direct spending represented about 27 percent
of the budget. By 1974, when the Congressional Budget Act was
adopted, it had swollen to 41 percent of total spending. Today
it has surged to nearly 60 percent. Combined with net
interest--a mandatory payment in the true sense of the word--
the government's automatic direct spending consumes more than
two-thirds of the budget,\16\ and in just 10 years it will
swell to 78 percent\17\ (see Figure 4). It is the main driver
of the government's debt.
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\16\Congressional Budget Office, The Budget and Economic Outlook:
2016 to 2026, January 2016, Table 3-1.
\17\Ibid., Table 1-2.
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Clearly this problem with direct spending has been building
for decades, yet lawmakers have found it difficult to build an
enduring consensus for addressing it. With each year that
passes, the challenge of spending control grows more difficult,
because the necessary changes in programs become larger and, in
many cases, more wrenching. At some point the programs will
simply collapse under their own weight. Those who claim to
``protect'' them by resisting reform only ensure their demise.
Gaining control of spending need not be seen, however, as
some daunting exercise in ``mindless austerity,'' as the
President so ominously puts it. As long as reform is necessary,
it can be approached as an opportunity to save and strengthen
these programs--to make them better for the people they are
intended to serve.
Consider a few examples.
This report proposes a new Medicare option that would
transform this retirees' health coverage program from a
government-run, price-controlled bureaucracy to a personalized
system in which seniors have the option of choosing their
health coverage best suited to their needs from a range of
commercial plans. Traditional fee-for-service Medicare would
always be an option available to current seniors, those near
retirement, and future generations of beneficiaries. Fee-for-
service Medicare, along with private plans providing the same
level of health coverage, would compete for seniors' business,
just as Medicare Advantage does today. The new program,
however, would also adopt the competitive structure of Medicare
Part D, the prescription drug benefit program, to deliver
savings for seniors in the form of lower monthly premium costs.
FIGURE 4
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
In short, this Medicare reform would give retired
Americans, not the government, the ultimate leverage over what
kind of coverage they will have--and the government provides
them financial assistance in making the choices.
Another area of automatic spending, assistance for low-
income Americans, should be revised to encourage self-
sufficiency, not to trap people in dependency. Clearly, persons
with chronic disadvantages need and deserve a sturdy safety
net. Others require assistance at particular times of economic
downturns or personal misfortune. Still, the most compassionate
way to provide government assistance is to help free
individuals from the need for it. Welfare programs should
encourage recipients toward supporting themselves to the
greatest degree possible. As was proved with the successful
welfare reform of the 1990s, when struggling people are
challenged to work and earn on their own, they rise to the
occasion--and they are better off for it.
It should be noted, too, that government is not the sole
source of the many domestic benefits Americans receive--it is
not even the primary one. Every benefit the government
ostensibly ``provides'' actually draws from the abundant
resources of the Nation's free market system. The government
could not maintain Medicare, or Social Security, or its
numerous safety net programs without the funding generated by
the economy. Communities could not build schools and hospitals
without local economies sufficiently prosperous to support
them. This is why the fiscal policy of this budget--restraining
spending and reducing deficits--is crucial to the well-being of
all Americans. Those who strive to pull themselves out of
difficulties benefit most from the expanding opportunities and
rising incomes that only a prosperous economy can provide.
Finally, policymakers must embrace the recognition that
government can never substitute for nature's safety net: the
family. For generation upon generation, the family has been the
main source of comfort, security, and economic stability for
the individual. It is where moral values and a sense of
responsibility grow. The family reinforces the individual's
place in the larger community. As government seeks to support
those who lose any connection to a family, it should take care
not to contribute to the dissolution of families. Government
programs should aim to strengthen the family, the most
important and enduring institution in society.
Federalism
The republic of the United States reached a turning point
in 1936: That was the first peacetime year in which the Federal
Government's total spending exceeded the combined outlays of
the State and local governments. ``It can even be argued,''
writes Amity Shlaes, ``that one year--1936--created the modern
entitlement challenge that so bedevils both parties.''\18\
---------------------------------------------------------------------------
\18\Amity Shlaes, The Forgotten Man: A New History of the Great
Depression (New York: Harper Perennial, 2008), page 11.
---------------------------------------------------------------------------
As the 20th century unfolded, the national government's
dominance--both fiscally and as the central governing
authority--expanded. This was understandable during times of
war--especially World War II--when the entire Nation was under
threat. The notion continued to expand, however, into an ever-
growing range of domestic policies. President Roosevelt's New
Deal was, of course, a major step. Later came President
Truman's unsuccessful pursuit of nationalized health care, and
President Johnson's Great Society. By the late 1980s, health
care once again got drawn in, with some proposing a single-
payer Canadian-style health care system for the United States.
In some respects, this trend culminated with Obamacare.
Over time, States in some respects have been reduced to
carrying out the wishes of Washington, rather than serving as
the ``laboratories of democracy.''
This is precisely contrary to the Founders' vision:
The powers delegated by the proposed Constitution to
the Federal Government are few and defined,'' Madison
wrote. ``Those which are to remain in the State
governments are numerous and indefinite. The former
will be exercised principally on external objects, as
war, peace, negotiation, and foreign commerce; with
which last the power of taxation will, for the most
part, be connected. The powers reserved to the several
States will extend to all the objects which, in the
ordinary course of affairs, concern the lives,
liberties, and properties of the people, and the
internal order, improvement, and prosperity of the
State.\19\
---------------------------------------------------------------------------
\19\James Madison, Federalist 45.
As succinctly put in the Tenth Amendment: ``The powers not
delegated to the United States by the Constitution, nor
prohibited by it to the States, are reserved to the States
respectively, or to the people.''
Indeed, Madison argued the Federal Government would depend
on the States--not the other way around: ``The State
governments may be regarded as constituent and essential parts
of the Federal Government; whilst the latter is nowise
essential to the operation or organization of the former.''\20\
This point is proved in reality by the countless activities,
essential to the lives of individuals and communities, that
predated the national government and would continue without it.
Even if the 50 States stood as separate entities, they would
still operate schools and hospitals; they would find ways to
build roads and bridges; scientific research would continue;
energy and communications companies would emerge.
---------------------------------------------------------------------------
\20\Ibid.
---------------------------------------------------------------------------
This is not to say Americans would be better off without
the Federal Government. Their security and prosperity are
vastly enhanced by the voluntary unity reflected in the bonds
of the national Constitution. The point is simply that the
Federal Government's principal role is to protect the security
of the Nation, and to maintain an environment that supports the
initiative and creativity possible only through the diversity
of the several States and the bonds of civil society.
The reversal of this concept that developed over the past
100 years or so also has fiscal consequences. Federal
Government resources cannot maintain the overreach of its
governing ambitions. That is the message of Washington's
current, catastrophic spending path. To restore fiscal
sustainability, Congress sooner or later will have to consider
realigning the roles of different levels of government. It will
have to reinstitute the practice of federalism.
This will remain a necessity even if Congress gains control
of entitlement spending. Yet the fiscal concerns are only part
of the reason. The increasing centralization of government
smothers the energy of State and local policymakers. Restoring
State autonomy will deliver benefits for the entire Nation in
critical areas such as education, health care, infrastructure,
energy, the environment, and employment.
The budget resolution supports these aims. It promotes
State flexibility in areas such as Medicaid and the
Supplemental Nutrition Assistance Program. It encourages State
and local initiative in education. It sheds the conceit that
Washington knows best what is right for the people. The very
structure of this report reflects a distinction between those
activities required of the Federal Government from those best
suited to States and localities and the private sector (see the
explanation in Functional Presentation).
Restoring Congressional Budgeting
The congressional budget process, enacted in 1974, has
rarely worked as designed. Deadlines in the Congressional
Budget Act are missed far more often than made, rules are often
skirted, loopholes in spending disciplines exploited. Since
1998, the House and Senate have failed nine times to agree on a
budget resolution, the cornerstone of the process.
These failures have unquestionably worsened in recent
years. Last year was the first time since 2001 that the House
and Senate agreed to a 10-year balanced budget plan. In recent
years, lawmakers manufactured ad hoc procedures that have done
next to nothing to stabilize the government's catastrophic
long-term fiscal outlook. For a while, the budgetary
mismanagement became the new norm. The budget calendar was not
merely ignored, it was deliberately breached, rendering the
fiscal year irrelevant and leading to a stream of omnibus
spending bills of varying durations negotiated by a handful of
leaders--undermining the committee system and depriving
lawmakers of the deliberation so central to the legislative
process. Though Congress has made progress, it is still
struggling to overcome many of those vices.
This unraveling does have profound consequences. The first
and most obvious is that without regular budget resolutions,
Congress has all but abandoned any serious attempt to manage
fiscal policy. It is true the Budget Control Act of 2011
established caps on discretionary spending (which have been
adjusted upward since then), and applied the automatic
enforcement regime of sequestration. At the same time, however,
it did nothing to rein in direct spending, the greatest threat
to the government's fiscal stability. None of the other
manufactured procedures employed since then has accomplished
much along these lines either.
Equally troubling is the effect on Congress's ability to
govern. The failure in budgeting is the most visible and
regular evidence of Congress's decline as a governing
institution: ``The importance of conflicts over the size and
distribution of the budget--failure to pass a budget on time or
at all has become a sign of inability to govern--testifies to
the overriding importance of budgeting. Nowadays, the State of
the Union and the state of the budget have become essentially
equivalent.''\21\
---------------------------------------------------------------------------
\21\Aaron B. Wildavsky and Naomi Caiden, The New Politics of the
Budgetary Process--Third Edition (New York: Addison-Wesley Educational
Publishers Inc., 1997).
---------------------------------------------------------------------------
Thus, the collapse of budgeting hastens the erosion of
congressional authority. The more Congress tolerates its fiscal
ineptitude, the more inept it becomes at legislating in
general.
Yet as discouraging as these conditions may be, they can be
corrected. The restoration of congressional budgeting can
start, and is essential to, the regeneration of Congress as a
governing institution. This can follow two tracks.
First, it is imperative that Congress this year pursue, as
far as possible, the ``regular order'' of budgeting envisioned
in the Congressional Budget Act. The existing process is far
from perfect. It is complicated, time-consuming, and often
frustrating. The estimating conventions underlying budget
procedures reflect a distinct bias in favor of higher spending
and larger government.
Nevertheless, if employed, the process does provide a
general schedule for spending and tax bills. The budget
resolution represents an agenda and work plan in legislative
form unmatched by any other procedure. It gives coherence to
the legislature's many fiscal measures that did not exist
before the Congressional Budget Act was adopted. With the
creation of the budget resolution, Congress's budget became the
working blueprint for fiscal policy, embracing lawmakers'
consensus vision of governing.
Returning to the regular order also offers lawmakers an
opportunity to learn for themselves, directly, whether the
process truly is ``broken,'' and if so by how much. ``I could
easily argue that the budget process isn't broken at all,''
remarked former House Budget Committee Chairman Jim Nussle at a
September 2011 committee hearing on process reform. ``[T]oday
the budget process is not even being used or at best is simply
being ignored.''\22\
---------------------------------------------------------------------------
\22\Jim Nussle, ``Perspectives on Budget Process Reform,''
testimony to the Committee on the Budget, U.S. House of
Representatives, 22 September 2011.
---------------------------------------------------------------------------
Recently, various Members and experts in the policy
community have offered a range of proposals built on a kind of
problem-solving model. That is, proponents identify a specific
weakness in the process--say, the difficulty Congress has in
passing annual spending bills on time--and then offer an
ostensible solution, such as a 2-year budget and appropriations
cycle. Some argue that the President should be more involved in
budget development at the beginning of the process, as a
possible means of heading off crisis-style confrontations late
in the year.
Many of these proposals focus on practical matters--how to
make budget procedures more efficient and workable, or how to
enhance enforcement of budget levels. All this is perfectly
reasonable. A budget process, no matter how skillfully
designed, is pointless if lawmakers cannot or will not use it,
or if it fails to achieve real fiscal control.
Nevertheless, the focus on these piecemeal changes may slow
the momentum toward the kind of broad rewrite of the process
that is necessary. The process designed in 1974 was complicated
to begin with; it merely added new procedures onto existing
spending and tax practices. Since then, Congress has enacted
additional layers of complexity, such as the Balanced Budget
and Emergency Deficit Control Act of 1985, the Budget
Enforcement Act of 1990, and the Statutory Pay-As-You-Go Act of
2010, among others. Given all this, it may be time to dismantle
the entire process and build a new one. The lessons of the past
four decades of congressional budgeting will certainly inform
that development. Still, in thinking about a new process,
lawmakers should step back and ask a threshold question: What
is the congressional budget process for?
The obvious first answer is fiscal control. That, however,
is part of a more fundamental act: the act of governing.
Because budgeting truly is governing, the budget process should
be seen as a principal means of exercising constitutional
government.
The Constitution does not prescribe how big government
should be, but it does establish a framework for limiting
government. One of the best ways to determine that limit is to
limit spending--one of the best measures of the size and scope
of government.
The budget also is Congress's main instrument for
policymaking, the legislature's essential authority. As Madison
wrote: ``This power of the purse may, in fact, be regarded as
the most complete and effectual weapon with which any
constitution can arm the immediate representatives of the
people, for obtaining a redress of every grievance, and for
carrying into effect every just and salutary measure.''\23\ Any
new budget process should enhance Congress's policymaking role.
---------------------------------------------------------------------------
\23\The Federalist, No. 58.
---------------------------------------------------------------------------
The process also must reinforce the balance of powers, one
of the most critical protections of liberty. For nearly a half
century after enactment of the 1921 Budget and Accounting Act--
which attempted to straddle the separation of powers by
establishing an executive-centered budget process modeled after
Great Britain's--the presidency grew increasingly powerful.
Starting in the 1950s, presidents began deliberately tying
their budgets together with their legislative programs,
increasing their ability to set the legislative agenda, and
helping sustain what Schlesinger called ``the imperial
presidency.''\24\ The 1974 Congressional Budget Act was, in
part, an attempt to restore the legislature's agenda-setting
role. The new budget process should advance that effort.
---------------------------------------------------------------------------
\24\Arthur M. Schlesinger Jr., The Imperial Presidency, (New York:
Houghton Mifflin Company, 2004).
---------------------------------------------------------------------------
Budgeting also should be an instrument for enhancing
congressional oversight. There is no better way to get the
attention of executive agencies than by controlling their
funding. The budget process should encourage appropriations
subcommittees and authorizing committees to use the tool of the
budget aggressively, and to control the ever-expanding
administrative state.
Finally, just as the restoration of sound budgeting for how
the Federal Government spends is critical to the promotion of
economic growth debt-reduction, federalism, and ordered
liberty, so too is the introduction of budgeting for how the
Federal Government directs others to spend: regulatory
budgeting.
When regulation is needed, it can be done in more cost-
effective ways. Before it is imposed, Congress can budget for
how much new regulation, if any, can sustainably be imposed on
America's economy year by year. The undue brake on economic
growth that Federal regulation sets must be controlled. It
makes eminent sense to do that using the kinds of budgeting
tools Congress applies to put the brakes on runaway Federal
spending. To date, Congress has not adopted regulatory
budgeting tools to manage the Federal regulatory footprint in
the way it manages Federal spending. Neither has it imposed
robust statutory controls against Federal regulators' abilities
to burden America's workers and economy with excessively
expensive and insufficiently effective Federal regulations. The
time has come to do both.
Conclusion
As described at the outset, this budget resolution
expresses a vision; its contours are detailed throughout the
text of this report. It is also an instrument for realizing
that vision. Its allocations of spending authority implement
the budget's priorities; its fiscal path--achieving balance
within 10 years--restores the sound fiscal norm that long kept
spending, and the size of government itself, in check. It is an
instrument for true fiscal sustainability, and for maintaining
America's unique and exceptional brand of constitutional
government.
TABLE 1.--FISCAL YEAR 2017 BUDGET RESOLUTION TOTAL SPENDING AND REVENUE
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-2021 2017-2026
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
SUMMARY
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total spending:
BA...................................................... 3,900,967 3,848,121 4,007,366 4,179,555 4,309,637 4,449,397 4,651,534 4,839,943 5,000,532 5,173,555 20,245,646 44,360,606
OT...................................................... 3,882,461 3,849,342 3,988,526 4,163,470 4,301,136 4,445,385 4,621,834 4,791,398 4,947,282 5,136,345 20,184,934 44,127,178
On-budget:
BA...................................................... 3,086,332 2,984,016 3,084,551 3,192,964 3,254,411 3,319,284 3,443,779 3,551,204 3,624,651 3,704,462 15,602,273 33,245,653
OT...................................................... 3,072,428 2,990,509 3,071,424 3,182,999 3,252,237 3,321,899 3,420,907 3,509,889 3,578,931 3,675,084 15,569,597 33,076,306
Off-budget:
BA...................................................... 814,635 864,105 922,815 986,592 1,055,226 1,130,113 1,207,755 1,288,739 1,375,882 1,469,093 4,643,372 11,114,954
OT...................................................... 810,033 858,833 917,101 980,471 1,048,900 1,123,486 1,200,927 1,281,509 1,368,352 1,461,261 4,615,337 11,050,872
Revenues:
Total................................................... 3,521,497 3,659,353 3,789,990 3,958,001 4,117,566 4,285,579 4,464,033 4,653,472 4,859,831 5,075,638 19,046,407 42,384,960
On-budget............................................... 2,692,937 2,799,875 2,902,418 3,040,763 3,168,226 3,301,656 3,443,940 3,595,338 3,762,041 3,936,429 14,604,219 32,643,623
Off-budget.............................................. 828,560 859,478 887,572 917,238 949,340 983,923 1,020,093 1,058,134 1,097,790 1,139,209 4,442,188 9,741,337
Recommended Change in Revenues:
Total................................................... +10,700 +26,000 +43,000 +41,400 +42,000 +41,900 +43,400 +43,400 +42,200 +41,000 +163,100 +375,000
On-budget............................................... +10,700 +26,000 +43,000 +41,400 +42,000 +41,900 +43,400 +43,400 +42,200 +41,000 +163,100 +375,000
Off-budget.............................................. 0 0 0 0 0 0 0 0 0 0 0 0
Surplus/Deficit (-):
Total................................................... -381,672 -198,531 -207,457 -194,777 -181,008 -141,019 -122,876 -76,487 -26,040 28,731 -1,163,444 -1,501,134
Macroeconomic Impact of Deficit Reduction Path.......... -20,709 -8,542 -8,921 10,692 2,562 18,787 34,925 61,439 61,411 89,438 -24,917 241,084
On-budget............................................... -379,491 -190,634 -169,006 -142,236 -84,011 -20,243 23,033 85,449 183,110 261,345 -965,378 -432,683
Off-budget.............................................. 18,527 645 -29,529 -63,233 -99,560 -139,563 -180,834 -223,375 -270,562 -322,052 -173,149 -1,309,535
Debt Held by the Public (end of year)..................... 14,400,000 14,726,000 14,976,000 15,190,000 15,436,000 15,576,000 15,808,000 15,934,000 15,812,000 15,960,000
Debt Subject to Limit (end of year)....................... 19,848,354 20,314,389 20,647,523 20,904,600 21,161,285 21,296,902 21,510,772 21,598,523 21,373,459 21,412,056
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
BY FUNCTION
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
National Defense (050):
BA...................................................... 559,254 593,759 607,553 619,761 631,991 644,193 657,101 670,425 683,163 698,114 3,012,318 6,365,314
OT...................................................... 566,461 574,049 592,442 605,138 617,088 634,044 641,635 649,501 667,016 681,216 2,955,179 6,228,591
International Affairs (150):
BA...................................................... 39,780 39,778 39,777 38,852 38,726 39,784 40,805 41,694 42,622 43,596 196,913 405,413
OT...................................................... 43,705 40,260 39,273 38,830 38,404 38,893 39,506 40,102 40,735 41,473 200,471 401,179
General Science, Space and Technology (250):
BA...................................................... 30,215 30,855 31,500 32,174 32,879 33,585 34,326 35,070 35,845 36,658 157,623 333,107
OT...................................................... 30,451 30,654 31,174 31,732 32,297 32,957 33,678 34,390 35,148 35,933 156,308 328,414
Energy (270):
BA...................................................... -2,914 1,601 1,675 1,683 1,747 1,816 1,888 1,959 2,029 -189 3,792 11,295
OT...................................................... 1,442 1,119 1,239 1,155 1,164 1,186 1,218 1,243 1,263 -927 6,119 10,102
Natural Resources & Environment (300):
BA...................................................... 38,641 39,185 39,720 40,862 40,712 41,518 42,878 43,874 44,845 44,026 199,120 416,261
OT...................................................... 41,170 41,109 40,846 42,022 41,151 41,802 43,057 43,489 44,369 43,059 206,298 422,074
Agriculture (350):
BA...................................................... 23,809 23,344 21,067 20,012 19,674 19,600 19,934 19,961 20,283 20,724 107,906 208,408
OT...................................................... 24,912 22,883 20,267 19,399 19,097 19,021 19,502 19,463 19,760 20,195 106,558 204,499
Commerce & Housing Credit (370):
On-budget:
BA.................................................... -3,096 -4,977 -7,162 -9,990 -11,207 -11,154 -11,122 -11,361 -10,905 -11,363 -36,432 -92,337
OT.................................................... -17,777 -22,531 -21,735 -23,337 -25,448 -26,187 -28,281 -29,993 -30,126 -30,184 -110,828 -255,599
Off-budget:
BA.................................................... 129 -3,473 -3,662 -4,024 -4,392 -4,621 -4,850 -5,087 -5,335 -5,701 -15,422 -41,016
OT.................................................... 205 -3,444 -3,647 -4,014 -4,387 -4,617 -4,845 -5,083 -5,330 -5,696 -15,287 -40,858
Transportation (400):
BA...................................................... 87,879 89,099 90,727 84,831 64,777 65,727 66,762 67,794 68,887 70,000 417,313 756,483
OT...................................................... 90,628 89,793 91,114 92,137 86,962 77,691 73,991 73,041 72,534 72,380 450,634 820,271
Community & Regional Development (450):
BA...................................................... 7,561 6,381 5,721 5,749 5,815 6,021 6,250 6,683 8,183 8,374 31,227 66,738
OT...................................................... 20,693 17,774 15,678 13,538 11,435 8,929 8,113 6,908 8,278 8,442 79,118 119,788
Education,Training,Employment,and Social Services (500):
BA...................................................... 78,795 84,083 85,451 86,862 88,102 88,818 93,490 94,414 95,476 96,049 423,293 891,540
OT...................................................... 91,997 85,833 86,078 87,440 88,757 89,802 92,500 95,172 96,493 97,506 440,105 911,578
Health (550):
BA...................................................... 465,184 366,670 369,978 381,404 390,584 398,225 407,107 416,534 426,598 454,051 1,973,820 4,076,335
OT...................................................... 458,633 375,603 370,695 380,274 388,437 395,694 404,121 413,211 422,901 449,930 1,973,642 4,059,499
Medicare (570):
BA...................................................... 590,086 583,750 643,371 684,911 731,321 817,737 834,731 839,165 914,301 973,544 3,233,439 7,612,917
OT...................................................... 590,068 583,690 643,267 684,816 731,237 817,648 834,638 839,021 914,164 973,401 3,233,078 7,611,950
Income Security (600):
BA...................................................... 497,523 471,709 480,783 491,841 479,718 488,273 497,873 507,892 518,397 529,675 2,421,574 4,963,684
OT...................................................... 491,960 461,357 473,392 483,961 472,117 486,470 491,557 495,442 507,575 525,323 2,382,787 4,889,154
Social Security (650):
On-budget:
BA.................................................... 37,199 40,124 43,373 46,627 50,035 53,677 57,540 61,645 66,076 70,376 217,358 526,672
OT.................................................... 37,227 40,141 43,373 46,627 50,035 53,677 57,540 61,645 66,076 70,376 217,403 526,717
Off-budget:
BA.................................................... 918,632 972,586 1,033,289 1,098,345 1,167,189 1,239,765 1,314,911 1,393,028 1,475,537 1,562,058 5,190,041 12,175,340
OT.................................................... 913,954 967,285 1,027,560 1,092,214 1,160,858 1,233,134 1,308,078 1,385,794 1,468,002 1,554,221 5,161,871 12,111,100
Veterans Benefits and Services (700):
BA...................................................... 174,766 173,539 187,777 194,202 200,763 217,151 214,690 211,449 229,055 236,447 931,047 2,039,839
OT...................................................... 182,047 174,275 187,312 193,407 199,856 216,047 213,505 210,297 227,790 235,210 936,897 2,039,746
Administration of Justice (750):
BA...................................................... 64,515 59,085 60,630 62,172 63,250 64,866 66,560 68,275 70,357 73,432 309,652 653,142
OT...................................................... 58,672 59,739 62,389 64,685 64,691 65,051 66,555 68,059 69,986 73,381 310,176 653,208
General Government (800):
BA...................................................... 23,367 22,293 22,087 21,924 21,758 23,680 23,932 24,183 24,426 24,620 111,429 232,269
OT...................................................... 22,749 21,650 21,516 21,629 21,565 23,221 23,647 23,924 24,177 24,391 109,109 228,469
Net Interest (900):
On-budget:
BA.................................................... 393,678 446,615 499,334 540,201 569,849 594,309 620,683 638,813 648,404 655,665 2,449,676 5,607,550
OT.................................................... 393,678 446,615 499,334 540,201 569,849 594,309 620,683 638,813 648,404 655,665 2,449,676 5,607,550
Off-Budget:
BA.................................................... -87,204 -87,518 -88,743 -89,073 -88,311 -85,152 -81,796 -78,044 -72,494 -64,748 -440,850 -823,084
OT.................................................... -87,204 -87,518 -88,743 -89,073 -88,311 -85,152 -81,796 -78,044 -72,494 -64,748 -440,850 -823,084
Allowances (920):
BA...................................................... -39,520 -52,890 -54,216 -57,006 -59,733 -61,661 -63,814 -65,767 -67,933 -65,057 -263,365 -587,597
OT...................................................... -20,821 -38,653 -48,261 -52,626 -56,411 -59,168 -61,148 -63,141 -65,208 -64,663 -216,772 -530,100
Government-Wide Savings (930):
BA...................................................... 34,478 32,662 -29,983 -37,042 -45,175 -115,840 -68,634 -13,285 -81,290 -131,037 -45,059 -455,145
OT...................................................... 14,610 46,700 -22,263 -29,889 -37,802 -107,032 -59,149 -3,260 -74,838 -113,780 -28,644 -386,702
Undistributed Offsetting Receipts (950):
On-budget:
BA.................................................... -88,561 -89,314 -81,278 -83,732 -87,842 -91,041 -99,201 -108,213 -114,167 -123,243 -430,727 -966,592
OT.................................................... -88,561 -89,314 -81,278 -83,732 -87,842 -91,041 -99,201 -108,213 -117,567 -123,243 -430,727 -969,992
Off-budget:
BA.................................................... -16,922 -17,490 -18,069 -18,656 -19,260 -19,879 -20,510 -21,158 -21,826 -22,516 -90,397 -196,286
OT.................................................... -16,922 -17,490 -18,069 -18,656 -19,260 -19,879 -20,510 -21,158 -21,826 -22,516 -90,397 -196,286
Overseas Contingency Operations/Global War on Terrorism (970):
BA...................................................... 73,693 26,666 26,666 26,666 26,666 0 0 0 0 0 180,357 180,357
OT...................................................... 38,485 27,762 25,573 25,592 25,598 8,884 3,240 776 0 0 143,010 155,910
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
1. Only on-budget amounts for fiscal years 2017-2026 are entered into the budget resolution legislative text. Off-budget amounts are shown for display purposes only.
2. The Office of Management and Budget and the Congressional Budget Office do not separately track outlays for Overseas Contingency Operations/Global War on Terrorism (GWOT) once funds have been appropriated. The budget, therefore,
shows in function 970 OCO/GWOT outlays that result from new budget authority occurring in fiscal years 2017-2026 only. Outlays resulting from OCO/GWOT activity prior to fiscal year 2016 are included in budget functions 050 and
150.
TABLE 2.--FISCAL YEAR 2017 BUDGET RESOLUTION DISCRETIONARY SPENDING
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-2021 2017-2026
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
SUMMARY
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total spending:
BA...................................................... 1,143,292 1,084,135 1,097,737 1,109,745 1,121,753 1,107,096 1,119,848 1,132,970 1,145,469 1,159,356 5,556,662 11,221,401
OT...................................................... 1,202,910 1,165,964 1,162,879 1,169,491 1,171,186 1,157,678 1,154,217 1,157,300 1,172,936 1,184,229 5,872,430 11,698,790
Base Defense (050):
BA...................................................... 551,068 585,469 599,071 611,079 623,087 635,096 647,848 660,970 673,469 687,356 2,969,774 6,274,513
OT...................................................... 557,743 565,121 583,345 596,062 607,911 624,797 632,317 640,020 657,296 670,488 2,910,183 6,135,101
Base Non Defense:
BA...................................................... 518,531 472,000 472,000 472,000 472,000 472,000 472,000 472,000 472,000 472,000 2,406,531 4,766,531
OT...................................................... 606,682 573,081 553,961 547,836 537,677 523,997 518,660 516,505 515,640 513,740 2,819,237 5,407,778
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
BY FUNCTION
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
National Defense (050):
BA...................................................... 551,068 585,469 599,071 611,079 623,087 635,096 647,848 660,970 673,469 687,356 2,969,774 6,274,513
OT...................................................... 557,743 565,121 583,345 596,062 607,911 624,797 632,317 640,020 657,296 670,488 2,910,183 6,135,101
International Affairs (150):
BA...................................................... 35,762 36,732 37,449 38,228 39,058 39,868 40,873 41,747 42,664 43,627 187,229 396,007
OT...................................................... 45,320 41,843 40,767 40,075 39,666 39,927 40,561 41,175 41,830 42,592 207,670 413,754
General Science, Space and Technology (250):
BA...................................................... 30,108 30,755 31,400 32,074 32,779 33,485 34,226 34,970 35,745 36,558 157,116 332,100
OT...................................................... 30,345 30,552 31,074 31,632 32,197 32,857 33,578 34,290 35,048 35,833 155,800 327,406
Energy (270):
BA...................................................... 2,739 2,816 2,880 2,947 3,017 3,086 3,159 3,231 3,309 3,388 14,399 30,572
OT...................................................... 3,101 2,922 2,913 2,972 3,029 3,086 3,149 3,220 3,293 3,370 14,937 31,055
Natural Resources & Environment (300):
BA...................................................... 36,118 37,078 38,081 39,108 40,189 41,263 42,390 43,555 44,748 46,001 190,574 408,531
OT...................................................... 38,039 38,304 38,796 39,601 40,445 41,459 42,508 43,068 44,195 44,969 195,185 411,384
Agriculture (350):
BA...................................................... 6,347 6,514 6,688 6,868 7,052 7,237 7,437 7,635 7,846 8,060 33,469 71,684
OT...................................................... 6,190 6,391 6,597 6,773 6,955 7,138 7,333 7,530 7,737 7,948 32,906 70,592
Commerce & Housing Credit (370):
On-budget:
BA.................................................... -12,590 -13,788 -14,999 -16,066 -16,795 -17,066 -17,120 -17,160 -17,196 -17,174 -74,238 -159,954
OT.................................................... -11,971 -13,495 -15,017 -16,144 -16,865 -17,150 -17,214 -17,257 -17,300 -17,281 -73,492 -159,694
Off-budget:
BA.................................................... 274 283 294 304 315 326 337 350 361 374 1,470 3,218
OT.................................................... 273 283 294 304 315 325 337 349 360 373 1,469 3,213
Transportation (400):
BA...................................................... 29,396 30,093 30,794 31,516 32,277 33,030 33,849 34,675 35,543 34,810 154,076 325,983
OT...................................................... 89,728 89,373 91,020 92,410 87,683 78,818 75,529 74,999 74,918 73,571 450,214 828,049
Community & Regional Development (450):
BA...................................................... 8,158 7,453 6,850 6,227 6,395 6,567 6,741 6,923 7,112 7,308 35,083 69,734
OT...................................................... 20,037 17,513 15,371 12,710 10,646 7,916 6,932 6,853 7,003 7,165 76,277 112,146
Education, Training, Employment, and Social Services
(500):
BA...................................................... 86,622 95,111 97,058 98,925 100,599 102,355 104,088 105,789 107,587 108,872 478,315 1,007,006
OT...................................................... 93,668 93,784 95,483 97,323 99,033 100,751 102,457 104,146 105,870 107,471 479,291 999,986
Health (550):
BA...................................................... 59,727 61,176 61,837 62,557 63,146 63,765 64,369 64,924 65,270 65,794 308,443 632,565
OT...................................................... 59,606 60,560 60,583 61,267 61,640 62,127 62,600 63,086 63,365 63,822 303,656 618,656
Medicare (570):
BA...................................................... 6,549 6,898 7,263 7,651 8,055 8,482 8,920 9,376 9,846 10,345 36,416 83,385
OT...................................................... 6,581 6,876 7,202 7,587 7,987 8,411 8,847 9,300 9,769 10,262 36,233 82,822
Income Security (600):
BA...................................................... 65,510 66,441 67,571 68,812 69,753 71,233 72,765 74,338 75,929 77,577 338,087 709,929
OT...................................................... 66,595 67,149 67,843 68,675 69,453 70,653 71,929 73,446 75,000 76,613 339,715 707,356
Social Security (650):
On-budget:
BA.................................................... 0 0 0 0 0 0 0 0 0 0 0 0
OT.................................................... 28 17 0 0 0 0 0 0 0 0 45 45
Off-budget:
BA.................................................... 5,362 5,522 5,688 5,862 6,039 6,219 6,406 6,600 6,800 7,009 28,473 61,507
OT.................................................... 5,384 5,521 5,659 5,831 6,008 6,188 6,373 6,566 6,765 6,972 28,403 61,267
Veterans Benefits and Services (700):
BA...................................................... 74,734 76,948 79,236 81,585 84,012 86,483 89,048 91,700 94,450 97,325 396,515 855,521
OT...................................................... 74,697 76,125 78,554 80,702 83,090 85,506 88,008 90,661 93,346 96,211 393,168 846,900
Administration of Justice (750):
BA...................................................... 55,032 56,471 58,195 59,973 61,811 63,671 65,619 67,618 69,703 72,051 291,482 630,144
OT...................................................... 54,916 56,291 57,905 59,624 61,319 63,151 65,090 67,072 69,137 71,129 290,055 625,634
General Government (800):
BA...................................................... 15,733 14,822 14,480 14,261 13,957 15,788 16,010 16,196 16,353 16,492 73,253 154,091
OT...................................................... 15,190 14,355 14,029 14,047 13,832 15,376 15,750 15,981 16,159 16,324 71,453 151,043
Allowances (920):
BA...................................................... -33,561 -51,173 -52,103 -54,580 -58,171 -59,731 -61,840 -63,748 -65,966 -67,034 -249,588 -567,907
OT...................................................... -17,687 -37,171 -46,170 -50,454 -54,639 -57,290 -59,315 -61,286 -63,379 -64,903 -206,121 -512,294
Government-Wide Savings (930):
BA...................................................... 46,511 1,849 -6,662 -14,252 -21,489 -34,061 -45,277 -56,719 -68,103 -79,383 5,958 -277,585
OT...................................................... 26,643 15,887 1,058 -7,099 -14,116 -25,253 -35,792 -46,694 -57,477 -68,700 22,373 -211,542
Overseas Contingency Operations/Global War on Terrorism (970):
BA...................................................... 73,693 26,666 26,666 26,666 26,666 0 0 0 0 0 180,357 180,357
OT...................................................... 38,485 27,762 25,573 25,592 25,598 8,884 3,240 776 0 0 143,010 155,910
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
TABLE 3.--FISCAL YEAR 2017 BUDGET RESOLUTION MANDATORY SPENDING
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-2021 2017-2026
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
SUMMARY
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total spending:
BA........................................................ 2,757,675 2,763,986 2,909,629 3,069,810 3,187,884 3,342,301 3,531,686 3,706,973 3,855,063 4,014,199 14,688,984 33,139,205
OT........................................................ 2,679,551 2,683,378 2,825,647 2,993,979 3,129,950 3,287,707 3,467,617 3,634,098 3,774,346 3,952,116 14,312,505 32,428,388
On-budget:
BA...................................................... 1,948,676 1,905,686 1,992,796 2,089,385 2,139,012 2,218,733 2,330,674 2,425,184 2,486,343 2,552,489 10,075,554 22,088,977
OT...................................................... 1,875,175 1,830,349 1,914,499 2,019,644 2,087,373 2,170,734 2,273,400 2,359,504 2,413,120 2,498,200 9,727,039 21,441,997
Off-budget:
BA...................................................... 808,999 858,300 916,833 980,426 1,048,872 1,123,568 1,201,012 1,281,789 1,368,721 1,461,710 4,613,429 11,050,229
OT...................................................... 804,376 853,029 911,148 974,336 1,042,577 1,116,973 1,194,217 1,274,594 1,361,227 1,453,916 4,585,465 10,986,392
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
BY FUNCTION
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
National Defense (050):
BA........................................................ 8,186 8,290 8,482 8,682 8,904 9,097 9,253 9,455 9,694 10,758 42,544 90,801
OT........................................................ 8,718 8,928 9,097 9,076 9,177 9,247 9,318 9,481 9,720 10,728 44,996 93,490
International Affairs (150):
BA........................................................ 4,018 3,046 2,328 624 -332 -84 -68 -53 -42 -31 9,684 9,406
OT........................................................ -1,615 -1,583 -1,494 -1,245 -1,262 -1,034 -1,055 -1,073 -1,095 -1,119 -7,199 -12,575
General Science, Space and Technology (250):
BA........................................................ 107 100 100 100 100 100 100 100 100 100 507 1,007
OT........................................................ 106 102 100 100 100 100 100 100 100 100 508 1,008
Energy (270):
BA........................................................ -5,653 -1,215 -1,205 -1,264 -1,270 -1,270 -1,271 -1,272 -1,280 -3,577 -10,607 -19,277
OT........................................................ -1,659 -1,803 -1,674 -1,817 -1,865 -1,900 -1,931 -1,977 -2,030 -4,297 -8,818 -20,953
Natural Resources & Environment (300):
BA........................................................ 2,523 2,107 1,639 1,754 523 255 488 319 97 -1,975 8,546 7,730
OT........................................................ 3,131 2,805 2,050 2,421 706 343 549 421 174 -1,910 11,113 10,690
Agriculture (350):
BA........................................................ 17,462 16,830 14,379 13,144 12,622 12,363 12,497 12,326 12,437 12,664 74,437 136,724
OT........................................................ 18,722 16,492 13,670 12,626 12,142 11,883 12,169 11,933 12,023 12,247 73,652 133,907
Commerce & Housing Credit (370):
On-budget:
BA...................................................... 9,494 8,811 7,837 6,076 5,588 5,912 5,998 5,799 6,291 5,811 37,806 67,617
OT...................................................... -5,806 -9,036 -6,718 -7,193 -8,583 -9,037 -11,067 -12,736 -12,826 -12,903 -37,336 -95,905
Off-budget:
BA...................................................... -145 -3,756 -3,956 -4,328 -4,707 -4,947 -5,187 -5,437 -5,696 -6,075 -16,892 -44,234
OT...................................................... -68 -3,727 -3,941 -4,318 -4,702 -4,942 -5,182 -5,432 -5,690 -6,069 -16,756 -44,071
Transportation (400):
BA........................................................ 58,483 59,006 59,933 53,315 32,500 32,697 32,913 33,119 33,344 35,190 263,237 430,500
OT........................................................ 900 420 94 -273 -721 -1,127 -1,538 -1,958 -2,384 -1,191 420 -7,778
Community & Regional Development (450):
BA........................................................ -597 -1,072 -1,129 -478 -580 -546 -491 -240 1,071 1,066 -3,856 -2,996
OT........................................................ 656 261 307 828 789 1,013 1,181 55 1,275 1,277 2,841 7,642
Education, Training, Employment, and Social Services (500):
BA........................................................ -7,827 -11,028 -11,607 -12,063 -12,497 -13,537 -10,598 -11,375 -12,111 -12,823 -55,022 -115,466
OT........................................................ -1,671 -7,951 -9,405 -9,883 -10,276 -10,949 -9,957 -8,974 -9,377 -9,965 -39,186 -88,408
Health (550):
BA........................................................ 405,457 305,494 308,141 318,847 327,438 334,460 342,738 351,610 361,328 388,257 1,665,377 3,443,770
OT........................................................ 399,027 315,043 310,112 319,007 326,797 333,567 341,521 350,125 359,536 386,108 1,669,986 3,440,843
Medicare (570):
BA........................................................ 583,537 576,852 636,108 677,260 723,266 809,255 825,811 829,789 904,455 963,199 3,197,023 7,529,532
OT........................................................ 583,487 576,814 636,065 677,229 723,250 809,237 825,791 829,721 904,395 963,139 3,196,845 7,529,128
Income Security (600):
BA........................................................ 432,013 405,268 413,212 423,029 409,965 417,040 425,108 433,554 442,468 452,098 2,083,487 4,253,755
OT........................................................ 425,365 394,208 405,549 415,286 402,664 415,817 419,628 421,996 432,575 448,710 2,043,072 4,181,798
Social Security (650):
On-budget:
BA...................................................... 37,199 40,124 43,373 46,627 50,035 53,677 57,540 61,645 66,076 70,376 217,358 526,672
OT...................................................... 37,199 40,124 43,373 46,627 50,035 53,677 57,540 61,645 66,076 70,376 217,358 526,672
Off-budget:
BA...................................................... 913,270 967,064 1,027,601 1,092,483 1,161,150 1,233,546 1,308,505 1,386,428 1,468,737 1,555,049 5,161,568 12,113,833
OT...................................................... 908,570 961,764 1,021,901 1,086,383 1,154,850 1,226,946 1,301,705 1,379,228 1,461,237 1,547,249 5,133,468 12,049,833
Veterans Benefits and Services (700):
BA........................................................ 100,032 96,591 108,541 112,617 116,751 130,668 125,642 119,749 134,605 139,122 534,532 1,184,318
OT........................................................ 107,350 98,150 108,758 112,705 116,766 130,541 125,497 119,636 134,444 138,999 543,729 1,192,846
Administration of Justice (750):
BA........................................................ 9,483 2,614 2,435 2,199 1,439 1,195 941 657 654 1,381 18,170 22,998
OT........................................................ 3,756 3,448 4,484 5,061 3,372 1,900 1,465 987 849 2,252 20,121 27,574
General Government (800):
BA........................................................ 7,634 7,471 7,607 7,663 7,801 7,892 7,922 7,987 8,073 8,128 38,176 78,178
OT........................................................ 7,559 7,295 7,487 7,582 7,733 7,845 7,897 7,943 8,018 8,067 37,656 77,426
Net Interest (900):
On-budget:
BA...................................................... 393,678 446,615 499,334 540,201 569,849 594,309 620,683 638,813 648,404 655,665 2,449,676 5,607,550
OT...................................................... 393,678 446,615 499,334 540,201 569,849 594,309 620,683 638,813 648,404 655,665 2,449,676 5,607,550
Off-Budget:
BA...................................................... -87,204 -87,518 -88,743 -89,073 -88,311 -85,152 -81,796 -78,044 -72,494 -64,748 -440,850 -823,084
OT...................................................... -87,204 -87,518 -88,743 -89,073 -88,311 -85,152 -81,796 -78,044 -72,494 -64,748 -440,850 -823,084
Allowances (920):
BA........................................................ -5,959 -1,717 -2,113 -2,426 -1,562 -1,930 -1,974 -2,019 -1,967 1,977 -13,777 -19,690
OT........................................................ -3,134 -1,482 -2,091 -2,172 -1,772 -1,878 -1,833 -1,855 -1,829 240 -10,651 -17,806
Government-Wide Savings (930):
BA........................................................ -12,033 30,813 -23,321 -22,790 -23,686 -81,779 -23,357 43,434 -13,187 -51,654 -51,017 -177,560
OT........................................................ -12,033 30,813 -23,321 -22,790 -23,686 -81,779 -23,357 43,434 -17,361 -45,080 -51,017 -175,160
Undistributed Offsetting Receipts (950):
On-budget:
BA...................................................... -88,561 -89,314 -81,278 -83,732 -87,842 -91,041 -99,201 -108,213 -114,167 -123,243 -430,727 -966,592
OT...................................................... -88,561 -89,314 -81,278 -83,732 -87,842 -91,041 -99,201 -108,213 -117,567 -123,243 -430,727 -969,992
Off-budget:
BA...................................................... -16,922 -17,490 -18,069 -18,656 -19,260 -19,879 -20,510 -21,158 -21,826 -22,516 -90,397 -196,286
OT...................................................... -16,922 -17,490 -18,069 -18,656 -19,260 -19,879 -20,510 -21,158 -21,826 -22,516 -90,397 -196,286
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
COMPARISON WITH THE
PRESIDENT'S BUDGET
----------
To this day, more than four decades since the adoption of
the Congressional Budget Act, some budget ``experts'' still
describe the congressional budget as a ``response'' to the
President's. That is true only in terms of timing. Merely as a
carryover from a 1921 law, the 1974 Budget Act scheduled the
President's submission before the congressional budget. The
effect, however, has been more significant than most might
think--largely because the sequence is taken for granted. Since
the executive budget process was installed nearly a century
ago, and increasingly since the 1950s, presidents have used
this instrument not mainly as an accounting tool--showing the
fiscal effects of executing existing policies--but as an
expression of their own policy agenda. Over the course of 50
years, the President's budget became an ever-more effective
tool empowering one person to determine the Nation's
direction--contrary to what the Constitution intended. It is no
mere coincidence that the practice corresponded with the rise
of what political historian Arthur M. Schlesinger termed ``the
imperial presidency.''
The Obama budgets provide an especially troubling example.
This President has been notorious in exceeding his authority.
He has made, for example, numerous legislative changes in his
own health care program after he had signed it--clearly
imposing on a prerogative reserved to the Congress. Reflecting
his own cavalier attitude about fiscal policy, he has submitted
his budgets late more often than not--including the latest one.
Worse are the irresponsible policies his budgets continue
to advance. His latest proposal, for fiscal year 2017, once
again does not even try to balance. While the House budget
reduces debt held by the public as a share of the economy, the
President's budget maintains debt at its historically high
levels. His budget makes no attempt to confront the
government's massive fiscal challenges, or to save critical
programs such as Medicare and Social Security. It is a status
quo budget that does nothing to advance the conversation about
maintaining a strong national defense, promoting a more robust
economy, and ensuring health and retirement security. The
President's budget expresses the progressive policies that have
led to a swollen and out-of-control government, and the
stagnation of economic growth and standards of living.
For these reasons, the President's budget was not even
worth the time for a hearing on it--at which the administration
would presumably attempt to defend the indefensible. Yet to
further detail its failures, a comparison between the House
budget and the President's is informative. Here are some
examples.
LAs a foundation for the congressional budget, the
Budget Committee uses the modest economic projections of the
Congressional Budget Office [CBO], which expects real gross
domestic product [GDP] to grow by an average of 2.1 percent per
year over the next decade. For his budget, the President
employs the more optimistic forecasts of his own economists,
who expect average annual growth of 2.3 percent per year over
the next decade. Both figures are disturbingly low, compared
with the roughly 3-percent average annual growth rate of the
past 50 years. In addition, the seemingly small difference
between the two estimates has significant budgetary effects.
Following a CBO ``rule of thumb,'' that two-tenths percentage
point difference would give the President roughly $650 billion
in lower deficits than the Budget Committee faced in writing
this package. Yet he manages to increase deficits after he
leaves office.
LWhile the Committee has developed a plan to
balance the budget within 10 years, the President's budget
never balances. It never tries to. In fact, deficits under the
President's budget begin to increase in 2021, and approach $800
billion in 2026. This is the product of the President's casual
attitude that deficits in the range of 3 percent of GDP are
acceptable. This is not a fiscal policy; it is an abandonment
of fiscal norms that leads to chronic and growing deficits and
debt. Only by restoring the goal of balancing the budget in
peacetime can Congress establish fiscal sustainability. No
other standard has substituted for this simple conviction. As a
result, fiscal policy has been adrift.
FIGURE 5
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The House budget resolution reduces spending by
$6.5 trillion over 10 years compared with current policy
projections. The President, even in the face of historically
high levels of debt, increases spending by $2.5 trillion over
the decade.
The House budget embraces tax reform that will
promote growth and encourage work, saving, and investment, and
it contains no tax increases. The President, by contrast,
raises taxes by $3.4 trillion over the next decade--and still
cannot reduce deficits.
The House budget reduces publicly held debt from
74 percent of GDP to 57 percent over the decade. The
President's budget makes no attempt to reduce debt, keeping it
constant at 74 percent of GDP over the next 10 years. That is
the highest level of debt since just after World War II. A
significant difference, however, is that the post-war debt
resulted from large but temporary surges of spending to save
the free world. Today's deficits and debt are the product of
permanent automatic spending programs.
FIGURE 6
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The House budget restores the time-tested
principle of federalism, encouraging the initiative of State
and local governments in addressing more of the Nation's
domestic policy concerns. The President's budget merely repeats
the failed and crippling notion that Washington knows best,
directing how individuals should live their lives, how State
and local governments should govern, and how businesses should
serve their customers.
The House budget advances patient-centered,
personalized health care and health coverage--and this
principle applies both to commercial insurance and major
government-sponsored programs such as Medicare. The Obama
budget predictably clings to the conceit of centralized,
Washington-based, one-size-fits-all health care--even as its
failure becomes ever clearer.
The House budget saves $487 billion over 10 years
by strengthening Medicare and establishing a patient-centered
option in Medicare. It achieves another $3 trillion in health
savings, by repealing Obamacare and allowing greater State
flexibility in Medicaid. The budget saves $1.5 trillion in
other automatic spending. The President, by contrast, traps
increasing numbers of lower income people in Medicaid, where
many sick individuals cannot get appointments, new
beneficiaries cannot find doctors, and Medicaid cards are mere
pieces of plastic. His health care law will increase Federal
spending for Medicaid and the State Children's Health Insurance
Program by $1 trillion over the next 10 years, with no
substantial reforms to improve the program. Meanwhile, he
imposes $501 billion in new Medicare cuts to medical
providers--part of the cuts needed to finance Obamacare, at
least on paper--with no meaningful restructuring of a program
going bankrupt.
The House budget provides more resources for
national security than the President does in fiscal year 2017
and over 10 years. The President claims illusory defense
spending increases with no plan to pay for adjusting statutory
defense spending caps upward.
The President's budget is a typically unserious set of
proposals that should nevertheless be taken seriously. It
expresses and leads a progressive impulse heavy on spending,
regulation, and debt--one that ultimately views the Nation as
the government's servant, not the other way around. This
comparison reflects some of the dangerous and self-defeating
flaws in that vision.
HOUSE BUDGET RESOLUTION VS. THE PRESIDENT'S BUDGET
----------------------------------------------------------------------------------------------------------------
House Budget Resolution President's Budget
----------------------------------------------------------------------------------------------------------------
Uses modest economic growth projections of the Relies on more optimistic economic assumptions of White
Congressional Budget Office. House forecasters.
----------------------------------------------------------------------------------------------------------------
Achieves balance within 10 years. Never balances; deficits climb starting in 2021 and
approach $800 billion by the end of the decade.
----------------------------------------------------------------------------------------------------------------
Reduces spending by $6.5 trillion over 10 years. Spends $2.5 trillion more than the House budget over 10
years.
----------------------------------------------------------------------------------------------------------------
Calls for growth-promoting tax reform that reduces Increases taxes by $3.4 trillion over 10 years.
rates and broadens the tax base. Contains no tax
increases.
----------------------------------------------------------------------------------------------------------------
Reduces debt held by the public from the current 74 Keeps publically held debt at about three-fourths of
percent of gross domestic product [GDP] to 57 economic output--the highest level since just after World
percent within 10 years. War II.
----------------------------------------------------------------------------------------------------------------
Restores the principle of federalism, encouraging Advances the failed notion that Washington knows best,
the initiative of State and local governments in dictating how individuals should live, how State and
addressing more of the Nation's domestic policy local governments should serve constituents, and how
concerns. businesses should serve their customers.
----------------------------------------------------------------------------------------------------------------
Promotes patient-centered, personalized health care Maintains the conceit of centralized, Washington-based,
both in the private sector and in Medicare. one-size-fits-all health care.
----------------------------------------------------------------------------------------------------------------
Saves $487 billion over 10 years by strengthening Increases Federal Medicaid and State Children's Health
Medicare and establishing a patient-centered Insurance Program spending by more than $1 trillion over
Medicare option. Achieves another $3.0 trillion in 10 years due to the President's health care law, with no
health savings, partly by repealing Obamacare and substantial reforms to improve the program. Imposes $501
allowing greater State flexibility in Medicaid. billion (gross) in new Medicare cuts to hospitals and
Saves another $1.5 trillion in other direct skilled nursing facilities, while ignoring the
spending. fundamental structural flaws in the program.
----------------------------------------------------------------------------------------------------------------
Spends more than the President for national defense Claims illusory defense spending increases with no plan to
in fiscal year 2017 and over 10 years. pay for raising statutory defense spending caps.
----------------------------------------------------------------------------------------------------------------
TABLE 4.--SUMMARY OF FISCAL YEAR 2017 BUDGET RESOLUTION
[As a percentage of GDP]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
Deficit(+)/Surplus(-):
Committee Recommendation............... +2.0% +1.0% +1.0% +0.9% +0.8% +0.6% +0.5% +0.3% +0.1% -0.1% +0.7%
CBO.................................... +2.9% +2.8% +3.5% +3.7% +4.0% +4.4% +4.4% +4.3% +4.6% +4.9% +4.0%
President's Budget..................... +2.6% +2.3% +2.6% +2.4% +2.4% +2.8% +2.7% +2.5% +2.7% +2.8% +2.6%
Debt Held by the Public:
Committee Recommendation............... 75.0% 74.0% 72.0% 70.0% 68.0% 66.0% 64.0% 62.0% 59.0% 57.0% n.a.
CBO.................................... 75.7% 75.7% 76.7% 77.8% 78.8% 80.3% 81.7% 82.8% 84.3% 86.1% n.a.
President's Budget..................... 76.5% 76.1% 76.1% 75.8% 75.5% 75.5% 75.4% 75.2% 75.2% 75.3% n.a.
Outlays:
Committee Recommendation............... 20.2% 19.3% 19.2% 19.2% 18.9% 18.8% 18.7% 18.6% 18.5% 18.3% 19.0%
CBO.................................... 21.1% 20.9% 21.5% 21.8% 22.0% 22.5% 22.4% 22.3% 22.8% 23.1% 22.0%
President's Budget..................... 21.5% 21.6% 22.1% 22.3% 22.4% 22.7% 22.6% 22.4% 22.7% 22.8% 21.6%
Revenues:
Committee Recommendation............... 18.3% 18.4% 18.2% 18.2% 18.1% 18.2% 18.1% 18.1% 18.1% 18.1% 18.2%
CBO.................................... 18.2% 18.1% 17.9% 18.0% 18.0% 18.0% 18.0% 18.1% 18.1% 18.2% 18.1%
President's Budget..................... 18.9% 19.4% 19.5% 19.8% 20.0% 19.9% 19.9% 19.9% 20.0% 20.0% 19.7%
--------------------------------------------------------------------------------------------------------------------------------------------------------
TABLE 5.--FISCAL YEAR 2017 HOUSE BUDGET RESOLUTION VS. THE PRESIDENT'S BUDGET
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-2021 2017-2026
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
SUMMARY
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total spending:
BA............................................ 3,900,967 3,848,121 4,007,366 4,179,555 4,309,637 4,449,397 4,651,534 4,839,943 5,000,532 5,173,555 20,245,646 44,360,606
OT............................................ 3,882,461 3,849,342 3,988,526 4,163,470 4,301,136 4,445,385 4,621,834 4,791,398 4,947,282 5,136,345 20,184,934 44,127,178
On-budget:
BA............................................ 3,086,332 2,984,016 3,084,551 3,192,964 3,254,411 3,319,284 3,443,779 3,551,204 3,624,651 3,704,462 15,602,273 33,245,653
OT............................................ 3,072,428 2,990,509 3,071,424 3,182,999 3,252,237 3,321,899 3,420,907 3,509,889 3,578,931 3,675,084 15,569,597 33,076,306
Off-budget:
BA............................................ 814,635 864,105 922,815 986,592 1,055,226 1,130,113 1,207,755 1,288,739 1,375,882 1,469,093 4,643,372 11,114,954
OT............................................ 810,033 858,833 917,101 980,471 1,048,900 1,123,486 1,200,927 1,281,509 1,368,352 1,461,261 4,615,337 11,050,872
Revenues:
Total......................................... 3,521,497 3,659,353 3,789,990 3,958,001 4,117,566 4,285,579 4,464,033 4,653,472 4,859,831 5,075,638 19,046,407 42,384,960
On-budget..................................... 2,692,937 2,799,875 2,902,418 3,040,763 3,168,226 3,301,656 3,443,940 3,595,338 3,762,041 3,936,429 14,604,219 32,643,623
Off-budget.................................... 828,560 859,478 887,572 917,238 949,340 983,923 1,020,093 1,058,134 1,097,790 1,139,209 4,442,188 9,741,337
Surplus/Deficit(-):
Total......................................... -381,672 -198,531 -207,457 -194,777 -181,008 -141,019 -122,876 -76,487 -26,040 28,731 -1,163,444 -1,501,134
Macroeconomic Fiscal Impact................. -20,709 -8,542 -8,921 10,692 2,562 18,787 34,925 61,439 61,411 89,438 -24,917 241,084
On-budget................................... -379,491 -190,634 -169,006 -142,236 -84,011 -20,243 23,033 85,449 183,110 261,345 -965,378 -432,683
Off-budget.................................. 18,527 645 -29,529 -63,233 -99,560 -139,563 -180,834 -223,375 -270,562 -322,052 -173,149 -1,309,535
Debt Held by the Public (end of year)........... 14,400,000 14,726,000 14,976,000 15,190,000 15,436,000 15,576,000 15,808,000 15,934,000 15,812,000 15,960,000 n.a. n.a.
Debt Subject to Limit (end of year)............. 19,848,354 20,314,389 20,647,523 20,904,600 21,161,285 21,296,902 21,510,772 21,598,523 21,373,459 21,412,056 n.a. n.a.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
PRESIDENT'S FY2017 BUDGET AS SUBMITTED
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Spending:
BA............................................ 4,234,877 4,374,189 4,674,166 4,933,090 5,178,555 5,459,300 5,691,832 5,911,899 6,225,061 6,529,224 23,394,877 53,212,193
OT............................................ 4,147,224 4,352,222 4,644,309 4,879,818 5,124,248 5,415,425 5,625,782 5,826,653 6,151,854 6,462,436 23,147,821 52,629,971
On-budget:
BA............................................ 3,403,270 3,484,403 3,725,153 3,917,538 4,099,023 4,308,739 4,463,956 4,604,220 4,834,174 5,052,751 18,629,387 41,893,227
OT............................................ 3,318,636 3,467,898 3,702,365 3,871,656 4,052,084 4,272,745 4,406,330 4,527,678 4,769,921 4,995,241 18,412,639 41,384,554
Off-budget:
BA............................................ 831,607 889,786 949,013 1,015,552 1,079,532 1,150,561 1,227,876 1,307,679 1,390,887 1,476,473 4,765,490 11,318,966
OT............................................ 828,588 884,324 941,944 1,008,162 1,072,164 1,142,680 1,219,452 1,298,975 1,381,933 1,467,195 4,735,182 11,245,417
Revenues:
Total......................................... 3,643,742 3,898,625 4,095,054 4,345,701 4,571,990 4,755,848 4,948,853 5,176,519 5,411,188 5,669,299 20,555,112 46,516,819
On-budget..................................... 2,816,842 3,035,325 3,196,854 3,413,801 3,591,790 3,728,348 3,876,853 4,053,019 4,237,888 4,436,899 16,054,612 36,387,619
Off-budget.................................... 826,900 863,300 898,200 931,900 980,200 1,027,500 1,072,000 1,123,500 1,173,300 1,232,400 4,500,500 10,129,200
Surplus/Deficit(-):
Total......................................... -503,482 -453,597 -549,255 -534,117 -552,258 -659,577 -676,929 -650,134 -740,666 -793,137 -2,592,709 -6,113,152
On-budget..................................... -501,794 -432,573 -505,511 -457,855 -460,294 -544,397 -529,477 -474,659 -532,033 -558,342 -2,358,027 -4,996,935
Off-budget.................................... -1,688 -21,024 -43,744 -76,262 -91,964 -115,180 -147,452 -175,475 -208,633 -234,795 -234,682 -1,116,217
Debt Held by the Public (end of year)........... 14,763,197 15,323,508 15,982,242 16,614,892 17,263,523 18,016,476 18,793,499 19,548,109 20,395,652 21,301,880 n.a. n.a.
Debt Subject to Limit (end of year)............. 20,143,189 20,879,678 21,693,743 22,447,564 23,201,455 24,004,097 24,839,340 25,679,835 26,541,534 27,438,173 n.a. n.a.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
FY2017 HOUSE BUDGET VS. FY2017 PRESIDENT'S BUDGET
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Spending:
BA............................................ -333,910 -526,068 -666,800 -753,535 -868,918 -1,009,903 -1,040,298 -1,071,956 -1,224,529 -1,355,669 -3,149,231 -8,851,587
OT............................................ -264,763 -502,880 -655,783 -716,348 -823,112 -970,040 -1,003,948 -1,035,255 -1,204,572 -1,326,091 -2,962,887 -8,502,793
On-budget:
BA............................................ -316,938 -500,387 -640,602 -724,574 -844,612 -989,455 -1,020,177 -1,053,016 -1,209,523 -1,348,289 -3,027,114 -8,647,574
OT............................................ -246,208 -477,389 -630,941 -688,657 -799,847 -950,846 -985,423 -1,017,789 -1,190,990 -1,320,157 -2,843,042 -8,308,248
Off-budget:
BA............................................ -16,972 -25,681 -26,198 -28,960 -24,306 -20,448 -20,121 -18,940 -15,005 -7,380 -122,118 -204,012
OT............................................ -18,555 -25,491 -24,843 -27,691 -23,264 -19,194 -18,525 -17,466 -13,581 -5,934 -119,845 -194,545
Revenues:
Total......................................... -122,245 -239,272 -305,064 -387,700 -454,424 -470,269 -484,820 -523,047 -551,357 -593,661 -1,508,705 -4,131,859
On-budget..................................... -123,905 -235,450 -294,436 -373,038 -423,564 -426,692 -432,913 -457,681 -475,847 -500,470 -1,450,393 -3,743,996
Off-budget.................................... 1,660 -3,822 -10,628 -14,662 -30,860 -43,577 -51,907 -65,366 -75,510 -93,191 -58,312 -387,863
Surplus/Deficit(-):
Total......................................... -121,810 -255,066 -341,798 -339,340 -371,250 -518,558 -554,053 -573,647 -714,626 -821,868 -1,429,265 -4,612,018
Macroeconomic Fiscal Impact................. 20,709 8,542 8,921 -10,692 -2,562 -18,787 -34,925 -61,439 -61,411 -89,438 24,917 -241,084
On-budget................................... -122,303 -241,939 -336,505 -315,619 -376,283 -524,154 -552,510 -560,108 -715,143 -819,687 -1,392,649 -4,564,252
Off-budget.................................. -20,215 -21,669 -14,215 -13,029 7,596 24,383 33,382 47,900 61,929 87,257 -61,533 193,318
Debt Held by the Public (end of year)........... -363,197 -597,508 -1,006,242 -1,424,892 -1,827,523 -2,440,476 -2,985,499 -3,614,109 -4,583,652 -5,341,880 n.a. n.a.
Debt Subject to Limit (end of year)............. -294,835 -565,290 -1,046,220 -1,542,964 -2,040,170 -2,707,195 -3,328,568 -4,081,312 -5,168,075 -6,026,118 n.a. n.a.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
THE ECONOMY AND ECONOMIC ASSUMPTIONS
----------
An Anemic Recovery
The economy is still languishing in the weakest recovery of
the modern era and the expansionist government policies of the
current administration are among the factors weighing on
growth.
The U.S. economy technically emerged from recession nearly
7 years ago, but the subsequent recovery has been subpar. Since
2010, real growth in gross domestic product [GDP] has averaged
only slightly better than 2.0 percent annually, well below the
3.0 percent historical trend rate of growth in the U.S.
This trend of prolonged anemic growth has surprised most
economic forecasters. Back in 2010, the Congressional Budget
Office [CBO] expected real GDP to grow by a relatively brisk
3.0 percent annual average over the 10-year budget window. By
2014, that average slipped to 2.5 percent. In CBO's latest
economic forecast, expected average real GDP growth fell to
just 2.1 percent (see Figure 7). CBO has significantly lowered
its expectation of long-term growth in potential GDP as well,
due mainly to negative developments in the labor market. CBO
expects slower growth in the potential labor force later this
decade, which is linked to the aging of the population and the
retirement of the baby-boom generation. With a smaller labor
force, there will also be less business investment and slower
growth in the country's capital stock. This ``new normal''--if
that is what it is--is especially troubling because without
more robust growth the economy will struggle to support the 80
million retirees expected over the next couple decades, as well
as the working age population. Standards of living will suffer,
especially for middle-income earners.
The President's policies also play a role in this trend.
The heavy spending promoted by the current administration
drains economic resources that otherwise would be available for
growth-producing activities. In addition, the sharp increase in
government debt--which now stands at near-record post-World War
II levels--will crowd out additional capital investment in the
long term. Meanwhile, CBO projects the Affordable Care Act--the
President's nationalized health program--will create incentives
for people to work fewer hours over the medium and longer term.
The overall picture that CBO's latest economic forecast paints
is that sluggish economic growth has evolved from mainly a
cyclical issue to a longer-term structural problem. The clear
downward trend in the economic forecast in recent years has
raised the hurdle significantly for those trying to correct the
fiscal imbalance over the next decade. This is important
because CBO's annual economic assumptions are adopted for the
budget resolution. As discussed in the next section, however, a
meaningful change in fiscal policy can repay in stronger
economic growth and budgetary dividends.
FIGURE 7
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Benefits of a Stronger Economy
A stronger economy would provide a number of tangible
benefits for the average American. Back in the latter part of
the 1990s, real GDP was growing at a rate of about 4.5
percent--roughly twice the rate of growth today. From 1995 to
1999, real median household income grew by $5,000, nearly 10
percent. Not coincidentally, this was a time when the Federal
budget achieved a string of surpluses. In contrast, fiscal
policy today features large deficits combined with a
historically large stock of government debt--and real median
income has fallen $3,700, or 6.5 percent, over the past 7
years.
A robust labor market also fosters more opportunity and
upward mobility. Currently, 6 million Americans are working
part-time due to poor business conditions or because that was
the only employment option available. In the latter part of the
1990s roughly half as many Americans faced this problem. A
stronger economy also naturally alleviates poverty. By the year
2000, after multiple years of robust economic growth, the rate
of poverty in the U.S. had declined to a 25-year low. A more
robust economy also provides more resources to the government
to maintain a strong safety net.
Achieving a stronger rate of growth requires the right
economic policies. This is the central theme of remarks
delivered in January at the annual meeting of the American
Economic Association by Stanford University economist John B.
Taylor.\25\ According to Taylor, key policies needed to bolster
growth include fundamental tax reform to lower tax rates on
people and businesses and thus reduce disincentives to work and
invest; regulatory reforms to scale back and prevent
regulations, such as Dodd-Frank, that fail cost-benefit tests
and hamper economic growth; and entitlement reforms to prevent
a debt explosion and improve incentives. The Congressional
Budget Office has also concluded that putting the Federal
budget on a path to balance is essential to creating more
economic growth and greater prosperity. CBO finds that a
significant deficit reduction package of $4 trillion would lead
to growth in real output per capita (a proxy for a country's
standard of living) of about 5 percent (about $4,000 per
person) by 2040 compared to the current law trajectory.\26\
---------------------------------------------------------------------------
\25\John B. Taylor, ``Can We Restart the Recovery All Over Again?''
presented at the 2016 annual meeting of the American Economic
Association, January 2016.
\26\Congressional Budget Office, The 2015 Long-Term Budget Outlook,
16 June 2015.
---------------------------------------------------------------------------
The Current Economic Situation
Economic output weakened sharply in the last quarter of
2015, falling to just 1.0 percent real GDP growth on a
seasonally adjusted, annualized basis. This weakness echoed how
the year began--with quarterly growth of just 0.6 percent. For
the year as a whole, real GDP grew by 2.4 percent (measured on
a year-over-year basis) in 2015, unchanged from the growth rate
posted in 2014. Since 2010, real GDP growth has averaged just
more than 2.0 percent annually, well below the roughly 3.0-
percent historical trend rate of growth in the U.S. Sluggish
economic growth has contributed to the government's fiscal
problems. It leads to lower revenue levels than would otherwise
occur while government spending (on welfare programs, for
example) is higher. According to CBO, if real GDP growth is
just 0.1 percentage point lower per year, the budget deficit
will be higher by $327 billion over 10 years. Conversely,
stronger economic growth would greatly improve the fiscal
outlook.
The pace of job growth appeared to be trending upward at
the start of 2016. Nonfarm payroll employment increased by
242,000 in February, compared to 172,000 in January and the
229,000 average monthly increase posted in 2015. The
unemployment rate ticked down to 4.9 percent in early 2016, the
lowest rate in 8 years and down 0.8 percentage point from the
rate at the start of 2015. The steady decline in the
unemployment rate, however, masks less healthy underlying
trends. When discouraged workers, marginally employed, and
underemployed persons are counted, the unemployment rate is
closer to 10 percent.\27\
---------------------------------------------------------------------------
\27\Bureau of Labor Statistics, U-6 Index, Table A-15, March 2016.
---------------------------------------------------------------------------
Although the overall trend of job gains has been solid of
late, and the unemployment rate has continued to decline, other
aspects of the labor market are not as robust. The labor force
participation rate has increased in recent months, but still
stands at just 62.9 percent, down roughly 3 percentage points
since early 2009, and remains near its lowest level since 1978
(See Figure 8). Long-term unemployment also remains a problem.
Of the 7.8 million people who are currently unemployed, more
than 2 million (28 percent) have been unemployed for more than
6 months. Prior to the recession, only about 17 percent of the
unemployed were out of work for that long. Long-term
unemployment has genuinely corrosive consequences. For
individuals, it erodes their job skills, further detaching them
from employment opportunities. At the same time, it undermines
the long-term productive capacity of the economy.
FIGURE 8
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
In previous episodes when the unemployment rate was at or
below 5.0 percent, the overall labor market was much healthier
than it is today. For instance, about a decade ago, in 2005,
the unemployment rate was trending lower and even dipped below
5.0 percent. Yet the labor force participation rate was 66
percent, more than 3 percentage points above the rate today.
The number of people not in the labor force (or ``on the
sidelines'') is currently 22 percent higher than the figure
back in 2005. Similarly, the under-employment rate (which
includes discouraged and marginally employed persons) is still
quite elevated at close to 10 percent. A decade ago, that rate
was about 8.5 percent. Also, more people today are working
part-time because of poor business conditions or they can only
find part-time work. Currently, 6 million Americans face this
problem, whereas that figure was slightly more than 4 million
in 2005.
For most of the working population, wage gains have been
subpar. Average hourly earnings of private-sector workers
increased by 2.4 percent over the past year. Prior to the
recession, average hourly earnings were tracking closer to 4
percent. Likewise, average income levels have remained
relatively flat in recent years. Real median household income
declined by roughly $800 in 2014 (latest year available) to
$53,657. That represents a sharp decline of 6.5 percent, or
$3,700, since 2007.
Oil prices have plunged over the past year and a half.
Since mid-2014, crude oil prices have dropped from just above
$100 per barrel to less than $30 per barrel early this year.
Although lower oil prices are a net benefit for consumers (e.g.
in lower gasoline prices), the price decline has hurt output
and investment in the growing U.S. energy sector and has
therefore weighed on the economy's overall growth rate.
FIGURE 9
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The sharp decline in oil prices has contributed to the
downward slide in headline inflation rates. For instance, the
price index for personal consumption expenditures [PCE] has
increased by 1.3 percent over the latest 12 months. The so-
called core PCE index (which excludes energy and food prices),
the Federal Reserve's preferred inflation gauge, has increased
1.7 percent over the past year. That level of inflation remains
below the Federal Open Market Committee's 2 percent objective
for inflation over the longer run.
After years of an extremely loose monetary policy stance,
the Federal Reserve finally increased interest rates in
December. The Fed had been holding interest rates near zero
since the depths of the financial crisis in 2008. Looking
ahead, the Fed has signaled that future rate increases will be
``gradual.'' Despite the Fed's recent move, the yield on the
10-year Treasury note has declined back below 2 percent in
early 2016 from a recent peak of 2.4 percent in mid-2015.
A portion of the fallback in Treasury rates, even as the
Fed has begun to raise the Federal funds rate, is likely due to
a ``flight to quality'' on the part of global investors as
economic prospects outside the U.S. have soured and market
volatility has increased significantly, particularly in China,
the world's second largest economy.
Many global central banks have signaled their intention to
keep interest rates low and their overall monetary policy
loose--in contrast to the Federal Reserve's disposition. This
divergence in central bank policy stances on interest rates, as
well as the differing economic outlook between the U.S. and the
rest of the world, has caused the U.S. dollar to appreciate
vis-a-vis other foreign currencies.
The U.S. dollar has appreciated more than 11 percent on a
trade-weighted basis since early 2015. The dollar's
appreciation tends to dampen the competitiveness of U.S.
exporters as their goods become more expensive for foreign
consumers. A stronger dollar, and weaker global growth, has led
to a fall in exports, a headwind for U.S. growth. Exports of
U.S. goods and services are down 7 percent over the past 12
months.
Mirroring the recent trend in global financial markets, the
U.S. stock market has experienced renewed volatility and has
been trending lower in early 2016.
The Economic Outlook
The administration's economic forecast is less hopeful than
it was last year but it remains more upbeat than either CBO or
the Blue Chip consensus of private-sector forecasters--who also
are less optimistic than last year. The administration expects
real GDP growth of 2.6 percent in calendar years 2016 and 2017,
2.4 percent in 2018, and 2.3 percent in later years measured on
a year-to-year basis. CBO--upon whose economic assumptions the
budget resolution is based--expects real GDP to grow by 2.5
percent in calendar year 2016, 2.6 percent in 2017, 2.2 percent
in 2018 and stabilizing at 2.0 percent in 2023 and later years.
CBO concedes its relatively weak near-term projections are
somewhat more optimistic than other private and government
forecasts: ``The economic projections in this report indicate a
slightly stronger economy in the near term than do the Blue
Chip consensus forecast (published in January) and the
forecasts developed by the Federal Reserve (and presented at
the Federal Open Market Committee's December 2015
meeting).''\28\
---------------------------------------------------------------------------
\28\Congressional Budget Office, The Budget and Economic Outlook:
2016 to 2026, January 2016, p. 32.
---------------------------------------------------------------------------
The Blue Chip consensus projects real GDP growth of 2.5
percent in 2016 and also 2017, 2.4 percent in 2018, and 2.2
percent in later years. Over the 10-year window of the budget
resolution, the administration's Office of Management and
Budget [OMB] expects real GDP growth to average 2.3 percent,
modestly higher than Blue Chip and significantly higher than
CBO which projects a 2.1 percent growth rate average over this
period.
Like other forecasters, the administration expects the
unemployment rate to decline gradually in the coming years.
According to OMB, the unemployment rate will average 4.7
percent in 2016, decline to 4.5 percent in 2017, and rise to
4.6 percent in 2018. The administration sees the unemployment
rate rising very gradually in subsequent years before leveling
off at 4.9 percent in 2023. (By comparison, the unemployment
rate was 4.6 percent in 2007, the year before the financial
crisis.) That path is similar in the near term but is more
optimistic in the latter part of the window than the CBO
forecast. CBO expects the unemployment rate to average 4.7
percent in 2016 and decline to 4.4 percent in 2017, before
rising to 4.6 percent in 2018, 4.8 percent in 2019 and leveling
off at 5.0 percent in 2020. The Blue Chip consensus sees a
near-term decline in the unemployment rate similar to both CBO
and the administration, but is closer to CBO's forecast in the
latter part of the window. According to Blue Chip, the
unemployment rate will average 4.8 percent in 2016, decline to
4.6 percent by 2017, and rise to 4.7 percent in 2018 and
further in later years before leveling off at 5.0 percent in
2022.
The administration expects consumer price inflation,
measured by the year-to-year percent change in the consumer
price index, to rise to 1.5 percent in 2016 from 2015's
unusually low level of 0.1 percent which reflected last year's
sharp drop in oil prices. The administration expects price
inflation of 2.1 percent in 2017 and 2.3 percent in 2021 and
later years. CBO expects price inflation of 1.3 percent in
2016, 2.3 percent in 2017 and 2.4 percent in 2018 and later
years. The Blue Chip consensus expects inflation over the next
two years that is similar to the administration's and CBO's
forecasts. According to Blue Chip, price inflation will average
1.6 percent in 2016, 2.3 percent in 2017, and 2.4 percent in
2018 and 2019 before leveling off at 2.3 percent in later
years.
OMB expects interest rates will rise to more normal levels
in the coming years. The 10-year Treasury note, which was about
2.1 percent in 2015, is projected to rise to about 2.9 percent
in 2016, 3.5 percent in 2017, and 3.9 percent in 2018. OMB
expects the 10-year Treasury to hit 4.2 percent in 2020 and
remain there in later years. CBO expects interest rates to rise
to more normal levels as well but sees slightly lower rates
than the administration for most years. CBO sees the 10-year
Treasury averaging 2.8 percent in 2016, 3.5 percent in 2017,
and 3.8 percent in 2018, and then stabilizing at 4.1 percent in
2020 and later years. The Blue Chip consensus also sees a
gradual increase in interest rates over the next two years but
at lower levels than the administration. The Blue Chip
consensus forecasts the 10-year Treasury note to average 2.6
percent in 2016, 3.2 percent in 2017, 3.8 percent in 2018 and
gradually rising further until stabilizing at 4.1 percent in
2022 and later years.
TABLE 6.--ECONOMIC PROJECTIONS: ADMINISTRATION, CBO, AND PRIVATE FORECASTERS
[Calendar years]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year to Year, Percent Change
--------------------------------------------------------------------------------------------------------------------------------------------------------
Real GDP:
Administration Budget.............................. 2.4 2.6 2.6 2.4 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3
CBO (Jan. 2016).................................... 2.4 2.5 2.6 2.2 1.8 1.9 2.1 2.1 2.0 2.0 2.0 2.0
Blue Chip (Oct. 2015 and Jan. 2016)................ 2.5 2.5 2.5 2.4 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2
Consumer Price Index:
Administration Budget.............................. 0.1 1.5 2.1 2.1 2.3 2.2 2.3 2.3 2.3 2.3 2.3 2.3
CBO (Jan. 2016).................................... 0.1 1.3 2.3 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4
Blue Chip (Oct. 2015 and Jan. 2016)................ 0.1 1.6 2.3 2.4 2.4 2.3 2.3 2.3 2.3 2.3 2.3 2.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual Average, Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Unemployment Rate:
Administration Budget.............................. 5.3 4.7 4.5 4.6 4.6 4.7 4.7 4.8 4.9 4.9 4.9 4.9
CBO (Jan. 2016).................................... 5.3 4.7 4.4 4.6 4.8 5.0 5.0 5.0 5.0 5.0 5.0 5.0
Blue Chip (Oct. 2015 and Jan. 2016)................ 5.3 4.8 4.6 4.7 4.7 4.8 4.9 5.0 5.0 5.0 5.0 5.0
3-Month Treasury Bill:
Administration Budget.............................. * 0.7 1.8 2.6 3.1 3.3 3.4 3.4 3.3 3.3 3.2 3.2
CBO (Jan. 2016).................................... 0.1 0.7 1.6 2.5 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2
Blue Chip (Oct. 2015 and Jan. 2016)................ 0.1 0.7 1.7 2.8 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1
10-Year Treasury Note:
Administration Budget.............................. 2.1 2.9 3.5 3.9 4.1 4.2 4.2 4.2 4.2 4.2 4.2 4.2
CBO (Jan. 2016).................................... 2.1 2.8 3.5 3.8 4.0 4.1 4.1 4.1 4.1 4.1 4.1 4.1
Blue Chip (Oct. 2015 and Jan. 2016)................ 2.1 2.6 3.2 3.8 4.0 4.0 4.0 4.1 4.1 4.1 4.1 4.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
*0.05 percent or less.
Sources: Congressional Budget Office, Office of Management and Budget, and Blue Chip Economic Indicators.
TABLE 7.--ECONOMIC ASSUMPTIONS OF THE FISCAL YEAR 2017 BUDGET RESOLUTION
[Calendar years]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year to Year, Percent Change
--------------------------------------------------------------------------------------------------------------------------------------------------------
Real GDP:
CBO (Jan. 2016)............................................... 2.5 2.6 2.2 1.8 1.9 2.1 2.1 2.0 2.0 2.0 2.0
Consumer Price Index:
CBO (Jan. 2016)............................................... 1.3 2.3 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual Average, Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Unemployment Rate:
CBO (Jan. 2016)............................................... 4.7 4.4 4.6 4.8 5.0 5.0 5.0 5.0 5.0 5.0 5.0
3-Month Treasury Bill:
CBO (Jan. 2016)............................................... 0.7 1.6 2.5 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2
10-Year Treasury Note:
CBO (Jan. 2016)............................................... 2.8 3.5 3.8 4.0 4.1 4.1 4.1 4.1 4.1 4.1 4.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
TABLE 8.--TAX EXPENDITURE ESTIMATES BY BUDGET FUNCTION, FISCAL YEARS 2015-2019\1\
[Billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Corporations Individuals
Function ------------------------------------------------------------------------------------------ Total
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015-19
--------------------------------------------------------------------------------------------------------------------------------------------------------
National Defense:
Exclusion of benefits and allowances to armed ....... ....... ....... ....... ....... 5.8 6.0 6.4 6.8 7.0 31.9
forces personnel.................................
Exclusion of military disability benefits......... ....... ....... ....... ....... ....... 0.3 0.3 0.3 0.3 0.3 1.4
Deduction for overnight-travel expenses of ....... ....... ....... ....... ....... 0.1 0.1 0.1 0.1 0.1 0.5
national guard and reserve members...............
Exclusion of combat pay........................... ....... ....... ....... ....... ....... 1.4 1.4 1.5 1.6 1.6 7.5
International Affairs:
Exclusion of certain allowances for Federal ....... ....... ....... ....... ....... 2.1 2.2 2.3 2.3 2.4 11.2
employees abroad.................................
Exclusion of foreign earned income:
Housing......................................... ....... ....... ....... ....... ....... 1.3 1.3 1.4 1.5 1.6 7.1
Salary.......................................... ....... ....... ....... ....... ....... 6.4 6.7 7.2 7.6 8.0 35.7
Inventory property sales source rule exception.... 1.7 1.7 1.8 1.8 1.8 ....... ....... ....... ....... ....... 8.8
Deduction for foreign taxes instead of a credit... 0.3 0.3 0.3 0.3 0.3 ....... ....... ....... ....... ....... 1.3
Interest expense allocation:
Unavailability of symmetric worldwide method*... -1.2 -1.2 -1.2 -1.3 -1.3 ....... ....... ....... ....... ....... -6.2
Separate grouping of affiliated financial 0.5 0.5 0.5 0.5 0.5 ....... ....... ....... ....... ....... 2.5
companies......................................
Apportionment of research and development expenses 0.2 0.2 0.2 0.2 0.2 ....... ....... ....... ....... ....... 1.1
for determination of foreign tax credits.........
Special rules for interest-charge domestic 0.6 0.6 0.6 0.7 0.7 ....... ....... ....... ....... ....... 3.2
international sales corporations.................
Tonnage tax....................................... 0.1 0.1 0.1 0.1 0.1 ....... ....... ....... ....... ....... 0.5
Deferral of active income of controlled foreign 99.3 108.9 114.0 118.1 123.2 ....... ....... ....... ....... ....... 563.6
corporations.....................................
General Science, Space, and Technology:
Expensing of research and experimental 4.7 5.2 5.7 6.0 6.0 0.1 0.1 0.1 0.1 0.1 28.3
expenditures.....................................
Therapeutic research credit....................... 0.1 0.1 0.1 ....... ....... 0.1 0.1 0.1 ....... ....... 0.8
Energy:
Credit for energy-efficient improvements to ....... ....... ....... ....... ....... 0.5 ....... ....... ....... ....... 0.5
existing homes...................................
Credit for holders of clean renewable energy bonds (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1 0.1 0.1 0.6
(Code sections 54 and 54C)\2,3\..................
Exclusion of energy conservation subsidies ....... ....... ....... ....... ....... (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
provided by public utilities.....................
Credit for holders of qualified energy ....... ....... ....... ....... ....... (\4\) (\4\) (\4\) (\4\) (\4\) 0.3
conservation bonds\2,3\..........................
Energy credit (section 48)........................ 1.0 1.5 1.6 1.6 1.7 0.2 0.3 0.2 0.1 0.1 8.3
Solar........................................... 0.9 1.4 1.5 1.5 1.6 0.1 0.2 0.2 0.1 0.1 7.7
Geothermal...................................... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\)
Fuel Cells...................................... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\)
Microturbines................................... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\)
Combined heat and power......................... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\)
Small wind...................................... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\)
Geothermal heat pump systems.................... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\)
Credits for electricity production from renewable
resources (section 45):
Wind............................................ 2.2 2.5 3.1 3.3 3.3 0.1 0.2 0.3 0.4 0.4 15.8
Closed-loop biomass............................. (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
Geothermal...................................... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
Qualified hydropower............................ (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
Small irrigation power.......................... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
Municipal solid waste........................... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.4
Open-loop biomass............................... 0.3 0.3 0.3 0.3 0.3 (\4\) (\4\) (\4\) (\4\) (\4\) 1.8
Special rule to implement electric transmission -0.2 -0.2 -0.2 -0.2 -0.2 ....... ....... ....... ....... ....... -1.0
restructuring....................................
Credits for investments in clean coal facilities.. 0.2 0.2 0.2 0.2 0.2 ....... ....... ....... ....... ....... 1.0
Coal production credits:
Refined coal.................................... (\4\) (\4\) (\4\) (\4\) (\4\) ....... ....... ....... ....... ....... 0.1
Indian coal..................................... (\4\) (\4\) (\4\) (\4\) (\4\) ....... ....... ....... ....... ....... 0.1
Credits for alternative technology vehicles:
Other alternative fuel vehicles................. (\4\) (\4\) (\4\) (\4\) (\4\) ....... ....... ....... ....... ....... 0.1
Residential energy-efficient property credit...... ....... ....... ....... ....... ....... 1.1 1.2 0.7 ....... ....... 3.0
Credit for plug-in electric vehicles.............. (\4\) (\4\) (\4\) (\4\) (\4\) 0.2 0.2 0.2 0.2 0.2 1.2
Credit for investment in advanced energy property. 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 1.2
Exclusion of interest on State and local (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.2
government qualified private activity bonds for
energy production facilities.....................
Expensing of exploration and development costs,
fuels:
Oil and gas..................................... 1.0 1.1 1.1 1.1 1.0 0.3 0.4 0.3 0.3 0.3 7.0
Other fuels..................................... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.5
Excess of percentage over cost depletion, fuels:
Oil and gas..................................... 1.4 1.3 1.4 1.6 1.6 (\4\) (\4\) (\4\) (\4\) (\4\) 7.4
Other fuels..................................... 0.2 0.2 0.3 0.3 0.3 (\4\) (\4\) (\4\) (\4\) (\4\) 1.4
Amortization of geological and geophysical 0.1 0.1 0.1 0.1 0.1 (\4\) (\4\) (\4\) (\4\) (\4\) 0.7
expenditures associated with oil and gas
exploration......................................
Amortization of air pollution control facilities.. 0.4 0.4 0.3 0.3 0.3 ....... ....... ....... ....... ....... 1.7
Depreciation recovery periods for energy-specific
items:
5-year MACRS for certain energy property (solar, 0.3 0.3 0.3 0.2 0.2 (\4\) (\4\) (\4\) (\4\) (\4\) 1.3
wind, etc.)....................................
10-year MACRS for smart electric distribution 0.2 0.2 0.2 0.2 0.2 ....... ....... ....... ....... ....... 1.0
property.......................................
15-year MACRS for certain electric transmission 0.2 0.2 0.2 0.2 0.2 ....... ....... ....... ....... ....... 1.0
property.......................................
15-year MACRS for natural gas distribution line. 0.2 0.2 0.1 0.1 0.1 ....... ....... ....... ....... ....... 0.8
Exceptions for publicly traded partnership with ....... ....... ....... ....... ....... 1.1 1.2 1.2 1.2 1.2 5.9
qualified income derived from certain energy-
related activities...............................
Natural Resources and Environment:
Special depreciation allowance for certain reuse (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
and recycling property...........................
Expensing of exploration and development costs, 0.1 0.1 0.1 0.1 0.1 (\4\) (\4\) (\4\) (\4\) (\4\) 0.5
nonfuel minerals.................................
Excess of percentage over cost depletion, nonfuel 0.1 0.1 0.1 0.1 0.1 (\4\) (\4\) (\4\) (\4\) (\4\) 0.5
minerals.........................................
Expensing of timber-growing costs................. 0.3 0.3 0.3 0.3 0.3 (\4\) (\4\) (\4\) (\4\) (\4\) 1.5
Special rules for mining reclamation reserves..... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.2
Special tax rate for nuclear decommissioning 0.2 0.2 0.3 0.3 0.3 ....... ....... ....... ....... ....... 1.3
reserve funds....................................
Exclusion of contributions in aid of construction (\4\) (\4\) (\4\) (\4\) (\4\) ....... ....... ....... ....... ....... 0.2
for water and sewer utilities....................
Exclusion of earnings of certain environmental (\4\) (\4\) (\4\) (\4\) (\4\) ....... ....... ....... ....... ....... 0.1
settlement funds.................................
Amortization and expensing of reforestation 0.1 0.1 0.1 0.2 0.2 0.1 0.1 0.1 0.1 0.1 1.3
expenditures.....................................
Special tax rate for qualified timber gain ....... ....... ....... ....... ....... 0.3 0.3 0.4 0.4 0.4 1.8
(including coal and iron ore)....................
Treatment of income from exploration and mining of ....... ....... ....... ....... ....... 0.1 0.1 0.1 0.1 0.1 0.5
natural resources as qualifying income under the
publicly-traded partnership rules................
Agriculture:
Expensing of soil and water conservation (\4\) (\4\) (\4\) (\4\) (\4\) 0.1 0.1 0.1 0.1 0.1 0.6
expenditures.....................................
Expensing of the costs of raising dairy and (\4\) (\4\) (\4\) (\4\) (\4\) 0.2 0.2 0.2 0.2 0.1 0.9
breeding cattle..................................
Exclusion of cost-sharing payments................ (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
Exclusion of cancellation of indebtedness income ....... ....... ....... ....... ....... 0.1 0.1 0.1 0.1 0.1 0.5
of farmers.......................................
Income averaging for farmers and fishermen........ ....... ....... ....... ....... ....... 0.1 0.2 0.2 0.2 0.2 0.9
5-year carryback period for net operating losses (\4\) (\4\) (\4\) (\4\) (\4\) 0.1 0.1 0.1 0.1 0.1 0.4
attributable to farming..........................
Expensing by farmers for fertilizer and soil (\4\) (\4\) (\4\) (\4\) (\4\) 0.1 0.2 0.2 0.2 0.2 0.9
conditioner costs................................
Cash accounting for agriculture................... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
Commerce and Housing:
Housing:
Deduction for mortgage interest on owner- ....... ....... ....... ....... ....... 71.0 77.0 84.3 91.1 96.4 419.8
occupied residences............................
Deduction for property taxes on real property... ....... ....... ....... ....... ....... 32.4 34.7 36.9 39.2 41.3 184.5
Exclusion of capital gains on sales of principal ....... ....... ....... ....... ....... 24.1 29.0 30.6 32.2 34.0 149.9
residences.....................................
Exclusion of interest on State and local 0.3 0.4 0.4 0.4 0.4 0.9 0.9 1.0 1.1 1.1 6.9
government qualified private activity bonds for
owner-occupied housing\5\......................
Credit for low-income housing................... 7.3 7.8 8.3 8.6 9.2 0.3 0.3 0.4 0.4 0.4 43.0
Credit for rehabilitation of historic structures 0.7 0.7 0.7 0.8 0.8 0.2 0.2 0.2 0.2 0.2 4.6
Credit for rehabilitation of structures, other (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1 0.1 0.3
than historic structures.......................
Exclusion of interest on State and local 0.3 0.3 0.3 0.3 0.3 0.7 0.7 0.8 0.8 0.9 5.4
government qualified private activity bonds for
rental housing.................................
Depreciation of rental housing in excess of 0.5 0.4 0.4 0.4 0.4 4.2 4.0 3.9 3.9 3.8 22.0
alternative depreciation system................
Other business and commerce:
Exclusion of interest on State and local 0.1 0.1 0.1 0.1 0.1 0.3 0.3 0.3 0.3 0.3 2.1
government small-issue qualified private
activity bonds.................................
Carryover basis of capital gains on gifts....... ....... ....... ....... ....... ....... -4.6 11.3 10.5 8.9 9.3 35.4
Deferral of gain on non-dealer installment sales 6.9 6.8 6.7 6.7 6.7 2.1 1.7 1.4 1.2 1.2 41.3
Deferral of gain on like-kind exchanges......... 11.0 11.1 11.4 11.7 12.2 5.8 5.9 6.0 6.2 6.4 87.7
Expensing under section 179 of depreciable 4.8 1.8 0.8 0.8 0.6 7.8 2.9 1.3 1.2 1.0 22.9
business property..............................
Amortization of business startup costs.......... (\4\) (\4\) (\4\) (\4\) 0.1 (\4\) (\4\) (\4\) 0.1 0.1 0.2
Reduced rates on first $10,000,000 of corporate 4.0 4.2 4.2 4.2 4.2 ....... ....... ....... ....... ....... 20.8
taxable income.................................
Exemptions from imputed interest rules.......... (\4\) (\4\) (\4\) (\4\) (\4\) 0.6 0.6 0.7 0.7 0.7 3.4
Expensing of magazine circulation expenditures.. 0.1 0.1 (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
Special rules for magazine, paperback book, and (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.2
record returns.................................
Completed contract rules........................ 0.9 0.9 0.9 1.0 1.0 0.1 0.1 0.1 0.1 0.1 5.2
Cash accounting, other than agriculture......... 0.3 0.3 0.3 0.3 0.3 1.8 1.9 1.9 2.0 2.0 11.1
Credit for employer-paid FICA taxes on tips..... 0.6 0.6 0.6 0.7 0.7 0.7 0.7 0.7 0.8 0.8 6.9
Deduction for income attributable to domestic 11.7 12.1 12.3 12.6 12.8 4.5 4.6 4.7 4.8 4.8 84.8
production activities..........................
Credit for the cost of carrying tax-paid (\4\) (\4\) (\4\) (\4\) (\4\) ....... ....... ....... ....... ....... (\4\)
distilled spirits in wholesale inventories.....
Reduced rates of tax on dividends and long-term ....... ....... ....... ....... ....... 131.7 134.6 137.1 140.9 145.4 689.6
capital gains..................................
Surtax on net investment income*................ ....... ....... ....... ....... ....... -34.8 -35.9 -36.9 -38.3 -40.0 -186.0
Exclusion of capital gains at death............. ....... ....... ....... ....... ....... 32.4 32.9 33.8 35.2 36.8 171.3
Expensing of costs to remove architectural and (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
transportation barriers to the handicapped and
elderly........................................
Exclusion for gain from certain small business ....... ....... ....... ....... ....... 0.9 1.0 1.0 1.1 1.1 5.1
stock..........................................
Distributions in redemption of stock to pay ....... ....... ....... ....... ....... (\4\) (\4\) (\4\) (\4\) (\4\) 0.2
various taxes imposed at death.................
Inventory methods and valuation:
Last in first out............................. 1.5 1.6 1.6 1.6 1.7 0.3 0.3 0.3 0.3 0.3 9.4
Lower of cost or market....................... 0.1 0.1 0.1 0.1 0.1 (\4\) (\4\) (\4\) (\4\) (\4\) 0.4
Specific identification for homogeneous (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
products.....................................
Exclusion of gain or loss on sale or exchange of (\4\) (\4\) (\4\) (\4\) (\4\) ....... ....... ....... ....... ....... 0.1
brownfield property............................
Income recognition rule for gain or loss from 0.1 0.1 0.1 0.1 0.1 1.0 1.0 1.0 1.0 1.0 5.3
section 1256 contracts.........................
Net alternative minimum tax attributable to net -0.5 -0.5 -0.5 -0.5 -0.5 -0.1 -0.1 -0.1 -0.1 -0.1 -3.0
operating loss limitation*.....................
Exclusion of interest on State and local (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
qualified private activity bonds for green
buildings and sustainable design projects......
Depreciation of buildings other than rental 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 2.2
housing in excess of alternative depreciation
system.........................................
Depreciation of equipment in excess of the -20.0 -18.0 -3.1 6.4 13.8 -8.2 -7.4 -1.3 2.6 5.7 -29.6
alternative depreciation system\6\.............
Financial institutions:
Exemption of credit union income.................. 2.2 2.4 2.5 2.7 2.9 ....... ....... ....... ....... ....... 12.7
Insurance companies:
Small life insurance company taxable income (\4\) (\4\) (\4\) (\4\) (\4\) ....... ....... ....... ....... ....... 0.2
adjustment.....................................
Special treatment of life insurance company 2.9 3.2 3.3 3.3 3.3 ....... ....... ....... ....... ....... 16.0
reserves.......................................
Special deduction for Blue Cross and Blue Shield 0.4 0.4 0.4 0.4 0.5 ....... ....... ....... ....... ....... 2.2
companies......................................
Tax-exempt status and election to be taxed only 0.1 0.1 0.1 0.1 0.1 ....... ....... ....... ....... ....... 0.5
on investment income for certain small property
and casualty insurance companies...............
Interest rate and discounting period assumptions 2.3 2.6 2.6 2.6 2.6 ....... ....... ....... ....... ....... 12.7
for reserves of property and casualty insurance
companies......................................
Proration for property and casualty insurance 0.4 0.4 0.4 0.4 0.5 ....... ....... ....... ....... ....... 2.1
companies......................................
Transportation:
Exclusion of employer-paid transportation benefits ....... ....... ....... ....... ....... 5.0 5.2 5.5 5.7 5.9 27.2
(parking, van pools, and transit passes).........
Deferral of tax on capital construction funds of 0.1 0.1 0.1 0.1 0.1 ....... ....... ....... ....... ....... 0.5
shipping companies...............................
Exclusion of interest on State and local (\4\) (\4\) (\4\) 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.6
government qualified private activity bonds for
highway projects and rail-truck transfer
facilities.......................................
Exclusion of interest on State and local (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
government qualified private activity bonds for
high-speed intercity rail facilities.............
Exclusion of interest on State and local 0.2 0.3 0.3 0.3 0.3 0.7 0.7 0.7 0.7 0.8 4.9
government qualified private activity bonds for
private airports, docks, and mass-commuting
facilities.......................................
Community and Regional Development:
Empowerment zone tax incentives................... 0.2 (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.2
New markets tax credit............................ 1.1 1.1 1.2 1.1 1.0 (\4\) (\4\) (\4\) (\4\) (\4\) 5.5
District of Columbia tax incentives............... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
Credit for Indian reservation employment.......... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\)
Exclusion of interest on State and local 0.1 0.1 0.1 0.1 0.1 0.3 0.3 0.3 0.4 0.4 2.3
government qualified private activity bonds for
sewage, water, and hazardous waste facilities....
Recovery zone economic development bonds\2,3\..... (\4\) (\4\) (\4\) (\4\) (\4\) 0.2 0.2 0.2 0.2 0.2 0.9
Eliminate requirement that financial institutions 0.5 0.5 0.5 0.5 0.5 ....... ....... ....... ....... ....... 2.6
allocate interest expense attributable to tax-
exempt interest..................................
Disaster Relief:
National disaster relief........................
[Estimate contained in other provisions]
Education, Training, Employment, and Social
Services:
Education and training:
Deduction for interest on student loans......... ....... ....... ....... ....... ....... 2.0 2.1 2.2 2.3 2.4 11.1
Exclusion of earnings of Coverdell education ....... ....... ....... ....... ....... 0.1 0.1 0.1 0.1 0.1 0.5
savings accounts...............................
Exclusion of scholarship and fellowship income.. ....... ....... ....... ....... ....... 2.7 2.9 3.0 3.2 3.4 15.2
Exclusion of income attributable to the ....... ....... ....... ....... ....... 0.2 0.2 0.2 0.2 0.2 0.8
discharge of certain student loan debt and NHSC
and certain state educational loan repayments..
Exclusion of employer-provided education ....... ....... ....... ....... ....... 1.2 1.2 1.2 1.3 1.3 6.2
assistance benefits............................
Exclusion of employer-provided tuition reduction ....... ....... ....... ....... ....... 0.3 0.3 0.3 0.3 0.3 1.6
benefits.......................................
Parental personal exemption for students aged 19 ....... ....... ....... ....... ....... 4.5 4.7 4.9 5.2 5.5 24.7
to 23..........................................
Exclusion of interest on State and local 0.2 0.2 0.2 0.2 0.2 0.4 0.4 0.4 0.5 0.5 3.0
government qualified private activity bonds for
student loans..................................
Exclusion of interest on State and local 1.0 1.0 1.0 1.1 1.1 2.6 2.6 2.8 2.9 3.1 19.1
government qualified private activity bonds for
private nonprofit and qualified public
educational facilities.........................
Credit for holders of qualified zone academy 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 1.4
bonds\2,3\.....................................
Deduction for charitable contributions to 0.3 0.4 0.4 0.4 0.4 6.2 6.4 6.6 6.8 7.1 35.0
educational institutions.......................
Credits for tuition for post-secondary ....... ....... ....... ....... ....... 19.7 21.0 21.2 12.5 9.6 84.0
education\3\...................................
Exclusion of tax on earnings of qualified
tuition programs:
Prepaid tuition programs...................... ....... ....... ....... ....... ....... ....... ....... 0.1 0.1 0.1 0.3
Savings account programs...................... ....... ....... ....... ....... ....... 0.7 0.9 1.1 1.3 1.4 5.5
Qualified school construction bonds\2,3\........ (\4\) (\4\) (\4\) (\4\) (\4\) 1.0 1.1 1.2 1.3 1.4 6.0
Employment:
Exclusion of employee meals and lodging (other ....... ....... ....... ....... ....... 2.1 2.1 2.2 2.3 2.4 11.1
than military).................................
Exclusion of benefits provided under cafeteria ....... ....... ....... ....... ....... 35.2 36.1 37.6 39.4 40.2 188.5
plans\7\.......................................
Exclusion of housing allowances for ministers... ....... ....... ....... ....... ....... 0.8 0.8 0.8 0.8 0.8 4.0
Exclusion of miscellaneous fringe benefits...... ....... ....... ....... ....... ....... 7.5 7.7 7.8 8.0 8.2 39.2
Exclusion of employee awards.................... ....... ....... ....... ....... ....... 0.3 0.3 0.3 0.3 0.4 1.7
Exclusion of income earned by voluntary ....... ....... ....... ....... ....... 3.2 3.2 3.3 3.3 3.4 16.4
employees' beneficiary associations............
Special tax provisions for employee stock 1.4 1.5 1.6 1.6 1.7 0.1 0.1 0.1 0.1 0.1 8.3
ownership plans (ESOPs)........................
Deferral of taxation on spread on acquisition of -1.1 -1.2 -1.2 -1.1 -1.1 0.4 0.4 0.3 0.3 0.3 -4.1
stock under incentive stock option plans*......
Deferral of taxation on spread on employee stock -0.1 -0.2 -0.2 -0.2 -0.2 (\4\) (\4\) 0.1 0.1 0.1 -0.6
purchase plans*................................
Disallowance of deduction for excess parachute -0.2 -0.2 -0.2 -0.2 -0.2 ....... ....... ....... ....... ....... -1.2
payments (applicable if payments to a
disqualified individual are contingent on a
change of control of a corporation and are
equal to or greater than three times the
individual's annualized includible
compensation)\8\*..............................
Limits on deductible compensation\8\*........... -0.8 -0.8 -0.9 -0.9 -0.9 ....... ....... ....... ....... ....... -4.3
Work opportunity tax credit..................... 0.4 0.1 ....... ....... ....... 0.1 (\4\) ....... ....... ....... 0.6
Social services:
Credit for children under age 17\3\............. ....... ....... ....... ....... ....... 57.1 56.0 55.8 55.6 42.5 267.0
Credit for child and dependent care and ....... ....... ....... ....... ....... 4.7 4.8 4.8 4.8 4.9 24.0
exclusion of employer-provided child care\3,9\.
Credit for employer-provided dependent care..... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
Exclusion of certain foster care payments....... ....... ....... ....... ....... ....... 0.4 0.4 0.4 0.4 0.4 2.1
Adoption credit and employee adoption benefits ....... ....... ....... ....... ....... 0.4 0.4 0.4 0.5 0.5 2.2
exclusion........................................
Deduction for charitable contributions, other than 1.0 1.1 1.1 1.1 1.1 36.2 37.3 38.5 39.8 41.1 198.4
for education and health\10\.....................
Credit for disabled access expenditures........... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.3
Health:
Exclusion of employer contributions for health ....... ....... ....... ....... ....... 145.5 143.8 151.4 159.6 169.4 769.8
care, health insurance premiums, and long-term
care insurance premiums\11\......................
Exclusion of medical care and TRICARE medical ....... ....... ....... ....... ....... 2.6 2.7 2.8 2.9 2.9 13.9
insurance for military dependents, retirees, and
retiree dependents not enrolled in Medicare......
Exclusion of health insurance benefits for ....... ....... ....... ....... ....... 0.9 0.9 1.0 1.0 1.1 4.9
military retirees and retiree dependents enrolled
in Medicare......................................
Deduction for health insurance premiums and long- ....... ....... ....... ....... ....... 5.2 5.1 5.4 4.8 4.8 25.3
term care insurance premiums by the self-employed
Deduction for medical expenses and long-term care ....... ....... ....... ....... ....... 10.1 11.1 11.4 12.2 13.7 58.5
expenses.........................................
Exclusion of workers' compensation benefits ....... ....... ....... ....... ....... 4.9 5.0 5.1 5.2 5.3 25.6
(medical benefits)...............................
Health savings accounts........................... ....... ....... ....... ....... ....... 1.8 2.1 2.4 2.8 3.3 12.4
Exclusion of interest on State and local 0.7 0.7 0.7 0.7 0.7 1.8 1.8 2.0 2.0 2.1 13.1
government qualified private activity bonds for
private nonprofit hospital facilities............
Deduction for charitable contributions to health 1.9 1.9 2.0 2.0 2.1 3.2 3.3 3.4 3.5 3.6 26.7
organizations....................................
Credit for purchase of health insurance by certain ....... ....... ....... ....... ....... ....... (\4\) (\4\) (\4\) (\4\) 0.2
displaced persons\3\.............................
Credit for orphan drug research................... 0.8 1.0 1.1 1.2 1.3 (\4\) (\4\) (\4\) (\4\) (\4\) 5.3
Tax credit for small businesses purchasing 0.2 0.2 0.1 0.1 0.2 1.2 0.9 0.6 0.8 0.9 5.2
employer insurance...............................
Subsidies for insurance purchased through health ....... ....... ....... ....... ....... 29.6 53.5 72.5 82.1 84.8 322.5
benefit exchanges\3\.............................
Income Security:
Exclusion of workers' compensation benefits ....... ....... ....... ....... ....... 2.7 2.9 3.0 3.2 3.3 15.1
(disability and survivors payments)..............
Exclusion of damages on account of personal ....... ....... ....... ....... ....... 1.7 1.7 1.7 1.7 1.8 8.5
physical injuries or physical sickness...........
Exclusion of special benefits for disabled coal ....... ....... ....... ....... ....... (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
miners...........................................
Net exclusion of pension contributions and
earnings:
Plans covering partners and sole proprietors ....... ....... ....... ....... ....... 8.0 9.3 10.7 15.5 17.7 61.1
(sometimes referred to as Keogh plans).........
Defined benefit plans........................... ....... ....... ....... ....... ....... 48.6 57.4 62.9 69.6 77.0 315.6
Defined contribution plans...................... ....... ....... ....... ....... ....... 72.8 82.7 98.9 117.6 132.9 504.8
Individual retirement arrangements:
Traditional IRAs................................ ....... ....... ....... ....... ....... 20.9 12.9 13.6 14.5 15.3 77.2
Roth IRAs....................................... ....... ....... ....... ....... ....... 7.1 7.0 7.7 8.5 9.2 39.5
Credit for certain individuals for elective ....... ....... ....... ....... ....... 1.2 1.2 1.2 1.2 1.2 6.0
deferrals and IRA contributions..................
Exclusion of other employee benefits:
Premiums on group term life insurance........... ....... ....... ....... ....... ....... 3.2 3.2 3.3 3.3 3.4 16.4
Premiums on accident and disability insurance... ....... ....... ....... ....... ....... 4.1 4.2 4.4 4.6 4.8 22.2
Additional standard deduction for the blind and ....... ....... ....... ....... ....... 2.7 2.8 3.0 3.3 3.5 15.3
the elderly......................................
Deduction for casualty and theft losses........... ....... ....... ....... ....... ....... 0.4 0.5 0.5 0.5 0.6 2.5
Earned income credit\3\........................... ....... ....... ....... ....... ....... 72.7 73.3 76.0 73.8 75.6 371.4
Phase out of the personal exemption for the ....... ....... ....... ....... ....... -15.0 -15.9 -16.9 -17.9 -19.0 -84.6
regular income tax, and disallowance of the
personal exemption and the standard deduction
against the alternative minimum tax*.............
Exclusion of survivor annuities paid to families ....... ....... ....... ....... ....... (\4\) (\4\) (\4\) (\4\) (\4\) 0.1
of public safety officers killed in the line of
duty.............................................
Exclusion of disaster mitigation payments......... (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.2
ABLE accounts\12\................................. ....... ....... ....... ....... ....... (\4\) (\4\) (\4\) (\4\) 0.1 0.1
Social Security and Railroad Retirement:
Exclusion of untaxed Social Security and railroad ....... ....... ....... ....... ....... 37.6 39.6 41.9 44.2 46.8 210.1
retirement benefits..............................
Veterans' Benefits and Services:
Exclusion of veterans' disability compensation.... ....... ....... ....... ....... ....... 6.8 7.6 7.4 7.1 7.9 36.8
Exclusion of veterans' pensions................... ....... ....... ....... ....... ....... 0.2 0.2 0.2 0.2 0.2 0.9
Exclusion of veterans' readjustment benefits...... ....... ....... ....... ....... ....... 1.6 1.8 1.8 1.9 2.0 9.1
Exclusion of interest on State and local (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) (\4\) 0.3
government qualified private activity bonds for
veterans' housing................................
General Purpose Fiscal Assistance:
Exclusion of interest on public purpose State and 9.7 9.8 10.1 10.3 10.6 25.6 26.0 26.7 29.1 29.9 187.7
local government bonds...........................
Deduction of nonbusiness State and local ....... ....... ....... ....... ....... 62.2 65.1 68.4 71.7 74.9 342.3
government income taxes, sales taxes, and
personal property taxes..........................
Build America bonds\2,3\.......................... ....... ....... ....... ....... ....... 3.2 3.2 3.2 3.2 3.2 16.0
Interest:
Deferral of interest on savings bonds............. ....... ....... ....... ....... ....... 1.2 1.3 1.3 1.3 1.3 6.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Details may not add to totals due to rounding. An ``*'' indicates a negative tax expenditure for the 2015-2019 period.
\1\Reflects legislation enacted by September 30, 2015.
\2\Estimate includes an outlay to State and local governments. For the purposes of this table outlays are attributed to individuals.
\3\Estimate includes refundability associated with the following outlay effects:
Corporations Individuals
Total
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015-19
-------------------------------------------------------------------------------------------
Credit for holders of clean renewable energy ....... ....... ....... ....... ....... (\4\) (\4\) (\4\) (\4\) (\4\) 0.2
bonds..........................................
Credit for holders of qualified energy ....... ....... ....... ....... ....... (\4\) (\4\) (\4\) (\4\) (\4\) 0.3
conservation bonds.............................
Recovery zone economic development bonds........ ....... ....... ....... ....... ....... 0.2 0.2 0.2 0.2 0.2 0.8
Credit for holders of qualified zone academy ....... ....... ....... ....... ....... 0.1 0.1 0.1 0.1 0.1 0.3
bonds..........................................
Credits for tuition for post-secondary education ....... ....... ....... ....... ....... 6.4 7.4 7.8 8.0 ....... 29.6
Qualified school construction bonds............. ....... ....... ....... ....... ....... 1.0 1.1 1.2 1.3 1.4 5.9
Credit for children under age 17................ ....... ....... ....... ....... ....... 33.7 33.9 34.5 35.0 22.1 159.2
Credit for child and dependent care and ....... ....... ....... ....... ....... 0.9 1.0 1.0 0.9 0.9 4.7
exclusion of employer-provided child care......
Credit for purchase of health insurance by ....... ....... ....... ....... ....... ....... (\4\) (\4\) (\4\) (\4\) 0.1
certain displaced persons......................
Subsidies for insurance purchased through health ....... ....... ....... ....... ....... 25.8 46.3 63.0 71.3 73.7 280.1
benefit exchanges..............................
Earned income credit............................ ....... ....... ....... ....... ....... 63.3 63.7 66.1 63.8 65.3 322.1
Build America bonds............................. ....... ....... ....... ....... ....... 3.2 3.2 3.2 3.2 3.2 16.0
\4\Positive tax expenditure of less than $50 million.
\5\Estimate includes effect of credit for interest on certain home mortgages (Section 25).
\6\Includes bonus depreciation and general acceleration under MACRS.
\7\Estimate includes amounts of employer-provided health insurance purchased through cafeteria plans and employer-provided child care purchased through
dependent care flexible spending accounts. These amounts are also included in other line items in this table.
\8\Estimate does not include effects of changes made by the Emergency Economic Stabilization Act of 2008.
\9\Estimate includes employer-provided child care purchased through dependent care flexible spending accounts.
\10\In addition to the general charitable deduction, the tax expenditure accounts for the higher percentage limitation for public charities, the fair
market value deduction for related-use tangible personal property, the enhanced deduction for inventory, the fair market value deduction for publicly
traded stock and exceptions to the partial interest rules.
\11\Estimate includes employer-provided health insurance purchased through cafeteria plans and TRICARE medical insurance, which are also included in
other line items on this table.
\12\Estimate does not include outlays due to Medicaid
MACROECONOMIC FEEDBACK EFFECTS
OF PRO-GROWTH POLICIES
----------
Economic growth is one of the major determinants of revenue
and spending levels--and therefore the size of budget
deficits--over a given period. According to the Congressional
Budget Office [CBO], if growth in real gross domestic product
is just 0.1 percentage point higher than expected over its 10-
year window, revenue would be $286 billion higher--without tax
increases--spending would be nearly $41 billion lower, and the
cumulative deficit would fall by $327 billion.
Conversely, as noted in the previous section, the lowering
of economic growth projections raises significant difficulties
in trying to restore fiscal balance. It poses a challenge for
this budget resolution, which, as is customary, generally
adopts CBO's economic assumptions. It also creates a
disadvantage for congressional budgets compared with those of
the President. The administration enjoys the luxury of using
its own economic projections, rather than those of the
nonpartisan CBO. In addition, the President's budget is a
``post-policy'' presentation; that is, it incorporates any
beneficial fiscal or economic effects the administration claims
will result from its policies--something congressional budgets
usually have not done.
CBO has written extensively on the risks to the economy of
deficits and debt, and how reducing deficits and debt would
benefit the economy. Other policies likely to boost economic
growth include fundamental tax reform, increasing domestic
energy production, and the restoration of incentives for people
to work, save, and invest.
CBO's analysis of the fiscal path of this year's House
budget resolution estimates that reducing budget deficits,
thereby bending the curve on debt levels, would be a net
positive for economic growth. According to that analysis, the
fiscal year 2017 budget would increase real economic output per
person by 1.7 percent, or about $1,100 in calendar year 2026,
and by 6.3 percent, or about $4,900 in calendar year 2040 when
compared with CBO's extended baseline. The analysis concludes
that deficit reduction creates long-term economic benefits
because it increases the pool of national savings and boosts
investment, thereby raising economic growth and job
creation.\29\ The greater economic output that stems from a
large deficit-reduction package would have a sizeable impact on
the Federal budget. For instance, higher output would lead to
greater revenues through the increase in taxable incomes. Lower
interest rates and a reduction in the stock of debt would lead
to lower government spending on net interest expenses.
---------------------------------------------------------------------------
\29\Congressional Budget Office, ``Budgetary and Economic Outcomes
Under Paths for Federal Revenues and Noninterest Spending Specified by
Chairman Price, March 2016,'' March 2016: https://www.cbo.gov/sites/
default/files/114th-congress-2015-2016/reports/51260-
BudgetaryPaths1.pdf.
---------------------------------------------------------------------------
This year's budget resolution reduces deficits compared to
CBO's January 2016 baseline by a total of $651 billion over 10
years due to macroeconomic feedback effects on the budget.
Lower deficits of $194 billion--consisting of $150 billion in
higher revenues and $44 billion in lower mandatory outlays--is
due to revised economic assumptions resulting from the
macroeconomic feedback effects of legislation enacted late last
year that made certain tax provisions permanent. These effects
also include economic developments through the end of calendar
year 2015 that were not included in the CBO baseline.\30\
---------------------------------------------------------------------------
\30\Congressional Budget Office preliminary estimate of the
macroeconomic feedback effects on the budget of recent legislation and
economic developments not included in the CBO January 2016 baseline,
released by email to House and Senate Budget Committees on 9 February
2016.
---------------------------------------------------------------------------
An additional $216 billion in lower deficits--a combination
of $225 billion in higher revenues, without tax increases, and
$9 billion in higher outlays--is due to the macroeconomic
feedback effects of fully repealing the Affordable Care Act
[ACA].\31\ CBO and the Joint Committee on Taxation [JCT]
estimate that repealing the ACA would increase the level of
gross domestic product by about 0.7 percent, on average, during
the latter half of the budget window relative to current-law
projections, mostly by increasing the supply of labor above
what would be expected under a continuation of the ACA. In
addition, CBO estimates the fiscal path of this budget
resolution--which provides 10-year savings in spending of $6.5
trillion from policy changes and debt service compared to
current policy--would result in positive macroeconomic feedback
effects that would further lower the deficit by approximately
$241 billion.\32\
---------------------------------------------------------------------------
\31\June 2015 published CBO/JCT estimate shifted forward 1 fiscal
year of the macroeconomic feedback effects on the budget of a full and
immediate repeal of the Affordable Care Act.
\32\Congressional Budget Office, ``Budgetary and Economic Outcomes
Under Paths for Federal Revenues and Noninterest Spending Specified by
Chairman Price, March 2016,'' March 2016.
FUNCTIONAL PRESENTATION
----------
For decades, the budget resolution and accompanying report
have presented the function-by-function breakdown in a manner
that evolved mostly from practical and accounting
considerations. The arrangement has changed little since
enactment of the Congressional Budget Act of 1974.
This resolution retains those conventional categories, as
do the summary tables in the report. The narrative discussion
below, however, takes a different approach. While keeping the
content of the functional categories intact, it arranges them
differently to reflect two important considerations: the
crucial role of federalism in the United States' governing
system, and the increasing burden of automatic spending
programs (formally called ``direct'' or ``mandatory''
spending).
The standard budget resolution format presents a range of
government activities largely without distinguishing those of
principal importance to the national government from those that
may draw greater initiative from States and localities or the
private sector. While National Defense and International
Affairs appear first--as is appropriate for two of the Federal
Government's main responsibilities--the sequencing of the
remaining functions seems to lack any logic other than their
function numbers. There is no reason, for example, why Energy
(Function 270) should appear before Health (Function 550), or
Veterans Benefits and Services (Function 700), or
Administration of Justice (Function 750).
The narratives below are arranged to make such a
distinction. The presentation retains the content of each
functional category, just as in the conventional format, but
organizes the functional discussions in four broader categories
as described below. The aim is to provoke a re-evaluation of
the roles of different layers of government, and to group
together the government's major domestic benefits programs,
reflecting their substantial and growing impact on the budget.
Put another way, the format encourages lawmakers and the public
to think differently about the budget by looking at it
differently.
The groupings are as follows:
Principal Federal Responsibilities. The first grouping
consists of those activities clearly associated with the
national level of government. Everyone would place national
defense and international affairs in this group, as directed by
the Constitution itself. That simplistic division, however,
fails to acknowledge several other categories for which the
Federal Government also has the central responsibility. These
include veterans' benefits (an aspect of the compensation for
military service), Federal courts and law enforcement, and
general government, the last of which mainly finances the
Legislative and Executive branches of the Federal Government.
Also included here are the Overseas Contingency Operations/
Global War on Terrorism, which finance non-recurring military
and diplomatic activities in the Middle East. The overall
grouping, using the formal functional titles, is as follows:
LNational Defense
LInternational Affairs
LOverseas Contingency Operations/Global War on
Terrorism
LVeterans Benefits and Services
LAdministration of Justice
LGeneral Government
LGovernment-Wide Policy
Domestic Priorities. This second set of functions draws
together mainly the discretionary spending for activities that
may be best administered or initiated by State and local
governments or the private sector--and most of which would
exist even if there were no Federal Government. This does not
suggest they are of lesser priority; indeed, their importance
is so immediate and direct that they benefit most from the
initiative of those closest and most directly involved. This
arrangement aims to encourage greater flexibility for States
and localities and the private sector to drive these
activities. (In the conventional format, these are Functions
250 through 650.) Although the discussion here focuses on the
discretionary spending in these categories, two sections--
Energy and Transportation -reflect both the discretionary and
direct spending components. This is because in these areas, the
two forms of spending are intertwined in ways unlike those of
other functional categories.
LGeneral Science, Space, and Technology
LEnergy (both discretionary and direct)
LNatural Resources and Environment
LAgriculture
LCommerce and Housing Credit
LTransportation (both discretionary and direct)
LCommunity and Regional Development
LEducation, Training, Employment, and Social
Services
LHealth
LIncome Security
LOther Domestic Discretionary (mainly the
administration of the Social Security and Medicare Programs)
Direct Spending Programs. This group reflects solely the
automatic spending components of Functions 250 through 650 in
the conventional format. The aim is to show the magnitude of
these programs--mostly for social insurance and safety net
programs--in the overall budget. This form of spending is
largely open-ended and flows from effectively permanent
authorizations. Most of the programs funded this way pay
benefits directly to groups and individuals without an
intervening appropriation. They spend without limit, and their
totals are determined by numerous factors outside the control
of Congress: caseloads, the growth or contraction of GDP,
inflation, and many others.
LSocial Security
LMedicare
LMedicaid, the Affordable Care Act, and Related
Programs
LIncome Support, Nutrition, and Related Programs
LFarm Support
LBanking, Housing, and the Postal Service
LStudent Loans, Social Services, and Related
Programs
LFederal Lands and Other Resources
LOther Direct Spending (science, natural
resources, and community and regional development)
Financial Management. This final grouping consists of those
functions that round out the budget's overall financing.
LNet Interest
LAllowances
LUndistributed Offsetting Receipts
Principal Federal Responsibilities
----------
The two most obvious responsibilities of the national
government are providing for the common defense of all the
constituent States, and conducting diplomacy on behalf of the
Nation as a whole. Related to these two is the supplemental
spending for the Overseas Contingency Operations/Global War on
Terrorism. As part of the compensation for military service,
the government also offers a range of benefits specifically for
veterans. The category called Administration of Justice mainly
reflects funding for Federal law enforcement agencies--such as
the Federal Bureau of Investigation and the Drug Enforcement
Administration, among others--as well as the Federal judiciary.
The vast majority of funding for the General Government
function supports the Executive and Legislative Branches of the
Federal Government. Included in this grouping as well are
several government-wide savings policies.
NATIONAL DEFENSE
Function Summary
The Federal Government has no higher responsibility than to
``provide for the common defense'' of the Nation. No other
level of government can do this, and it is not an option; it is
a constitutional duty--one whose gravity is intensifying. The
global security environment is growing more dangerous, as the
United States faces increasingly complex and evolving threats
around the world. These include, but are not limited to, the
following:
Russian aggression in Eastern Europe;
Terrorist activities by the Islamic State and
other networks;
The nuclear and missile programs of North Korea
and Iran;
China's ambitions to aggressively exert influence
in the Asia-Pacific.
As Henry A. Kissinger, former Secretary of State, testified
to the Senate Armed Services Committee last year on the global
security environment: ``[W]e haven't faced such diverse crises
since the end of the Second World War.''\33\ General Martin E.
Dempsey, former Chairman of the Joint Chiefs of Staff, echoed
this assessment more recently, testifying that ``the global
security environment is as uncertain as I've ever seen it . . .
the world is rapidly changing everywhere, and we're seeing
significant shifts in an already complex strategic
landscape.''\34\
---------------------------------------------------------------------------
\33\Committee on Armed Services, U.S. Senate, ``Global Challenges
and the U.S. National Security Strategy,'' hearing 29 January 2015.
\34\Committee on Armed Services, U.S. Senate, ``Counter-ISIL
(Islamic State of Iraq and the Levant) Strategy,'' hearing 7 July 2015.
---------------------------------------------------------------------------
Recent terrorist attacks in Paris and San Bernardino, CA,
reflect this new reality. Americans deserve leaders who are
committed to executing their constitutional duty to defend the
Nation. Truly assessing the threats and developing a strategy
to deter and combat them while mitigating risk as far as
possible should be the ultimate objective of the administration
and defense leaders. The President and the Congress must then
be honest about the true costs of the strategy, and provide
full funding for its implementation.
According to the House Armed Services Committee:
``Reclaiming our role as a global leader does not mean the
United States must `police' the world; rather, the United
States must engage when hostile actors threaten our interests
and must reassure allies in order to preserve the international
order that the United States has painstakingly established. If
not, as we have seen in places such as Syria, Ukraine, and the
South China Sea, others will fill the vacuum and establish an
order that is inconsistent with our values and our security.''
To meet the demands of the 21st century, the committee says,
the U.S. military needs both strength and agility. ``Military
strength requires enough capability to deal with a wide array
of threats--both quality and quantity.'' As for agility, the
committee argues: ``We must have the military capability able
to protect us from unknown and unexpected threats. We have to
be able to learn, to anticipate, and to adapt faster than
anyone else.''\35\
---------------------------------------------------------------------------
\35\Committee on Armed Services, U.S. House of Representatives,
Views and Estimates, 5 February 2016.
---------------------------------------------------------------------------
Following the prescription above for executing national
security policy has been challenging in recent years due to
laws designed to curtail spending and put the Federal
Government on a fiscally sustainable path. While the Department
of Defense has been expected to do more in terms of foreign
engagement, funding for these requirements has been reduced.
The national defense budget has carried the bulk of
sequestration's effects after the enactment of the Budget
Control Act [BCA] of 2011. Compared to the planned defense
spending requested by then-Secretary Robert M. Gates in 2011--
the last time the Department was able to truly align a funding
request with a strategy--the automatic enforcement procedures
of the BCA will arbitrarily cull almost $1 trillion from
defense, eroding critical warfighting capabilities,
modernization, and readiness across all the services. According
to General Dempsey, the Department's request for fiscal year
2016 was insufficient to execute the national security strategy
with acceptable levels of risk: the budget request was ``at the
lower ragged edge of manageable risk'' and offered ``no slack,
no margin left for error or strategic surprise.''\36\ Yet
Congress underfunded defense by $5 billion. Every year since
the BCA was enacted, budgetary prescriptions have been shaping
national defense strategy, not the other way around, resulting
in higher risks for service members and the Nation. According
to the House Armed Services Committee: ``[O]ur national
security strategy has not evolved to mitigate the risks we face
or reconcile the resources available to counter those
threats.''\37\ The mismatch between strategy and funding is
unacceptable and needs to change.
---------------------------------------------------------------------------
\36\Committee on Armed Services, U.S. Senate, ``Review of the
Defense Authorization Request for Fiscal Year 2016 and the Future Years
Defense Program,'' hearing 3 March 2015.
\37\Committee on Armed Services, U.S. House of Representatives,
Views and Estimates, 5 February 2016.
---------------------------------------------------------------------------
Turning to the fiscal year 2017 budget, the administration
is requesting $551 billion for base national defense funding
for the budget year, in line with the Bipartisan Budget Act of
2015, and $6.2 trillion over the 10-year window. In fiscal
years 2018 and beyond, the administration assumes base defense
spending above the Budget Control Act caps claiming ``the
nation's defense strategy cannot be executed at sequester-
levels of funding.''\38\ While this budget matches the
administration's fiscal year 2017 defense request, consistent
with the maximum level allowed under current law, it provides
$6.3 trillion over the 10-year window, nearly $90 billion above
the administration's plan. Further, this budget assumes $23
billion in overseas contingency operations funding to be
dedicated to base defense requirements, bringing total
resources for base defense funding to $574 billion (see section
on Overseas Contingency Operations/Global War on Terrorism). It
is now more critical than ever to ensure the U.S. military has
all the resources it needs as it continues to engage in ever-
evolving threats in the Middle East and around the globe.
---------------------------------------------------------------------------
\38\Department of Defense Office of the Under Secretary of Defense
(Comptroller) Chief Financial Officer, Defense Budget Overview Fiscal
Year 2017 Budget Request, February 2016.
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The resolution specifies $559.3 billion in total budget
authority and $566.5 billion in total outlays in fiscal year
2017, per current law (see Function 050 in the summary tables).
These amounts include funding to compensate, train, maintain,
and equip the military forces of the United States. More than
95 percent of the funding in this function goes to Department
of Defense military activities. The remainder funds the atomic
energy defense programs of the Department of Energy, and other
defense-related activities (primarily in connection with
homeland security).
Almost all of defense funding comes through annually
appropriated, discretionary spending, which in this resolution
totals $551.1 billion in budget authority and $557.7 billion in
outlays in fiscal year 2017. This is the established level
provided for in the Bipartisan Budget Act of 2015, which
amended the Budget Control Act caps. Direct spending in 2017
for this category--which includes allowances, offsetting
receipts, and retirement payments--is $8.2 billion in budget
authority and $8.7 billion in outlays in fiscal year 2017. The
10-year totals for the entire defense category are $6.4
trillion in budget authority and $6.2 trillion in outlays.
Funding for the Pentagon's non-enduring activities in
Afghanistan and Iraq is carried in a separate function called
Overseas Contingency Operations/Global War on Terrorism (see
Function 970 in the summary tables).
Illustrative Policy Options
Policy development in this area rests with the Committee on
Armed Services and the Appropriations Subcommittee on Defense.
They will arrange priorities for maintaining robust national
defense capabilities while responsibly managing taxpayer
resources. Some illustrative areas of particular concern
include the following.
Military Compensation and Benefits. As discussed in last
year's budget resolution, the current compensation and benefits
system for military personnel, retirees, and their families is
unsustainable. Consequently, the fiscal year 2016 budget
resolution encouraged the committees of jurisdiction to review
the recommendations of the Military Compensation and Retirement
Modernization Commission [MCRMC]\39\ and consider reforms to
sustain the long-term fiscal health of these programs,
especially the retirement and health care benefits. In the
Fiscal Year 2016 National Defense Authorization Act (Public Law
114-92), the Armed Services Committees successfully included
substantial reforms to the military retirement system,
expanding the benefits to all military personnel while
simultaneously putting the program on a fiscally sustainable
path. According to the Congressional Budget Office [CBO], the
new system will yield significant long-term savings in direct
spending, with expected annual outlay reductions of about 20
percent, or $10 billion.\40\ This laudable achievement on the
part of the Armed Services Committee members and the Congress
will ultimately provide a better and fairer benefit for all
military personnel in the future, while maintaining the
benefit's sustainability.
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\39\The Fiscal Year 2013 National Defense Authorization Act
established the MCRMC to conduct a comprehensive review of military
compensation and retirement systems and ultimately make recommendations
to do the following: ensure the long-term viability of the All-
Volunteer Force; enable quality of life for military personnel that
fosters successful recruitment, retention, and careers; and modernize
and achieve fiscal sustainability for the compensation and retirement
systems.
\40\Congressional Budget Office, Cost Estimate of H.R. 1735
National Defense Authorization Act for Fiscal Year 2016, 11 May 2015.
Military Health Care. The health care system that benefits
military personnel, their families, and retirees also needs
reform. In their findings, the MCRMC members reported that
``the quality of TRICARE benefits as experienced by service
members and their families has decreased, and the fiscal
sustainability of the program has declined.''\41\ In 1990,
funding for military health care accounted for approximately 4
percent of the Department's budget; in 2016, the administration
requested, and Congress appropriated, health care funding
accounting for 9 percent of the Department's base budget.\42\
This increased proportional growth in health care spending
occurred even as the total defense budget significantly
increased between 2000 and 2012. Consequently, Congress made
changes to the system to help rein in cost growth rates,
including Federal ceiling prices for prescription drugs.
Nevertheless, more needs to be done. Reforming the military
health care system is a priority for the House Armed Services
Committee, which plans on ``examining the whole military health
care system'' with the goal of ensuring it ``can sustain
trained and ready health care providers to support the
readiness of the force and a quality health care benefit that
is valued by its beneficiaries.''\43\ Once again, this budget
supports the Armed Services Committee's efforts to tackle this
issue, and the Budget Committee looks forward to seeing the
resulting policy recommendations expected later this year.
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\41\Military Compensation and Retirement Modernization Commission,
Final Report of the Military Compensation and Retirement Modernization
Commission, January 2015, p. 81.
\42\Congressional Budget Office, Long-Term Implications of the 2016
Future Years Defense Program, January 2016.
\43\Committee on Armed Services, U.S. House of Representatives,
Views and Estimates, 5 February 2016.
Budget Transparency. Like all government agencies, the
Department of Defense has a responsibility to account for and
effectively manage its taxpayer-provided resources. The
continued failure of the Defense Department to receive a clean
audit from the Government Accountability Office not only limits
transparency and congressional oversight of defense programs,
but also erodes public confidence in the Department's ability
to effectively spend taxpayer resources. According to the House
Armed Services Committee: ``For more than 20 years, the
Comptroller General of the United States has consistently
identified the financial management of the Department of
Defense as a high-risk area.''\44\ This is especially
disconcerting during times of fiscal constraint, when it is
more important than ever for agencies to complete self-
assessments to make tough decisions on setting priorities with
limited resources. The Fiscal Year 2010 National Defense
Authorization Act (Public Law 111-84) required the Department
to implement the Financial Improvement and Audit readiness
plan, and the Department expects full auditability by the end
of fiscal year 2017. The budget anticipates the Pentagon's full
attention to meeting its auditability goals and continued
Department efforts to effectively allocate existing resources.
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\44\Ibid.
Defense Industrial Base and Sustainment. A robust
industrial base is vital to the national security of the United
States and to military readiness. As defense budgets have
declined, there has been a much needed focus on the acquisition
of new weapons systems to modernize the armed forces. Little
attention, however, has been given to the inescapable fact that
sustainment is 60 percent to 80 percent of the total lifecycle
cost of a weapons system, according to the Department of
Defense.\45\ Therefore, the ongoing health of the defense
industrial base, in its entirety, also must be carefully
considered.
---------------------------------------------------------------------------
\45\Government Accountability Office, Weapon Systems Management:
DOD Has Taken Steps to Implement Product Support Managers but Needs to
Evaluate Their Effects, April 2014.
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The sustainment industrial base comprises both private
sector and military facilities, each serving a unique and vital
role in the maintenance, repair, and overhaul of weapons,
weapons systems, components, subcomponents, parts, and
equipment. As budget resources become more scarce, the military
facilities and private sectors should focus on the areas in
which each excels, entering into public-private partnerships,
as appropriate, to save taxpayer dollars and increase the
warfighter's readiness. Furthermore, the Department should
learn from recent mistakes and failed policies, which include
the unnecessary furlough of working capital fund employees or
managing by end strength. Workload should be one of the key
drivers when managing depots, arsenals, and ammunition plants
to ensure the lowest cost to the taxpayer.
Military depots are the backbone of the organic industrial
base and are the Nation's insurance policy against the tides of
economic uncertainty, changes in the defense industry, and
wartime demands. Additionally, military depots serve as the
appropriate location to maintain command and control of the
majority of warfighting systems. The B-52 bomber program, as
one example, is a reminder that sustainment of weapons systems
for decades beyond their initially projected lifecycle is here
to stay and will be essential to meeting military readiness
needs. Military depots have proven their value to the taxpayer
for efficiently sustaining systems that are no longer
profitable or no longer cost-effective to maintain in the
private sector. During peacetime or war, military depots meet
military readiness requirements and provide critical and
necessary skill sets on time and on budget.
Acquisition reform should reaffirm the value of military
core statutes and the longstanding balance of workload between
military depots and the private sector. These key provisions in
existing law, when vigorously enforced, will ensure that the
vital security interests of the United States military are met
through the maintenance of a healthy defense industrial base,
even during a time of declining budgets.
INTERNATIONAL AFFAIRS
Function Summary
The international affairs budget is critical in advancing
U.S. strategic priorities and interests, especially those
relating to economic opportunities, national security, and
American values. That said, duplicative programs, programs
unrelated to vital U.S. national interests, and inefficiencies
are prevalent in the budget and should be addressed. This
budget resolution represents a thorough re-evaluation of
accounts in this category and gives priority to programs that
are both integral to the core mission and that effectively and
efficiently achieve desired outcomes.
From World War II, through the end of the Cold War, and
into the 21st century, the United States has remained essential
to the security of its allies and the international
community.\46\ The U.S. is vital to international peace,
security, stability, and the spread of democracy and freedom.
America needs to maintain a diplomatic and economic engagement
in the world that will ensure its ``principles of democracy,
opposition to aggression and intimidation by authoritarian
regimes, and a strong assistance program that assists allied
partners.''\47\
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\46\The Foreign Policy Initiative, Foreign Policy 2015, 30
September 2015, http://foreignpolicyi.org/files/uploads/images/2015-09-
30-Foreign%20Policy%202015.pdf.
\47\Ibid.
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According to the Committee on Foreign Affairs, reducing
poverty through economic growth is a ``key objective of the
U.S. national security strategy and core responsibility of the
Federal departments and agencies implementing U.S. foreign
assistance programs.''\48\ The failure to properly manage
foreign aid resources will not only doom U.S. development
programs, but will also continue the cycle of dependence on
U.S. foreign aid.\49\
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\48\Committee on Foreign Affairs, U.S. House of Representatives,
Views and Estimates, 4 February 2016.
\49\Ibid.
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The United States and its citizens face grave new threats,
and must ``refrain from pursuing a protectionist and
isolationist retreat.''\50\ The new challenges America faces
today require a ``vision and policies anchored not in the
fatalism of U.S. decline, but rather in a renewed commitment to
a strong and enduring American global leadership.''\51\
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\50\The Foreign Policy Initiative, op cit.
\51\Ibid.
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For this budget category (Function 150 in the summary
tables), the budget resolution proposes a total of $39.8
billion in budget authority and $43.7 billion in outlays for
fiscal year 2017. This funding covers the following:
international development, food security, and humanitarian
assistance; international security assistance; the conduct of
foreign affairs; foreign information and exchange activities;
and international financial programs. The primary agencies
responsible for executing these programs are the Departments of
State, Agriculture, and the Treasury; the U.S. Agency for
International Development [USAID]; and the Millennium Challenge
Corporation. Over 10 years the budget totals are $405.4 billion
in budget authority and $401.2 billion in outlays.
The majority of the funding is discretionary spending,
which is $35.8 billion in budget authority and $45.3 billion in
outlays for fiscal year 2017. Direct spending in this
function--totaling $4.0 billion in budget authority and -$1.6
billion in outlays for fiscal year 2017--includes loan
guarantee programs, payments to the Foreign Service Retirement
and Disability Fund, and foreign-military sales programs. The
negative figures reflect receipts from foreign-military sales
and financing programs.
As with National Defense, funding for the State Department
and USAID's incremental, non-enduring civilian activities in
the frontline states of the global war on terrorism is
reflected in the category called Overseas Contingency
Operations/Global War on Terrorism.
Reorganize the Department of State
The Constitution invests foreign-policymaking power in the
President by granting that office the authority to negotiate
treaties and appoint ambassadors. To assist the President in
discharging his foreign affairs duties, the Congress in 1789
created the Department of State, the first executive department
established.\52\ The core responsibilities of the Department's
Secretary are diplomacy, providing foreign policy advice to the
President, understanding the international environment, and
advancing U.S. interests abroad.\53\
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\52\U.S. Department of State, ``Duties of the Secretary of State,''
20 January 2009: http://www.state.gov/secretary/115194.htm.
\53\Ibid.
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An effective American foreign policy depends on a strong
State Department, but strategic guidance and accountability are
hard to find. State's diminished relevance can be attributed to
failings in three principal areas: human resources, programs,
and the Department's organizational structure.\54\
---------------------------------------------------------------------------
\54\Quadrennial Diplomacy and Development Review, Enduring
Leadership in A Dynamic World, 2015: http.//www.state.gov/documents/
organization/241429.pdf.
---------------------------------------------------------------------------
As identified in the Department's Quadrennial Diplomacy and
Development Review [QDDR] of 2015, the Department needs to
modernize how it recruits or acquires necessary skill sets and
invest in training for employees to meet current and
forthcoming challenges.\55\ The Department is unable to pivot
from crisis to crisis efficiently as obsolete skill sets cannot
be downsized to create room for those in demand. Currently, the
Department does not give priority to the training of its
employees, especially with respect to leadership skills. As a
result, Department staff members do not build expertise
commensurate with their private sector counterparts.
---------------------------------------------------------------------------
\55\Ibid.
---------------------------------------------------------------------------
The 2015 QDDR identified the need to ``deepen expertise in
planning and performance management.''\56\ This is especially
true with respect to how the Department deploys foreign
assistance programs. Currently, monitoring and evaluation of
Department programs is sporadic and does not inform future
programming decisions. The Department's goals and objectives
are vague or broad to the point that they could not reasonably
be identified. At the country level, goals such as encouraging
a given country to become more democratic are empty and provide
no strategic guidance on implementation.\57\ At the program
level, every program is deemed a success because goals are
quantitative (e.g. number of people trained or textbooks
distributed) rather than qualitative. As a result, foreign
assistance funding does not advance discrete foreign policy
objectives, and only anecdotal success is identifiable. To
date, only one country (Greece) has ever ``graduated,'' or
advanced on both the political and economic scale, to warrant
an end to U.S. foreign assistance.\58\ Such stark figures
should call into question the entire foreign assistance model
as currently employed by the Department of State.
---------------------------------------------------------------------------
\56\Ibid.
\57\Ibid.
\58\Ibid.
---------------------------------------------------------------------------
With the increase in crises around the world, the
Department has assumed new responsibilities leading to an ever-
expanding bureaucracy, now desperately in need of rightsizing.
While the number of assistant secretary positions is capped by
Congress at 24, the Department has vastly increased its use of
``special envoys,'' ``ambassadors-at-large,'' ``special
advisers,'' and ``coordinators.''\59\ Issues that are naturally
cross-regional or cross-functional are given their own office
or bureau and associated budget thereby creating redundancy
with existing offices and activities. The Department has
struggled to reduce these areas of overlap as bureaus and
offices fiercely protect budgets and resources.
---------------------------------------------------------------------------
\59\Ibid.
---------------------------------------------------------------------------
The Department is now approaching a period of transition
and new leadership, providing a natural opportunity to
undertake far-reaching, and long overdue, reforms. In addition
to the three areas addressed above, State should consider other
reforms that have been initiated but remain incomplete. For
example, integrating USAID into the Department of State will
enable the U.S. to structure more effective foreign assistance
programs. When it comes to advancing democracy, which is
inherently tied to America's diplomacy, USAID will be best
served by being integrated into a single entity responsible for
all of America's foreign policy.
Illustrative Discretionary Spending Policy Options
The committees of jurisdiction--the Committees on Foreign
Affairs and Agriculture, as well as the Appropriations
Subcommittee on State, Foreign Operations, and Related
Programs--should continue effective oversight of international
affairs programs to ensure resources are used efficiently to
achieve desired results that ultimately support U.S. national
interests. While the final policy choices will lie with the
committees, some options worthy of consideration might include
the following.
Reform Food Aid. One of the areas where the international
affairs budget fails to use taxpayer dollars efficiently and
effectively is the U.S. international food aid program,
including Food for Peace (Public Law 480, Title II), which
provides emergency food assistance abroad and supports
development programs in developing nations. Its failings result
primarily from enduring program constraints, including the
cargo preference (which dictates at least 50 percent of food
aid must be shipped on U.S. flagged vessels). Other impediments
include the requirement that 100 percent of food commodities be
produced in the U.S., and monetization requirements, the
practice of selling U.S. commodities on foreign markets to fund
development projects. Several bipartisan efforts have called
for reforming food programs. According to a 2011 report by the
Government Accountability Office [GAO], the practice of
monetization loses an average of 25 cents of every dollar spent
on food aid.\60\ This budget therefore endorses food aid
reforms to get maximum benefit out of every dollar spent on
this program.
---------------------------------------------------------------------------
\60\Government Accountability Office, International Food
Assistance: Funding Development Projects through the Purchase,
Shipment, and Sale of U.S. Commodities Is Inefficient and Can Cause
Adverse Market Impacts, 23 June 2011.
Overhaul the Broadcasting Board of Governors. For years,
the Office of the Inspector General and the Government
Accountability Office have noted inefficiencies and redundant
bureaucratic structures within the Broadcasting Board of
Governors [BBG]. This budget calls for overhauling the
governing structure and organization of the BBG, with a
reduction in funds until such changes are made. The BBG, which
became an independent entity in 1998, is responsible for
directing and overseeing all U.S. international broadcasting
services, such as Voice of America. BBG is mostly known for
programs that educate the world on American culture, society,
and governance, in addition to promoting democratic principles
such as human rights and religious freedom. While international
broadcasts can be an effective tool in executing America's
foreign policy objectives, BBG fails to efficiently implement
its mission due to egregious mismanagement, lack of
accountability, and program overlap. In July 2014, the House
passed H.R. 4490, the United States International
Communications Reform Act of 2014, a bipartisan reform bill
that addresses these problems to improve the management and
effectiveness of BBG programs. The Committee on Foreign Affairs
reiterates the critical need to reform the BBG: ``In order to
confront the challenges posed by Islamic State and Russian
propaganda, among others, Congress must first fix the
organization charged with leading this effort.''\61\
Consequently, this budget supports a reduction in funding for
BBG until significant reforms are made as to safeguard taxpayer
dollars from continued waste at the hands of governmental
mismanagement.
---------------------------------------------------------------------------
\61\Committee on Foreign Affairs, U.S. House of Representatives,
Views and Estimates, 4 February 2016.
Eliminate Contributions to the Clean Technology Fund and
the Strategic Climate Fund. The Obama Administration created
the Clean Technology and Strategic Climate Funds in 2010. They
provide foreign assistance to support energy-efficient
technologies intended to reduce energy use and mitigate climate
change. Borrowing funds abroad to provide financial assistance
in this area is not a core U.S. foreign policy function--
especially during times of large and mounting debt. In
addition, the government should not attempt to pick winners and
losers in terms of which technologies and companies to favor
and advance abroad. Both programs should be considered for
---------------------------------------------------------------------------
elimination.
Reduce Education Exchange Programs. Function 150 includes
two education exchange accounts intended to encourage mutual
understanding between Americans and citizens around the world
through scholarship and leadership programs: Educational and
Cultural Exchange Programs and the Open World Leadership
Center. Although their mission is laudable, exchange programs
are a non-essential component of the foreign-affairs budget and
should be reduced accordingly. When reduction decisions for
these accounts are made, the priority should go to programs
that are in line with U.S. strategic interests and that receive
matching foreign-government contributions, such as the
Fulbright Program.
Reduce Contributions to International Organizations and
Programs. The United States makes voluntary contributions to
several multilateral organizations and programs. These often
duplicate funding provided in the Contributions to
International Organizations [CIO] account, which makes payments
to organizations pursuant to treaties the United States has
signed. Further, United States contributions to the United
Nations Development Program [UNDP], which has been flagged by
the Special Inspector General for Afghanistan Reconstruction
[SIGAR] as problematic, flow through this account. According to
SIGAR, UNDP's oversight and management of the Law and Order
Trust Fund for Afghanistan--to which the United States and
other donors have contributed more than $3 billion since 2002--
is weak, making taxpayer dollars susceptible to fraud, waste,
and abuse.\62\ Although this budget fully funds the CIO
account, it does not support voluntary contributions for the
International Organizations and Programs account, including
contributions to the UNDP.
---------------------------------------------------------------------------
\62\John F. Sopko, Special Inspector General for Afghanistan
Reconstruction, letter to Helen Clark, UNDP Administrator, 12 September
2014: http://www.sigar.mil/pdf/special%20projects/SIGAR-14-98-SP.pdf.
Eliminate Funding for Peripheral Foreign-Affairs
Institutions. The United States funds multiple independent
agencies and quasi-private institutions through the foreign-
affairs budget. Included in this list are the Inter-American
Foundation, the African Development Foundation, the East-West
Center, and the Asia Foundation. These institutions all engage
in activities that overlap the State Department and USAID
activities. Consolidating and eliminating funding for multiple
institutions that perform similar tasks will make U.S.
engagement with the world more efficient and cost-effective.
Further, some of these organizations already receive private
---------------------------------------------------------------------------
funding and could continue with non-government funds.
Make the Millennium Challenge Corporation Lead Agency on
Foreign-Development Assistance. The United States has two
primary foreign-development assistance programs: USAID's
Development Assistance program and the Millennium Challenge
Corporation [MCC].\63\ Funding for foreign aid and helping
other nations rise toward prosperity keep the United States
safe and strengthen the economy by establishing new trading
partners and markets. Such development assistance is
worthwhile, however, only if it produces results for the aid
recipients.
---------------------------------------------------------------------------
\63\Committee on Foreign Affairs, U.S. House of Representatives,
Views and Estimates, 4 February 2016.
---------------------------------------------------------------------------
America's experience with having two development-assistance
programs has shown that MCC's model has been more effective in
achieving results. MCC's emphasis on outcomes rather than
inputs should be the foundation of all U.S. development-
assistance programs. Other elements of MCC's model that should
be extended throughout U.S. development-assistance programs
include the following:
Strict requirements on recipient countries to
prove strong commitments to good governance, economic freedom,
and investment in their citizens in order to be considered for
aid;
A willingness of the U.S. government to terminate
assistance if an aid recipient starts to fail on these critical
commitments;
Country ownership, which requires the country to
plan its own aid projects and lead implementation;
Strict timelines for aid projects.
These principles are critical to ensuring the long-term
sustainability of projects once U.S. assistance concludes.
Further, MCC's model is resulting in the ``MCC Effect,'' in
which countries are independently making reforms in favor of
good governance, economic freedom, and other MCC requirements,
to qualify for a compact--and the effectiveness of this
approach appeared early on. For example, in July 2007 the MCC
signed a compact with Lesotho only after the country passed the
Legal Capacity of Married Persons Act in 2006 that ensured
married women, who had previously been legally categorized as
minors, were granted basic economic, financial, and social
rights.\64\ In 2010, USAID announced a reform agenda, USAID
Forward, and claims to be in the process of adopting more
accountable policy standards, country ownership, and
timetables. Although some changes have been made to the
agency's practices, success continues to remain elusive. MCC's
model is more effective and efficient in delivering foreign
aid. It also generates the most benefits for the taxpayer
dollar. For these reasons, the committees of jurisdiction
should consider making MCC the lead agency on foreign-
development assistance.
---------------------------------------------------------------------------
\64\Millennium Challenge Corporation, ``One Step Closer to
Achieving Gender Equality in Lesotho,'' 2013: https://www.mcc.gov/our-
impact/story/story-one-step-closer-to-achieving-gender-equality-in-
lesotho.
International Religious Freedom. The United States should
promote freedom of religion or belief around the world, given
the importance of religious freedom to human rights, economic
development, stability, and democracy. The independent U.S.
Commission on International Religious Freedom [USCIRF] has
provided important oversight and recommendations in this
regard, including redirecting and conditioning aid. It calls
for budget justifications to take into account the findings and
recommendations of USCIRF. Additionally, the Office of
International Religious Freedom continues to serve as an
important voice on these issues in the State Department and
should be supported.
OVERSEAS CONTINGENCY OPERATIONS/
GLOBAL WAR ON TERRORISM
Function Summary
This category reflects non-enduring funding for the
execution of Global War on Terrorism [GWOT] and other closely
related activities, also known as Overseas Contingency
Operations [OCO]. It provides funding for Department of Defense
military operations and for the incremental civilian activities
in Afghanistan, Pakistan, and Iraq led by the Department of
State and the U.S. Agency for International Development
[USAID]. The funding is entirely discretionary, with no direct
spending components.
The resolution calls for $73.7 billion in total budget
authority and $38.5 billion in new outlays in fiscal year 2017
for OCO/GWOT (shown in Function 970 in the summary tables).
This funding level is consistent with the Bipartisan Budget Act
of 2015. Due to the evolving nature of contingency operations,
if the administration determines additional funds are needed to
execute the war mission, the President should request
supplemental funding as he deems necessary for these defense
operations only.
Policy Assumptions
Base Defense Requirements. Russian aggression and the
growing threats of the Islamic State in the Middle East shape
the parameters of an increasingly complex and challenging
security environment. Out of the total OCO funding level of
approximately $74 billion for fiscal year 2017, this resolution
assumes $23 billion of these funds will be used for base
defense requirements. Combined with the $551 billion in base
National Defense funding (Function 050), the total spending
level for base defense requirement needs for fiscal year 2017
is $574 billion. This is consistent with the funding level
provided in H. Con. Res. 27, the Concurrent Resolution on the
Budget--Fiscal Year 2016.
Budgeting for OCO. Funding provided in the OCO/GWOT budget,
if enacted, will occur 16 years after the 9/11 terrorist
attacks on the United States, which triggered wars in
Afghanistan and Iraq. Consistent with the administration's
plan, this budget supports phasing out the Overseas Contingency
Operations/Global War on Terrorism designation for both defense
and civilian programs, and assumes a transition to base budget
funds in future years.
OCO Transparency. All Federal program funding should be
fully transparent and subject to agency accountability and
congressional oversight. For both defense and civilian efforts
in the frontline states funded with OCO monies, this budget
supports full transparency of where the funds have been spent
in the past, the present, and, if applicable, the future. The
committees of jurisdiction have ably enforced such
requirements, including section 1534 of the Fiscal Year 2016
National Defense Authorization Act, which calls for a
Comptroller General report on the use of OCO operation and
maintenance funds for base requirements.\65\
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\65\The National Defense Authorization Act for Fiscal Year 2016,
(Public Law 114-92), section 1534.
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VETERANS BENEFITS AND SERVICES
Function Summary
The Department of Veterans Affairs provides an array of
benefits to veterans and their families, including disability
compensation and pensions, education benefits, survivor
benefits, medical treatment, life insurance, vocational
rehabilitation, and burial and memorial benefits. The benefits
are provided through three administrative agencies: the
Veterans Health Administration, the Veterans Benefits
Administration, and the National Cemetery Administration.
The VA budget includes both discretionary and direct
funding. Discretionary accounts fund medical care, medical
research, construction programs, information technology, and
general operating expenses, among other things. Direct spending
accounts fund disability compensation, pensions, vocational
rehabilitation and employment, education, life insurance,
housing, and burial benefits, among other benefits and
services.
The budget resolution calls for $174.8 billion in total
budget authority and $182.0 billion in total outlays in fiscal
year 2017. Discretionary spending is $74.7 billion in budget
authority and $74.7 billion in outlays in fiscal year 2017,
about 4 percent higher than last year's levels for VA's
discretionary budget. Direct spending in fiscal year 2017 is
$100.0 billion in budget authority and $107.4 billion in
outlays. The 10-year totals for budget authority and outlays
are $2.0 trillion and $2.0 trillion, respectively. This
resolution accommodates up to $66.4 billion for fiscal year
2018 in discretionary advance appropriations for medical care,
consistent with the Veterans Health Care Budget and Reform
Transparency Act of 2009.
A Culture of Mismanagement and Wasteful Spending
For years, the Department of Veterans Affairs [VA] has been
plagued with problems in health care delivery, business
processes, and performance across the country. These are the
products of growing bureaucratic mismanagement, in addition to
leadership and staffing failures. In 2015, the Government
Accountability Office added both VA health care and information
technology acquisitions to their High-Risk List, which calls
attention to ``agencies and program areas that are high risk
due to their vulnerability to fraud, waste, abuse, and
mismanagement, or are most in need of transformation.''\66\
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\66\Government Accountability Office, High-Risk Series: An Update,
February 2015.
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The following examples highlight why GAO views the VA as
high risk.
VA Medical Construction Projects. The Department
of Veterans Affairs medical center in Aurora, Colorado cost
taxpayers $1.7 billion in 2015, more than $1 billion over
budget.\67,68\ According to an April 2013 GAO report, ``VA's
largest medical center construction cost increases ranged from
59 percent to 144 percent, with a total cost increase of nearly
$1.5 billion and an average increase of approximately $366
million per project. The schedule delays ranged from 14 to 74
months with an average of 35 months per project.''\69\
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\67\Ibid.
\68\``Cost of Aurora veteran's hospital leaps to $1.73 billion,''
The Denver Post, 18 March 2015: http://www.denverpost.com/news/
ci_27730588/cost-aurora-veterans-hospital-leaps-1-73-billion; and
``VA's Colorado hospital has a `shocking' sticker price: $1.7 billion.
Yes, billion,'' The Washington Post, 18 March 2015: https://
www.washingtonpost.com/news/federal-eye/wp/2015/03/18/vas-colorado-
hospital-has-a-shocking-sticker-1-7-billion-yes-billion/.
\69\Government Accountability Office, VA Construction Additional
Actions Needed to Decrease Delays and Lower Costs of Major Medical-
Facility Projects, April 2013: http://www.gao.gov/assets/660/
653585.pdf.
VA Information Technology Systems. In 2015, the
VA Inspector General highlighted VA information technology [IT]
systems development--of which the Veterans Benefit Management
System [VBMS] is a component--as a ``long-standing high-risk
challenge, susceptible to cost overruns, delays, performance
problems, and, in some cases, complete project failures.''\70\
The Veterans Benefits Administration [VBA] reported it has made
progress in reducing the backlog claims through VBMS;
nevertheless, recent audits and reports contradicted that claim
and did not attribute the decrease in backlogs specifically to
VBMS. Further, the VBMS budget increased from $580 million in
2009 to $1.3 billion in 2015, with no end in sight. Even with a
122-percent increase in funding to end the backlog, VBMS
continues to fail in providing needed services.
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\70\VA Office of Inspector General, Department of Veterans Affairs
Follow-up Review of the Veterans Benefits Management System, 14
September 2015: http://www.va.gov/oig/pubs/VAOIG-13-00690-455.pdf.
Contract Regulation Noncompliance. In 2015, a 35-
page document addressed to VA Secretary McDonald detailed how
VA officials made $6 billion in medical supply purchases that
were in direct violation of Federal contracting rules.\71\ The
document also described a culture of lawlessness and chaos at
the Veterans Health Administration [VHA]. The VA's failure to
abide by Federal contracting regulations makes taxpayer dollars
more susceptible to fraud, waste, and abuse and is
unacceptable.
---------------------------------------------------------------------------
\71\``Senator asks VA Chief about `continuing culture of chaos'
that fails veterans,'' The Washington Post, 22 June 2015: https://
www.washingtonpost.com/news/federal-eye/wp/2015/06/22/senator-to-va-
chief-what-are-you-doing-to-address-continuing-culture-of-chaos-that-
fails-our-veterans/.
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The Way Forward
VA needs to adopt a new way of thinking to address its most
challenging problems, such as ensuring access to health care,
quality and delivery of programs, and cost management. All
programs should maximize net benefits, and be cost- and target-
efficient.
All VA programs vulnerable to significant moral hazard
should require adequate cost sharing to assure that
beneficiaries commit enough of their own resources to act
responsibly, with amounts scaled to what they can afford.
Reducing moral hazard on the part of government agencies and
program beneficiaries is one of many ways to improve VA
programs.\72\ Last, Congress should require any VA rule or
regulation with an annual economic impact of $100 million or
more to come before Congress for an up-or-down vote before that
rule or regulation takes effect.\73\
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\72\Peter H. Schuck, Why Government Fails So Often and How It Can
Do Better, 2014.
\73\Neil Siefring, ``The REINS Act will keep regulations and their
costs in check,'' The Hill. 16 February 2016: http://thehill.com/blogs/
pundits-blog/economy-budget/250178-the-reins-act-will-keep-regulations-
and-their-costs-in; and Passage of H.R. 427 (H. Rept. 114-214), the
Regulations from the Executive in Need of Scrutiny Act of 2015 (REINS
Act), (H.R. 427, H. Rept. 114-214): https://www.congress.gov/bill/
114th-congress/house-bill/427.
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VA should conduct a thorough analysis to sort out and
reassess its missions based on their importance, difficulty,
and past success. VA leaders can achieve this by thinning out
the bureaucracy by, among other things, reducing the number of
layers between top and bottom employees; reducing the number of
managers; accelerating the hiring and appointments processes
(working alongside the Congress where appropriate);
streamlining the disciplinary process; refining performance
measure metrics; and strengthening oversight and contract
administration of government private employee contracts.\74\
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\74\Schuck, op. cit.
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The agency also needs personnel reforms. VA's workforce is
in serious crisis, experiencing a long-term decline in quality,
accountability, vision, energy, and professional commitment. No
organization or Federal agency can function effectively without
maintaining an effective workforce--and that includes
disciplining employees when necessary. At the VA, however, it
is nearly impossible to fire, demote, or suspend staff members
(civil servants and Senior Executive Service [SES]).\75\ The
Veterans Committee Chairman remains a strong advocate of
providing the VA with authority to take such actions when
justified.
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\75\Ibid.
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Another way to hold SES and supervisors accountable is to
change the positions from the General Schedule to a GG schedule
(excepted service). Within the intelligence community, each
intelligence organization (i.e., the Defense Intelligence
Agency, the National Geospatial-Intelligence Agency, the
National Security Agency, and the National Reconnaissance
Office) uses the GG schedule that enables the agencies to
dismiss employees that do not meet performance goals.
Without these steps, the consequences will be an
increasingly demoralized, poorly equipped, and undisciplined VA
workforce. These VA civil servants and Senior Executive Service
employees are, after all, the implementers and ultimate
instruments of the VA's policies, and if they are not up to the
job, then neither is the VA.
As Congress continues to operate under statutory spending
caps, all agency budget submissions should receive
congressional scrutiny to ensure that every taxpayer dollar
requested is thoroughly justified and used effectively and
efficiently. Exposing funds to mismanagement is not an option
during times of fiscal restraint. Moreover, continuing to throw
more money at a dysfunctional agency that refuses to be
transparent and accountable, without significant reforms, is a
disservice to all veterans and the public.
Illustrative Policy Options
While specific policy decisions will fall to the Committee
on Veterans' Affairs and the Appropriations Subcommittee on
Military Construction, Veterans Affairs, and Related Agencies,
the following options reflect ways to apply the principles
described above.
DISCRETIONARY SPENDING
Limit Awards and Bonuses. In 2014, the Department of
Veterans Affairs awarded more than $142 million in cash
bonuses, in addition to $276 million for items including
retention and relocation payments and rewards for saving money
on travel and inventive ideas.\76\ Incredibly, the VA
leadership made these awards the same year that the VA's health
scandal denied veterans access to VA health care. Committee on
Veterans' Affairs Chairman Miller has been spearheading VA
bonus reform and warned: ``Until VA leaders learn this
important lesson and make a commitment to support real
accountability at the Department, efforts to reform VA are
doomed to fail.''\77\ This budget option calls for reducing the
aggregate amount of awards and bonuses paid to VA employees by
30 percent. This option was also included in the House-passed
H.R. 294 Long-Term Care Veterans Choice Act with bipartisan
support.\78\
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\76\Martin Matishak, ``Still Mired in Scandal, VA Awards $142
Million in Bonuses,'' The Fiscal Times, 11 November 2015: http://
www.thefiscaltimes.com/2015/11/11/Still-Mired-Scandal-VA-Awards-142-
Million-Bonuses; Donovan Slack and Bill Theobald, ``Veterans Affairs
pays $142 million in bonuses amid scandals,''. USA Today, 11 November
2015: http://www.usatoday.com/story/news/politics/2015/11/11/veterans-
affairs-pays-142-million-bonuses-amid-scandals/75537586/; Anna
Giaritelli, ``VA gave 156,000 employees $142 million bonuses in 2014,''
the Washington Examiner, 11 November 2015: http://
www.washingtonexaminer.com/va-gave-156000-employees-142-million-in-
bonuses-in-2014/article/2576155.
\77\Rep. Jeff Miller, Miller Newsletter, 15 November 2015:
http://jeffmiller.house.gov/news/email/
show.aspx?ID=Z5MPA3CVK5FYYORBX7RZEZH4KM
\78\Congressional Budget Office cost estimate for H.R. 294, the
Long-Term Care veterans Choice Act, 2 March 2015: https://www.cbo.gov/
sites/default/files/114th-congress-2015-2016/costestimate/hr2940.pdf.
Consolidate VA's Transition Assistance Program Goals,
Plans, Success Program with Other Federal Agencies. Redundant
Federal programs are leading to million, if not billions, in
wasteful spending. At a time of increased budget pressure,
American taxpayers cannot afford to keep buying the same
service twice. The Transition Assistance Program Goals, Plans,
Success Program [TAP GPS] is designed to facilitate service
members' transition to civilian life and is governed by a
working group from the Departments of Defense, Education, and
Labor [DOL], the Small Business Administration, and the Office
of Personnel Management. The working group designs the
curriculum composed of a 5-day core class focused on job
hunting skills and VA benefits plus the optional 2-day course
focused on education, small business, and trades training. TAP
GPS is taught largely by contractors hired by DOL and VA.
Unfortunately, instead of combining the training curricula
requirements into one overarching contract, VA and DOL have
awarded separate contracts, thus doubling the overhead costs.
Additionally, VBA leaders have shifted TAP GPS funding to cover
the costs of other VA non-statutory job placement programs
unrelated to the statutory TAP GPS program. This option would
consolidate duplicative VA and DOL transition programs to
---------------------------------------------------------------------------
achieve greater service member and veteran transition results.
Establish Accountability Standards for the Veterans
Benefits Management System. In 2009, VBA initiated efforts to
address the disability claims backlog by modernizing the way it
receives and processes benefits claims. The VBA proposed a
multi-pronged transformation to retrain, reorganize, and
streamline business processes, in addition to building and
implementing technology solutions including the Veterans
Benefits Management System [VBMS]. The intent of transitioning
to a paperless claims process is to enable a more efficient
workflow by reducing processing time and minimizing rating
inconsistencies and errors.
According to the Committee on Veterans' Affairs, VBMS
suffers from a range of program problems including inadequate
cost control, unplanned changes in system and business
requirements, inefficient contracting practices, and lack of a
concrete plan to decommission redundant legacy systems.\79\
VBMS Program Management Office reports significant increases of
VBMS life-cycle costs from $580 million in September 2009 to
about $1.5 billion in January 2015.\80\ As a result, the VA
cannot ensure an effective return on its investment to
taxpayers and the total VBMS system development cost remains
unknown. The VA needs to properly address the above problems if
it is to decrease the disability claims backlog. Until the VBA
and the VA's Office of Information Technology are able to
deliver a reasonable and cost-efficient path forward, including
an objective and true scope of milestones and progress, VBMS
resources should be frozen at current levels. This budget
option would freeze current funding levels for VBMS until the
VA successfully creates benchmarks that would ensure proper
progress, good governance, and efficient spending on this
program.
---------------------------------------------------------------------------
\79\Committee on Veterans' Affairs, U.S. House of Representatives,
Fiscal Year 2017 Views and Estimates, 5 February 2015.
\80\VA Office of Inspector General, Department of Veterans Affairs:
Follow-up Review of the Veterans Benefits Management System, 14
September 2015: http://www.va.gov/oig/pubs/VAOIG-13-00690-455.pdf.
Allow Veterans to Deposit Disability Compensation into the
Thrift Savings Plan. Similar to a civilian 401k plan, the
Thrift Savings Plan [TSP] is a government-sponsored retirement
program that allows Federal employees and military personnel to
save money for retirement. Once separated from military
service, veterans are unable to continue contributions into
their TSP accounts unless employed by the Federal
Government.\81\ Many non-retired veterans face obstacles that
may delay--or prevent--financial success. According to a 2014
National Foundation for Credit Counseling survey, service
members are more likely to rely or misuse credit cards than
their civilian counterparts leading to higher debt when they
transition out of the military.\82\ The survey also found 77
percent of service members worry about lack of savings to cover
unexpected expenses, cover retirement, and being able to make
debt payments on time.\83\ This option would allow non-retired
veterans the opportunity to invest their disability
compensation into a TSP account, providing these individuals an
opportunity to plan for their future retirement.\84\ All
veterans, not just retirees, should have access to the TSP
benefit.
---------------------------------------------------------------------------
\81\David Goldich, ``Substance Over Sound Bite: Better Veterans
Policy In The NDAA,'' 1 October 2015: http://warontherocks.com/2015/10/
substance-over-sound-bite-better-veterans-policy-in-the-ndaa/.
\82\Harris Poll, A Survey about Financial Literacy Among the U.S.
Military, .The survey reflects service members concerns prior to their
transition to veteran status. Poll, Harris (2014). A Survey about
Financial Literacy Among the U.S. Military, prepared for The National
Foundation for Credit Counseling, undated: https://www.nfcc.org/wp-
content/uploads/2013/06/
NFCC_Pioneer_Military_Survey_DATASHEET_and_KEY_FINDINGS_0517141.pdf
\83\Ibid.
\84\Goldich, op. cit.
Improve Oversight of Certain Contractual Arrangements.
According to a 2015 GAO report to the Chairman of the Veterans'
Affairs Subcommittee on Oversight and Investigations, the VA
could not produce proper documentation identifying the extent
to which it used interagency contracts for services provided by
another agency in fiscal years 2012 through 2014.\85\ While the
VA claims it obligated about $1.7 billion to other government
agencies between fiscal years 2012 through 2014,\86\ GAO's
analysis of VA's accounting system data found the total amount
transferred over the same time period was between $2.3 billion
and $2.6 billion, a difference of $600 million to $900
million.\87\ These inconsistences place the VA resources at
risk of fraud, waste, and abuse. The GAO report found
documentation from the VA's contract management and accounting
systems were incomplete and the VA's management of contract
awards lacked justification for granting interagency contracts.
This option would require the VA to reconcile data between the
contract management and accounting systems, review interagency
contracts, and ensure all interagency contracts are properly
reviewed and documented in both systems.
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\85\Government Accountability Office, Veterans Affairs Contracting:
Improved Oversight Needed for Certain Contractual Arrangements, July
2015: http://gao.gov/assets/680/671116.pdf.
\86\Ibid.
\87\Ibid.
---------------------------------------------------------------------------
DIRECT SPENDING
Modify Housing Stipend Paid to Children Who Use Transferred
Post-9/11 GI Bill Education Benefits. The GI Bill's primary use
is assisting a veteran's reintegration into civilian life by
providing the education and skills necessary to gain meaningful
employment after military service. To provide both a recruiting
and retention incentive, the Post-9/11 GI Bill allows each
military service to determine which service members who meet
the statutory eligibility requirements to transfer all or some
of their education benefits to their dependents. Instead of
targeting the benefit to retain service members with critically
needed skills, the services have made eligible all service
members who qualify under the time-in-service requirements.
Notably, the Military Compensation and Retirement Modernization
Commission suggested eliminating the housing stipend paid to
children. This option would revert the Post-9/11 GI Bill back
to its original intent by focusing resources on veterans
readjusting into society post military career.
Prevent VA from Providing Unlimited Amounts for Flight
Training at Public Schools. Brought to Congress' attention by
the VA, Veterans Service Organizations [VSOs], and the National
Association of State Approving Agencies [NASAA], some flight
schools are exploiting an aviation training tuition loophole in
the Post-9/11 GI Bill.\88\ Some institutions of higher learning
have applied extreme costs for flight fees as there are no caps
in place for such institutions with third-party flight
contractors. According to representatives from NASAA, some
student veterans are taking flight classes as electives with no
cost cap for flight fees.\89\ In response to concerns from
stakeholders regarding this loophole, the Chairman of the
Veterans' Affairs Subcommittee on Economic Opportunity
introduced legislation grandfathering current flight school
students' tuition for 2 years and making improvements to
veterans' educational assistance. In 2016, the measure passed
the House on a bipartisan basis. This option reflects the
provision in the legislation that applies a tuition cap for
flight programs at public institutions of higher learning that
is consistent with other veterans' educational programs.\90\ A
similar option was also included in the President's fiscal year
2017 budget request.
---------------------------------------------------------------------------
\88\Curtis L. Coy, Deputy Under Secretary for Economic Opportunity,
Veterans Benefit Administration, testimony before the House Veterans'
Affairs Subcommittee on Economic Opportunity, 19 November 2014: https:/
/veterans.house.gov/witness-testimony/mr-curtis-l-coy-7. The Iraq and
Afghanistan Veterans of America, the American Legion, and the Veterans
of Foreign Wars all support closing this loophole.
\89\Ibid.
\90\The Veterans Employment, Education, and Healthcare Improvement
Act (H.R. 3016): https://www.congress.gov/bill/114th-congress/house-
bill/3016/text.
Round Down Annual Cost-of-Living Allowance to the Next
Lower Whole Dollar. This option would require VA to round down
increases in the monthly compensation rate resulting from an
annual cost-of-living adjustment [COLA] to the next lower whole
dollar. The VA would apply this round down to both disability
compensation and dependency and indemnity compensation
payments. A similar requirement expired at the end of 2013 and
this option would reinstate this policy. It has also been
---------------------------------------------------------------------------
included in the President's requests for the past 5 years.
Reconcile and Properly Manage Concurrent VA and Military
Drill Compensation. Under statute, reservists and National
Guard members are prohibited from receiving VA compensation or
pension benefits and military drill pay concurrently.\91\
According to a 2014 VA Inspector General's report: ``VA did not
process VA benefit offsets to disability compensation benefits
in a timely manner when reservists earned drill pay
concurrently during fiscal years 2011 and 2012.'' The report
also found VBA's VA compensation and military drill
unprocessing rates for fiscal years 2011 and 2012 were not
significantly different from a similar 1997 VA Inspector
General's audit. Therefore, it is likely the VBA has not
processed offsetting claims since 1997.\92\ This budget option
calls for immediate recovery of all offsets from previous
fiscal years in addition to enhanced oversight to ensure the VA
follows the law and collects drill pay offsets in a timely
manner.
---------------------------------------------------------------------------
\91\Title 10--Armed Forces, Subtitle E--Reserve Components, Part II
Personnel Generally, Chapter 1209--Active Duty, Sec. 12316--Payment of
certain Reserves while on duty: https://www.gpo.gov/fdsys/granule/
USCODE-2011-title10/USCODE-2011-title10-subtitleE-partII-chap1209-
sec12316, and Title 38, Veterans' Benefits, Part IV--General
Administrative Provisions, Chapter 53--Special provisions relating to
benefits, section. 5304, Prohibition against duplication of benefits.
\92\VA Office of Inspector General, Veterans Benefits
Administration: Audit of the Management of Concurrent VA and Military
Drill Pay Compensation, 3 June 2014: http://www.va.gov/oig/pubs/VAOIG-
13-02129-177.pdf.
Reconcile Post-9/11 GI Bill Monthly Housing Allowance and
Book Stipend Payments. The size of the current Post-9/11 GI
Bill program and its associated financial risks are of great
concern. In 2013, VBA paid about $5.4 billion in housing
allowances and book stipends to approximately 789,000 students.
The VA's Inspector General found about $41 million in improper
or inaccurate payments.\93\ This option would require Congress
to align education service recovery procedures with Federal
regulations, and require the VA to review and reconcile book
stipend collection procedures, and collect outstanding improper
payments.
---------------------------------------------------------------------------
\93\VA Office of Inspector General, Veterans Benefits
Administration: Audit of Post-9/11 G.I. Bill Monthly Housing Allowance
and Book Stipend Payments, 11 July 2014: http://www.va.gov/oig/pubs/
VAOIG-13-01452-214.pdf.
Temporarily Reduce VA Reporting Fees to Postsecondary
Education Institutions. The VA pays schools a reporting fee
based on the number of students receiving VA educational
benefits. Title 38 U.S. Code Sec. 3684 mandates that reporting
fees must be used for the purpose of certifications or
otherwise supporting programs for veterans.\94\ The usage and
application of reporting fees has been less and less
scrutinized. Many institutions have used the reporting fees as
an offset to their overall budget and personal staff salaries.
This option would require the VA to verify proper usage of
reporting fees during every compliance survey and audit. This
option was also included in Senate-passed legislation, with
bipartisan support.\95\
---------------------------------------------------------------------------
\94\Title 38--United States Code Veterans' Benefits (Public Law
112-7), Sec. 3684:
https://veterans.house.gov/sites/republicans.veterans.house.gov/
files/documents/Title%2038-SCRAPrint3.pdf.
\95\Congressional Budget Office, Cost Estimate for S. 1203 the 21st
Century Veterans Benefits Delivery and Other Improvements Act, 1
October 2015:
https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/
costestimate/s1203.pdf.
Recover Post-9/11 GI Bill Education Overpayments. VA
provided $11 billion in Post-9/11 GI Bill education benefits to
almost 800,000 veterans in fiscal year 2015.\96\ According to a
GAO report in 2015: ``VA identified $416 million in Post-9/11
GI Bill overpayments in fiscal year 2014, affecting
approximately one in four veteran beneficiaries and about 6,000
postsecondary institutions of higher education.'' The VA was
able to recover $264 million, but has still failed to collect
the remaining $152 million in overpayments from fiscal year
2014, and an additional $110 million from prior years.\97\ This
option would require VA to do the following: (1) recover Post-
9/11 GI Bill education overpayments; (2) address overpayments
to student veterans and institutions of higher learning; and
(3) improve its notification process with student veterans and
those institutions.
---------------------------------------------------------------------------
\96\Government Accountability Office, Post-9/11 G.I. Bill:
Additional Actions Needed to Help Reduce Overpayments and Increase
Collections, October 2015: http://www.gao.gov/assets/680/673230.pdf.
\97\Ibid.
Reinstate Eligibility Verification Reports for Pension
Benefits. In December 2012, VBA officials discontinued
requesting eligibility verification reports [EVRs]. Under this
change, veterans and beneficiaries do not have to submit an
annual EVR to prove eligibility and continue receiving pension
payments.\98\ Eliminating EVRs represents a serious risk to VA
that it will not receive changes that affect eligibility. This
option would require VA to implement Pension and Fiduciary
Service procedures that confirm veteran and beneficiary
eligibility, and implement a plan to reduce the amount of
overpayments due to the changes in income and dependency
status.\99\
---------------------------------------------------------------------------
\98\VA Office of Inspector General, Veterans Benefits
Administration: Audit of Pension Payments, 4 September 2013: http://
www.va.gov/oig/pubs/VAOIG-12-00181-299.pdf; and Department of Veterans
Affairs Office of Inspector General (2015). Semiannual Report to
Congress Issue 74/1 April--30 September 2015: http://www.va.gov/oig/
pubs/VAOIG-12-00181-299.pdf.
\99\Ibid.
Review All Temporary 100-Percent Disability Evaluations.
According to a 2014 Inspector General's report, the Veterans
Benefits Administration has not correctly assessed and
monitored 100-percent disability evaluations, and failed to
ensure each temporary 100-percent evaluation had a future
examination date in the veteran's record. In addition, the
report estimates the VBA paid more than $85 million in improper
disability compensation benefits without medical evidence. The
VBA's continued failure to conduct timely reviews of these
evaluations will result to an estimated $222.6 million in
unsupported payments over the next 5 years.\100\ This option
calls for Congress to change regulations and require the VA to
monitor temporary 100-percent disability evaluations and allow
it to recover payments made in error.
---------------------------------------------------------------------------
\100\VA Office of Inspector General, Veterans Benefits
Administration: Follow-up Audit of 100 Percent Disability Evaluations,
6 June 2014: http://www.va.gov/oig/pubs/VAOIG-14-01686-185.pdf.
---------------------------------------------------------------------------
ADMINISTRATION OF JUSTICE
Function Summary
In the 15 years since 9-11, Americans have grown accustomed
to living in an environment of enhanced security. Airports,
government buildings, major sporting venues, and myriad other
public facilities now feature the instruments of vigilance that
have become necessarily common. Yet despite these measures,
terrorism continues to lurk in the shadows, striking out all
too unexpectedly--as demonstrated in Boston, Paris, and San
Bernardino. The President's relatively sanguine attitude--
describing Al Qaeda as ``decimated'' and dismissing the brutal
Islamic State as a ``jay-vee'' team--does not help. The threat
of further terrorist acts on America's homeland remains.
The answer does not lie in throwing more money at the
challenge. The ongoing risk of domestic terrorism, and the
tidal wave of government debt, call for better targeting of
Federal law enforcement funds. Federal tax dollars for the
Departments of Justice and Homeland Security should be focused
on administering justice, arresting and prosecuting terrorists,
protecting and securing the Nation's borders, investigating
Federal crimes, and seeking punishment for those guilty of
unlawful behavior. Local law enforcement, in contrast, is the
responsibility of the States and local communities, and they
should determine the best course of action in deterring
localized crime.
In 2015, more than $2 billion in discretionary grants were
disbursed by the Department of Justice [DOJ] from three
sources: Community Oriented Policing Services, the Office of
Justice Programs, and the Office on Violence Against Women. The
GAO reported in 2012 that many of DOJ's some 11,000 annual
grants are awarded without consideration of overlap or
duplication with other grant programs, and that DOJ should
better target its grants. GAO's 2015 update of that report
states that DOJ has only partially addressed this area of
potential duplication.\101\ According to the President's fiscal
year 2017 budget, Washington will award $7.2 billion in total
justice and homeland security grants in fiscal year 2016 to
State and local governments. The administration needs clear
guidance from Congress in facing the Nation's continuing
security threats. Furthermore, it is not the function of the
Federal Government to finance State and local governments.
Federal law enforcement needs to focus on its core
responsibilities.
---------------------------------------------------------------------------
\101\Government Accountability Office, 2015 Annual Report:
Additional Opportunities to Reduce Fragmentation, Overlap, and
Duplication and Achieve Other Financial Benefits, April 2015, p. 209:
http://www.gao.gov/assets/670/669613.pdf.
---------------------------------------------------------------------------
The principal activities in this category (Function 750 in
the summary tables) include Federal law enforcement programs,
litigation and judicial activities, correctional operations,
and border security. The function includes most of the
Department of Justice and several components of the Department
of Homeland Security [DHS]. Other agencies funded here include
the Federal Bureau of Investigation [FBI]; the Drug Enforcement
Administration; the Bureau of Alcohol, Tobacco, Firearms and
Explosives; the United States Attorneys; legal divisions within
the Department of Justice; the Legal Services Corporation; the
Federal Judiciary; and the Federal Bureau of Prisons.
The vast majority of this category's funding is
discretionary, provided by the Appropriations Subcommittees on
Commerce, Justice, Science and Related Activities, and Homeland
Security. The Committee on the Judiciary and the Committee on
Homeland Security have the main authorizing duties. The
resolution calls for $55.0 billion in discretionary budget
authority and $54.9 billion in outlays for fiscal year 2017.
The small amount of direct spending in the category--which
funds certain immigration activities, the Crime Victims Fund,
the Assets Forfeiture Fund, and the Treasury Forfeiture Fund,
among others--totals $9.5 billion in budget authority and $3.8
billion in outlays. The 10-year totals for the function are
$653.1 billion in budget authority and $653.2 billion in
outlays.
Illustrative Policy Options
In developing policies to meet their budget targets, the
committees of jurisdiction cited above should give priority to
those activities that are essential for the Federal Government.
This does not necessarily require more funding in each area; it
means addressing those Federal responsibilities first. The
proposals below indicate policy options that the committees
might consider.
DISCRETIONARY SPENDING
Consolidate Justice Grants. In fiscal year 2015, DOJ
awarded nearly $4.7 billion in total grants to conduct
research, provide training assistance, and support the State
and local criminal justice system. The Congressional Research
Service and GAO have identified overlap and duplication within
many of these grant programs, and it is clear that they fund
law enforcement activities that are primarily State and local
responsibilities. In addition, Federal grants should not be
awarded to State and local law enforcement agencies unless they
comply with the Federal law. This includes jurisdictions that
refuse to honor Federal detainers, harbor illegal aliens, or
fail to share information on criminal illegal aliens. This
option streamlines grants into three categories--first
responders, law enforcement, and victims--while eliminating
waste, inefficiency, and bureaucracy.
Eliminate Unnecessary Headquarters and Construction Funding
for DHS, DOJ, and the Judiciary. Construction funding for
various agencies within this budget function have increased
without due oversight and cost-benefit analysis, though the
committees of jurisdiction have focused on addressing cost
overruns and increasing accountability. This budget recommends
reducing DHS and DOJ construction budgets by 15 percent to rein
in unnecessary construction projects, while exempting those
agencies involved with border security and immigration
enforcement. The budget recommends additional scrutiny of cost
overruns of DHS's St. Elizabeth's project, the largest Federal
building project in the District of Columbia since the
Pentagon. Additionally, no funding should be provided for the
Office of Public Advocate, or any similar or successor
position, in Immigration and Customs Enforcement. The
President's fiscal year 2017 budget request includes $1.4
billion to build a new FBI headquarters, along with the $390.0
million already provided in the current year's budget. This
budget questions such a request, given the current, fiscally
constrained environment.
Eliminate the Legal Services Corporation. It is the duty of
State and local governments to provide legal services to those
individuals unable to provide it for themselves. Local
jurisdictions are more aware of their citizens' needs and can
provide more responsive service than the Federal Government.
Critics have argued that despite restrictions already in place,
the Legal Services Corporation too often focuses on social
activist causes rather than advocating for those persons
needing legal help the most.
DIRECT SPENDING
Permanently Extend Customs User Fees. Continuing the policy
of the Emergency Unemployment Compensation Extension Act of
2014, the budget assumes the Bureau of Customs and Border
Protection continues to collect customs user fees through
fiscal year 2026, the last year of the budget window. With the
passage of the Emergency Unemployment Compensation Extension
Act of 2014, authority to collect these fees expires in 2024.
The Bipartisan Budget Agreement of 2015 extended customs user
fee collections through 2025. This budget recommends making
these customs user fees permanent.
GENERAL GOVERNMENT
Function Summary
A government that seeks greater efficiency in its programs
should demand no less from its own operations. Yet this has not
been the case with many of the Federal Government's agencies.
Funding in the category of General Government (Function 800 in
the summary tables) has increased by roughly 30 percent since
fiscal year 2007, but no one would contend the additional
resources have produced a smooth, businesslike operation. The
budget resolution aims to eliminate identified waste across all
Federal Government branches and agencies. If a program or
activity is poorly targeted, ineffective, duplicative of other
efforts, or could be better performed by the private sector, it
merits consideration for elimination or restructuring by the
committees of jurisdiction.
This category mainly provides funding for the Legislative
and Executive Branches of the Federal Government. On the
legislative side, these funds support the operations of
Congress, including the Congressional Budget Office, the
Library of Congress, and the Government Accountability Office.
In the Executive Branch, the category finances the Executive
Office of the President, including the Office of Management and
Budget, the Council on Environmental Quality, White House
salaries, and White House building repair; general tax
administration and fiscal operations of the Department of the
Treasury (including the Internal Revenue Service); the Office
of Personnel Management; the real-property and personnel costs
of the General Services Administration; general-purpose fiscal
assistance to States, localities, the District of Columbia, and
U.S. territories; and other general government activities.
Most of this funding comes through annual appropriations
(discretionary spending), which in fiscal year 2017 totals
$15.7 billion in budget authority and $15.2 billion in outlays.
Budget authority for direct spending in this area will total
$7.6 billion, with $7.6 billion in accompanying outlays. Over
10 years, the budget anticipates $232.3 billion in total budget
authority and $228.5 billion in outlays.
Illustrative Discretionary Spending Policy Options
While specific policy options will be determined by the
committees of jurisdiction--which include the Committees on
Transportation and Infrastructure, House Administration, Ways
and Means, Natural Resources, Oversight and Government Reform--
the discussion above offers practical guidelines they might
follow. Some potential examples are presented below. Funding
for Federal operations and mismanagement of properties are just
a few areas where savings should be achieved. Some other
potential examples are presented below. This resolution also
urges the Office of Management and Budget and relevant agencies
to make a top priority of implementing the data aggregation and
transparency initiatives in the Digital Accountability and
Transparency Act.
Some specific options worthy of consideration are described
below.
Decrease Costs of the Government Printing Office by
Increasing the Use of Electronic Copies. The Government
Printing Office [GPO] prints thousands of pages of government
documents each year--most of which have gained a ubiquitous
online presence. Federal departments and agencies, for example,
maintain their key budget documents, reports, and data online
and available to the public. This resolution supports greater
selectivity in the material GPO prints, allowing users to rely
more heavily on increased electronic access to materials. It is
consistent with recommendations to establish a sustainable
business model for GPO and continue meeting demands to make
information available in a digital age.\102\
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\102\National Academy of Public Administration, Rebooting the
Government Printing Office: Keeping America Informed in the Digital
Age, January 2013: https://www.gpo.gov/pdfs/about/
GPO_NAPA_Report_FINAL.pdf.
Terminate the Election Assistance Commission. This
independent agency was created in 2002 as part of the Help
America Vote Act to provide grants to States to modernize
voting equipment. Its mission has been fulfilled. The National
Association of Secretaries of State, the association of State
officials responsible for administering elections, has passed
resolutions stating the Election Assistance Commission [EAC]
has served its purpose, and funding is no longer necessary. The
EAC should be eliminated and any valuable residual functions
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should be transferred to the Federal Election Commission.
Accompany Pro-Growth Tax Reform with Responsible Reductions
to the Internal Revenue Service. The Internal Revenue Service
[IRS] has more than 90,000 employees and spends in excess of
$11 billion annually. Additionally, the Internal Revenue Code
now contains approximately four million words, and each year
taxpayers and businesses spend more than six billion hours
complying with filing requirements.\103\ The investigation
related to the IRS targeting American citizens demonstrates
that the massive budget has not resulted in the IRS serving
taxpayers better; rather, it has created a bloated bureaucracy
filled with inefficiency and abuse.
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\103\National Taxpayer Advocate, 2013 Annual Report to Congress,
December 2013.
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The President's budget makes the tax code more complex and
proposes to increase the IRS budget. This resolution calls for
simplifying the burdensome tax code through tax reform (see the
Revenue and Tax Reform section of this report), naturally
reducing the agency's size by promoting policies that lead to
less reliance on the IRS. As outlined in a 2012 Government
Accountability Office report, simplifying the tax code may
reduce accidental errors in tax filing and improve voluntarily
compliance.\104\ A simplified tax code would have the dual
benefits of reducing both the time taxpayers devote to
complying with an overly complex code, and the taxpayer dollars
needed to administer and enforce it.
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\104\Government Accountability Office, Opportunities to Improve the
Taxpayer Experience and Voluntary Compliance, April 2012.
Scale Back Funding to the Legislative and Executive
Branches. The budget for the House of Representatives today is
$188 billion less than it was when Republicans assumed the
majority in 2011. This budget resolution aims to scale back
government wherever it has expanded needlessly or beyond its
proper role. That includes within government operations and
offices themselves. It also could include reforms such as
scaling back pensions of former U.S. presidents--recognizing
their ability to support themselves primarily through other
means of employment--while providing for their security and
pensions for any surviving spouses. The resolution recommends
treating the Legislative and Executive Branch appropriations
the same as other Federal agencies and programs, and paring
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costs where possible.
Further Consolidate Federal Data Centers. This budget
supports the bipartisan Federal Data Center Consolidation
Initiative [FDCCI], which was created in 2010 to reverse the
widespread escalation of Federal data center construction,
acquisition, management, and maintenance. By increasing
efficiencies and continued efforts to incorporate cloud
computing technologies, the Federal Government can
significantly decrease taxpayer spending on underused
infrastructure.\105\
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\105\Chief Information Officer [CIO], Federal CIO Council, ``Data
Center Consolidation and Optimization'': https://cio.gov/drivingvalue/
data-center-consolidation/.
Reform Information Technology. The Office of Management and
Budget and multiple agencies could help the Federal Government
realize savings by strengthening oversight and taking steps to
better implement PortfolioStat, a bipartisan-supported process
to help agencies manage their information technology
investments.\106\ This budget supports strengthening
congressional oversight of key Federal agencies' major
information technology investments. Federal agencies should
also apply better management of software licenses and the
Office of Management and Budget should issue a directive to
assist agencies in doing so.
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\106\Chief Information Officer [CIO], Federal CIO Council,
``PortfolioStat'': https://cio.gov/drivingvalue/portfoliostat/.
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GOVERNMENT-WIDE POLICY
Function Summary
This category includes various policies that produce
government-wide savings in multiple categories rather than in a
single, specific budget function. For fiscal year 2017, the
resolution calls for $34.5 billion in budget authority and
$14.6 billion in outlays. The 10-year totals for budget
authority and outlay savings are -$455.1 billion and -$386.7
billion, respectively. (The figures appear in Function 930 in
the summary tables.) As is true elsewhere, specific policies
will be determined by the appropriate committees of
jurisdiction.
Illustrative Policy Options
DISCRETIONARY SPENDING
The total base discretionary budget authority for fiscal
year 2017 assumed in the resolution is $1.070 trillion--the
same level required by the discretionary spending caps in the
Bipartisan Budget Act [BBA] of 2015. The resolution offers
approximately $46.5 billion in fiscal year 2017 non-defense
discretionary savings in several budget functions should
Congress choose to enact additional deficit reduction for that
year. Because these additional savings would cause the
resolution to display a lower total base discretionary level
than contemplated by the BBA, $46.5 billion in non-defense
discretionary spending is added back to Function 930 to make
the total budget resolution base discretionary level match the
amount specified in the BBA.
Over the 10-year budget window, the resolution assumes
$277.6 billion in savings beyond what is contemplated in the
BCA. Much of the assumed savings can be accomplished by the
illustrative policy options presented in the various budget
function summaries in this report. Additional illustrative
options to achieve further discretionary savings are presented
below.
Reduce the Federal Civilian Workforce Through Attrition.
The budget includes discretionary savings by assuming a 10-
percent reduction in certain agencies of the Federal civilian
workforce through attrition, whereby the administration would
be permitted to hire one employee for every three who leave
government service. National security positions would be
exempt.
Reform Civil Service Pensions. The policy described in the
Income Support, Nutrition, and Related Programs section of this
report would increase the share of Federal retirement benefits
funded by the employee. This policy has the effect of reducing
the personnel costs for the employing agency. The budget
assumes savings from a reduction in agency appropriations
associated with the reduction in payments that agencies make
into the Civil Service Retirement and Disability Fund for
Federal employee retirement.
Implement Transition to Shared Services. The current
structure and operations of the Federal Government requires
most agencies and departments to maintain and employ their own
management services. Drawing on improvements made throughout
the private sector, this budget calls for a bipartisan-
supported, government-wide transition to shared services.
Moving to cross-agency and interagency support for management
of internal functions such as information and technology,
supply chain, financial activities, human resources, and
administration will not only help government to run more
effectively, but will also allow individual departments and
agencies to function better together.\107\
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\107\Partnership for Public Service, ``Building A Shared Services
Marketplace: Recommendations from the Shared Services Roundtable,''
March 2015: http://ourpublicservice.org/publications/
viewcontentdetails.php?id=470.
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DIRECT SPENDING
Reduce Improper Payments/Program Integrity. This budget
calls for program integrity savings by assuming that Continuing
Disability Reviews [CDRs] and Supplemental Security Income
Redeterminations are fully funded and that additional steps are
taken to reduce improper payments in Medicare, Medicaid,
Unemployment Insurance, the Earned Income Tax Credit, and other
programs. By ensuring that all benefits are targeted toward the
appropriate households, this budget will reduce fraud and
improper payments in these programs.
Improper payments are widespread and growing, and now cost
U.S. taxpayers in the neighborhood of $100 billion per year--
and government departments and agencies seem unable to reduce
these excessive payments. Even more troubling is the current
administration's apparent lack of concern and unwillingness to
take corrective action.
This is an issue the Budget Committee intends to pursue
aggressively in the future under the leadership of
Representative Palmer (R-AL) and other Committee members. The
Committee believes those departments and agencies that cannot
decrease the amount of improper payments should be held
accountable for their inability to stop these inappropriate
expenditures. The Budget Committee will work with the
appropriations and authorizing committees exploring numerous
ideas to effectively address this problem.
A March 2015 report by the Government Accountability Office
found that government-wide improper payment estimates pursuant
to the Improper Payments Information Act of 2002, as amended,
totaled $124.7 billion in fiscal year 2014, an increase of $19
billion from the previous year. These improper payments were
attributable to 124 programs spread among 22 agencies. The
reported government-wide error rate was 4.5 percent of program
outlays in fiscal year 2014, compared to 4.0 percent reported
in fiscal year 2013. Nevertheless, roughly 65 percent of these
excessive payments--or $80.9 billion--fall in just three
programs: Medicare fee-for-service, Medicaid, and the Earned
Income Tax Credit.
GAO reported that agencies continue to face difficulties in
reducing improper payments. In addition, GAO found that sharing
death data can help prevent improper payments to deceased
individuals or those who use deceased individuals' identities,
but the Social Security Administration has trouble maintaining
these data, and other Federal agencies face difficulty
obtaining them.\108\
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\108\Government Accountability Office, ``Improper Payments,
Government-Wide Estimates and Use of Death Data to Help Prevent
Payments to Deceased Individuals,'' testimony before the U.S. Senate
Committee on Homeland Security and Governmental Affairs, 16 March 2015:
http://www.gao.gov/assets/670/669026.pdf.
Align the G Fund Investment Return with an Appropriate Risk
Profile. The resolution assumes savings by correctly aligning
the rate of return on U.S. Treasury securities within the
Federal Employee Retirement System's Thrift Savings Plan with
its investment risk profile. Securities within the G Fund are
not subject to risk of default. Payment of principal and
interest is guaranteed by the U.S. Government. Yet the interest
rate paid is equivalent to a long-term security. As a result,
those who participate in the G Fund are rewarded with a long-
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term rate on what is essentially a short-term security.
Assume Savings in Budget Control Act Continue. The BCA
established an automatic enforcement mechanism--commonly known
as a sequester--to ensure a promised level of savings from that
law was actually realized. These savings were first implemented
in 2013 and are scheduled to last through 2025. The resolution
proposes to extend the savings created by the BCA for an
additional year, although the budget calls on Congress to
replace the automatic sequester with specific, targeted
reforms.
Domestic Priorities
----------
The budget resolution provides funding for a range of
priority activities and services that are domestic in nature.
Although all of them are of national importance--that is why
they appear in the Federal budget in the first place--they bear
a special connection to the States and localities that
constitute the Nation, as well as the vast array of non-
government institutions throughout the country. K-12 education,
for instance, is a quintessentially local priority. Because
most Americans do most of their traveling in or near their own
communities, their own roads and bridges are a fundamental
local concern. Health care is provided mainly through local
hospitals and private physicians. All these activities, and
many others, would exist even if there were no Federal
Government. Washington did not create them; States and
localities and the private sector did. These are also the main
sources of the initiative and creativity that drives these
domestically centered arrangements. The concept of federalism
on which America was founded recognizes that fact, and
encourages the diversity of approaches best furnished by layers
of government or non-government institutions closer to the
people served. In grouping these activities together, the
discussion below seeks to encourage greater flexibility for
States and localities and the private sector to find new,
better, and more efficient ways to provide these services.
While the Federal Government can help in these areas, its role
should be to support, not to dominate.
The activities presented here are mainly the discretionary
spending components in Functions 250 through 650 in the
conventional budget format. In two areas, however--Energy
(Function 270) and Transportation (Function 400)--both the
discretionary and direct spending components are presented.
This is because in these two categories, discretionary and
direct spending are uniquely intertwined.
GENERAL SCIENCE, SPACE, AND TECHNOLOGY
Function Summary: Discretionary Spending
The largest component of this category--about half of total
spending--is for the space-flight, research, and supporting
activities of the National Aeronautics and Space Administration
[NASA]. The function also contains general science funding,
including the budgets for the National Science Foundation [NSF]
and the Department of Energy's Office of Science.
The budget resolution reduces questionable and unjustified
spending, while supporting core government responsibilities.
The resolution emphasizes basic research, providing stable
funding for NSF to conduct priority biological, computing, and
information sciences; basic research in math and the physical
sciences; and science, technology, engineering, and math [STEM]
education. The budget provides continued support for NASA and
recognizes the vital strategic importance of the United States
remaining the preeminent space-faring Nation. This budget
aligns funding in accordance with NASA's core principles: to
support robust space capability, to allow for exploration
beyond low Earth orbit, and to support the Nation's scientific
and educational base.
The vast majority of this category's funding is
discretionary, provided by the House Committee on Science,
Space, and Technology and the Appropriations Subcommittee on
Commerce, Justice, Science, and Related Activities. The
resolution calls for $30.1 billion in discretionary budget
authority and $30.3 billion in outlays in fiscal year 2017. The
10-year totals for discretionary budget authority and outlays
are $332.1 billion and $327.4 billion, respectively.
Illustrative Discretionary Spending Policy Options
The committees of jurisdiction will determine policies to
align with the spending levels in the resolution. The options
below are offered as illustrations of the kinds of proposals
that can help meet the budget's fiscal guidelines.
Restore Core Government Responsibilities. In fiscal year
2016, $66.4 billion was dedicated to research across the
Federal Government, more than half to applied research. The
resolution's levels support preserving the Federal scientific
community's original role as a venue for groundbreaking
discoveries and a driver of innovation and economic growth. It
responsibly pares back applied and commercial research and
development and areas of wasteful spending that do not provide
a high return on taxpayer resources. The proper role of the
Federal Government is to support basic research, and funding
should be distributed accordingly. For example, spending for
the Department of Energy's Office of Science includes several
high-risk projects, which in a time of needed fiscal
constraint, should be embarked on by the private sector
instead. The Advanced Research Projects Agency-Energy program,
created specifically for high-risk/high-reward energy projects,
received almost $300 million in 2015. The Government
Accountability Office [GAO] and the House Committee on Science,
Space, and Technology have identified many of these grants as
neither high-risk/high-reward nor something private industry
could not take on itself. Of the 44 smaller companies that
received these grants, GAO found that 18 had received grants
from private industry for a similar technology. Funding for
nuclear physics received almost $600 million in 2015 for
research and development, and grants were issued to research
groups at 90 public and private universities, along with nine
federally funded laboratories. Much of the research conducted
at these universities and laboratories has clear overlap and
duplication. There must be greater oversight of the grants that
the Department of Energy awards.
Similarly, the NSF needs to be more transparent and
accountable to the taxpayer. Every grant issued should be
accompanied by an explanation of the project's scientific
merits and how it serves the national interest as prescribed in
the House-passed Scientific Research in the National Interest
Act (H.R. 3293). NSF-funded studies--such as a $1.3 million
project to measure the effectiveness of koozies in varying
temperatures;\109\ an $853,000 project investing in a
winemaking curriculum aimed at teenagers; and a $706,000
project to fund a shrimp fight club at Duke University
measuring the punching power of mantis shrimp--do not serve a
vital national interest. Funding for these programs and
similarly wasteful or low-return studies should be redirected
to scientific research that better serves the national
interest.
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\109\A koozie is an insulated sleeve designed to keep a beverage
cold.
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Lastly, in NASA, spending on earth science, not space, has
increased by more than 60 percent in recent years, even though
it is not NASA's mission priority. This spending should be cut
back to previous funding levels and redistributed to those
missions unique to NASA.
Reduce Expenses for the Department of Homeland Security's
Directorate of Science and Technology. The budget recommends
reductions in management and administrative expenses for the
Department of Homeland Security's Directorate of Science and
Technology, while shifting funding to frontline missions and
capabilities.
ENERGY
Function Summary
The Obama Administration incorrectly believes that climate
change is a greater threat to Americans than terrorism,\110\
which may be why the administration wastes billions of taxpayer
dollars annually subsidizing green energy projects. In the
President's budget request for fiscal year 2017, the
administration requested approximately $3 billion for the
purposes of energy conservation efforts and research, as well
as development and commercialization of low- or zero-carbon
energy sources.\111\
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\110\Brian Hughes, ``Josh Earnest: Climate Change a greater threat
to Americans than terrorism,'' NewsFeeding.Net, 10 February 2015.
\111\Department of Energy, Fiscal Year 2017 Budget Justification,
Volume 3, February 2015: http://energy.gov/cfo/downloads/fy-2017-
budget-justification.
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In December 2015, the United States joined 195 countries at
the Paris, France ``COP21'' United Nations Conference in an
agreement to take steps to limit global warming. This was one
of the President's international objectives within his Climate
Action Plan. The Obama Administration entered into the
agreement without any consultation with Congress. In fact, the
administration has taken extraordinary steps to limit
congressional oversight, advice, and consent with respect to
this agreement. Given the President's inclination to bypass
Congress, the agreement amounts to nothing more than a
political gesture rather than a binding legal commitment, which
would have to go through Congress. The administration's
ultimate goal is to send billions of dollars to the Green
Climate Fund--the key financing arm of the United Nations
Framework Convention on Climate Change--without congressional
authorization. In light of this executive overreach, the budget
recommends increased accountability and oversight related to
the President's Climate Action Plan initiatives.
Just as troubling was the President's veto of bipartisan
legislation to develop the Keystone XL pipeline. This
legislation would expand an existing pipeline that runs from
the Western Canadian Sedimentary Basin through the southern
United States to provide more economical transportation of oil.
A January 2014 report, prepared by the U.S. Department of
State, concluded that a total of 42,100 jobs throughout the
United States would be supported by the construction of the
proposed pipeline.
Meanwhile, from 2009 through 2013, the White House provided
more than $67 billion in subsidies to green energy companies
through tax credits and loan guarantees alone.\112\ Despite the
excessive subsidies, solar power and wind energy combined only
grew from 0.9 percent to 2.0 percent of domestic energy
consumption over the same time period.\113\
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\112\Terry M. Dinan, ``CBO Testifies on Federal Financial Support
for Fuels and Energy Technologies,'' Congressional Budget Office, 13
March 2013.
\113\Energy Information Administration, ``Primary Energy
Consumption by Source'': http://www.eia.gov/totalenergy/data/monthly/
pdf/sec1<7.pdf.
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Many of the administration's loan guarantee projects have
failed. Abound Solar, which received $400 million in loan
guarantees, was cited by the Colorado Department of Public
Health and Environment for hazardous waste left from its failed
solar panels.\114\
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\114\Michael Sandoval, ``Bankrupt Abound Solar to Bury Unused Solar
Panels in Cement,'' The Daily Signal, The Heritage Foundation, 26
February 2013.
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Another grant recipient, A123, was given permission to hand
out as much as $3.7 million in bonuses to top executives as a
part of its bankruptcy proceedings.\115\ This is particularly
problematic, because unlike the private sector, in which this
company would eventually be held accountable to its investors
for these payouts, taxpayers have no way of holding the Federal
Government accountable for each ``investment.''
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\115\Paul Chesser, ``A123's Executives Get Their Richly Undeserved
Bonuses,'' National Legal and Policy Center, 13 November 2012: http://
nlpc.org/stories/2012/11/13/a123s-executives-get-their-richly-
undeserved-bonuses.
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This negative return for the American taxpayer has not
deterred this administration's penchant for failed policies. In
a never-ending pursuit to appease the far-left political base
and its liberal agenda, this administration, in its fiscal year
2017 budget request, has intensified its efforts to pick
winners and losers within the energy market. The
administration's budget includes a $10 per barrel tax on
domestically produced and imported petroleum products to pay
for President Obama's 21st Century Clean Transportation
System.\116\
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\116\Office of Management and Budget, Budget of the U.S. Government
for Fiscal Year 2017, 9 February 2016.
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This plan would tax low- and middle-class energy consumers
at the pump and in their homes, to subsidize inefficient
investments in clean transportation infrastructure. The White
House National Economic Council confirmed the administration is
well aware of the harm this will cause consumers by stating:
``We recognize that oil companies will likely pass on some of
these costs.''\117\ The Congressional Research Service
concluded that ``consumers would see higher prices, not only
directly for gasoline and other consumer products, but, in
general, for many products to varying degrees,'' and ``. . .
the fee would likely result in decreased discretionary consumer
purchasing power which may translate into lower expected
economic growth.''\118\ With stagnant wages and anemic economic
growth under this administration, Americans are still
struggling with the weakest economic recovery since the Great
Depression. Consumers simply cannot afford this 10-year, $319-
billion tax increase.\119\
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\117\Nathan Bomey, ``Obama's $10 oil tax proposal would cost
motorists,'' USA Today, 5 February 2016, http://www.usatoday.com/story/
money/2016/02/04/president-obama-oil-tax-gasoline/79835274/.
\118\Congressional Research Service, Subject: $10 Fee/Tax on Oil,
memorandum to the Senate Energy and Natural Resources Committee, 8
February 2015.
\119\Department of the Treasury, General Explanations of the
Administration's Fiscal Year 2017 Revenue Proposals, February 2016.
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None of this is to say that the search for newer
technologies and low-carbon sources of energy is without
merit--only that these activities are best suited for the
private sector. This administration prefers to pick winners and
losers in the market, which crowds out disfavored energy
sources, even if they are more reliable and come at
significantly lower costs. The President was so concerned about
low-cost energy pushing consumers away from his preferred, more
expensive options that he named Steven Chu as his first
Secretary of Energy less than a year after Chu said: ``Somehow
we have to figure out how to boost the price of gasoline to the
levels in Europe.''\120\
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\120\Neil King Jr. and Stephen Power, ``Times Tough for Energy
Overhaul,'' The Wall Street Journal, 12 December 2008.
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After 7 years, the verdict is in: increased oil and natural
gas production by private sector companies on private land has
made the U.S. the world's number one energy producer. The world
has experienced an energy boom that continues to drive gas and
other energy prices lower. Yet at least $67 billion of
government spending has brought the Nation no closer to cost-
effective zero-carbon energy. Technological breakthroughs will
continue to occur--such as the combination of horizontal
drilling and hydraulic fracturing that emerged in the mid-
2000s--but the Federal Government must resist the temptation to
intervene at taxpayers' expense.
Discretionary spending in this category includes some of
the civilian energy and environmental programs of the
Department of Energy [DOE]. It also includes funding for the
basic operations of the Nuclear Regulatory Commission. A large
majority of the DOE discretionary budget is allocated to
commercial and applied research and development for new energy
technologies--activities that are better left to the private
sector. It also includes Electricity Delivery and Energy
Reliability, as well as operations and maintenance accounts for
some of DOE's direct spending programs, like the Power
Marketing Administrations.
According the National Science Foundation, private sector
companies in the U.S. spent more than $302 billion on research
and development [R&D] in 2012. While these efforts focus on
more than just energy, detailed NSF surveys indicate that
funding for more efficient fuel consumption, electric vehicles,
energy efficiency, and fossil fuel R&D total billions of
dollars' worth of private sector capital per year. As a result,
DOE's research and development should focus solely on
breakthrough innovations.
Direct spending in this category includes the remaining
civilian energy and environmental programs at the DOE. It also
includes the Rural Utilities Service of the U.S. Department of
Agriculture [USDA], the Tennessee Valley Authority, and the
Federal Energy Regulatory Commission. (It does not include
DOE's national security activities, conducted by the National
Nuclear Security Administration, which are in Function 050, or
its basic research and science activities, which are in
Function 250.)
For fiscal year 2017, the budget resolution provides $2.7
billion in discretionary budget authority, with $3.1 billion in
related outlays (shown in Table 2, Function 270). Direct
spending figures (shown in Table 3, Function 270) are -$5.7
billion in budget authority and -$1.7 billion in outlays. The
negative balances reflect the incoming repayment of loans and
receipts from the sale of electricity produced by Federal
entities, which are accounted for as ``negative spending,'' as
well as rescissions of unobligated balances in green energy
loan programs. Over 10 years, the resolution provides
discretionary budget authority of $30.6 billion and $31.1
billion in outlays. Ten-year totals for direct spending are
-$19.3 billion in budget authority and -$21.0 billion in
outlays.
Illustrative Discretionary Spending Policy Options
In the House, discretionary spending energy programs
(Function 270 in Table 2) fall under the jurisdiction of the
Committee on Energy and Commerce. Funding for these programs
comes from the Appropriations Subcommittees on Energy and Water
Development, and Related Agencies, and Interior, Environment,
and Related Agencies. These committees will determine specific
policy options to meet the budget's fiscal guidelines.
A central aim of their policies should be to ensure that
private sector capital is not crowded out by government
overreach and bureaucratic waste. They should also protect
taxpayers from poor government decision-making that wastes
Federal dollars and increases energy prices. Finally,
streamlining R&D activities across the Department of Energy
will increase efficiency, consolidate operations, and reduce
costs. The following illustration reflects this approach.
Reduce Funding for Commercial Research and Development. The
resolution supports maintaining current funding levels for
basic R&D activities within the DOE, while significantly
reducing funding for applied R&D. Focusing on basic R&D will
allow DOE to zero in on cutting-edge discoveries that may lead
to major improvements in society, such as the Internet, while
leaving research on the application and commercialization of
new technologies to the private sector.
Illustrative Direct Spending Policy Options
In the process of transforming policy in this area, the
Committee on Energy and Commerce can be guided in part by
seeking to reverse the damage caused by the excesses of the
administration's energy policies. They can also evaluate each
program's merit by asking a simple question: If this program
did not exist, would there be a private sector industry or
entity that would fund similar activities? If the answer is
```yes,'' the program should be viewed as ripe for reform, or
even elimination. The options below indicate some possible
directions the Energy and Commerce Committee could take.
Rescind Unobligated Balances from the Stimulus Bill's Green
Energy Programs. The budget recommends rescinding unobligated
balances in DOE's loan portfolio. Since implementation of the
American Recovery and Reinvestment Act of 2009, or the stimulus
bill, these programs have spawned numerous failures, such as
Solyndra and Abound Solar. The government cannot undo the harm
that has been done or recover taxpayer dollars from failed
entities. It can, however, reclaim all of the spending
authority the administration has not yet obligated to ensure
that taxpayers are not exposed to further risk for renewable
energy projects that would not otherwise be market-viable.
Rescind Funding for Biomass Research and Development. The
Biomass Research and Development program is a joint initiative
of the USDA and the DOE, intended to ``carry out research on
and development and demonstration of (A) biofuels and biobased
products, and (B) the methods, practices, and technologies for
the production of biofuels and biobased products.''\121\
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\121\U.S. Department of Agriculture, ``Biomass Research and
Development Initiative Competitive Grants Program,'' Catalog of Federal
Domestic Assistance: https://www.cfda.gov/
index?s=program&mode=form&tab=core&id=
416c795f6d234174f72d346d328d0464.
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Unreasonable mandates in the Renewable Fuel Standard have
already forced private sector gasoline refiners and importers
to spend billions of dollars of their own money to assist
bringing uneconomic biofuels to market. Piling on millions of
Federal dollars only perpetuates the problem and exposes
taxpayers to financial risk.
Repeal Stimulus-Driven Borrowing Authority Specifically for
Green Transmission. The $3.25 billion in borrowing authority in
the Western Area Power Administration's Transmission
Infrastructure Program provides loans to develop new
transmission systems aimed solely at integrating renewable
energy. This authority was inserted into the 2009 stimulus bill
without the opportunity for debate. Of most concern, the
authority includes a bailout provision that would require
American taxpayers to pay outstanding balances on projects that
private developers fail to repay. The budget rescinds the
program's unobligated funds, saving taxpayers more than $1
billion.
NATURAL RESOURCES AND ENVIRONMENT
Function Summary: Discretionary Spending
America's bountiful environment--her breathtaking parks and
forests, diverse wildlife, rivers and lakes, and land, water,
and mineral resources--represent an extraordinary national
heritage worthy of preservation and responsible stewardship.
Yet over the years the Federal Government has contorted the
aims of preservation into a justification for ever more
centralized regulation.
For instance, the primary role of the Environmental
Protection Agency [EPA] is to ensure that the air Americans
breathe and the water they drink is clean and unpolluted. For
too long, however, rather than making human health and the
environment a priority, the EPA has viewed itself as an energy
policy authority, regulating low-cost, reliable energy sources
out of the market and mandating increased use of uncompetitive
and less reliable ones. Given these circumstances, any EPA
funding should require the EPA Administrator to certify that
all scientific and technical information and data relied on to
support a risk, exposure, limitation, regulation, regulatory
impact analysis, or guidance has been made available to the
public.
The Obama Administration's Clean Power Plan--which not only
regulates power plants but also expands EPA's reach into State
power markets generally--is a perfect example. The Supreme
Court recently ruled that implementation should be halted until
multiple legal challenges against the plan are resolved. The
EPA estimates the plan will cost energy providers up to $8.8
billion in annual compliance costs by 2030, a large share of
which will likely be passed on to taxpayers in the form of
higher energy prices. Private researchers believe the impact
could be even more profound, because the EPA did not include in
their estimate the costs of new transmission infrastructure,
intermittent resource integrations, or stranded assets. The
budget recommends withholding any funding to implement this
program as well as other unnecessary, costly regulatory
regimes, such as the soon-to-be-proposed ozone standards, the
proposed ``Waters of the United States'' rule, the stream
buffer rule, and the ``coal ash'' rule relating to disposal of
coal residuals.
The National Association of Manufacturers released a study
in 2015 indicating that tightening the ozone standard to 65
parts per billion, the low end of the range being considered by
the EPA, could cut U.S. gross domestic product by $140 billion
per year.\122\ Similarly, the Office of Surface Mining's stream
buffer rule would cause a dramatic decline in domestic coal
production. This would lead to the elimination of 44,000 to
77,000 American jobs, according to the National Mining
Association.\123\ In addition to withholding funding for these
executive overreaches, Members of Congress have recommended
their own solutions. The House of Representatives recently
passed the Supporting Transparent Regulatory and Environmental
Actions in Mining [STREAM] Act (H.R. 1644), sponsored by
Representative Mooney (R-WV). This common sense legislation
would bring transparency and accountability to the regulatory
overreach of the Office of Surface and Mining; the Senate
should consider it.
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\122\NERA Economic Consulting, Economic Impact of a 65 ppb National
Ambient Air Quality Standard for Ozone, February 2015.
\123\National Mining Association, Economic Analysis of Proposed
Stream Protection Rule: Final Report, October 2015.
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On 17 April 2015, the EPA finalized its rule regarding
disposal of coal combustion residuals from electric utilities,
known as the ``coal ash'' rule. This rule creates uncertainty
for plant operators. While EPA appropriately characterized coal
ash as non-hazardous under Subtitle D of the Solid Waste
Disposal Act, because of EPA's limited authority under Subtitle
D, the final rule is flawed: It is self-implementing and
enforceable only through citizen suits. This means regulated
entities will have to interpret the rule, and enforcement will
result in a patchwork of regulatory interpretations made by
Federal District Courts around the country. The final rule is
also problematic because State permit programs will not operate
in lieu of the final rule. Consequently, even if States adopt
the final rule, regulated entities in compliance with a State
permit can still be sued for non-compliance with the final
rule. Furthermore, this rule negatively burdens State and local
economies. The EPA's own data conclude this regulation will
cost $735 million per year. The EPA further concluded the cost
of this rule will outweigh the benefits by two-and-a-half
times.\124\ This compliance burden will be borne by small
businesses and local communities in the form of lower wages and
less economic opportunity.
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\124\Environmental Protection Agency, Hazardous and Solid Waste
Management System; Disposal of Coal Combustion Residuals From Electric
Utilities, December 2014.
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H.R. 1734, which passed the House on 22 July 2015, would
alleviate both of the key concerns with the final rule. The
legislation will result in the establishment of enforceable
State permit programs that directly incorporate EPA's technical
requirements in the final rule. This means there will be direct
enforcement of the requirements in the final rule by a
regulatory agency. The proposed McKinley amendment to H.R. 22
(also introduced in the Senate as S. 2446) addressed the issue
in the Statement of Administration Policy from July 2015, and
in particular would require EPA to review State permit programs
prior to State implementation.
The budget focuses on paring back unnecessary spending used
to carry out overreaching regulatory expansion. This budget
also emphasizes core government responsibilities, while
reducing spending in areas of duplication or non-core
functions. Pursuant to these guidelines, the resolution
provides $36.1 billion in discretionary budget authority for
fiscal year 2017, with $38.0 billion in related outlays (see
Function 300 in Table 2). These funds will finance programs
within the Departments of Interior, Agriculture, Commerce, and
Transportation, as well as the Army Corps of Engineers, and the
EPA.
Some of the larger spending programs subject to
appropriations are the EPA's clean water and drinking water
programs, as well as the agency's environmental programs and
management account, the Army Corps construction account,
operations and maintenance accounts, accounts responsible for
operation of the National Park Service and the Wildland Fire
Management accounts in the U.S. Forest Service and the
Department of the Interior.
The Forest Service and the Interior Department have used a
large amount of their overall budget allocations toward
wildfire suppression in the Western region of the U.S. The
frequency and severity of these wildfires pose a risk to the
citizens, water, and wildlife of the region. Borrowing for
wildfires is detrimental to the long-term planning of these
agencies. This budget acknowledges the need to minimize the
adverse effects of fire transfers on the budgets of other fire
and non-fire programs, and the need to responsibly budget for
wildfires. One solution is the Resilient Federal Forests Act of
2015 (H.R. 2647), a bipartisan measure introduced by
Representative Westerman (R-AR) and passed by the House. The
legislation sets in place responsible forest management and
wildfire funding solutions.
This budget recognizes the negative impact of the drinking
water crisis currently plaguing the people of Flint, Michigan,
and the greater Michigan area. This crisis is a failure of
leadership--specifically by the EPA, which was aware of
dangerously high levels of lead in Flint drinking water in
April 2015, yet failed to act until January 2016 when they were
forced to intervene. Nonetheless, Congress has a moral
obligation to find positive solutions for all the people
affected by this situation. Members of Congress are engaged in
a full investigation through public hearings and other
oversight measures to solve this problem and prevent it from
happening again. The budget calls for a bipartisan way forward
to address infrastructure needs of the Flint area and to ensure
the health and safety of all the children, families, and
citizens adversely affected by this crisis.
Illustrative Discretionary Spending Policy Options
The Committee on Natural Resources is the primary
authorizer in this area. The Appropriations Subcommittees on
Energy and Water Development, and Related Agencies, and
Interior, Environment and Related Agencies are responsible for
annual funding. As the committees determine policies here, they
may be guided by the budget's effort to focus on core
government activities and reduce duplication and waste. Options
that may help meet budget targets include those described
below.
Reduce Environmental Protection Agency Funding. The EPA
continues to use its budget to implement its unprecedented
activist regulatory policy to the detriment of States,
localities, small businesses, and energy consumers. This is
evidenced in the many ongoing legal challenges facing EPA's
proposed regulations. The budget reduces annual funding levels
for the EPA to allow the agency to focus on its core mission of
simply enforcing laws passed by Congress rather than
continually attempting to re-write them through regulations.
Eliminate the EPA Office of Regulatory Policy and
Management. This office manages the regulatory development
process for the EPA by providing support and guidance for the
agency's national and regional offices in developing
regulations. According to the EPA website, a primary function
of this office is to ``manage the Agency's policy priority
agenda.''\125\ As an executive agency merely created to enforce
congressional statutes, the EPA should have no policy priority
agenda at all.
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\125\Environmental Protection Agency, ``About the Office of
Policy,'' February 2016: www.epa.gov.
Cut Waste, Fraud, and Abuse. An examination of the Citizens
Against Government Waste Congressional Pig Book, similar
accounts by Senators Flake and Lankford, numerous reports by
the Government Accountability Office and Federal agencies'
Inspector Generals, and documents provided by other committees
expose numerous instances of waste, fraud, and abuse that can
be removed from the Federal ledger. The most offensive example
is providing pay for EPA employees suspended for numerous
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reasons, including watching pornography during work hours.
Streamline Climate-Change Activities Across Government.
This budget resolution reduces spending for numerous climate-
change-related activities and research within this function,
primarily by reducing overlapping or unproductive policies. It
also recommends better coordination of programs and funds to
eliminate duplicative and unnecessary spending. Many of these
programs are funded within the National Oceanic and Atmospheric
Administration [NOAA] as well as the EPA.
Eliminate the National Sea Grant College and Fellowship
Programs. Since 1966, NOAA has provided Federal funds to
various universities and academic research organizations across
33 States to sponsor a variety of marine research, outreach,
and education projects. The program also funds a National Sea
Grant Office, which offers fellowship opportunities for
graduate students. While the premise of these programs is
reasonable, they illustrate a growing trend within individual
agencies to offer and fund education-based grants and
fellowships that are better suited for either the Department of
Education or provided by State and local government.
AGRICULTURE
Function Summary: Discretionary Spending
Discretionary funding in the agricultural category supports
agricultural research, education, and economics; direct and
guaranteed farm operating and ownership loans; operating
budgets of the Farm Service Agency, Foreign Agricultural
Service, and Risk Management Agency; marketing and information
services; animal and plant health inspection services;
Department of Agriculture administration; and a variety of
related programs and activities.
The budget provides for fiscal year 2017 discretionary
spending in these areas totaling $6.3 billion in budget
authority and $6.2 billion in outlays. Over the 10-year period
of 2017 through 2026, the budget assumes discretionary spending
of $71.7 billion in budget authority and $70.6 billion in
outlays. (See Function 350, Table 2).
Illustrative Discretionary Spending Policy Options
Funding for discretionary agriculture programs and
activities will be determined by the Appropriations
Subcommittee on Agriculture, Rural Development, Food and Drug
Administration, and Related Agencies. The budget recommends
giving a higher priority to competitive grant-based
agricultural research. This type of research funding, in
contrast to formula-based and other forms, is most likely to
spur agricultural productivity growth, which is important to
enhancing the international competiveness of U.S. agriculture
over the longer term. Also, continued attention should be given
to streamlining and, where possible, consolidating operations
and activities across U.S. Department of Agriculture agencies,
including in its large network of county field offices.
COMMERCE AND HOUSING CREDIT
Function Summary: Discretionary Spending
Supporting commerce--maintaining an environment that allows
ingenuity and free enterprise to flourish--is a worthy and
important role of government. This includes providing necessary
oversight and regulation of business and commerce. As in many
other areas, however, the Federal Government has too often
taken the approach that more money, more red tape, and more
bureaucracy can answer every problem. A fundamental government
role is to maintain competitive markets that encourage
innovation and creativity, and promote efficiency, thereby
stimulating an expanding range of products and services at
lower costs for consumers.
One example is the ruling of the Federal Communications
Commission [FCC] to re-classify the Internet as a
telecommunications service, rather than an information service,
pursuant to the highly regulatory Title II of the 1934
Communications Act. The reclassification empowers the
government to regulate rates and give priority to content,
which will inevitably lead to increased fees and taxes on the
consumer. This budget rejects the FCC's ``Net Neutrality''
rules and generally opposes the government's attempt to
intervene in the free market. The Committee on Energy and
Commerce has made commendable efforts to prohibit the FCC from
onerous regulation of rates for broadband internet access, and
this budget resolution supports the No Rate Regulation of
Broadband Internet Access Act (H.R. 2666).
The resolution envisions a Federal system that supports
commerce and regulates in an efficient manner, providing
sufficient oversight where necessary without wasting taxpayer
monies or stifling free enterprise. Additionally, as it is
risky for the Federal Government to be in the business of
picking winners and losers, subsidies to commercial entities
should be minimized where possible.
These kinds of activities on the Federal level are
supported through discretionary spending in the Commerce and
Housing Credit category (Function 370 in Table 2), where the
government funds programs through the Departments of Commerce
and Housing and Urban Development. Entities funded with
discretionary dollars in this function include the Federal
Trade Commission, the majority of the Small Business
Administration, and regulatory agencies such as the Securities
and Exchange Commission.
On a unified basis, for fiscal year 2017, the budget
resolution provides -$12.3 billion in discretionary budget
authority and -$11.7 billion in outlays (Table 2). The negative
discretionary budget authority and outlay figures mainly
reflect the subsidy rates applied to certain loan and loan
guarantee programs scored under the guidelines of the Federal
Credit Reform Act, such as Federal Housing Administration and
Government National Mortgage Association [Ginnie Mae] programs.
This accounting method is further discussed in the section of
this report titled ``Banking, Commerce, Postal Service, and
Related Programs.''
Illustrative Discretionary Spending Policy Options
The main committees responsible for funding programs in
this area are the Committee on Financial Services and the
Committee on Energy and Commerce. As they make final policy
determinations, the committees of jurisdiction should aim to
reduce unwarranted subsidies to big businesses, reform
inefficient government bureaucracies, and create a climate that
supports rather than stifles commerce and free enterprise.
Options worthy of consideration include those cited below.
Eliminate Corporate Welfare Programs in the Department of
Commerce. Subsidies to businesses distort the economy, impose
unfair burdens on taxpayers, and are especially problematic
given the fiscal problems facing the Federal Government.
Programs that should be considered for elimination include the
following:
The Hollings Manufacturing Extension Program,
which subsidizes a network of nonprofit extension centers that
provide technical, financial, and marketing services for small-
and medium-size businesses. These services are largely
available in the private market. The program already obtains
two-thirds of its funding from non-Federal sources, and was
originally intended to be self-supporting.
The International Trade Administration [ITA].
This agency, within the Department of Commerce, provides trade-
promotion services for U.S. companies. The fees it charges for
these services do not cover the cost of these activities.
Businesses can obtain similar services from State and local
governments and the private market. The ITA should be
eliminated or should charge for the full cost of these
services.
The National Network for Manufacturing
Innovation. This program, also known as the Advanced
Manufacturing Technology Consortia, provides Federal grants to
support research for commercial technology and manufacturing.
As stated in the Heritage Foundation's The Budget Book:
``Businesses should not receive taxpayer subsidies; these long-
lived and unnecessary subsidies increase Federal spending and
distort the marketplace. Corporate welfare to politically
connected corporations should end.''\126\
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\126\The Heritage Foundation, The Budget Book: 106 Ways to Reduce
the Size & Scope of Government, 2015: p. 94
Tighten the Belts of Government Agencies. Duplication,
hidden subsidies, and large bureaucracies are symptomatic of
many agencies within Function 370. For example, the Securities
and Exchange Commission [SEC] now has more than 4,000
employees. Although its funding has grown by more than 60
percent since 2007, the President, in his annual budget
submissions, has consistently requested additional increases.
This resolution questions the premise that more funding for the
SEC means better, smarter regulation, and recommends reforming
the agency so it can perform its duties more efficiently.
Another example is the Federal Trade Commission's budget,
which has increased 30 percent since 2008. This budget calls
for assessing the ever-growing spending of Federal agencies,
determining what levels are necessary to effectively and
efficiently execute their missions, and adjusting funding
accordingly.
Eliminate the Department of Commerce and Consolidate
Necessary Functions Into Other Departments. Since its
establishment in 1903, the Commerce Department has expanded in
size and scope to include many elements whose priorities would
be better suited in other agencies. As a result, the Department
of Commerce and its various agencies and programs are rife with
waste, abuse, and duplication. This budget proposes the
following dissolution, delegation of authority, and
consolidation measures:
Consolidate National Oceanic and Atmospheric
Administration functions into the Department of the Interior.
Establish the U.S. Patent and Trademark Office as
an independent agency.
Eliminate the International Trade Administration.
Delegate trade enforcement activities to the
International Trade Commission.
Consolidate the Bureau of Industry and Security
within the Department of State.
Eliminate the Economic Development
Administration.
Consolidate trade adjustment activities within
the Department of Labor, which already has a duplicate program.
Consolidate the Minority Business Development
Agency within the Small Business Administration.
Consolidate the National Institute of Standards
and Technology and the National Technical Information Services
within the National Science Foundation.
Consolidate the National Telecommunication and
Information Administration with the Federal Communications
Commission as an independent agency.
Consolidate the United States Census Bureau and
the Bureau of Economic Analysis into the Department of Labor's
Bureau of Labor Statistics.
TRANSPORTATION
Function Summary
A 21st century transportation system is one that enables
people and goods to move freely, efficiently, and cost-
effectively. To the extent possible, it responds to consumers'
demands--in this case, the demands of the traveling public.
Every day, people traveling to and from work and businesses
moving their products to market expect reliable, safe, and
convenient means of transportation. They understand they will
have to pay for what they get, but they likewise expect to get
what they pay for. All levels of government and the private
sector fund transportation activities. It is incumbent on
Congress to consider the proper Federal role within this
system. Congress especially should identify those needs that
are of national importance and are Federal in responsibility,
and then focus on those, rather than be distracted by and spend
precious funds on ancillary activities. A major component of
the Nation's transportation system is its vast network of
highways. This section offers a robust discussion of the
challenges facing the Federal highway program as well as
consideration of other categories of transportation.
The Interstate Highway System dates to 1944 legislation,
though it was the Federal-Aid Highway Act of 1956 that
established the program enabling its construction. That same
year, Congress created the Highway Trust Fund (under the
Highway Revenue Act of 1956) as a mechanism to ensure that the
revenue generated from gasoline taxes would ``not be diverted''
to purposes other than building the Interstate Highway System.
For decades the trust fund was self-financing. Then Congress
began authorizing annual spending out of the trust fund above
the amount tax receipts collected, and cash shortfalls
resulted. Congress covered the first shortfall in 2008 with
cash infusions from general revenues, and it has continued this
practice for subsequent shortfalls. Notably, these transfers do
not make the trust fund self-sustaining; rather, they enable
the Federal Government to meet its financial obligations to
States on time.
Federal motor fuel tax rates stand at 18.4 cents per gallon
for gasoline and 24.4 cents per gallon for diesel. These taxes,
along with related fees, fill the trust fund and finance
Federal surface transportation programs. The most recent fuel
tax increase was enacted in 1993, originally as part of
deficit-reduction legislation. Two years later, that additional
tax was redirected to the Highway Trust Fund. Congress must
approve any fuel tax increases or decreases, which do not
automatically change with inflation. Federal fuel-economy
standards are eroding the trust fund's balances. The
Congressional Budget Office [CBO] projects new Federal fuel-
economy standards will reduce trust fund revenue by 21 percent
in 2040, when they are fully phased in. To illustrate the
effect of a 21-percent drop, the CBO estimates that if all cars
on the road now met the stricter efficiency standards, it would
mean a $57-billion cumulative reduction in revenue between now
and 2022.
Though gas-tax receipts have plateaued, spending continues
to grow. From 1999 through 2008, outlays outpaced receipts in
the trust fund by almost $1 billion a year, on average. The
spending-revenue gap has widened further under the current
administration, expanding to more than $11 billion a year.
Recently enacted legislation, the Fixing America's Surface
Transportation [FAST] Act, reauthorized Federal highway and
transit programs for 5 years and also provided for a $70-
billion general revenue transfer to the trust fund. The
transfer is intended to cover projected trust fund deficits,
which range from $12 billion in fiscal year 2016 to $16 billion
in fiscal year 2020. The CBO projects the trust fund's transit
account will face a $2-billion shortfall sometime in fiscal
year 2021, and the trust fund's cumulative deficits will grow
from $21 billion in fiscal year 2022 to $108 billion by fiscal
year 2026.\127\
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\127\Congressional Budget Office, ``Projections of the Highway
Trust Fund Accounts''--CBO's January 2016 Baseline, 25 January 2016:
https://www.cbo.gov/publication/43884.
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Continuing on the present course will lead to one of two
outcomes within about 5 years. Under current law, the Highway
Trust Fund cannot incur negative balances, so spending will
automatically decrease and the Department of Transportation
will have to ration and delay reimbursements to States to
maintain a ``prudent balance'' in the fund. Alternatively,
Congress will need to provide additional bailouts (i.e. more
transfers from the general fund) with borrowed money.
The deterioration of the Highway Trust Fund is a major
concern reflected in the Transportation category of the budget
(Function 400 in the summary tables). The function also
includes ground, air, water, and other transportation funding.
The major agencies and programs within this function are the
Department of Transportation (which includes the Federal
Aviation Administration; the Federal Highway Administration;
the Federal Transit Administration; motor-carrier, rail, and
pipeline-safety programs; and the Maritime Administration); the
Department of Homeland Security (including the Federal Air
Marshals, the Transportation Security Administration [TSA], and
the U.S. Coast Guard); the aeronautical activities of the
National Aeronautics and Space Administration; and the National
Railroad Passenger Corporation, or Amtrak.
For these programs and agencies, the budget resolution
calls for $87.9 billion in budget authority and $90.6 billion
in outlays in fiscal year 2017. Discretionary budget authority
in 2017 is $29.4 billion, with outlays of $89.7 billion (see
Table 2); direct spending is $58.5 billion in budget authority
and $900 million in outlays (Table 3). Over 10 years, budget
authority totals $756.5 billion, with outlays of $820.3
billion.
The large discrepancy between discretionary budget
authority and outlays here results from the split treatment of
the transportation trust funds, such as the Highway Trust Fund,
through which funding is provided as a type of mandatory budget
authority, while outlays--controlled by annual limitations on
obligations set in appropriations acts--are treated as
discretionary spending. Because of this unique budgeting
regime, the discussion below examines both categories of
transportation spending.
Basic transportation policies in this area fall under the
jurisdiction of the Committee on Transportation and
Infrastructure and the Appropriations Subcommittee on
Transportation, Housing and Urban Development, and Related
Agencies. Policies for the Transportation Security
Administration and Federal Air Marshals are determined by the
Committee on Homeland Security and the Appropriations
Subcommittee on Homeland Security. These committees will
determine the policy choices in their jurisdictions. The budget
supports maintaining essential funding for surface
transportation, aviation, and safety--offset by reductions in
other transportation activities of lower priority to the
Federal Government.
Illustrative Direct Spending Policy Options
Ensure the Solvency of the Highway Trust Fund. The Highway
Trust Fund [HTF] has required large general fund contributions
totaling $141 billion since 2008. While no trust fund shortfall
is imminent for several years, the budget resolution continues
a reform that would require any future general fund transfer to
the HTF to be fully offset. CBO estimates that, under current
law, the Highway Trust Fund again will face insolvency during
fiscal year 2021, the year after expiration of the FAST Act.
Congress has time to address the systemic factors that have
been driving the trust fund's bankruptcy. It can continue
asking general taxpayers to assume an increasing share in the
cost of Federal transportation programs, as has been the
practice since the first trust fund bailout. Doing so would
further unravel the crucial user-pays/user-benefits model that
proved successful over the program's history--that of a highway
program funded directly with motorists' user fees. Congress
could reconsider the mission of the program, including which
activities belong in a Federal program versus being run by
State or local governments or even funded by groups in civil
society. Doing so would allow Congress to distinguish between
the programs it believes are national in scope and Federal in
responsibility from those that another level of government
could provide more effectively. Congress may conclude, for
example, that it bears some role in the great task of
rebuilding the decades-old Interstate Highway System, while
building bicycle and recreational trails, sidewalks, and
streetcars, which produce local benefits, lies outside its
purview.
The budget encourages reform that puts the trust fund back
on sound financial footing, and it dispenses with the habit of
raiding general funds and increasing the deficit. It recommends
sensible reforms to avert the projected bankruptcy of the
Highway Trust Fund within the budget window, by aligning
spending with incoming revenues, and it also includes a
provision to ensure any future general-fund transfers will be
fully offset.
Congress has many options to consider. One is exploring
innovative financing mechanisms to support surface-
transportation infrastructure and safety programs--with, for
example, further public-private sector partnerships
demonstrated in the Transportation Infrastructure Finance and
Innovation Act program. Additionally, the budget recommends
giving States more flexibility to fund the highway projects
they feel are most critical. Doing so means reconsidering
current spending mandates on non-highway projects through
program set-asides or the eligibility of non-highway activities
for funding. One possible reform could include a pilot program
for States to fund their transportation priorities with State
revenues, opt out of the Federal fuel taxes, and forgo Federal
allocations. Such reform may be viewed as reflecting an ongoing
dynamic: that of many States proposing or enacting funding
solutions to pay for their transportation programs. No two
States' transportation situations are identical, and thus
neither their preferred sources of funding nor their spending
priorities will be the same.
Restructure the Air Traffic Control System. Upgrading the
United States' air traffic control [ATC] system, by reforming
its governance and funding structures, is in the interests of
air travelers, businesses that operate within the National
Airspace System, and Federal taxpayers. Without reform,
improvements such as reduced airport congestion, timely
technological upgrades, improved service, and stable funding
for investments will remain out of reach. Restructuring the
system, on the other hand, would have numerous benefits,
including attracting a talented workforce, meeting demand in
the skies, and cost-effectively maintaining the safest ATC
system in the world. A model successfully adopted by some other
countries is that of a federally chartered, not-for-profit
corporation. The corporation operates and modernizes the ATC
system and is self-funded through service charges paid by
users. A government entity--the Federal Aviation Administration
in the U.S.--remains as the safety regulator.
The budget supports a new approach for providing ATC
services and modernization, but it does not assume savings from
this policy. It includes a reserve fund to accommodate the
budgetary effects of such a proposal, and the reserve fund
requires the downward revision of the Budget Control Act's
discretionary spending limits to reflect the reduction in
appropriated spending on ATC-related activities that should
occur as part of ATC reform.
AN UPGRADE IS NEEDED
The FAA operates a safe ATC system, but it is not because
the Federal Government owns and operates it. It is safe due to
the daily efforts of the FAA's approximately 14,000 air traffic
controllers and to safety being at the fore of aircraft design
and maintenance. Technology used by the FAA is obsolete. Its
computer system relies on ground-based radar, not the Global
Positioning System [GPS]. As a point of contrast, the thousands
of travelers who fly daily within the system carry GPS-enabled
phones. For at least two decades Congress has legislated, with
little success, reforms requiring the FAA to operate its Air
Traffic Organization [ATO] like a business and expedite
modernization. The ATO remains a massive bureaucracy with high
operating costs, losses in productivity, and a culture that
resists change. The FAA also has received criticism over its
implementation of the multibillion-dollar Next Generation Air
Transportation System [NextGen] program, which is to upgrade
the ATC system. In a recent letter to the FAA's Administrator,
the Department of Transportation's Inspector General wrote:
``While FAA reports improvements in its management of
acquisitions, major projects continue to experience problems
that delay the introduction of new technologies, such as
performance-based navigation; postpone benefits to users; and
defer the retirement of costly legacy systems . . .
Notwithstanding reforms, several underlying and systemic
issues--including overambitious plans, shifting requirements,
software development problems, ineffective contract and program
management, and unreliable cost and schedule estimates--affect
the FAA's ability to introduce new technologies and
capabilities that are critical to transitioning to
NextGen.''\128\
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\128\See Office of the Inspector General, Department of
Transportation, FAA Reforms Have Not Achieved Expected Cost,
Efficiency, and Modernization Outcomes, Audit Report AV-2016-05, 15
January 2016: https://www.oig.dot.gov/sites/default/files/
FAA%20Organizational%20Structure_ Final%20Report%5E1-15-16.pdf.
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Instead, the U.S. needs is a high-tech ATC service provider
that will respond quickly to market forces. Recognizing this
need in their respective situations, more than 50 countries--
from Canada, the United Kingdom, and Spain, to Germany,
Australia, and New Zealand--have remodeled their ATC systems
over the past few decades. While the countries have adopted
different corporation models, they have enjoyed similar
results: consistent or increased safety, modernized systems,
improved service, and lower costs.
Likewise, modernization of the United States' ATC system
would help the U.S. remain competitive. It would allow for
better cost management, safe and efficient delivery of
services, and a more direct connection between system users and
funding.
BUDGETARY EFFECTS
The budget contains a reserve fund to accommodate any
budgetary effects resulting from ATC system reform. The budget
would view a new provider of ATC services as independent, and
therefore it would not support including such an entity's
spending and revenue as part of the Federal Government's
budget. Under such reform, Federal spending on ATC and related
activities should necessarily decrease as soon as the new
provider assumes operational responsibility and begins
assessing service charges. Therefore, the budget's reserve fund
provision requires that the Budget Control Act's discretionary
spending caps be lowered to reflect this decrease in
appropriated funding.
Congress may choose to transition the U.S. ATC system to a
federally chartered, non-profit corporation model as part of
reform efforts. As international experience has shown, the
following factors are typical under this type of model: the new
ATC services provider would be independent and self-supporting,
charging its users fees for services it provides. The fees
would fund daily operations and finance borrowing in private
capital markets to pay for capital-intensive investments.
Receipts from the fees would not be deposited into the U.S.
Treasury but would be managed directly by the ATC provider.
This entity would operate the ATC system directly and set its
own budget. It would become the employer of current government
employees connected to providing ATC services, and it would be
provide for the health and retirement benefits of new
employees. A chief executive officer and governing board would
be composed of aviation stakeholders, and the board would make
key decisions such as which new technologies and practices to
adopt. The ATC provider, not Congress, would initiate
organizational changes, systems upgrades, and investments. The
budget resolution would view such an entity as independent, not
as an agent of the Federal Government.
Phase Out Subsidies for Essential Air Service. Essential
Air Service [EAS] is a classic example of a temporary
government program that has become immortal. EAS funding--
originally intended to provide transitional assistance to small
communities to adjust to the airline deregulation in the late
1970s--has not only continued but has grown rapidly in recent
years. The budget recommends phasing out this spending.
Illustrative Discretionary Spending Policy Options
Eliminate Funding for Amtrak Operating Subsidies. The
budget supports eliminating operating subsidies that have
insulated the National Railroad Passenger Corporation [Amtrak]
from making the structural changes necessary to start producing
returns. It also supports reforms enabling Amtrak's management
to make sound business decisions that ultimately allow it to
run as a self-supporting business, eliminating the need for
taxpayer subsidies to the passenger rail service. For example,
Amtrak's management, in coordination with stakeholders, could
be empowered to make repair and safety a priority over route
expansion; eliminate food and beverage service losses once and
for all; reduce headquarters and administrative costs; and even
discontinue unprofitable lines or sell them to interested
private parties who may repurpose the lines. Another option for
Congress is requiring Amtrak to gradually begin contracting out
the operation of its lines, as other commuter rail lines in the
U.S. have done. The aims would be to improve the quality of
service for riders, reduce costs, and potentially result in a
greater role for the private sector.
Provisions in the FAST Act restructured Amtrak funding
accounts, setting up a National Network account and a Northeast
Corridor account. Generally routes in the Northeast Corridor
operate at a profit but have high capital costs, while long-
distance routes in the National Network tend to operate at a
loss but have low capital costs. The 1997 Amtrak authorization
law required Amtrak to operate free of subsidies by 2002. Yet
taxpayers continue subsidizing approximately $45 of the cost of
the average Amtrak ticket sold.\129\ The budget recommends
judicious reforms that help Amtrak change course.
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\129\Based on fiscal year 2015 ridership of approximately 30.8
million customers and a $1.4 billion total appropriation.
Prohibit Funding for High-Speed Rail. High-speed rail is
not profitable or self-sustaining in the U.S. for several
reasons. The U.S. has low population densities relative to
high-speed rail markets in Europe and Asia. American travelers
have wide access to personal vehicles, along with competitively
priced air and bus transportation. Both factors mean high-speed
rail cannot attract sufficient numbers of riders, which in turn
makes it challenging to meet revenue targets. Several governors
across the country rejected Federal high-speed rail funding in
recent years, because they recognized the risk to their
taxpayers, who would have had to subsidize the proposed lines.
Only two high-speed rail lines in the world are profitable: one
in France and another in Japan.\130\ They serve densely
populated areas where gasoline is expensive. Similar success is
far from certain in the U.S. Committing American taxpayers to
such risky projects is not a proper role of the Federal
Government.
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\130\See the Reason Foundation, High-Speed Rail in Europe and Asia:
Lessons for the United States, May 2013, http://reason.org/files/
high_speed_rail_lessons.pdf.
Phase Out New Starts Transit Grants. New Starts grants are
for fixed-guideway mass transit projects that are largely of
local, not national, benefit. The budget supports phasing out
these grants to give States and cities time to plan their
future transportation priorities and spending accordingly. This
Federal grant money can have the perverse consequence of
distorting local decisions about which types of transportation
projects to build. The bias can favor more expensive projects.
For example, a city may opt to build a new, more expensive rail
transit project in one part of town at the expense of expanding
more cost-effective, flexible bus service in an area where that
service is already in high demand. Without the subsidies, that
decision may be the reverse. Moreover, if a transit project
fails to produce promised ridership and revenue levels, local
citizens must make up the difference to cover operating costs,
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often through higher taxes.
Eliminate TIGER Grants. The Transportation Investment
Generating Economic Recovery [TIGER] Program was a 2009
stimulus measure established as a competitive grant program.
Though the program was intended to drive funding to critical
transportation needs for the country, more than 60 percent of
the grants support local transit or so-called ``enhancement''
projects. With grantee selection based on vague metrics,
including ``livability,'' the Department of Transportation has
failed to provide more information to the public regarding
documentation of its review process as requested by the
Government Accountability Office.\131\
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\131\See the Reason Foundation, ``Eliminate TIGER Program,'' 17
February 2015: http://reason.org/news/show/eliminate-tiger-program.
Make Rail Safety a Priority Through User Fees. The budget
supports the vital role of the Federal Railroad Administration
in ensuring freight- and passenger-rail safety, while reducing
spending on non-essential transportation programs. Without
compromising the ongoing implementation of technology aimed at
preventing train crashes, one option in this area would be to
connect users of the freight and passenger-rail system to the
funding for safety programs, rather than fund them through
general revenues. The Congressional Budget Office has included
such a policy in its compilation of options for reducing the
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Federal deficit.
Require Improved Performance at Washington Metropolitan
Area Transit Authority [WMATA]. WMATA, commonly called
``Metro,'' is a local transit authority that operates rail,
bus, and paratransit services in the Nation's capital and
nearby communities. In addition to fare box and advertising
revenue, it receives Federal aid through annual appropriations
acts. The District of Columbia, Maryland, and Virginia also
raise matching funds through dedicated sources to pay for
Metro's services. Congress appropriated $150 million to Metro
in fiscal year 2016. Approximately 40 percent of Metro's rush
hour passengers are Federal Government employees. The transit
agency has been beleaguered by poor performance in several
areas: low on-time performance, weekly service disruptions,
maintenance backlogs, smoky rail tunnels, high operating costs,
and a tragically fatal rail accident in early 2015. In October
2015, U.S. officials at the Federal Transit Administration
assumed direct safety supervision of Metro's rail system.
Customer satisfaction has hovered around 81 percent during
the past 2 years. More recently, from the first through the
third quarter of 2015, Metrorail customers' satisfaction
dropped to 67 percent, and Metro cites unreliable service as
the primary cause.\132\ Metro's ridership is also falling short
of projections. In fiscal year 2015, Metrorail ridership was
higher than in fiscal year 2014 but came up 16.5 million trips
short of projections. This shortfall includes lower-than-
expected ridership on the new Silver Line, for which expansion
plans are under way. The budget supports legislative reforms
that require Metro to contain its costs and operate more like a
business, rather than continue rewarding the poorly performing
system with subsidies from Federal taxpayers. Metro customers
would benefit from more reliable, safer service. Options for
Metro could range from further reducing administrative costs to
competitively contracting some of its operating activities, as
the nearby Virginia Railway Express and the Maryland Area
Regional Commuter systems have done.
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\132\Washington Metropolitan Area Transit Authority, ``Vital
Signs,'' November 2015, p. 5, http://www.wmata.com/about_metro/
scorecard/documents/Vital_Signs_Q3_2015.pdf.
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COMMUNITY AND REGIONAL DEVELOPMENT
Function Summary: Discretionary Spending
Federal funding for economic and community development in
both urban and rural areas appears in this category. It
includes Community Development Block Grants; the non-power
activities of the Tennessee Valley Authority; the regional
commissions, including the Appalachian Regional Commission; the
Economic Development Administration; and partial funding for
the Bureau of Indian Affairs. Homeland Security spending in
this function includes the State- and local-government grant
programs of the Department of Homeland Security, as well as
part of the funding for the Federal Emergency Management
Agency.
While supporting these programs related to emergency
preparedness and critical needs, this resolution urges
streamlining non-essential community and regional initiatives
that are not core functions of the Federal Government.
The majority of this category's funding is discretionary
and provided by the Appropriations Subcommittees on Financial
Services; Energy and Water; Agriculture; Interior, Environment,
and Related Agencies; and Homeland Security. Relevant
authorizing committees for this category include the Financial
Services Committee, the Committee on Transportation and
Infrastructure, and the Committee on Homeland Security.
The resolution calls for $8.2 billion in discretionary
budget authority and $20.0 billion in outlays in fiscal year
2017. The 10-year totals for discretionary budget authority and
outlays are $69.7 billion and $112.1 billion, respectively. The
figures appear in Function 450 of Table 2.
Illustrative Discretionary Spending Policy Options
As elsewhere, the committees of jurisdiction will make
final policy determinations. The proposals below indicate
policy options that might be considered.
Eliminate Non-Core Programs. At a time when reducing
spending is imperative for the government's fiscal well-being,
this resolution recommends taking a hard look at community and
regional programs, focusing on those that deliver funds for
non-core Federal Government functions, and consolidating and
streamlining programs wherever possible. The following programs
should be considered in this review:
The Community Development Fund [CDF].
Historically, about 80 percent to 90 percent of funding for the
CDF is spent on the Community Development Block Grant program
[CDGB], a program that dates to the 1974 Housing and Community
Development Act of 1974. CDBG is an annual formula grant
directed to State and local governments. In 2016, Congress
appropriated $3.0 billion for CDBG. A vast range of activities
are eligible for funds, such as home water and energy
efficiency activities, historic preservation, demolishing
blighted properties, street and sidewalk repairs, job training,
grants to local businesses, and community planning.
Local organizations, private business, and sometimes
local communities at-large are the ultimate recipients of CDBG
funds. Likewise, the benefits are enjoyed locally, not
nationally. The program's effectiveness has been compromised
over the decades by debates over formulas, which have allowed
wealthier communities to receive funding at the expense of
lower-income communities; currently there is no maximum
community poverty rate to determine eligibility for funds, nor
are communities with high average income limited or excluded.
Further, wasteful and inefficient projects have received
grants, and the program has been criticized for incurring
unnecessarily high administrative costs, which drain funding
for actual projects.
The Economic Development Administration [EDA].
Although the program purports to give financial aid to
economically distressed areas, it is nothing more than a mask
for political pet projects. Essentially, the agency provides
``grants'' and ``investments'' for local projects, including
private sector projects that should not be eligible for Federal
Government's help to begin with. Just as with earmarks, the EDA
uses taxpayer dollars to target local projects with a very
narrow benefit--in many cases just one particular company or
small segment of population, and should be eliminated.
Focus Department of Homeland Security Urban Area Security
Initiative Grants. Urban Area Security Initiative grants to
more than 30 cities have not produced measurable results for
the most critical municipalities. This option would limit the
grants to the top 11 cities on a risk-based formula basis.
Reform the Federal Emergency Management Agency. The budget
supports implementation of reforms at the Federal Emergency
Management Agency [FEMA] passed by Congress to improve service
delivery and cost efficiencies in disaster assistance, while at
the same time proposing further steps to eliminate overlap and
inefficiencies.
The budget also acknowledges the need to look at reforms in
disaster-relief assistance to ensure those State and local
governments most in need are receiving the assistance required.
The disaster declaration is intended as a process to help State
and local governments receive Federal assistance when the
severity and magnitude of the disaster exceeds State and local
resources, and when Federal assistance is absolutely necessary,
but recent administrations have come to use it almost
promiscuously. From 1953 through 1992, presidents made 1,153
total disaster declarations--including Major Disasters
Declarations, Emergency Declarations, and Fire Management
Assistance Declarations--for an average of 29 declarations per
year.\133\ The past three administrations alone have more than
doubled that number, making in excess of 2,400 declarations to
date--including a single-year high of 242 by the current
administration in 2011.
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\133\Federal Emergency Management Agency, ``Disaster Declarations
by Year,'' February 2015.
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When disaster relief decisions are not made judiciously,
limited resources are diverted away from communities that are
truly in need. This budget supports Government Accountability
Office recommendations and takes a closer look at the
following: (1) reducing Federal expenditures by updating
disaster-declaration-eligibility indicators--such as per-capita
thresholds and other major disaster metrics--by, for example,
adjusting for inflation; and (2) providing more scrutiny on
cost-share levels and waivers. For example, preparedness
programs such as the Emergency Management Performance Grants
have shown greater buy-in by State and local governments;
demonstrated better performance in delivering resources to
first responders; and ensured efficient and effective response
operations. These types of reforms will increase transparency
in the way that disaster declaration decisions are made and in
accurately measuring a State's capacity to respond to a
disaster.
Waste, Duplication, and Abuse of Federal Emergency
Management Agency Programs. In addition to the reforms listed
above, this budget proposes the elimination of duplicative
programs that are not providing their designated benefit, and
whose funds are not being used for the purposes originally
intended.
The Intercity Passenger Rail Grant Program. This
program, run by FEMA on behalf of the Department of Homeland
Security [DHS], this program provides security funds solely for
Amtrak. Amtrak already receives $1.5 billion annually from the
Federal Government that could be used for funding security
upgrades. In addition, the Amtrak grant program could be
eliminated and the Department of Homeland Security could allow
Amtrak to competitively apply for funding through the Transit
Security Grant Program, which provides security grants to
transit systems.
Intercity Bus Security Grant Program. This is
another program run by FEMA for the DHS. It was created to
provide funding for security on intercity bus systems. Many
grant recipients, however, are private companies whose focuses
are not public transportation but rather private contracting
and event transportation. The President has put this grant
program on the chopping block, stating that the grants are not
awarded based on risk. The administration believes making risk-
based awards ``is the best way to allocate resources to the
areas with the greatest need so as to maximize security gains
for the Nation.''\134\ In addition, this grant program could be
rolled into the Transit Security Grant Program, which provides
funding for transit systems.
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\134\See Office of Management and Budget, Terminations, Reductions,
and Savings: Budget of the U.S. Government, Fiscal Year 2012, Page 38:
https://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/
assets/trs.pdf
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EDUCATION, TRAINING, EMPLOYMENT,
AND SOCIAL SERVICES
Function Summary: Discretionary Spending
One of the Federal Government's most important goals should
be creating and supporting an environment of opportunity for
all Americans. A key component of this endeavor is ensuring
that all Americans have access to a high-quality education. A
well-educated workforce drives strong economic performance and
international competitiveness.
Education is a national priority and therefore of great
interest to Washington policymakers. The question is how best
to advance the cause of quality education. In recent years, the
primary approach to furthering educational opportunity has
consisted of creating additional Federal programs and spending
more money. While pursued with the best of intentions, this
approach has stripped local entities of opportunities to make
decisions about how their educational systems and programs will
be measured. It is biased toward programs that spend more but
pays little attention to what the country is getting for all of
that money. Higher spending has not led to higher achievement.
Principally, Federal support for K-12 education should aim
to support State and local entities and empower them to produce
good outcomes for students. It should not seize control from
States and localities. Real gains in education result from the
diversity and creativity of State and local educators;
centralizing rules and standards in Washington risks smothering
their effectiveness and innovation. The Federal Government does
have an interest in education, but that interest is chiefly in
promoting the initiatives of local educators, not dictating
them.
In addition to high-quality educational opportunities,
Americans of all ages must have access to skills- and job-
training that will equip them to compete in the rapidly
changing global economy. Federal training programs--also a
major component of discretionary funding in this function--are
notorious for their failure and duplication. As described
further below, dozens of Federal training programs have created
a labyrinth of bureaucracy that consistently fails to produce
substantial numbers of job placements. In addition to reforming
training programs so they serve Americans more effectively,
Congress must make every dollar count by eliminating wasteful,
duplicative, and ineffective programs.
For fiscal 2017, the budget resolution in this category
(Function 500 in Table 2 of this report) provides $86.6 billion
in discretionary budget authority and $93.7 billion in outlays,
which primarily goes to the Departments of Education, Labor,
and Health and Human Services.
Illustrative Discretionary Spending Policy Options
The main committees responsible for funding programs in
this area are the Committee on Education and the Workforce and
the Appropriations Subcommittee on Labor, Health and Human
Services, Education, and Related Agencies. They will make final
policy determinations for discretionary funding, and should aim
to support America's students and workforce without
overstepping the Federal Government's boundaries or usurping
the authority of State and local entities. Options worthy of
consideration include the following.
Reform Job-Training Programs. The Bureau of Labor
Statistics reports that 7.8 million Americans are unemployed.
Yet they also report 5.6 million job openings. This gap is due
in part to the failure of the Nation's workforce-development
programs to successfully match workers' skills with employers'
needs. In the 113th Congress, the Committee on Education and
the Workforce made laudable progress toward consolidating these
programs with enactment of the Workforce Innovation and
Opportunity Act (Public Law 113-128).
This budget builds on these efforts by calling for further
consolidation of duplicative Federal job-training programs and
improved coordination with the recently reformed workforce
development system. This budget will also improve the remaining
programs' accountability by aligning their performance
indicators with those passed as part of the Workforce
Innovation and Opportunity Act. A streamlined approach with
increased oversight and accountability will not only provide
administrative savings, but will improve access, choice, and
flexibility, enabling workers and job seekers to respond
quickly and effectively to whatever specific career challenges
they face. In addition, the budget recommends a 15-percent
State flexibility allotment under the Workforce Innovation and
Opportunity Act.
Make the Pell Grant Program Sustainable. The Pell Grant
program is the foundation of Federal student aid, helping low-
income students better afford a college education. After years
of decisions to raise the Pell Grant award levels, however, the
program is on unstable financial ground, with real consequences
for future students. The Congressional Budget Office projects
the program will face a shortfall again in fiscal year 2022.
Between fiscal year 2006 and 2016, Pell Grant discretionary
costs ballooned from $12.8 billion to $23.6 billion. CBO
estimates the costs will total $28.1 billion by fiscal year
2026, the last year of the 10-year budget window. Instead of
confronting the program's cost drivers, previous Congresses
increasingly relied on mandatory spending to make up for
discretionary funding deficiencies. Instead of implementing
necessary, structural reforms to set up the program for long-
term success, lawmakers repeatedly resorted to short-term
funding patches--a temporary answer that will not prevent
another severe funding cliff for the program in the future. Any
reforms to Pell Grants should aim toward helping low-income
students gain access to higher education. The budget recommends
making responsible adjustments so that Pell Grants will
continue to remain available for future students. These include
the following:
Roll back certain recent expansions to the needs
analysis to ensure aid is targeted to needy students. The
Department of Education attributed 14 percent of program growth
between 2008 and 2011 to recent legislative expansions to the
needs-analysis formula. The biggest cost drivers come from
changes made in the College Cost Reduction and Access Act
[CCRAA] of 2007, such as the expansions of the level at which a
student qualifies for an automatic zero Expected Family
Contribution and the income-protection allowance. These should
be returned to pre-CCRAA levels.
Eliminate administrative fees paid to
participating institutions. The government pays participating
schools $5 per grant to administer and distribute Pell awards.
Schools already benefit significantly from the Pell program
because the aid makes attendance at those schools more
affordable.
Consider setting a maximum-income cap that
accounts for family size and other qualifying factors.
Currently there is no fixed upper-income limit for a student to
qualify for Pell. Figures are plugged into a formula to
calculate the grant amount for which the student qualifies. The
higher the income level of the student and the student's family
(and therefore expected family contribution to the student's
education), the smaller the grant he or she receives.
Eliminate eligibility for less-than-half-time
students. Some students eligible for Pell grants may be
balancing a job and college courses, along with other
responsibilities. Timely completion of required course credits
remains important, and the budget supports reserving funding
for students who are enrolled on at least a half-time basis.
Consider reforms to Return of Title IV Funds
regulations. Simple changes to this policy, such as increasing
the amount of time a student must attend class to withdraw
without debt owed for back assistance, will increase the
likelihood of students completing their courses and reduce
incentives for fraud.
Adopt a sustainable maximum-award level. The
Department of Education attributed 25 percent of recent program
growth to the $619 increase in the maximum award done in the
stimulus bill that took effect in the 2009-2010 academic year.
To get program costs back to a sustainable level, the budget
recommends maintaining the maximum award for the 2016-2017
award year throughout the budget window. This award would be
fully funded through discretionary spending.
Encourage Higher Education Policies That Promote
Innovation. Federal higher-education policy should focus not
solely on financial aid but on policies that maximize
innovation and ensure a robust menu of institutional options
from which students and their families can choose. Such
policies should include reexamining the data made available to
students, to make certain they are armed with information that
will assist them in making decisions about their individual
postsecondary education. Additionally, the Federal Government
should remove regulatory barriers in higher education that act
to restrict flexibility and innovative teaching, particularly
as it relates to non-traditional or contemporary models, such
as online coursework.
Eliminate Administrative Fees Paid to Schools in the
Campus-Based Student-Aid Programs. Under current law,
participating higher-education institutions are allowed to use
a percentage of Federal program funds for administrative
purposes. The budget suggests prohibiting this practice.
Schools already benefit significantly from participating in
Federal student-aid programs.
Ensure Federal Early Childhood Programs Work for Children
and Families. Recently enacted legislation, the Every Student
Succeeds Act, is intended to scale back Federal overreach into
local education decisions and reorganize and streamline many
programs and funding streams. In short, it aims to better
target resources and shrink bureaucracy. As the legislation is
implemented, the budget supports giving priority to funding for
programs with demonstrated success, and facilitating State and
local efforts. In future legislation, it also supports reforms
to consolidate or eliminate programs and activities that are
not improving outcomes for participating children and parents.
For example, a study released in 2010 by the Department for
Health and Human Services [HHS], found that the decades-old
Head Start program was not improving participating children's
math, language, and literacy skills. Nor was it improving
parenting practices.\135\ Children and their parents deserve
better. The administration has since taken regulatory action
aimed at correcting the program's course, but without engaging
Congress in discussions about how best to do so. More can be
done, and the budget supports efforts by the committees of
jurisdiction to ensure that the focus at HHS is not on
perpetuating bureaucracy or ineffective programs but on
adequately supporting parents, expanding parental choice, and
preparing low-income children for kindergarten and later
education. Overall, winding down early childhood programs that
are not working, and resisting efforts to establish or fund new
programs while existing ones are failing to fulfill their
promises, is in the best interests of children and their
parents and taxpayers.
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\135\See U.S. Department of Health and Human Services, Head Start
Impact Study, 15 January 2010: http://www.acf.hhs.gov/sites/default/
files/opre/executive_summary_final.pdf.
Reform Federal Primary and Secondary Education Programs.
The Every Student Succeeds Act is aimed at prohibiting Federal
overreach in the area of academic standards for K-12 education,
too. Certain provisions prevent the Federal Government from
coercing States into adopting specific sets of academic
standards, such as Common Core. Setting standards, devising
curricula, and conducting related activities are not Federal
duties; they are of State and local concern. The budget
supports work to implement these provisions as well as future
efforts that stop Federal edicts and instead empower States and
local communities.
Further, the current structure for K-12 programs at the
Department of Education is fragmented and ineffective. Many
programs are duplicative, not working as intended, or are
highly restricted, serving only a small number of students.
Given the budget constraints, Congress must focus resources on
programs that truly help students. The Every Student Succeeds
Act was crafted to eliminate or consolidate 49 of these
programs and replace them with a single Student Support and
Academic Enrichment Grant.\136\ The budget encourages the
timely transition from a morass of K-12 programs to the new
streamlined system, which will increase efficiency and empower
State and local entities. Students and families deserve choice
and flexibility in their educational decisions. Downsizing the
number and scope of programs, and making more Federal aid
dollars portable will make that possible. Federal dollars
should be spent not on more bureaucracy, but on efforts that
improve academic outcomes.
---------------------------------------------------------------------------
\136\Became Public Law 114-95.
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The budget also recommends that, as efforts to consolidate
and streamline are undertaken, the committees of jurisdiction
continue giving priority to funding for students with
disabilities provided under the Individuals with Disabilities
Education Act [IDEA]. IDEA funding has consistently fallen
short of the 40-percent Federal contribution threshold
established in statute. In a letter requesting the Budget
Committee give priority to IDEA funding, Chairman Kline (R-MN)
of the Committee on Education and the Workforce, along with
several other House Members, write that inadequate funding
means ``[S]chool districts struggle to offer special needs
students the necessary placements, supports, and services to
which they are legally entitled.''\137\ Congress should refocus
efforts to support this existing commitment before it
entertains new education programs or initiatives.
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\137\Letter to Budget Committee Chairman Price, M.D. (R-GA) and
Ranking Member Van Hollen (D-MD), from Chairman Kline and
Representatives McMorris Rodgers (R-WA), Sessions (R-TX), and Smith (R-
TX), 11 March 2016: http://edworkforce.house.gov/uploadedfiles/
idea_budget_letter_fy_2017.pdf.
Encourage Private Funding for Cultural Agencies. Federal
subsidies for the National Endowment for the Arts, the National
Endowment for the Humanities, and the Corporation for Public
Broadcasting can no longer be justified. The activities and
content funded by these agencies go beyond the core mission of
the Federal Government. The agencies can raise funds from
private-sector patrons, which will also free them from any risk
---------------------------------------------------------------------------
of political interference.
Make Way for State, Local, and Private Funding for Museums
and Libraries. The Institute of Museum and Library Services is
an independent agency that makes grants to museums and
libraries. This is not a core Federal responsibility. This
function can be funded at the State and local level and
augmented significantly by charitable contributions from
private-sector businesses, organizations, and individuals in
civil society.
Promote More Private Funding for the Smithsonian
Institution. The Smithsonian Institution consists of 19 museums
and galleries, a zoological park, and research and supporting
facilities. Approximately 26.7 million visitors enjoyed the
Smithsonian complex in fiscal year 2015. That same year, it
raised nearly $230 million in private funds. Through Federal
grants and appropriated funds, general taxpayers contribute
about 60 percent of its annual budget. The remaining 40 percent
is derived from trust fund sources and non-Federal funds,
including private gifts, endowment disbursements, membership
contributions, external grants, and business income.\138\ The
budget supports continued efforts by the Smithsonian to
generate non-Federal revenue. Given the current Federal fiscal
environment, increased private funding can better enable the
Smithsonian to expand its collections, improve existing
facilities, and make business decisions it deems necessary.
---------------------------------------------------------------------------
\138\See Smithsonian Dashboard, Finances: http://dashboard.si.edu/
finances.
Eliminate the Corporation for National and Community
Service. Programs administered out of this agency provide
funding to students and others who work in certain areas of
public service. Participation in these programs is not based on
need. The United States has a long history of robust volunteer
work and other efforts that provide services to communities and
individuals. Americans' generosity in contributing their time
and money to these efforts is extraordinary and should be
encouraged. The Federal Government already has aid programs
focused on low-income students, and the oxymoronic act of
paying ``volunteers'' is not a core Federal responsibility,
especially in times of high deficits and debt. Further, it is
much more efficient to have such efforts operate at the State
and local level by the community that receives the benefit of
the service.
HEALTH
Function Summary: Discretionary Spending
America should maintain its world leadership in medical
science by encouraging competitive forces to work through the
marketplace in delivering cures and therapies to patients.
Federal policies should foster innovation in health care, not
stifle it. Yet too often the bureaucracy and red tape in
Washington hold back medical innovation and prevent new
lifesaving treatments from reaching patients. This resolution
recognizes the valuable role of government support for
organizations, such as the National Institutes of Health [NIH],
but also the indispensable contributions to medical research
coming from outside Washington.
In addition to the NIH, programs and agencies that receive
discretionary funding in this category (Function 550 in Table
2) include Project Bioshield, the Food Safety and Inspection
Service, and the Food and Drug Administration. The resolution's
discretionary totals for fiscal year 2017 are $59.7 billion in
budget authority and $59.6 billion in outlays. The 10-year
discretionary totals are $632.6 billion in budget authority and
$618.7 billion in outlays.
Illustrative Discretionary Spending Policy Options
The principal authorizing committees in this category are
the Committee on Energy and Commerce and the Committee on
Oversight and Government Reform. Funding is provided by the
Appropriations Subcommittees on Labor, Health and Human
Services, Education, and Related Agencies; Agriculture, Rural
Development, Food and Drug Administration, and Related
Agencies; and the Legislative Branch. These panels will make
the actual policy choices, which might be guided by the
principles and policy options described below.
Support Global Health Responses. Threats to public health
must be taken seriously. As the first line of defense for the
American people, the budget protects funding for the NIH and
the Centers for Disease Control and Prevention [CDC]. This
resolution recognizes the importance of resources to combat
infectious diseases and respond to global health crises,
ensuring the nation's capability to prepare and act upon
emerging health threats, such as Ebola, Zika, and the like.
Foster Medical Research, Innovation, and Development.
Medical breakthroughs and discoveries are made every day, and
the pace of medical innovation will continue to quicken due to
advancements in groundbreaking fields such as genomic medicine,
biomedical research, and molecular medicine. The NIH and the
CDC foster fundamental creative discoveries, cures, and
therapies, and serve as the first line of defense against
health safety and security threats. The budget resolution
supports a level of funding for these agencies that enables
them to continue their important work.
Regrettably, much of this innovation has faced significant
hurdles due to Federal over-regulation. For example, a recent
report from the Mercatus Center at George Mason University
highlights the proper role the Food and Drug Administration
[FDA] should have in the 21st Century.\139\ It should not be an
organization that holds up products for 9 years before
approving them.\140\ It should not cost innovators close to $20
million to deal with the FDA's myriad requirements.\141\ Most
important, patients should not be left to suffer the true costs
of delaying life-saving devices. This resolution calls for a
complete examination of the FDA approval process to promote a
more effective, efficient system that truly safeguards
Americans' access to innovative cures and therapies.
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\139\Jason Briggeman, Joseph V. Gulfo, and Ethan C. Roberts, The
Proper Role of the FDA for the 21st Century, the Mercatus Center at
George Mason University, February 2016: http://mercatus.org/sites/
default/files/Gulfo-Proper-Role-FDA-v1.pdf.
\140\Emergo, ``How long it has historically taken the FDA to clear
510(k) submissions,'' retrieved 1 February 2016: http://
www.emergogroup.com/resources/research/fda-510k-review-times-research.
\141\AdvaMed, FDA Impact on U.S. Medical Technology Innovation,
November 2010: http://advamed.org/res.download/30.
Strengthen Oversight and Program Integrity Measures.
Federal grant programs fund a variety of health care services
provided by State and local governments. Every dollar made
available through these programs should be used transparently,
and in the most effective manner possible, for its intended
purpose. This budget resolution supports increased program
integrity measures to prevent fraud and abuse in health care
---------------------------------------------------------------------------
programs.
Defend Life and Promote Access to Health Care. This
resolution supports the long-standing policy to ban Federal
taxpayer dollars from funding elective abortions and calls for
a 1-year cessation of Federal funding for Planned Parenthood.
The resolution would reinvest the Planned Parenthood funding in
community health centers to promote greater access to care for
women, men, children, and the unborn.
Limit Federal Health Coverage Funding for Members of
Congress and Their Staffs. Currently, Federal contributions to
the Federal Employee Health Benefits Program grow by the
average weighted rate of change in these programs. This budget
supports restricting the growth in these plans to inflation.
Make Common Sense Reforms to the Occupational Safety and
Health Administration. The goal of the Occupational Safety and
Health Administration [OSHA] should be to find ways to make
even more progress on the excellent record of U.S. businesses
in preventing workplace accidents, not to unnecessarily punish
job creators. This budget would provide regulatory relief for
businesses by preventing OSHA from imposing fines for non-
serious infractions that are corrected within the time allotted
in the citation, or by the end of the final appeals process.
Restrict Federal Funding for Advertising Against American-
Made Products and Wasteful Government Activities Such as
Pickleball. This budget repeals funding from the Prevention and
Public Health Fund, created as part of the Affordable Care Act.
The goals of the fund are laudable--and it is a goal of the
budget to focus on preventing disease rather than simply
treating people once they become ill. Nevertheless, funding for
the Prevention and Public Health Fund is over and above the
amount that Congress has appropriated for the activities
covered by it. In effect, administrators at the Department of
Health and Human Services can spend the funds made available
however they want, without congressional oversight. As the
Committee on Energy and Commerce has uncovered, the
administration has used dollars in this fund to promote
Pickleball, free pet neutering, massage therapy, kickboxing,
and Zumba.
Additionally, this budget does not support the use of
taxpayer dollars to advertise against American-made products.
Following the passage of the American Recovery and Reinvestment
Act, the CDC was allocated taxpayer dollars to award grants for
wellness efforts. These funds were used, however, to run ads
singling out and attacking legal American products and
industries that the administration claimed contributed to bad
health. The CDC does excellent work on early detection,
prevention, and treatment for breast and cervical cancer, as
well as on immunizations, flu vaccines, and many other worthy
efforts. The agency should receive sufficient funding for these
activities, but no government agency should receive American
taxpayer dollars to advertise against American-made products
Target Resources, Improve Outcomes. The budget supports
better targeting of Federal spending to achieve the country's
health care goals. For example, the budget calls for
eliminating duplicative programs at the Department of Health
and Human Services [HHS]. The budget proposes to merge the
Agency for Healthcare Research and Quality [AHRQ] into existing
HHS agencies. The AHRQ's mission and areas of research exist
within other HHS agencies and are therefore duplicative and
unnecessary.
The budget also supports prudent investments to improve
mental health care and awareness. In 2015, according to NIH,
nearly 10 million adults in the U.S. lived with severe mental
illness,\142\ and it is important that the Federal Government
give priority to treatment of the sickest and most vulnerable
patients. The Government Accountability Office recently did a
study that identified more than 100 distinct programs
supporting individuals with serious mental illness, and found
interagency coordination for programs severely lacking.\143\
Federal dollars should not be squandered on antiquated programs
that fail to meet patients' needs. The budget calls for Federal
programs to be reoriented to advance treatment for those facing
serious mental illness. Any research conducted and grants
awarded by the Federal Government should be firmly rooted in
evidence-based practice. Programs and resources in this area
should focus on psychiatric care for patients and families most
in need of services.
---------------------------------------------------------------------------
\142\National Institute of Mental Health, ``Director's Blog: Mental
Health Awareness Month: By the Numbers,'' 15 May 2015: http://
www.nimh.nih.gov/about/director/2015/mental-health-awareness-month-by-
the-numbers.shtml.
\143\Government Accountability Office, HHS Leadership Needed to
Coordinate Federal Efforts Related to Serious Mental Illness, report to
the Energy and Commerce Subcommittee on Oversight and Investigations,
December 2014: http://energycommerce.house.gov/sites/
republicans.energycommerce.house.gov/files/114/Analysis/
20150205GAOReport.pdf.
---------------------------------------------------------------------------
Finally, the budget recognizes that the United States is in
the midst of a deadly battle with opioid and heroin abuse.
According to the CDC, drug overdose deaths have increased five-
fold since 1980.\144\ The Committee on Energy and Commerce has
led an ongoing effort to ascertain which Federal programs have
been effective in combatting opioid abuse, and which have not--
and why the latter failed. This effort should continue. The
budget calls for a complete examination of the Federal response
to the crisis. The government should implement prevention
activities, and evaluate them to identify effective strategies
for preventing substance abuse. The budget resolution includes
a policy statement that describes in greater detail the
contours of how the Federal Government should respond to the
ongoing substance abuse crisis.
---------------------------------------------------------------------------
\144\Margaret Warner, Ph.D., et al, ``Drug poisoning deaths in the
United States, 1980-2008,'' Centers for Disease Control and Prevention,
National Center for Health Statistics Data Brief No. 81, December 2011:
http://www.cdc.gov/nchs/data/databriefs/db81.htm.
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INCOME SECURITY
Function Summary: Discretionary Spending
Programs that subsidize food and housing for low-income
Americans remain largely unreformed, nearly two decades after
the success of the Personal Responsibility and Work Opportunity
Act--the major welfare reform bill enacted in 1996. This budget
proposes to improve work incentives for these programs and
increase State flexibility.
Discretionary spending components of this category
(Function 600 in Table 2) include the Special Supplemental
Nutrition Program for Women, Infants, and Children; the Low
Income Housing Energy Assistance Program; housing assistance
programs; and the Child Care and Development Block Grant. For
these programs the budget resolution provides $65.5 billion in
budget authority in fiscal year 2017, and $66.6 billion in
outlays. The budget assumes discretionary spending of $709.9
billion in budget authority and $707.4 billion in outlays in
this area over the 2017-2026 period.
Illustrative Discretionary Spending Policy Options
The main committees responsible for funding these programs
are the Committee on Agriculture; the Committee on Financial
Services; and the Appropriations Subcommittees on Labor, Health
and Human Services, Education, and Related Agencies, and on
Agriculture, Rural Development, Food and Drug Administration,
and Related Agencies. They will make final policy
determinations for discretionary funding and should aim to
provide State flexibility and to expand work incentives. The
options below are potential policy proposals that follow such
guidelines.
Make Responsible Reforms to Housing-Assistance Programs.
This resolution supports taking actions that would make
housing-assistance programs more sustainable and direct Federal
dollars to serve those most in need. Despite dramatic funding
increases, the Worst Case Housing Needs Report to Congress by
the Department of Housing and Urban Development [HUD] suggests
the number of families who are severely rent-burdened or live
in substandard conditions remains alarmingly high. Reforms are
needed to ensure assistance is available to those most in need
and is structured in a way that best enables upward mobility.
One option would be to gradually expand the Moving to Work
program to high-performing public housing authorities. Moving
to Work gives public housing authorities more flexibility in
how they spend funds so that they can serve families more
efficiently and effectively. This budget also supports the
reforms incorporated into the Housing Opportunity Through
Modernization Act of 2015 (H.R. 3700). Declaring households
ineligible for assistance if they exceed the income and asset
limits allows HUD to make sure that housing assistance is being
provided to those who need it most.
Reform Supplemental Nutrition Assistance Program [SNAP]
Outreach Funding. This budget assumes that outreach funding for
SNAP is reduced, and funds are shifted toward programs that
facilitate upward mobility, such as properly reformed job-
training programs.
Eliminate the Emergency Food and Shelter National Board
Program [EFS]. This is the Federal Emergency Management Agency
[FEMA] version of the Agriculture Department's The Emergency
Food Assistance Program [TEFAP]. Both programs provide
groceries and prepared meals to needy individuals through local
government and non-profit entities. Providing comparable
benefits to a similar population, but managing the programs
separately, is an inefficient use of Federal funds. The sheer
volume of Federal hunger programs, and the fact they are
scattered among several agencies, prevent them from being used
by those people they are intended to help. The Government
Accountability Office cites the example of a director of a non-
governmental organization who administers the FEMA version of
the program; the director explains that it is often unclear
which Federal food assistance programs are available to non-
governmental organizations and which ones are best suited for
his organization's mission and resources.\145\ After
eliminating the Emergency Food and Shelter National Board
Program [EFS], the budget supports requiring the Department of
Agriculture to adopt any responsibilities currently being met
by the EFS program and not currently being met by TEFAP.\146\
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\145\Government Accountability Office, Domestic Food Assistance:
Multiple Programs Benefit Millions of Americans, but Additional Action
Is Needed to Address Potential Overlap and Inefficiencies, 20 May 2015:
http://www.gao.gov/assets/680/670313.pdf.
\146\The Department of Homeland Security proposed that the
Department of Housing and Urban Development take over the Emergency
Food and Shelter National Board Program, but no consolidation efforts
were proposed. See Department of Homeland Security, Congressional
Budget Justification for Fiscal Year 2016, pp. 31-42: https://
www.dhs.gov/sites/default/files/publications/
DHS_FY2016_Congressional_Budget_Justification.pdf.
Continue Support for Efforts to End Chronic Homelessness.
Thanks to efforts at the Federal, State, and local levels,
chronic homelessness in the U.S. has declined by 21 percent
since 2010. Yet much remains to be done. This resolution urges
HUD to refocus efforts to accomplish the administration's
laudable goal of helping to end chronic homelessness by 2020.
OTHER DISCRETIONARY SPENDING
Discretionary spending under the Medicare Program consists
primarily of administration and management costs. The budget
resolution totals for fiscal year 2017 are $6.5 billion in
discretionary budget authority, with $6.6 billion in outlays.
The 10-year totals in the budget resolution are $83.4 billion
in discretionary budget authority and $82.8 billion in outlays
(Function 570 in Table 2). This also includes the budget for
the Medicare Payment Advisory Commission, a non-partisan,
independent agency established by the Balanced Budget Act of
1997 to advise Congress on Medicare payment policies and
analyze issues affecting beneficiaries, such as access to care,
quality of care, health care outcomes, and so on.
For administering the Social Security Programs, the budget
provides $5.4 billion in discretionary budget authority and
$5.4 billion in outlays for fiscal year 2017. The 10-year
totals for discretionary budget authority and outlays are $61.5
billion and $61.3 billion, respectively (Function 650 in Table
2). All the budget authority and all but a sliver of residual
outlays are off budget. The Social Security Administration
oversees the program.
The budget assumes that program integrity funding is
provided to combat waste, fraud and abuse, and reduce improper
payments. The resolution recommends these resources be provided
within existing Budget Control Act cap levels for fiscal year
2017 through fiscal year 2026, thereby saving $10.0 billion
over 10 years.
Direct Spending
----------
Uncontrolled automatic spending (formally called ``direct''
or ``mandatory'' spending\147\) has come to dominate the
Federal budget, and its share of total outlays continues to
increase. As noted previously, this form of spending is largely
open-ended and flows from effectively permanent authorizations.
Most of the programs funded this way pay benefits directly to
groups and individuals without an intervening appropriation.
They spend without limit, and their totals are determined by
numerous factors outside the control of Congress: caseloads,
the growth or contraction of GDP, inflation, and many others.
---------------------------------------------------------------------------
\147\The Balanced Budget and Emergency Deficit Control Act (Public
Law 99-177) defines ``direct spending'' as budget authority provided in
law other than appropriations acts; entitlement authority; and the
Supplemental Nutrition Assistance Program (formerly food stamps).
---------------------------------------------------------------------------
The majority of this spending goes toward the government's
health programs--mainly Medicare, Medicaid, and now the
Affordable Care Act. Social Security represents another major
component. Apart from these, however, there are numerous other
benefit programs financed with automatic spending. These
include farm assistance, food stamps, a range of income support
programs, tuition assistance for college students, and many
other programs. This section discusses solely the direct
spending in these areas to reinforce the urgency of getting
this spending under control.
SOCIAL SECURITY
Function Summary: Direct Spending
The prevailing attitude among many in Congress--and in the
broader policy community--is to deny the inevitable crisis
facing the Social Security Program. This position ignores the
unalterable fact that absent structural reform, Social Security
will fail to fulfill its promises to the Nation's retired and
disabled persons--and that outcome will occur sooner than
expected.
Social Security benefits are financed through payroll taxes
credited to two trust funds: one for Old-Age and Survivors
Insurance [OASI], and the second for Disability Insurance [DI].
Under current law, both trust funds face insolvency within the
next 20 years--one in less than 7 years--depleting their
capacity to pay full benefits. The Social Security Program
already is running a cash deficit, meaning it is paying more to
beneficiaries annually than it collects in revenue. If not for
balances of Treasury securities in the trust funds, built up
from previous surpluses, the program would be unable to meet
all its benefit payments now. With each year Congress delays,
the policy changes needed to correct the program's fiscal
trajectory will become too large and wrenching to adopt. That
will lead to sudden, steep reductions in benefits.
For these reasons, the House adopted a rule for the 114th
Congress prohibiting legislation that improves the financial
condition of DI at the expense of the OASI Trust Fund. The rule
provides an exemption, however, for legislation that improves
the financial condition of both trust funds.
The lack of bipartisan congressional action on a long-term
solution to the problem facing Social Security has resulted in
many Members of Congress offering their own solutions. One such
proposal would be a bipartisan commission that would be
required to study the structural deficiencies within the
current Social Security system and report back with specific
legislative proposals for Congress and the President to
consider.
This budget calls for a bipartisan way forward by amending
a current-law trigger that would require the President and
Congress to begin the process of reforming Social Security.
Social Security benefits are reflected in the direct
spending of budget Function 650. It is the largest budget
category in terms of outlays.
Under this budget, these benefits total $913.3 billion in
budget authority in fiscal year 2017, and $908.6 billion in
outlays. Over 10 years, the totals are $12.2 trillion in budget
authority and $12.1 trillion in outlays. With respect to the
budget resolution, these benefits are treated as off budget and
do not appear in the legislative text. (In this report, they
appear as off-budget direct spending in Table 3.)
While the Committee on Ways and Means will determine actual
policies, the discussion below offers some guiding principles
to include in the debate.
OASI's Looming Insolvency
Although the OASI Trust Fund is projected to remain solvent
through 2035, its financial condition is more fragile than that
estimate suggests.
Any value in the balances of the Social Security Trust Fund
is derived from dubious government accounting. The trust fund
is not a real savings account. From 1983 through 2010, more tax
revenues were collected by the trust fund than what it paid out
in Social Security benefits. The government borrowed these
surplus funds for programs unrelated to Social Security.
Critics called this a ``raid'' on Social Security that
threatened retirees' future benefits--but it was not. All the
borrowed funds were replaced with interest-bearing Treasury
securities--the only kind of resources the trust fund holds--
that can be redeemed as needed. That is what makes the trust
fund a trust fund.
The real problem is that the ability to redeem these
securities depends entirely on the Treasury's ability to raise
money through taxes or borrowing. That is especially
significant now that the program is running a cash deficit, and
paying out more in benefits than it collects in payroll taxes.
To pay full benefits, the government must pay back the money it
owes Social Security. This trend will worsen, because 10,000
baby boomers are reaching retirement age every day. As stated
in 2013 by the then-Director of the Congressional Budget Office
[CBO]: ``[O]n a unified budget basis, taking account of just
the tax revenues, the dedicated tax revenues, and the benefits,
[Social Security] is contributing [to] the deficit now. If one
instead looks at just the balance in the Social Security Trust
Fund . . . the annual balance is positive now, but will be
negative within about a half dozen years.''\148\
---------------------------------------------------------------------------
\148\Douglas W. Elmendorf, Director of the Congressional Budget
Office, testimony to the Committee on the Budget, U.S. House of
Representatives, 13 February 2013.
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Social Security's fiscal condition warrants a long-term
solution that keeps the promise made to the Nation's current
and future retirees.
This budget calls for a bipartisan path forward in
addressing the long-term structural problems within Social
Security. The path will require all parties to first
acknowledge the fiscal realities of this critical program.
Short-term policy proposals that merely delay addressing Social
Security's long-term fiscal challenges are no longer
acceptable. Neither borrowing between the OASI and DI trust
funds, nor reallocating the apportionment of payroll tax
revenues to each fund, is a long-term solution to Social
Security's fiscal challenges. ``If you want to help both
programs you're not going to accomplish that by moving money
around just between them.''\149\
---------------------------------------------------------------------------
\149\Ibid.
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The President's Fiscal Commission elevated the debate,
suggesting a more progressive benefit structure to ensure that
the majority of benefits go to the Nation's most vulnerable.
The Commission also acknowledged the reality of increasing
longevity and proposed reforms to alleviate the demographic
problems that are undermining Social Security's finances.
Certain details of the Commission's Social Security
proposals, particularly on the tax side, are questionable. This
budget does not endorse taking more money from families and
businesses. Nonetheless, the Commission outlined a number of
bold, positive solutions that would strengthen the long-term
solvency of Social Security.
This budget seeks to build on the Fiscal Commission by
requiring the President to put forward specific solutions to
fix Social Security's long-term fiscal problem. The budget also
puts the onus on Congress to offer legislation ensuring the
long-term solvency of this program. Any policy proposal offered
regarding the Disability Insurance program should first and
foremost strengthen the long-term integrity of the program for
Americans with disabilities (see further discussion below).
Starting the Process
This budget requires the President and Congress to begin
the process of reforming Social Security by altering a current-
law trigger that, in the event the Social Security Program is
not sustainable, requires the President, in conjunction with
the Social Security Board of Trustees, to submit a plan for
restoring the balance to the fund. This provision would then
require congressional leaders to put forward their positive
solutions to ensure the long-term solvency of the Social
Security Program. While the Committee on Ways and Means would
make the final policy decisions, this provision would require
the following:
If in any year the Board of Trustees of the
Federal Old-Age and Survivors Insurance Trust Fund and the
Disability Insurance Trust Fund, in its annual Trustees'
Report, determine that the 75-year actuarial balance of the
Social Security Trust Funds in the 75th year is in deficit, the
Board of Trustees should, no later than the 30th of September
of the same calendar year, submit to the President
recommendations for statutory reforms necessary to achieve a
positive 75-year actuarial balance and a positive annual
balance in the 75th year.
No later than the 1st of December of the same
calendar year in which the Board of Trustees submits its
recommendations, the President shall promptly submit
implementing legislation to both Houses of Congress, including
recommendations necessary to achieve a positive 75-year
actuarial balance and a positive annual balance in the 75th
year.
Within 60 days of the President's submission, the
committees of jurisdiction to which the legislation has been
referred shall report the bill, which shall be considered by
the full House and Senate under expedited procedures.
Disability Insurance
The Social Security Disability Insurance program provides
an essential income safety net for persons with disabilities
and their families. Due in large part to the predictable
consequence of demographic factors and policy decisions,
however, DI program revenues will be unable to cover the full
costs of benefits in 2022, according to the Social Security
Trustees, unless Congress acts.
In 2015 Congress took the first step toward comprehensive
Disability Insurance reform that would solve the trust fund's
long-term financing troubles. The Bipartisan Budget Act of 2015
included a number of provisions to reduce fraud and increase
program integrity that strengthened the DI program and extended
its solvency date to 2022.\150\
---------------------------------------------------------------------------
\150\Public Law 114-74.
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Despite this recent legislation, the structural problems
facing the DI program remain the same. Under current law, its
trust fund is expected to be exhausted in 2022. If lawmakers do
not enact reforms to ensure the long-term solvency of the
Disability Insurance Program, an immediate 11-percent reduction
in benefits will be required when the trust fund becomes
exhausted.\151\
---------------------------------------------------------------------------
\151\Congressional Budget Office, Estimate of the Effects on the
OASI and DI Trust Fund of enacting H.R. 1314, the Bipartisan Budget Act
of 2015, introduced 27 September 2015.
---------------------------------------------------------------------------
The huge growth in the number of individuals receiving
Disability Insurance, and the benefits paid to each, have
contributed heavily to the worsening financial condition of the
DI trust fund. In 2012, the Congressional Budget Office
reported that the share of working-age adults receiving
Disability Insurance benefits rose from 1.3 percent in 1970 to
4.5 percent in 2011.\152\ Between 1990 and 2013, the total
number of individuals receiving DI benefits increased from 4.3
million to 11.3 million, or by 155.8 percent.\153\ Meanwhile,
tax revenues paid into the DI trust fund have remained
relatively flat as a share of taxable payroll.
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\152\Congressional Budget Office, Policy Options for the Social
Security Disability Insurance Program, July 2012, p. 2.
\153\Congressional Research Service, Social Security Disability
(DI) Trust Fund: Background and Solvency Issue, 21 August 2014.
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The demographic factors contributing to the problem include
the aging of the baby boomers into their most disability-prone
years, and the increased number of women in the workforce now
eligible for benefits should they become severely disabled. In
addition, policymakers have expanded the ways in which
applicants may qualify for benefits. At the same time, those on
disability are in many ways prevented from improving their
situations. If they work too much, they see their benefits cut
off.
Principles for Disability Insurance Reform
Congress and the President should develop bipartisan
legislation to secure the future of the DI program. This
legislation should be rooted in principles that do the
following:
Ensure benefits continue to be paid to
individuals with disabilities and their family members who rely
on them;
Prevent an 11-percent across-the-board benefit
cut;
Make the Disability Insurance program work
better; and
Promote opportunity for those trying to return to
work;
Consistent with the House rule, reforms should begin to
improve the financial situation of the Social Security Program.
Illustrative Policy Option
Eliminate the Ability to Receive Both Unemployment
Insurance and Disability Insurance. This option would eliminate
concurrent receipt of unemployment and disability insurance, a
clear example of duplication in the Federal budget. The
proposal would give the Social Security Administration the
authority to identify fraud and prevent individuals from
obtaining benefits from both programs. It is consistent with a
similar policy proposal the President has made in his budget
requests. In acknowledging the President's desire to act, this
budget takes the first step in preventing across-the-board
benefit reductions to the Social Security Program. This policy
option could save up to $5.4 billion.
MEDICARE
Function Summary: Direct Spending
The Medicare Program, along with Medicaid, reached its 50th
anniversary in July 2015. By many measures, Medicare has seen
remarkable successes, such as providing access to health care
for millions of seniors, and contributing to increased life
expectancies and decreased rates of poverty among seniors.
Recent reforms have also introduced choice and market
competition to the program through Medicare Advantage and
Medicare Part D, an optional prescription drug benefit, which
provide seniors with the opportunity to choose from an array of
private plan options the coverage that best suits their health
care needs.
Nevertheless, these successes have been accompanied by
significant difficulties. Medicare and the other major health
care programs are projected to consume an ever-increasing
portion of the Federal budget over time.\154\ In the next
decade, annual spending on these programs will double, from
$1.0 trillion to $2.0 trillion, the Congressional Budget Office
estimates.\155\ Furthermore, the basic benefit for Medicare
Parts A and B--which cover hospital insurance and supplementary
medical insurance, respectively--remains a complicated
structure that conflicts with the experience a majority of
beneficiaries enjoyed for a lifetime in the private health
insurance market prior to entering the program. The complexity
of the benefit structure, along with a multitude of rules and
regulations, make Medicare a bureaucratic quagmire for both
beneficiaries and providers. Many providers either no longer
accept new Medicare patients or refuse to accept Medicare
altogether simply to avoid the bureaucracy. Under current law,
Medicare's promise to America's seniors will be broken during
the next 50 years, as the program will no longer be able to
provide health security for current or future beneficiaries.
Such a prospect is unacceptable and actions must be taken to
save, strengthen, and secure Medicare, ensuring the program's
long-term sustainability for all generations.
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\154\Using CBO's descriptions, the major health care programs are
Medicare, Medicaid, the State Children's Health Insurance Program, and
the Affordable Care Act's exchanges and associated credits and
subsidies.
\155\Congressional Budget Office, The Budget and Economic Outlook:
2016 to 2026, January 2016.
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Medicare's most notable challenge lies in its failing
financial structure, which makes the program unsustainable for
the long term. Over the past five decades, Medicare has
expanded to include four parts--Part A, Part B, Part C
(Medicare Advantage), and Part D (optional prescription drug
coverage)--each with a different funding mechanism.
When the Medicare Program began in 1965, it consisted of
just two essential parts: Part A, coverage for hospital
services, or hospital insurance [HI]; and Part B, or
supplementary medical insurance [SMI]. The HI Trust Fund is
funded primarily through a designated payroll tax of 2.9
percent that is shared equally by employer and employee. The
SMI Trust Fund is supported much differently; revenues consist
of beneficiary premiums, which must account for 25 percent of
all Part B costs on an annual basis, and transfers from the
U.S. Treasury's general revenues.
During the late 1990s, Medicare Part C, or Medicare
Advantage [MA], was created. Medicare Advantage offers
beneficiaries private plan options that cover services provided
under Part A, Part B, and often Part D benefits. The Federal
Government determines the level of spending per enrollee that
will be provided to MA plans (with funds from the appropriate
trust funds used to offset the Part A, Part B, and Part D
costs), and beneficiaries pay a monthly premium as they do
under Parts B and D.
Finally, Medicare Part D, prescription drug coverage, was
established in 2003. Part D is structured similarly to Part B
and is a separate account within the SMI Trust Fund.
Beneficiary premiums account for approximately 25.5 percent of
costs, with the remaining 74.5 percent funded through general
revenues.\156\ Unlike any other program in Medicare, however,
Part D relies on market forces and competition among private
plans to drive down costs. As a result, year after year Part D
reports costs millions of dollars lower than projected, while
still maintaining high quality and beneficiary satisfaction--
lessons that ought to be applied throughout the Medicare
Program.
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\156\Part D also receives payments from States for dually enrolled
beneficiaries in the program.
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Medicare currently serves more than 57 million
beneficiaries, and is the second largest direct, or automatic,
spending program after Social Security.\157\ In 2015, Medicare
Program costs totaled $634 billion, and CBO projects spending
to more than double by 2026, reaching $1.3 trillion that year.
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\157\CMS.gov: https://www.cms.gov/fastfacts/.
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Several factors contribute to the growth in program
spending over the next decade. Foremost is the aging of the
population. In 2011, the first baby boomer enrolled in
Medicare. This generation will continue to age into the program
over the next two decades at a rate of approximately 10,000
beneficiaries per day. By the time the baby-boom generation has
fully aged into Medicare in 2030, the program will cover more
than 75 million beneficiaries. Such an increase in the
Medicare-covered population naturally corresponds with an
increase in program costs, but this effect is further
exacerbated by a number of additional factors. Since the
beginning of the program, the average life expectancy has
increased dramatically while the Medicare retirement age has
remained unchanged. In 1965, the average life expectancy was 70
years, meaning Medicare provided 5 years of health care
coverage on average. Today, life expectancy is almost 80 years,
and the average Medicare beneficiary remains in the program
roughly three times longer than those enrolled at its
inception.
Additionally, revenues for Part A--supporting the HI Trust
Fund--cannot meet the costs of the program due to a shrinking
working-age population. When Medicare was created, there were
4.5 workers for every beneficiary enrolled in the program,
which easily sustained the pay-as-you-go funding structure.
Today, the ratio has declined, with approximately three workers
per beneficiary. By 2030, when the baby-boom generation has
fully aged into Medicare, the ratio will be closer to two
workers per beneficiary, meaning less revenue will be available
to offset ever-increasing program costs. Finally, although most
beneficiaries pay into the Medicare Program throughout their
working years, the Medicare benefit the average person receives
far exceeds his or her contribution to the program through
payroll taxes. For example, the present value of lifetime
Medicare taxes for a married couple earning the average wage
and retiring at age 65 in 2015 equaled approximately $140,000
contributed through payroll taxes, but the anticipated lifetime
Medicare benefit is estimated to be $422,000--roughly three
times the lifetime contribution.\158\
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\158\C. Eugene Stuerle and Caleb Quakenbush, Social Security and
Medicare Lifetime Benefits and Taxes, Urban Institute, September 2015:
http://www.urban.org/sites/default/files/alfresco/publication-pdfs/
2000378-Social-Security-and-Medicare-Lifetime-Benefits-and-Taxes.pdf.
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These trends play a significant role in Medicare's long-
term outlook. The CBO recently updated enrollment projections
for Medicare by age group. Currently, the majority of
beneficiaries are under age 75, but by 2035 there will be more
Medicare beneficiaries over age 75 than under.\159\ This is
especially concerning when the difference in Medicare per
capita spending between older and younger beneficiaries has
widened. The average spending for a Medicare beneficiary of 85
years is now more than twice that of a 66-year-old, and
spending is three times greater for a 95-year-old.\160\ Not
surprisingly, Medicare costs are expected to rise not only as a
greater number of beneficiaries enter the program, but also as
per-capita costs increase with the continued aging of the
Medicare population. The CBO estimates net program spending to
grow from 3 percent of gross domestic product [GDP] to 5.1
percent by 2040. Compared to the other major health care
programs--Medicaid, the State Children's Health Insurance
Program, and the Affordable Care Act [ACA]--that are expected
to grow from 2.2 percent to 2.9 percent of GDP by 2040, this is
a startling growth rate for a single program.\161\ Furthermore,
the Medicare Trustees estimate the total amount of unfunded
obligations for the Medicare Program over the 75-year period to
equal $3 trillion for the HI Trust Fund and $24.6 trillion for
the SMI Trust Fund.\162\
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\159\The Congressional Budget Office, The 2015 Long-Term Budget
Outlook, June 2015: https://www.cbo.gov/sites/default/files/114th-
congress-2015-2016/reports/50250/50250-breakout-Chapter2-2.pdf.
\160\Tricia Neuman, Juliette Cubanski, Jennifer Huang, and Anthony
Damico, The Rising Cost of Living Longer: Analysis of Medicare Spending
by Age for Beneficiaries in Traditional Medicare, The Kaiser Family
Foundation, 14 January 2015: http://kff.org/medicare/report/the-rising-
cost-of-living-longer-analysis-of-medicare-spending-by-age-for-
beneficiaries-in-traditional-medicare/.
\161\The Congressional Budget Office, The 2015 Long-Term Budget
Outlook, June 2015: https://www.cbo.gov/sites/default/files/114th-
congress-2015-2016/reports/50250/50250-breakout-Chapter2-2.pdf.
\162\United States Department of the Treasury. United States
Government Notes to the Financial Statements for the Years Ended
September 30, 2014, and 2013: https://www.fiscal.treasury.gov/
fsreports/rpt/finrep/fr/14frusg/NotestoFinancialStatements_2014.pdf.
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In the short term, Medicare costs are projected to outpace
income, creating a shortfall in the HI Trust Fund. In January
of this year, the CBO reported the HI Trust Fund would be
exhausted by 2026--4 years earlier than the date estimated by
the Medicare Trustees--likely due to the decline in projected
economic growth.\163\ Expenditures from the trust fund, which
is financed solely through the 2.9-percent payroll tax, have
exceeded revenues annually since 2008. Although the Medicare
trustees expect a slight surplus from 2015 through 2023, the
ratio of revenues to costs declines quickly in the following
years. The most recent projection, reported by the trustees in
July 2015, estimated depletion of the HI Trust Fund in 2030.
Upon depletion, Medicare may only pay for Part A services equal
to the amount of revenues available in the HI Trust Fund, which
are expected to cover only 86 percent of promised benefits. The
Social Security Act is silent on what steps may be taken upon
depletion of the HI Trust Fund, but beneficiaries' access to
health care services would certainly be severely reduced
without action.
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\163\Congressional Budget Office, The Budget and Economic Outlook:
2016 to 2026, January 2016.
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Structural reforms to the Medicare Program are necessary to
ensure the long-term viability of the program without
compromising beneficiary access to quality care. The Affordable
Care Act imposed across-the-board cuts on Medicare providers
and services, and put those savings toward new government
spending programs rather than to extend the solvency of the
Medicare Program. Furthermore, the Medicare trustees have
warned for several years that the low Medicare payment updates
authorized by the ACA will lead to serious limitations of
access over the long term, and create perverse incentives in
the short term that further distort the health care sector. By
2040, approximately half of hospitals, 70 percent of skilled
nursing facilities, and 90 percent of home health agencies will
have negative margins, the Medicare trustees estimate--an
unsustainable situation that will cause many providers to
withdraw from the program, and will unquestionably limit access
to quality care for Medicare beneficiaries.\164\ Furthermore,
the Independent Payment Advisory Board [IPAB] established by
the ACA must submit proposals for further spending reductions
if the estimated rate of growth in Medicare exceeds GDP plus 1
percent. Without congressional action to achieve the same level
of savings, the IPAB's proposals will automatically take
effect. Given these pressures, medical providers have acted
accordingly, with record rates of consolidation among hospitals
and physician practices. Medicare currently pays approximately
67 percent of what private insurance would otherwise pay for
hospital services. Over time, however, reimbursements for
services are expected to fall well below providers' overhead
costs, such as rent, energy, equipment, and the cost of
employing medical staff. A recent study by the Government
Accountability Office [GAO] reported that from 2007 through
2013, the number of vertically consolidated physician practices
nearly doubled, from 96,000 to 182,000; this occurred more
rapidly in recent years across all regions and hospital
sizes.\165\
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\164\2015 Annual Report of the Boards of Trustees of the Federal
Hospital Insurance and Federal Supplementary Medical Insurance Trust
Funds. July 2015. https://www.cms.gov/research-statistics-data-and-
systems/statistics-trends-and-reports/reportstrustfunds/downloads/
tr2015.pdf.
\165\Government Accountability Office, Increasing Hospital
Physician Consolidation Highlights Need for Payment Reform, December
2015: http://www.gao.gov/assets/680/674347.pdf.
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As currently structured, Medicare cannot fulfill the
promise of health care security for America's seniors. Medicare
must be saved, strengthened, and secured to restore the trust
that both current and future retirees will continue to have
guaranteed access to health care providers, services, and
treatments. Looking to examples both within the Medicare
Program and the private sector, positive solutions can be
discovered that reduce costs while maintaining access to high
quality care through patient-centered reforms that foster
competition, restore market forces, expand choices and empower
individuals, promote innovation, and provide flexibility for
patients and providers.
This budget resolution reflects the Medicare Program in the
direct spending portion of Function 570 (see Table 3). The
function includes all four program components: Medicare Part A
Hospital Insurance Program, Part B Supplementary Medical
Insurance Program, Part C Medicare Advantage Program, and Part
D prescription drug coverage. For fiscal year 2017, the net
direct spending totals in the resolution are $583.5 billion in
budget authority and $583.5 billion in outlays. Over 10 years,
Medicare direct spending is projected at $7.5 trillion in
budget authority and $7.5 trillion in outlays.
Illustrative Direct Spending Policy Options
As in past years, the President's fiscal year 2017 budget
ignores the underlying structural flaws in the Medicare Program
and imposes additional policies that follow the same principles
of the Affordable Care Act: greater government control in
strengthening the IPAB and the Federal bureaucracy, coupled
with further reductions to reimbursements for providers. These
tactics garner savings without regard for the impact on the
doctor-patient relationship. In contrast, this budget provides
policy proposals that protect seniors' health care security.
The budget offers true structural reforms that generate
savings, by allowing competition to derive greater
efficiencies, without the loss of access to high-quality care
for beneficiaries. The primary authorizing committees--Ways and
Means and Energy and Commerce--have made a laudable commitment
to structural Medicare reforms, along with efforts to improve
transparency and eliminate waste, fraud, and abuse in the
program.\166,167\
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\166\Committee on Ways and Means Committee, Views and Estimates, 5
February 2016.
\167\Committee on Energy and Commerce, Views and Estimates on the
President's Fiscal Year 2017 Budget, 4 February 2016.
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The authorizers retain jurisdiction over the Medicare
Program and the ability to author necessary program reforms,
but may choose to follow the framework outlined below to ensure
Medicare's long-term sustainability for America's current and
future retirees.
Enhance Quality and Choice in Medicare. Throughout
Medicare's history, Washington has been slow to innovate and
respond to transformations in health care delivery. Meanwhile,
controlling costs in Medicare's open-ended fee-for-service
system has proved impossible without limiting access or
sacrificing quality. This is because policies in the main have
merely controlled prices or payments, not costs; in the absence
of real structural reform, the factors that drive costs higher
remain. Today, costs continue to grow, seniors continue to lose
access to quality care, and the program remains on a path to
bankruptcy. Inaction will not protect Medicare; it will only
hasten the program's demise.
Reform aimed at empowering patients--combined with a
strengthened safety net for the poor and the sick--will not
only ensure the fiscal sustainability of this program, the
Federal budget, and the U.S. economy, but will also guarantee
that Medicare can fulfill the promise of health security for
America's seniors. Hence, this budget resolution fully supports
a patient-centered program that enhances quality and choice in
Medicare.
Under this program, traditional Medicare--which would
always be an option available to beneficiaries--and private
plans providing the same level of health coverage would compete
for seniors' business, just as Medicare Advantage does today.
By adopting the competitive structure of Part D, the
prescription drug benefit, the program would also deliver
savings for seniors in the form of lower monthly premium costs.
This improved program assumes a simplified benefit that
provides comprehensive coverage for all beneficiaries, rather
than the complex and fragmented structure in place today.
Currently, beneficiaries must enroll in three separate programs
to get the same comprehensive coverage. Seniors are required to
enroll in Part A for hospitalization; coverage is provided
separately for physician services and prescription medications,
through the optional Parts B and D, respectively. None of these
coverage options, however, offers financial protections for
seniors, such as annual or lifetime limits, and many must sign
up for an additional supplemental insurance policy called
Medigap to obtain a fully comprehensive coverage package.
Today, only Medicare Advantage (Part C) offers seniors the
opportunity to choose from a selection of comprehensive
coverage plans. Not surprisingly, Medicare Advantage enrollment
has tripled in the past decade and currently serves more than
16 million seniors.\168\ Medicare Advantage also shows higher
satisfaction rates than traditional Medicare. Beneficiaries
were especially satisfied with the overall cost of Medicare
Advantage plans and with the simplified health process compared
to traditional Medicare.\169\
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\168\Gretchen Jacobson, Anthony Damico, Tricia Neuman, and Marsha
Gold, Medicare Advantage 2015 Spotlight: Enrollment Market Update, The
Kaiser Family Foundation, 30 June 2015: http://kff.org/medicare/issue-
brief/medicare-advantage-2015-spotlight-enrollment-market-update/.
\169\Morning Consult, Seniors Love Their Medicare (Advantage), 30
March 2015: http://morningconsult.com/2015/03/seniors-love-their-
medicare-advantage/.
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The Medicare improvements envisioned in this budget
resolution would adopt the popular simplified coverage
structure of Medicare Advantage, and allow seniors more plan
choices while reducing costs. It would resemble the private
insurance market, in which the majority of Americans select a
single health care plan to cover all their medical needs.
The enhanced program would also continue to offer a robust
financial benefit to all beneficiaries. In many ways, the
benefit provided would mirror the Federal Employees Health
Benefits [FEHB] Program for Federal employees, retirees, and
their families. FEHB boasts the widest selection of health
plans in the country, from which its eight million members may
choose. Plans offered under the FEHB Program may charge
different premium amounts, competing for individuals' choices,
and the government pays a certain percentage--or a defined
contribution--to help offset the cost of coverage. Similarly, a
Medicare recipient would choose from an array of guaranteed-
coverage options, including traditional Medicare, for a health
plan that best suits his or her needs.
The Federal Government contribution would go directly to
the plan provider, following the current model under both the
FEHB Program and Medicare Advantage. Furthermore, the
government payment would be adjusted so the sick would receive
more financial assistance if their conditions worsened, and
lower-income seniors would receive additional support to help
cover premiums and out-of-pocket costs. Wealthier seniors would
assume responsibility for a greater share of their premiums.
Additionally, this enhanced Medicare program would ensure
affordability by fixing the currently broken system and letting
market competition work as a real check on widespread waste and
skyrocketing health care costs--as successfully demonstrated
through the competitive structure adopted by Medicare Part D.
More than 70 percent of beneficiaries are currently enrolled in
the prescription drug benefit, which enjoys extremely high
satisfaction rates among seniors.\170\ In 2015, nearly 90
percent reported satisfaction with their coverage, and 85
percent consider the coverage to be a good value.\171\
Similarly, this personalized arrangement puts patients in
charge of how their health care dollars are spent, requiring
providers to compete against one another on price and quality.
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\170\The Kaiser Family Foundation, The Medicare Part D Prescription
Drug Benefit, 13 October 2015: http://kff.org/medicare/fact-sheet/the-
medicare-prescription-drug-benefit-fact-sheet/#endnote_link_165022-4.
\171\Morning Consult, National Tracking Poll, conducted 8-13 July
2015: http://www.medicaretoday.org/pdfs/
2015_Medicare_Today_National_Seniors_Poll.pdf.
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The improvements to Medicare derive from a long history of
bipartisan reform plans based on the defined contribution
model, or premium support, with a competitive bidding structure
to lower costs. The 1999 Breaux-Thomas Commission, the
Domenici-Rivlin 2010 Report, and the 2011 Wyden-Ryan plan all
put forward this model of reform as it is designed to ensure
security and affordability for seniors now and into the
future.\172\ All three recognize two fundamental truths: the
current path of Medicare is unsustainable, and it is
unacceptable for Washington to allow the program to fail
current or future beneficiaries. Each proposal further
developed the policy with the intent of preserving Medicare
over the long term without reducing health care access or
quality.
---------------------------------------------------------------------------
\172\National Bipartisan Commission on the Future of Medicare,
Building a Better Medicare for Today and Tomorrow, 16 March 1999:
http://thomas.loc.gov/medicare/bbmtt31599.html; Bipartisan Policy
Center, Restoring America's Future, November 2010: http://
bipartisanpolicy.org/wp-content/uploads / sites / default / files /
BPC%20FINAL%20REPORT%20FOR % 20PRINTER%2002 % 2028%2011.pdf.; Senator
Ronald L. Wyden and Representative Paul D. Ryan. Guaranteed Choices to
Strengthen Medicare and Health Security for All: Bipartisan Options for
the Future, 15 December 2011: http://budget.house.gov/uploadedfiles/
wydenryan.pdf.
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The policy continues to garner bipartisan support today.
Most recently, the President's fiscal year 2017 budget proposal
included a similar reform to introduce a competitive bidding
structure into the Medicare Advantage program. His proposal
fails, however, to offer the benefits of more choice and lower
costs achieved through the competitive bidding structure to all
beneficiaries.
Following these examples, the Congressional Budget Office
preformed an analysis of two variations of premium support that
established a defined government contribution using different
formulas. CBO determined that a Medicare program following the
premium support model that based the contribution level on an
average of bids submitted by competing plans would result in
savings for both beneficiaries and the program. Moreover, it
would set up a carefully monitored exchange for Medicare plans.
Health plans that chose to participate in the Medicare exchange
would agree to offer insurance to all Medicare beneficiaries,
to avoid cherry-picking, and to ensure that Medicare's sickest
and highest-cost beneficiaries received coverage.\173\ A
patient-centered Medicare program would also adopt these
protections to guarantee better health, better value, and
better choice for America's seniors, and allow all those in
traditional, fee-for-service Medicare the same opportunity as
new retirees to remain there or transition into the improved
program beginning in 2024.
---------------------------------------------------------------------------
\173\Congressional Budget Office, A Premium Support System for
Medicare: Analysis of Illustrative Options, 18 September 2013: http://
www.cbo.gov/sites/default/files/09-18-PremiumSupport.pdf.
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This resolution envisions giving seniors the freedom to
choose plans best suited for them, guaranteeing health security
throughout their retirement years. Further, it resolves the
concerns regarding Medicare's long-term sustainability, while
also lowering costs for beneficiaries. With the adoption of
patient-centered improvements, this program would preserve the
positive aspects of traditional Medicare, while modernizing the
program to reflect the changes to health care delivery in the
21st century.
Implement a Unified Deductible and Reform Supplemental
Insurance. This resolution strengthens the Medicare Program
through another bipartisan proposal. The outdated and
fragmented fee-for-service arrangement would be streamlined
into one benefit, unifying the separate parts of the program,
which would provide coverage for both hospital and physician
services. Additionally, the reform would provide common sense
financial protections for America's seniors and reform
supplemental insurance policies. This proposal, which was also
supported by a number of bipartisan commissions including
Breaux-Thomas, Domenici-Rivlin, and Simpson-Bowles, would allow
the Medicare benefit to operate more like private health
insurance coverage.\174\\,\\175\\,\\176\
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\174\National Bipartisan Commission on the Future of Medicare, op.
cit., 16 March 1999; Bipartisan Policy Center, op. cit., November 2010.
\175\Bipartisan Policy Center, op. cit. November 2010.
\176\The National Commission on Fiscal Responsibility and Reform,
The Moment of Truth, December 2010: http://www.fiscalcommission.gov/
sites/fiscalcommission.gov/files/documents/
TheMomentofTruth12<1<2010.pdf.
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With this reform, Medicare will have a single, annual
deductible for medical costs and include a catastrophic cap on
annual out-of-pocket expenses--an important aspect of the
private health insurance market to safeguard the sickest and
poorest beneficiaries that is currently absent from Medicare.
These reforms build in further protections for beneficiaries
and for the preservation of the Medicare Program for future
generations.
Means Test Premiums for High-Income Seniors. Under current
law, high-income beneficiaries are responsible for a greater
share of the premium costs for Medicare's Part B and Part D
programs, or the optional coverage for physician services and
prescription drug coverage, respectively. Medicare Advantage
enrollees receiving coverage for these benefits similarly
assume a share of the costs. Parts B and D must account for all
additional program costs net of beneficiary premiums from
general revenues, because these components of the Medicare
Program do not have a dedicated income source like the 2.9-
percent payroll tax that funds Part A benefits. Consistent with
several bipartisan proposals, and the President's fiscal year
2017 budget, this resolution assumes additional means testing
of premiums in Medicare Parts B and D for high-income seniors,
including full responsibility of premium costs for individuals
with annual income exceeding $1 million.
Equalize the Retirement Age with Social Security. One of
the Nation's greatest achievements of the 20th century was the
dramatic increase in the average life expectancy. As Americans'
health improves, extending their lives, many enjoy the benefits
of employment later in life. To further ensure Medicare's long-
term sustainability, this resolution recommends a gradual
increase of the Medicare retirement age to correspond with that
of Social Security.
Reform Payment Systems to Promote Quality and Patient
Outcomes. Many of the criticisms of the current Medicare
Program are due to complicated payment systems for myriad
providers and thousands of services, which encourage the
fragmented nature of health care and discourage innovation.
Therefore, this resolution includes payment reforms that would
create incentives and reward providers for delivering high-
quality, responsive, and coordinated care in the most
clinically appropriate setting, based on each patient's
individual medical needs. Such reforms include equal payments
for services despite the site of care at which the service was
delivered; coordination of post-acute care through an episodic
payment; and modification of the Medicare Advantage benefit to
improve care management for hospice and end-stage renal disease
[ESRD] patients. Many patients often require additional care
after hospital stays, but with many sites of care to choose
from--ranging in both cost and intensity of services--patients
and their families often suffer due to a lack of care
coordination. This budget includes reforms that encourage
providers to coordinate throughout the continuum of care, and
offers a complementary episodic payment reform.
Under current law, Medicare's hospice and ESRD benefits are
carved out of the Medicare Advantage program. The Medicare ESRD
benefit severely restricts patient access to MA plans, reducing
patient freedom of choice. Medicare's hospice benefit, however,
ought to be fully studied to ensure the benefit serves its
intended purpose. Hospice care was originally designed to
preserve dignity at the end of life while reducing the
financial burden that otherwise would have been incurred for
those who are terminally ill. Although the hospice benefit is
intended to cover an array of services--including skilled
nursing services, inpatient care, home health care, drug
coverage, and palliative care--the Medicare Program spent
approximately $1 billion on non-hospice services while
beneficiaries were enrolled in hospice care in 2012.\177\
Moreover, a preponderance of evidence suggests that the benefit
has actually increased, rather than decreased, the amount of
spending that would have otherwise occurred for a terminally
ill patient. The increasing concentration of the use of hospice
care among the very old accounts for almost the entire increase
in the spending per beneficiary at the end of life. To provide
integrated, coordinated care for beneficiaries, reduce wasteful
spending, and offer greater patient choice, this resolution
assumes Medicare Advantage includes hospice and ESRD within its
benefits package in a budget neutral manner. Furthermore, it
calls on GAO to conduct a study examining the Medicare hospice
benefit to ensure the program serves beneficiaries according to
the original program design.
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\177\Medicare Payment Advisory Commission, Report to the Congress
Medicare Payment Policy: March 2014: http://www.medpac.gov/documents/
reports/mar14_entirereport.pdf?sfvrsn=0.
Streamline Support for Graduate Medical Education. All
Americans benefit from a strong physician workforce. Since the
creation of the Federal health care programs, Federal funds
have supported physician training. The congressional report
from the Social Security Amendments of 1965 comments on the
need for Federal funds to support hospitals in the education
and training of physicians, nurses and other medical personnel,
``until the community undertakes to bear such education costs
in some other way . . . ''\178\ Instead, the level of Federal
support has grown over time, and the complexity of the payment
formulas linked to a hospital's Medicare inpatient volume has
made accountability and oversight next to impossible. The
financing structure also props up an antiquated system that
fails to recognize the rapidly changing care delivery model and
the demographic shifts within the population--meaning the
number of physicians is insufficient and cannot meet the
Nation's needs either in terms of specialty or geography.
Distributing funds directly to hospitals favors traditional
acute care institutions and discourages physician training in
various clinical or lower cost settings of care, including
children's hospitals, safety net hospitals, ambulatory surgical
centers, and so on.\179\ The call for reform to enhance
accountability, transparency, and flexibility in graduate
medical education has been advanced by the Institute of
Medicine, the Medicare Patient Advisory Commission, the
American Enterprise Institute and the Heritage
Foundation.\180\\,\\181\\,\\182\\,\\183\ This resolution
recommends that support for medical education should accurately
reflect the costs of training future physicians and be
streamlined into a single payment, providing greater freedom
and flexibility to encourage teaching institutions and States
to develop innovative approaches to medical education.
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\178\Committee on Finance, U.S. Senate, Social Security Amendments
of 1965 (H.R. 6675), Report to the Committee on Finance, U.S. Senate
(Rept. 404), 30 June 1965: https://ssa.gov/history/pdf/Downey%20PDFs/
Social%20Security%20Amendments%20of%201965%20Vol%202.pdf.
\179\Institute of Medicine of the National Academies, Graduate
Medical Education that Meets the Nation's Health Needs, 29 July 2014:
http://www.nap.edu/read/18754/chapter/1#xi.
\180\Ibid.
\181\Medicare Payment Advisory Commission, Does it Cost More to
Train Residents or to Replace Them?, September 2013: http://
www.medpac.gov/documents/contractor-reports/
sept13_residents_gme_contractor.pdf?sfvrsn=0.
\182\American Enterprise Institute, Improving Health and Health
Care: An Agenda for Reform, December 2015: https://www.aei.org/wp-
content/uploads/2015/12/Improving-Health-and-Health-Care-online.pdf.
\183\John O'Shea, Reforming Graduate Medical Education in the U.S.,
The Heritage Foundation, 29 December 2014: http://www.heritage.org/
research/reports/2014/12/reforming-graduate-medical-education-in-the-
us.
Establish an Uncompensated Care Fund. Since 1986, Medicare
has provided additional financial support to hospitals that
serve a significant population of low-income patients in the
form of a disproportionate share hospital [DSH] payment. This
funding was intended to ensure access for low-income patients
and those unable to afford the costs of care. Hospitals, in
addition to receiving a Medicare DSH payment, may also receive
a Medicaid DSH payment so long as they meet certain
requirements. This has led to some States engaging in improper
fund transfers in order to gain additional Federal support of
State Medicaid budgets through the Federal Medical Assistance
Percentage.
Additionally, limiting DSH payments to only hospitals fails
to recognize the abundance of uncompensated care that occurs
outside of the hospital setting. Therefore, this resolution
recommends converting the separate DSH payments into a single
flexibility fund to support uncompensated care, to more
appropriately and equitably distribute funds in a targeted
manner that recognizes all providers serving low-income
populations.
Reform Medical Liability Insurance. This resolution also
advances common sense curbs on abusive and frivolous lawsuits.
Medical lawsuits and excessive verdicts increase health care
costs, result in reduced access to care, and contribute to the
practice of defensive medicine. When mistakes happen, patients
have a right to fair representation and fair compensation. The
current tort litigation system, however, too often serves the
interests of lawyers while driving up costs due to expenses
associated with the practice of defensive medicine. The costs
of defensive medicine are often overlooked, but add a
considerable burden to overall health care spending. According
to a comprehensive study published in 2010 more than 30 percent
of health care costs, or approximately $650 billion annually,
were attributable to defensive medicine.\184\ Even if the costs
are only a fraction of this projection, such expenses are
unnecessary and unsustainable for the Medicare Program and
America's seniors. Therefore, this resolution supports several
changes to laws governing medical liability.
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\184\Jackson Healthcare, Physician Study: Quantifying the Cost of
Defensive Medicine, 2010: http://www.jacksonhealthcare.com/media-room/
surveys/defensive-medicine-study-2010.aspx.
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MEDICAID, THE AFFORDABLE CARE ACT,
AND RELATED PROGRAMS
Function Summary: Direct Spending
One of the worst conceits of Washington is that it can
centrally manage the entire health care sector. Health care in
America comprises a vast network of doctors and nurses,
technicians, medical device manufacturers, pharmaceutical
makers, hospitals and in-home services, educational
institutions, financial arrangements, and, above all,
patients--along with numerous others. It is a complex and
dynamic set of interactions that employs more than $3 trillion
of the Nation's resources; it is a sector in which the
participants themselves--not academics and bureaucrats--are
clearly best suited to establishing effective and efficient
means of delivering this uniquely valued service.
Yet for decades, Federal policymakers have relentlessly
sought to systematize health care to meet their ideological and
bureaucratic aims. While no one objects to ensuring health care
for as many Americans as possible, the government's increasing
imposition distorts the medical market, drives up prices,
requires tedious regulations, and undermines Americans' liberty
in this most important and intimate realm: their health.
The products of this concept include Medicare (discussed
previously), Medicaid, and now the Affordable Care Act
[ACA].\185\ Of these, Medicaid constitutes the majority of
direct spending in this function (Function 550 in Table 3). The
totals for fiscal year 2017 are $405.5 billion in budget
authority and $399.0 billion in outlays. Over 10 years, the
budget projects direct spending of $3.4 trillion in budget
authority and $3.4 trillion in outlays.
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\185\The Affordable Care Act consists of the two related measures
enacted in March 2010 that constituted the health care legislation: the
Patient Protection and Affordable Care Act (Public Law 111-148), and
the Health Care and Education Reconciliation Act of 2010 (Public Law
111-152).
---------------------------------------------------------------------------
Medicaid is a crucial component of the American safety net.
It provides a fundamental level of security for low-income
Americans who struggle with long-term illnesses and
disabilities. These are individuals who are unable to perform
substantial gainful activities. Medicaid is often the only
option for people in these difficult circumstances.
Medicaid is also a vital program for low-income children,
parents, pregnant women, and seniors. The social safety net
should catch these individuals when they fall. For those who
are able-bodied, it should serve as a springboard to help them
get back up.
For many, though, Medicaid's promises are empty, its goals
are unmet, and its dollars are wasted. Sick individuals cannot
get appointments, and new beneficiaries cannot find doctors,
making Medicaid synonymous with poor access and little care. In
fact, according to a study conducted by a team of renowned
economists from the Massachusetts Institute of Technology,
Harvard, and Dartmouth, Medicaid's value to its recipients is
significantly lower than the government's cost of the
program.\186\ In addition, doctors who provide services to
Medicaid patients are severely under-reimbursed,\187\ a problem
made worse by adding more individuals to the system.\188\
Without reform, Medicaid will fail to deliver on its promise of
providing a sturdy health care safety net for the Nation's most
vulnerable.
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\186\Amy Finkelstein, Nathaniel Hendren, and Erzo F.P. Luttmer, The
Value of Medicaid: Interpreting Results from the Oregon Health
Insurance Experiment, June 2015, pp. 2, 40, 41: http://
economics.mit.edu/files/10580. Furthermore, the study found that
Medicaid does not have a ``statistically significant impact on
mortality or physical health measures'' for recipients.
\187\The Henry J. Kaiser Family Foundation, ``Medicaid-to-Medicare
Fee Index,'' Accessed 8 January 2016: http://kff.org/medicaid/state-
indicator/medicaid-to-medicare-fee-index/.
\188\Congressional Budget Office, The Budget and Economic Outlook:
2016 to 2026, p. 73. In 2015, the average number of people enrolled in
Medicaid, on a monthly basis, was 76 million, making Medicaid the
largest health care provider in the country.
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Furthermore, Medicaid spending is not sustainable. The
program turned 50 last year, but its next 50 years are highly
uncertain. By 2030, Medicaid, along with Medicare, Social
Security, and net interest payments, will take up every dollar
of projected Federal Government revenue. That means that if
these three programs stay on their current paths, the
government will no longer be able to afford its other
priorities and activities--national defense, education,
transportation, and non-health safety net programs. Congress
will have to either sharply constrain these programs or put
very large sums on the government's credit card. The longer
Congress waits to address the problem, the more intractable it
becomes.
According to the CBO, since 1980, Medicaid spending has
increased by more than 2,500 percent, and by 300 percent of
gross domestic product. In just the past 15 years, Medicaid
spending has increased by 200 percent, or 66 percent as a share
of GDP. The CBO projects Federal spending on this program to be
$381 billion in fiscal year 2016. This amount is expected to
grow by 68 percent over the next 10 years, reaching $642
billion by fiscal year 2026.\189\
---------------------------------------------------------------------------
\189\Congressional Budget Office, op. cit., pp. 68-69. Also see p.
73, and pp. 152-153.
---------------------------------------------------------------------------
This number, however, masks the full cost of Medicaid,
because it represents only the Federal share of spending.
States also pay a significant portion of Medicaid costs, and
their spending on the program is expected to follow these
upward trends as well. According to the most recent data
available from the Centers for Medicare and Medicaid Services
[CMS], total State Medicaid spending is expected to rise from
about $216.0 billion in fiscal year 2015 to $337.5 billion in
fiscal year 2023.\190\
---------------------------------------------------------------------------
\190\Office of the Actuary, Centers for Medicare and Medicaid
Services, 2014 Actuarial Report on the Financial Outlook for Medicaid.
This reflects the most recent data available. The 2015 Actuarial report
will be released some time this summer.
---------------------------------------------------------------------------
Medicaid's current funding structure (the Federal Medical
Assistance Percentage [FMAP]) creates a perverse incentive for
States to expand the program while providing little incentive
to save. For every dollar a State government spends on
Medicaid, the Federal Government traditionally has paid an
average of 57 cents. Expanding Medicaid coverage during boom
years is tempting for States because they pay less than half
the cost. Conversely, there is little incentive to restrain
Medicaid's growth, because State governments only save an
average of 43 cents for every dollar worth of coverage they
rescind. The program's expansion under Obamacare exacerbates
this challenge, with the Federal Government covering 100
percent of every dollar spent on a State's additional Medicaid
population in 2016.\191\ CBO estimates the President's health
care law will increase Federal Medicaid and State Children's
Health Insurance Program [SCHIP] spending by more than $1
trillion over the 2017-2026 period. This sharp increase is due
to the millions of new beneficiaries the Affordable Care Act
will drive into these programs. In fact, CBO estimates that in
2025, 14.5 million new enrollees will be added to the Medicaid
Program as a result of the ACA, three million more than the
agency projected just last August.\192\
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\191\This percentage will decrease over time, falling to 95 percent
of the costs for a State's additional Medicaid population in 2017, and
90 percent in 2020 and thereafter.
\192\Congressional Budget Office, op. cit., p. 114. The comparison
to 2025 is necessary because that was the last year of the estimating
period in August.
---------------------------------------------------------------------------
Illustrative Direct Spending Policy Options
For all the reasons given above, the budget resolution
calls for major reforms of the Medicaid Program and repeal of
the Affordable Care Act. The status quo before the ACA is not
acceptable, but repeal of the President's law is necessary to
clear the way for patient-centered health care in America.
Americans should have more choices in what types of
coverage options are available so they can pick a plan that
best fits their unique health care needs. A first step in the
right direction is eliminating Obamacare's burdensome one-size-
fits-all mandates and regulations that are driving up the price
of insurance and limiting options. Encouraging a robust,
competitive insurance market would reduce costs, restore
flexibility, and provide Americans more options to choose the
coverage they want for themselves and their families.
Many Americans face high insurance costs due to pre-
existing conditions. No one should be priced out of the market.
Those who have a bad injury or illness should also have access
to quality and responsive care. To guarantee affordable
coverage, patient-centered health care would provide
protections for patients with pre-existing conditions, reward
those who maintain health coverage, and give States--who are
better equipped to respond to the needs of their communities--
more control over regulating insurance. Finally, patient-
centered health care must break down costly and burdensome
barriers to innovation so that life-saving technologies and
treatments are reaching patients in need. By moving health care
into the 21st Century, America can build on the remarkable
advancements that have already been made, which make delivery
of care more effective, efficient, and affordable.
These principles--affordability, accessibility, quality,
choices, innovation, and responsiveness--provide the roadmap to
health care that actually works for patients and providers, a
responsive network that puts health care decisions in the hands
of individuals, families, and their doctors, not Washington.
The budget resolution includes a policy statement that
describes in greater detail the contours of such a patient-
centered approach.
The House committees responsible for the program changes in
these areas are Energy and Commerce, Ways and Means, Education
and the Workforce, Judiciary, Natural Resources, House
Administration, and three Appropriations Subcommittees:
Agriculture, Rural Development, Food and Drug Administration
and Related Agencies; Labor, Health and Human Services,
Education, and Related Agencies; and Legislative Branch. These
panels will determine the exact parameters of structural
Medicaid reform, as well as those for other policies flowing
from the fiscal assumptions in this budget resolution.
Nevertheless, meaningful Medicaid reform and other measures to
slow the growth of Federal spending, while also providing
recipients with a benefit that helps improve health outcomes,
are critical. One set of potential approaches is outlined
below.
Provide State Flexibility in Medicaid. One way to
strengthen and secure the Medicaid benefit is to convert the
Federal share of Medicaid spending into finite funding amounts
that each State can tailor to meet its needs. Governors and
State legislatures are closer to patients in their States and
know better than Washington bureaucrats where there are unmet
needs and opportunities to cut down on waste, fraud, and abuse.
This approach would end the misguided one-size-fits-all
approach that ties the hands of State governments trying to
make their Medicaid programs as effective as possible. The
arrangement would provide each State with the freedom and
flexibility to tailor a Medicaid program that fits the needs of
its unique population.
Even with the limited flexibility of Medicaid's current
waiver program, States have developed innovative reforms that
produce cost savings and quality improvements. For example, the
Healthy Indiana Plan (implemented prior to the ACA) provided
that State's residents who did not qualify for Medicaid with
access to health benefits such as physician services,
prescription drugs, inpatient and outpatient hospital care, and
disease management, all without additional funding. Other
States could alter eligibility requirements, for example, or
move able-bodied adults off the Medicaid rolls. The savings
generated could then be redirected toward additional
protections for the most vulnerable populations, or to other
State health care priorities.
Regrettably, the more recent trend from the Obama
Administration has been to limit the flexibility of States to
overhaul State Medicaid programs this way. For example, the
Centers for Medicare and Medicaid Services have not approved
waiver requests from Arkansas, Iowa, Indiana, and Montana,
which sought to implement premiums for individuals with incomes
between 50 percent and 100 percent of the Federal poverty
level. Also, CMS has denied States' requests to waive certain
Medicaid benefits; has denied most attempts to impose cost-
sharing in amounts greater than those allowed under Federal
law; and has not approved Pennsylvania's attempt to include a
work requirement for all able-bodied adults, ages 21-64, as a
condition of eligibility.\193\
---------------------------------------------------------------------------
\193\Robin Rudowitz and MaryBeth Musumeci, The ACA and Medicaid
Expansion Waivers, The Kaiser Family Foundation, 20 November 2015:
http://kff.org/report-section/the-aca-and-medicaid-expansion-waivers-
issue-brief/.
---------------------------------------------------------------------------
All States should have the flexibility to adapt their
Medicaid programs--to design their benefit packages in a way
that best meets the needs of their State populations; to
promote personal responsibility and healthy behaviors; and to
encourage a more holistic approach to care that considers not
only Medicaid beneficiaries' health conditions, but also their
economic, social, and family concerns. State legislators and
governors know their people better than far-away Washington and
should have the flexibility they need to provide the best care
to their residents.
The budget resolution would transform Medicaid from an
open-ended entitlement back to a quality safety net for the
Nation's most vulnerable. States would have the option to
choose one of two possible designs. The first arrangement,
which has been included in the past several House-passed
budgets, would combine Medicaid and SCHIP resources into a
single lump sum that could then be distributed by the State.
The second option would employ a per-capita-cap methodology to
account for the variable populations--elderly, disabled,
children, and adults--within the program.
The first arrangement would offer the following advantages.
The designation of funds would rest solely with
the State. States would be able to spend their own funds at
whatever level they chose, with sole discretion over
eligibility requirements, benefits, and provider reimbursement
rates for both Federal and State sums. Federal Government
health care mandates would be eliminated, allowing States to
innovate and design their programs to best meet the unique
needs of their citizens. For example, States could decide to
target funds to the most vulnerable, choosing to improve the
quality of care and access to vital services. As State reforms
reduce dependence on government assistance, the people helped
will be more likely to enter the workforce, have insurance, and
be able to lift themselves up the economic ladder. Under this
option, States could implement work requirements.
The reform would encourage State innovation.
Through this arrangement, both the Federal Government and the
States would have budgetary certainty, which would create
strong incentives for the States to manage the Federal funding
wisely. Any spending that exceeded the amount provided to the
State would have to be financed by the State. Conversely, the
funding provided to States would not be reduced if they found
innovative ways to reduce Medicaid costs. Any savings that a
State was able to achieve would be returned directly to that
State's taxpayers. Under a traditional State Flexibility Fund,
States could, for example, use money saved to support other
welfare programs, including Temporary Assistance for Needy
Families, Supplemental Security Income, and the Supplemental
Nutrition Assistance Program (food stamps) if the need was
greater in those areas.
The fiscal outlook would improve for both States
and the Federal Government. Level funding, provided by a
traditional State Flexibility Fund, will help States focus on
expanding private sector employment and getting their citizens
out of poverty instead of increasing enrollments to collect
more Federal money. Over the next decade, level funding would
prevent the Federal Government from borrowing and spending
money it does not have, and State policymakers would know with
certainty the amount of Federal assistance they could count on,
while Federal taxpayers would know its costs.
The second arrangement would bring its own set of benefits.
The program design would ensure protections for
the most vulnerable. This option would provide States with
designated funding for those persons who are truly in need of
care and support. Based on the four main eligibility categories
as currently defined by the Federal Government in the Medicaid
Program--the elderly, the blind and disabled, nondisabled
adults, and children--a per-person payment amount would be
established to account for the average cost of care, per
enrollee, in each of these four principal categories, and would
be indexed to a predetermined growth rate. The Federal
Government would then provide Medicaid funds to the States
based on the total number of enrollees in each category. This
option accounts for the variation in spending amongst the four
different categories, helping target funds to the most
vulnerable.
This arrangement would provide certainty for
State budgets. The per-capita-payments made to the States would
be made for all enrollees in the program, including anyone who
might not have been expected to sign up. In times of slow
economic growth or during a recession, this certainty will
afford each State the opportunity to provide coverage to those
who meet the eligibility requirements, without breaking the
State budget.
The reform would promote good behavior and
innovation. States would also be encouraged to use the funds
carefully, targeting the resources provided to those who need
them most. States would receive the same amount from the
Federal Government for each person enrolled according to the
appropriate category, regardless of how much they spent on each
enrollee. Further, Federal law would provide the basic template
for the program to provide accountability for the funds and
help root out waste, fraud, and abuse.\194\ Reforming Medicaid
in this way also would enable States to design their Medicaid
programs in a manner that will best serve their residents. Once
the eligibility criteria were determined, each State would have
the flexibility to pursue reforms of their choosing, without
Washington dictating to the States the type of coverage each
State should offer. For example, instead of entitling
beneficiaries to a set of services, States could decide to use
the per-capita-payment as a defined contribution payment and
allow the Medicaid beneficiaries to use the amount to choose
from among a number of competing insurance options. As another
option for Medicaid beneficiaries, States could decide to use
part of the per-capita-payment amount to fund Health Savings
Accounts as part of their State-run design.
---------------------------------------------------------------------------
\194\Committee on Oversight and Government Reform, Uncovering
Waste, Fraud, and Abuse in the Medicaid Program, staff report 25 April
2012: https://oversight.house.gov/wp-content/uploads/2012/04/
Uncovering-Waste-Fraud-and-Abuse-in-the-Medicaid-Program-Final-3.pdf.
Ultimately, either reform would improve the health care
safety net for low-income Americans by giving States the
ability to offer their Medicaid populations more options and
better access to care. This kind of reform would ease the
fiscal burdens imposed on State budgets, contribute to the
long-term stabilization of the Federal Government's fiscal
---------------------------------------------------------------------------
path, and preserve the Medicaid safety net.
Establish an Uncompensated Care Fund. In both Medicare and
Medicaid, hospitals that serve a disproportionately large
number of low-income patients can qualify for higher payments.
In Medicaid, hospitals have to meet certain Federal criteria to
qualify for these payments. The hospitals that do qualify are
known as Medicaid disproportionate share hospitals [DSH].
Currently, States are given discretion in deciding which
hospitals receive Medicaid DSH payments and the size of those
payments. That discretion, however, has led to wasteful
spending, as some States engaged in funding transfers to
increase their FMAPs above the amount specified in law.\195\ To
stop that practice, Congress established fixed ceilings on DSH
payments to each State, but those ceilings have increased over
time. Additionally, providing DSH payments only to hospitals
fails to recognize the substantial uncompensated care that
occurs outside the hospital setting. Therefore, this resolution
recommends converting the separate Medicaid and Medicare DSH
payments into a single flexibility fund to support
uncompensated care, to more appropriately and equitably
distribute funds in a targeted manner that recognizes all
providers serving vulnerable populations.
---------------------------------------------------------------------------
\195\Government Accountability Office, Improving Transparency and
Accountability of Supplemental Payments and State Financing Methods,
November 2015: http://www.gao.gov/products/GAO-16-195T.
Apply Work Requirements to Medicaid. The budget proposes to
advance a work requirement for all able-bodied adults who are
enrolled in Medicaid, modeled after the Temporary Assistance
for Needy Families Program. This proposal would ensure that an
able-bodied, working-age adult could qualify for Medicaid only
if he or she were actively seeking employment or participating
in an education or training program. Work not only provides a
source of income and self-sufficiency, but also has been
demonstrated as a valuable source of self-worth and dignity for
individuals. In fact, employment and self-esteem are so
intricately tied together that a Gallup-Healthways Well-Being
Index found: ``Unemployed adults and those not working as much
as they would like are about twice as likely as Americans who
are employed full time to be depressed.''\196\ Expanding work
requirements to Medicaid will allow more people to escape
poverty while also preserving their self-respect, their self-
reliance, and their courage and determination.
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\196\Alyssa Brown and Kyley McGeeney, In U.S., Employment Most
Linked to Being Depression-Free, Gallup, 23 August 2013: http://
www.gallup.com/poll/164090/employment-linked-depression-free.aspx.
Eliminate Waste, Fraud, and Abuse. The budget also advances
several reforms to help root out waste, fraud, and abuse in the
Medicaid Program. For example, under current law, States are
required to enroll otherwise qualified immigrants in Medicaid
while those individuals are arranging documentation verifying
their U.S. citizenship or satisfactory immigration status. This
proposal would prevent Federal funding for coverage until
applicants have provided satisfactory evidence of their
immigration status. Other reforms include counting lottery
winnings toward Medicaid eligibility, counting parts of income-
generating annuities toward eligibility, and making Medicaid
coverage effective the first day of the month after
application. All these reforms will help target the limited
Medicaid resources to those who are actually in need of them.
In addition to these major reforms, the budget recognizes
several options that can be implemented in the short term that
will both strengthen and preserve the Medicaid Program. The
first is to reform the 1115 waiver process. One potential
improvement would be requiring that waivers be budget-neutral
in actual costs and to ensure that any new spending does not
duplicate other Federal programs. Another would be allowing
States to adopt approved waivers, without having to go through
the approval process again.
The second reform is to address the problem of Medicaid
provider taxes. Currently, 49 States finance a portion of their
Medicaid spending through provider taxes\197\--a gimmick used
to garner greater financial assistance from the Federal
Government and boost State Medicaid budgets. States impose
taxes on the very same health care providers who are paid by
the Medicaid Program, increase payments to those providers by
the same amount, and then use that additional spending to boost
the amount the Federal Government matches. In short, provider
taxes decrease transparency by distorting Medicaid funding, and
dramatically increase Federal spending.\198\ The maximum amount
a State can tax a provider is 6 percent. The budget recommends
lowering this number to 5.5 percent immediately, and begin
completely phasing out the practice over a longer period.
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\197\Alaska is the only State that does not have at least one
provider tax, but the State is evaluating the feasibility of such a
tax.
\198\Government Accountability Office, Medicaid Financing: States'
Increased Reliance on Funds from Health Care Providers and Local
Governments Warrants Improved CMS Data Collection, July 2014, p. 14: In
fiscal year 2012, for example, 41 of the 47 States with provider taxes
reported revenue of $18.8 billion. Also see Brian C. Blase, Medicaid
Provider Taxes: The Gimmick That Exposes Flaws with Medicaid's
Financing, The Mercatus Center at George Mason University, February
2016.
Repeal the Medicaid Expansions in the Affordable Care Act.
The ACA created major expansions in the Medicaid Program
beginning in 2014. As noted previously, the Federal Government
now pays a significantly larger share of the Medicaid expenses
for individuals who are newly eligible for Medicaid due to the
ACA, dramatically increasing Federal spending. Newly eligible
beneficiaries will also add pressure to already-strained State
budgets beginning in 2016, when the Federal matching rate
begins to decrease and the health care law forces States to
bear some of the expansion costs. According to CBO, 11 million
new individuals will enroll in Medicaid in 2015, and by 2025,
there will be 14.5 million new individuals in the program
because of the ACA.\199\
---------------------------------------------------------------------------
\199\Congressional Budget Office, op. cit., p. 114.
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This expansion not only magnifies the challenges to both
State and Federal budgets, but also binds the hands of local
governments in developing solutions that meet the unique needs
of their citizens. The health care law exacerbates the already
crippling one-size-fits-all enrollment mandates that have
resulted in below-market reimbursements, poor health care
outcomes, and restrictive service availability.
The budget calls for repealing the Medicaid expansions
contained in the health care law and removing its burdensome
programmatic mandates on State governments.
Repeal the Affordable Care Act Exchange Subsidies. The
Affordable Care Act represents the worst aspects of
Washington's conceit that health care decisions can be best
determined by government bureaucrats rather than by patients,
families, and their doctors. Six years after its enactment,
Obamacare has proven to be a failure for families, employers,
and the health care sector writ large, while 30 million
Americans still remain without health insurance coverage.
Rather than becoming more affordable, insurance coverage has
grown too expensive to purchase or too expensive to use, as
premiums and deductibles have skyrocketed. In 2014, 7.5 million
Americans paid the individual mandate penalty, totaling $1.5
billion. Additionally, in CBO's most recent set of 10-year
budget estimates, enrollment projections for 2016 were reduced
by 38 percent from the March 2015 report--down from 21 million
to 13 million. These results are reflected in recent public
opinion polls that show the majority of Americans continue to
oppose the Affordable Care Act.\200\
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\200\Andrew Dugan, Americans Tilt More Negative Toward Affordable
Care Act, Gallup, 13 November 2015. http://www.gallup.com/poll/186629/
americans-tilt-negative-toward-affordable-care-act.aspx
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Predictably, the ACA has adversely affected the health care
market generally, causing the most hardship for individuals and
families. Americans with employer-provided health care
coverage--approximately 147 million people--are paying higher
premiums and higher deductibles under Obamacare.\201\ President
Obama promised premiums would decline $2,500 per family;
instead, average premiums in the employer-sponsored market have
increased by $3,775.\202\ Since 2010, family premiums in the
employer-sponsored market have increased by 27 percent, to more
than $17,000 annually. Deductibles are also increasing.
Deductibles for individual plans in the employer-sponsored
market are up an average of 67 percent, from $646 in 2010 to
$1,077 in 2015. This is faster than the rise in individual
premiums (24 percent), about seven times more than the rise in
workers' wages (10 percent), and more than cumulative inflation
over the period (9 percent).\203\ Individuals and families are
also facing higher prescription drug costs under Obamacare. The
average person with a plan in the exchange marketplace has to
pay 46 percent of his or her total drug costs, compared to 20
percent for someone with employer-sponsored health care,
according to a recent Health Affairs article.\204\
---------------------------------------------------------------------------
\201\The Kaiser Family Foundation, 2015 Employer Health Benefits
Survey, 22 September 2015: http://kff.org/health-costs/report/2015-
employer-health-benefits-survey/.
\202\The Kaiser Family Foundation, Premiums and Worker
Contributions Among Workers Covered by Employer-Sponsored Coverage,
1999-2015. September 2015: http://kff.org/interactive/premiums-and-
worker-contributions/.
\203\The Kaiser Family Foundation/Health Research & Educational
Trust [HRET]: http://kff.org/health-costs/press-release/employer-
family-health-premiums-rise-4-percent-to-17545-in-2015-extending-a-
decade-long-trend-of-relatively-moderate-increases/.
\204\``Out-Of-Pocket Prescriptions Costs Under A Typical Silver
Plan Are Twice As High As They Are In The Average Employer Plan,''
Health Affairs, October 2015. The account is also cited in ``Drug
prices spike under Obamacare,'' The Washington Examiner, 6 October
2015: http://www.washingtonexaminer.com/article/2573465?utm-
content=buffer305b8&utm-medium=social&utm-source=twitter.com&utm-
campaign=buffer.
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Under the ACA's subsidy structure, government support
shrinks as income rises, effectively penalizing two-income
households and creating a disincentive for people to marry. For
example, two singles can each make $46,680 per year (400
percent of the Federal poverty level) and still qualify for
government subsidies. If the two marry, and their combined
income hits $93,360 per year, they lose their government
subsidy. A single mother who earns $47,190 per year (300
percent of the poverty level) can get a subsidy to buy health
insurance for her and her child. If she decides to marry the
child's father, who earns $46,680 per year (400 percent of
poverty), then the family no longer qualifies for the subsidy
help. The ACA also includes myriad new taxes and penalties to
offset the roughly $2 trillion in new spending, including an
increase in the Medicare payroll tax that one tax expert
described as a ``shockingly inequitable marriage
penalty.''\205\ The policy taxes wages higher than $200,000 for
individuals and $250,000 for couples. For example, if a single
woman and a single man each earns less than the individual
threshold per year, neither is required to pay the health law's
additional Medicare payroll tax. If they marry, however, they
could break the marriage threshold and owe thousands of dollars
in additional taxes.
---------------------------------------------------------------------------
\205\Robert Pear, ``New Taxes to Take Effect to Fund Health Care
Law,'' The New York Times, 8 December 2012: http://www.nytimes.com/
2012/12/09/us/politics/new-taxes-to-take-effect-to-fund-health-care-
law.html?-r=1.
---------------------------------------------------------------------------
Furthermore, despite the President's promise, ``if you like
your health care plan, you can keep it''--labeled by PolitiFact
as the 2013 Lie of the Year\206\--several hundred thousand
people, across more than a dozen States, lost their plans due
to the cancellation of policies that did not satisfy the
coverage requirements mandated by the ACA.\207\ Obamacare also
has limited access to health care, as more health plans narrow
networks--limiting the number of physicians and hospitals
covered under the plan--in an effort to reduce costs, while
still meeting the requirements mandated by the ACA. As reported
by Modern Healthcare, 70 percent of plans sold on the Obamacare
exchanges in 2014 consisted of narrow networks.\208\ According
to a recent Avalere study, Obamacare networks have 34 percent
fewer providers compared to commercial plans. On average,
Obamacare plans have 42 percent fewer oncologists and
cardiologists and 32 percent fewer primary care
physicians.\209\ For many patients, especially those in rural
areas, there are too few in-network providers, and patients are
forced to travel long distances to find a hospital and doctor.
Additionally, some plans cover the hospital stay, but not the
physician, leaving patients with exorbitant bills. According to
a recent Deloitte survey, only 30 percent of exchange enrollees
were satisfied with their health coverage plan, significantly
lower than other types of insurance, including employer-
sponsored coverage, Medicaid, and Medicare.\210\
---------------------------------------------------------------------------
\206\http://www.politifact.com/truth-o-meter/article/2013/dec/12/
lie-year-if-you-like-your-health-care-plan-keep-it/.
\207\``More than a Dozen States Plan to Cancel Health Care Policies
Not in Compliance with Obamacare,'' Fox News, 9 October 2014: http://
www.foxnews.com/politics/2014/10/09/more-than-dozen-states-plan-to-
cancel-health-care-policies-not-in-compliance/?Source=GovD.
\208\Bob Herman, ``Network Squeeze: Controversies Continue Over
Narrow Health Plans,'' Modern Healthcare, 28 March 2015:
http://www.modernhealthcare.com/article/20150328/MAGAZINE/
303289988.
\209\Avalere, Exchange Plans Include 34 Percent Fewer Providers
than the Average for Commercial Plans, 15 July 2015: http://
avalere.com/expertise/managed-care/insights/exchange-plans-include-34-
percent-fewer-providers-than-the-average-for-comm.
\210\Deloitte, Public Health Insurance Exchanges Opening the Door
for a New Generation of Engaged Health Care Consumers: https://
www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-
health-care/us-lshc-hix-consumer-survey.pdf.
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Effects of the law are also felt by employees, their
employers, and throughout the U.S. economy. Individuals are
discouraged from work because the premium subsidies become much
less generous as people earn more income. For the individual or
family, earning more makes their health coverage more
expensive. The law's tax increases total more than $1 trillion
over the next decade, reducing economic growth, wages, and
work. The Congressional Budget Office estimates that by 2025,
the ACA will reduce the labor supply by 0.86 percent, or 2
million full-time-equivalent workers. The individuals who will
be most affected by this decrease are those who make less than
275 percent of the Federal poverty level, which translates into
roughly less than $65,000 in income.\211\
---------------------------------------------------------------------------
\211\Edward Harris and Shannon Mok, How CBO Estimates the Effects
of the Affordable Care Act on the Labor Market, Congressional Budget
Office Working Paper 2015-09, December 2015: http://www.cbo.gov/sites/
default/files/114th-congress-2015-2016/workingpaper/51065-ACA-Labor-
Market-Effects-WP.pdf.
---------------------------------------------------------------------------
The Affordable Care Act's employer mandate makes full-time
workers--especially younger and less-skilled workers--more
costly to hire by requiring employers to provide expensive
Obamacare-compliant insurance. Under the mandate, employers
with more than 50 full-time workers who fail to meet certain
arbitrary health coverage criteria set by the administration
will be subject to tax penalties of up to $3,000 per worker.
Because of the mandate's penalty, employers will likely shift
their hiring toward part-time workers (those who work less than
30 hours per week) to avoid triggering the ACA's employer
penalty. There is evidence that this is already occurring. More
than 2.1 million Americans are now working part-time because
they cannot find full-time work;\212\ that is nearly double the
amount seen before the recession.\213\ As the ACA takes full
effect, this trend toward part-time work will likely increase
over time. Even the President--by twice unilaterally delaying
the punitive employer mandate for medium-sized businesses--has
implicitly acknowledged the damage this tax will cause.\214\
New data show a decline in the average hours worked per week by
lower-wage employees and many more working just below 30 hours
per week. Roughly 2.6 million people are at risk of having
their work hours cut. Sixty-three percent of the people most at
risk are female, and nearly 60 percent are 19-34 years
old.\215\
---------------------------------------------------------------------------
\212\Bureau of Labor Statistics, U.S. Department of Labor, The
Employment Situation--December 2015, 8 January 2016:
http://www.bls.gov/news.release/pdf/empsit.pdf.
\213\Bureau of Labor Statistics, U.S. Department of Labor. The
Employment Situation--December 2007, 4 January 2008. http://
www.bls.gov/news.release/archives/empsit-01042008.pdf.
\214\Grace-Marie Turner, 70 Changes to ObamaCare . . . So Far,
Galen Institute, 26 January 2016: http://galen.org/newsletters/changes-
to-obamacare-so-far/.
\215\Lanhee Chen, Hearing on the Impact of the Affordable Care Act
(ACA) Employer Mandate's Definition of Full-Time Employee on Jobs and
Opportunities, Hoover Institution Economic Working Paper 14105, 28
January 2014: http://www.hoover.org/sites/default/files/14105-chen-
hearing-on-the-impact-of-the-aca-employer-mandates-definition-of-full-
time-employee-on-jobs-and-opportunities.pdf.
---------------------------------------------------------------------------
The ACA expanded Washington bureaucracy through a number of
new programs. Many of these programs were either duplicative of
existing efforts or expend taxpayer dollars with no
accountability. Still others created new programs exemplifying
the ideology of Washington knows best. The Prevention and
Public Health Fund, though intended to support prevention and
public health activities, provided the administration with
access to $15 billion that could be accessed without restraint,
and was raided to supplement the costly ACA exchanges. The law
also established the Patient-Centered Outcomes Research
Institute to conduct research on the effectiveness of various
medical treatments, and imposes a $2 fee for every covered
life--the epitome of bureaucracy in health care determining the
cost-benefit of treatments for patients. The Centers for
Medicare and Medicaid Innovation [CMMI] presents another
example: CMMI was designed to test new payment models in
Medicare and Medicaid, but the administration has interpreted
its authority beyond the ability to ``test'' payment models and
announced it will ``mandate'' untested payment models that may
adversely affect quality of care for Medicare and Medicaid
patients.
The most egregious program created under the Affordable
Care Act, however, is the Independent Payment Advisory Board--a
panel of 15 unelected, unaccountable bureaucrats--charged with
making coverage decisions on Medicare to decrease program
spending levels without the authority of Congress.
Additionally, program management remains famously
unimpressive. President Obama himself acknowledged the rollout
of HealthCare.gov--the website to enroll individuals and
families in health insurance plans available through the health
exchanges--was a ``well-documented disaster.''\216\ It is also
the subject of a recent, scathing report by the Inspector
General of the Department of Health and Human Services
[HHS].\217\ Despite administration claims to the contrary, the
website's troubles have continued. On 4 September 2014, the
administration informed Congress that a hacker uploaded
malicious software on HealthCare.gov in July of that year. The
Department did not discover it until late August. Investigators
attributed the hack to a basic security flaw.\218\ A September
2015 HHS audit report found that the HealthCare.gov website was
stored on a network with high-risk cybersecurity flaws,
jeopardizing the confidentiality of personal information for
millions of Americans. According to the report, the Centers for
Medicare and Medicaid Services failed to perform basic
vulnerability scans that might have uncovered website server
weaknesses. Another September 2015 HHS audit found
HealthCare.gov contracts were poorly managed, costing taxpayers
tens of millions of dollars. According to reports, the total
cost of the failed enrollment system surpassed $2 billion.
---------------------------------------------------------------------------
\216\``Obama: `HealthCare.gov `a well-documented disaster,''' The
Hill, 16 June 2015: http://thehill.com/policy/healthcare/245128-obama-
healthcaregov-a-well-documented-disaster.
\217\Office of the Inspector General, Department of Health and
Human Services, HealthCare.gov: CMS Management of the Federal
Marketplace--A Case Study, February 2016.
\218\``HealthCare.gov was hacked in July, feds say,'' The Hill, 4
September 2014. http://thehill.com/policy/healthcare/216700-report-
healthcaregov-was-hacked-in-july.
---------------------------------------------------------------------------
The administration has also failed to adequately safeguard
families' incomes. For example, almost one million people
received faulty Obamacare tax forms. In February 2015, the
Obama Administration revealed it had botched tax forms for
800,000 people who purchased insurance through the Federal
exchange. HHS had incorrect information on about 20 percent of
forms. According to the administration, about 50,000 people had
already filed their tax forms using the incorrect information.
The corrected 1095-A forms were not made available until early
March. As a result, many refund checks were delayed by weeks,
if not months. The administration also allowed payment of
subsidies to more than 300,000 people who did not have legal
residence. Those who received unlawful premium subsidies likely
cost Federal taxpayers more than $500 million. Most of this
money will never be recovered.
In 2014, in a test of the system, the Government
Accountability Office was able to enroll 11 of 12 people with
false identities into subsidized exchange coverage. In mid-
July, the GAO announced that all 11 maintained subsidized
coverage through 2014 and were re-enrolled in 2015. Some fake
applicants were approved for subsidized coverage based solely
on their attestation without any supporting documents.\219\ Six
of the applicants received notices that their coverage was
being terminated for failure to submit information or
documentation. The GAO was able to have five of them reinstated
just by calling the exchange--and they got higher subsidies.
The fake applicants received confusing and erroneous
information from the Federal exchange. The GAO also found that
Federal contractors continued to accept documents as true
without attempting to verify their authenticity.
---------------------------------------------------------------------------
\219\Committee on Finance, U.S. Senate, Nonpartisan Watchdog Finds
HealthCare.gov Approving Subsidies for Fake Applicants, 15 July 2015:
http://www.finance.senate.gov/newsroom/chairman/release/?id=3e92ee66-
2bb7-4ca3-8e38-ede4af367db6.
---------------------------------------------------------------------------
These serious problems are not mere glitches in an
otherwise smooth-running operation. They are the predictable
and inevitable result of a program that remains profoundly and
fundamentally flawed--notwithstanding numerous changes to the
law. According to the Galen Institute, more than 70 significant
changes have been made to the law since it was enacted in
2010--43 of them through unilateral administrative action, 24
through legislation, and three by the Supreme Court.\220\
---------------------------------------------------------------------------
\220\Turner, op. cit.
---------------------------------------------------------------------------
According to CBO estimates, the ACA's health insurance
exchange subsidies will cost American taxpayers $729.5 billion
over the next 10 years. The subsidies cost a lot more than
that, however; they cost Americans the freedom to make
decisions about their own health care coverage. This budget
stands for the principles that individuals should be free to
choose their own health insurance, health care providers should
not be forced to be complicit in abortion, organizations should
not be forced to finance activities or make health decisions
that violate their religious or moral beliefs, and a single-
payer health system--which the ACA will eventually foster if
left unchecked--is wrong for America. Bureaucrats in Washington
should not be trusted to determine what type of health
insurance and how much health care Americans should get; that
is a decision that should involve the individual and his or her
doctor.
For all these reasons, this budget calls for full repeal of
the Affordable Care Act.\221\
---------------------------------------------------------------------------
\221\The insurance premium subsidies are provided in the form of
refundable tax credits. This means some recipients receive the subsidy
as a reduction in their tax liabilities. If all or part of the credit
exceeds the individual's tax liability, that portion--the
``refundable'' part of the credit--is delivered as a payment and
categorized as an outlay. Most of the subsidies are provided in the
latter way. See Congressional Budget Office, ``Insurance Coverage
Provisions of the Affordable Care Act--CBO's January 2015 baseline,''
January 2015: http://www.cbo.gov/sites/default/files/cbofiles/
attachments/43900-2015-01-ACAtables.pdf.
---------------------------------------------------------------------------
As mentioned earlier, however, repealing Obamacare is only
the first step. The more important effort is to rethink health
care fundamentally--to shed the hugely arrogant illusion that
Washington bureaucrats and technicians can somehow control and
manage the many moving parts that interact to create what is
known as health care in America. Instead of trying to box this
immensely valuable service into an homogenous, government-run
system, policymakers should enlist the creativity of all the
participants--and also open the door to innovators from outside
the field, who may be able to deliver unexpected insights--and
reform health care from the ground up. This should start from
the most fundamental relationship in medicine: the one between
the patient and the doctor.
Limit Federal Employee Health Benefit Growth for Retired
Members of Congress and Their Staffs and Base Retirement
Benefits on Length of Service. Currently, Federal contributions
to the Federal Employees Health Benefits Program grow by the
average weighted rate of change in these programs. This budget
supports restricting the growth in these plans to inflation for
retirees.\222\ The budget also proposes basing Federal employee
retirees' health benefits on length of service. This option
would reduce premium subsidies for retirees who had relatively
short Federal careers.
---------------------------------------------------------------------------
\222\The budget also restricts growth of the Federal Employees
Health Benefits Program for current Members of Congress and their
staffs. The cost savings from this proposal are reflected in the
discretionary spending section of Function 550.
---------------------------------------------------------------------------
INCOME SUPPORT, NUTRITION,
AND RELATED PROGRAMS
Function Summary
The War on Poverty began with a promise by President
Johnson in 1964: ``Our aim is not only to relieve the symptom
of poverty, but to cure it and, above all, to prevent it.''
Over the next five decades, trillions and trillions have been
spent on anti-poverty programs. The Census Bureau's poverty
rate offers one measurement of the extent to which poverty was
cured. Two years after the War on Poverty began, the poverty
rate stood at 14.7 percent. In 2014, the poverty rate was
unimproved from 48 years earlier at 14.8 percent. Reflecting on
the divergence between higher spending and disappointing
results, in 1988 President Reagan noted: ``The Federal
Government declared war on poverty, and poverty won.''
FIGURE 10
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Federal Government continues to operate a patchwork of
more than 90 welfare programs that lack any coordination in
their efforts to help people escape poverty, for which spending
by all levels of government exceeds $1 trillion. Multiple
programs, overlapping services, and differing benefit
structures often create significant disincentives to work,
keeping many trapped in a cycle of poverty for years. While
reforms during the 1990s reduced Temporary Assistance for Needy
Families [TANF] caseloads by more than two-thirds, and helped
many cash welfare recipients find work and escape poverty,
those reforms were limited in scope and affected only a small
part of the safety net.
If America is going to cure poverty and prevent it, the
effectiveness of anti-poverty programs must be measured by the
number of individuals lifted out of poverty rather than the
number of dollars being spent. What's more, if the government
continues running unsustainable deficits and experiences a debt
crisis, the poor and vulnerable will undoubtedly be the hardest
hit, as the Federal Government's only recourse will be severe,
across-the-board cuts. That is why the Committee on the Budget
has engaged in an initiative called Restoring the Trust for all
Generations. The initiative calls for solutions that promote
positive outcomes and results for individuals and their
families.
The goal of anti-poverty programs should be self-
sufficiency, not extended dependency. To that end, this budget
proposes to continue the successful welfare reforms of the
1990s by improving work requirements for means-tested programs
to help more people escape poverty and move up the economic
ladder. It focuses resources in programs that deliver real
results, restraining spending to reasonable levels, reducing
improper payments, and allowing States more ability to improve
programs through policy innovation. It is focused on the
following principles:
Expect able-bodied adults receiving welfare to
work or prepare for work in exchange for receiving benefits.
Work--especially full-time work--is the surest way to avoid
poverty. Many welfare programs provide benefits to alleviate
immediate need, yet few expect able-bodied adults to work or
assist them in finding and keeping jobs so they can move up the
economic ladder. This budget proposes that able-bodied
individuals receiving welfare benefits from a variety of
programs be required to work or prepare for work in exchange
for benefits, and that States be held accountable for engaging
recipients in activities to help them find jobs and stay
employed.
Get incentives right when people move from
welfare to work. The Nation's safety net should be designed to
help those in need so they can get back on their feet and care
for themselves and their family. Yet States and other service
providers may lose money when someone leaves welfare for work,
meaning they are better off failing than succeeding. Given the
way the welfare system works now, it may not make sense for
someone on welfare to work more because they can end up worse
off in the end. Under this budget resolution, committees across
Congress would work together to get these incentives right, to
make sure everyone is better off when someone leaves welfare
for work.
Focus welfare programs on outcomes, not inputs.
The Federal Government often evaluates programs based on
inputs, such as benefits paid, classes held, or people served.
Yet very few if any programs are measured based on their
results to assess whether they are really helping people out of
poverty and dependency. To make sure taxpayer dollars are spent
wisely, this budget would require committees overseeing welfare
programs to work together to develop similar outcome measures
for their programs. These outcome measures will allow Congress
and the American people to better judge whether these programs
are working and whether they should continue, need to be
reformed, or should end.
Preserve welfare benefits for those most in need.
The American public is faced with a steady stream of reports
revealing how welfare benefits are being paid to those who
should never receive them. This frustrates taxpayers paying for
these programs and reduces resources for those who truly need
access to these benefits. Advances in technology have made it
possible to more easily protect against fraud and abuse, and
States are beginning to use these tools more frequently. The
budget would implement these technological and administrative
processes across means-tested programs to better protect
taxpayer dollars allocated for these programs. By reducing
abuse, these welfare programs will be better focused on those
who truly need help to move their families forward.
Finally, no set of government safety net programs can
replace, or improve upon, nature's safety net: the family. For
generation upon generation, the family has been the main source
of comfort, security, and economic stability for the
individual. It is where moral values and a sense of
responsibility grow. The family reinforces the individual's
place in the larger community. Government programs should
recognize and support those who lose any connection to a
family. At the same time, however, government should take care
not to contribute to the dissolution of families. Government
programs should aim to strengthen the family, the most
important and enduring institution in society.
Social scientists across the political spectrum agree that
children are better off with married parents.\223\ Yet today,
more than 40 percent of children are born to unwed
mothers,\224\ and the structure of anti-poverty programs places
harsh anti-marriage penalties on those who currently depend on
these programs when it is clear that ``the married, two-parent
family is one of the best weapons we have in the fight against
poverty.''\225\ In 2014, the poverty rate for single mother-led
families was almost five times the poverty rate for married-
couple families, 30.6 percent and 6.2 percent,
respectively.\226\ This budget proposes to reduce, and wherever
possible eliminate, the marriage penalties that have been
unwittingly built into the current welfare system.
---------------------------------------------------------------------------
\223\``They Do: The scholarly about-face on marriage,'' The Boston
Globe, 26 April 2015: http://www.bostonglobe.com/ideas/2015/04/25/
scholarly-kiss-for-wedded-bliss/INyenlyr0FIuWzaJDuFWGK/story.html.
\224\Centers for Disease Control and Prevention, Births: Final Data
for 2013, National Vital Statistic Report Volume 64, Number 1, 15
January 2015: http://www.cdc.gov/nchs/data/nvsr/nvsr64/nvsr64_01.pdf.
\225\Robert L. Doar, Morgridge Fellow in Poverty Studies at the
American Enterprise Institute, testimony to the Committee on the
Budget, U.S. House of Representatives, 28 October 2015.
\226\Carmen DeNavas-Walt and Bernadette D. Proctor, United States
Census Bureau, Income and Poverty in the United States: 2014, issued
September 2015: https://www.census.gov/content/dam/Census/library/
publications/2015/demo/p60-252.pdf.
---------------------------------------------------------------------------
Most of the Federal Government's income-support programs
are reflected in the direct spending components of Function
600, Income Security (see Table 3). These include Federal
employee retirement and disability benefits (including military
retirees); general retirement and disability insurance
(excluding Social Security)--mainly through the Pension Benefit
Guaranty Corporation--and benefits to railroad retirees;
unemployment compensation; food and nutrition assistance,
including food stamps and school lunch subsidies; and other
income-security programs.
This last category includes: TANF, the government's
principal cash welfare program; Supplemental Security Income
[SSI]; and spending for the refundable portion of the Earned
Income Tax Credit. Agencies administering these and other
programs in Function 600 include the Departments of
Agriculture, Health and Human Services, Housing and Urban
Development, the Social Security Administration (for SSI), and
the Office of Personnel Management (for Federal retirement
benefits).
For these programs, the resolution provides $432.0 billion
in direct spending budget authority for fiscal year 2017, and
$425.4 billion in outlays. The 10-year figures are $4.3
trillion in budget authority and $4.2 trillion in outlays. The
figures appear in Function 600 of Table 3.
Illustrative Direct Spending Policy Options
The main committees responsible for funding programs under
Function 600 are Ways and Means, Agriculture, Oversight and
Government Reform, and Education and the Workforce. They will
make final policy determinations on how to increase State
flexibility, reduce improper payments, and reform programs to
eliminate marriage penalties and work disincentives. Some
potential policy options following these guidelines might
include the following.
Strengthen Welfare Work Requirements. Welfare reforms in
the 1990s led to substantial declines in poverty, increases in
work, and decreases in government dependency. The Temporary
Assistance for Needy Families [TANF] program was a central
feature of these reforms. This budget calls for reforms to
strengthen TANF work requirements so States will engage more
recipients in activities leading to self-sufficiency. This
should include ending States' ability to reduce work targets by
spending more than required, and blocking the Obama
Administration from waiving these work requirements altogether.
This budget also calls for TANF reforms to provide States with
more options to help people prepare to leave welfare for work,
and to hold States accountable for their success in getting
people off welfare and into jobs.
Convert the Supplemental Nutrition Assistance Program into
State Flexibility Allotments. Spending on the Supplemental
Nutrition Assistance Program [SNAP]--formerly known as the Food
Stamp Program--has increased dramatically over the past 15
years, growing more than fourfold since 2001. Spending doubled
from 2001 to the eve of the most recent recession, then doubled
again during the recession, and has stayed at an elevated level
during the recovery. Various factors are driving this growth,
but one major reason is that while the States have the
responsibility of administering the program, they have little
incentive to ensure it is run well.
The budget resolution envisions converting SNAP into an
allotment tailored for each State's low-income population.
States would have to satisfy key conditions such as meeting
work targets, as well as meeting certain program integrity
requirements (such as preventing the use of benefits outside
the State of residence, including photo identification on
electronic benefit transfer [EBT] cards, and restricting the
program to non-junk food products). This option would make no
changes to SNAP until 2021, providing States with time to
structure their own programs.
Enforce SNAP Work Requirements. H.R. 3102, the Nutrition
Reform and Work Opportunity Act of 2013, included the
elimination of waivers from SNAP work requirements for Abled-
Bodied Adults without Dependents. As was demonstrated by the
welfare reforms of the 1990s, work requirements are central to
ensuring that public assistance helps individuals transition to
independence.
Eliminate Broad-Based Categorical Eligibility. Broad-based
categorical eligibility allows households to become eligible
for SNAP by receiving a minimal Temporary Assistance for Needy
Families fund benefit or service. Typically, an individual is
made eligible by receiving a TANF brochure or being referred to
a social service telephone number. This allows individuals to
qualify for SNAP benefits under less restrictive criteria.
Eliminate Abuse of the Low-Income Energy Assistance
Program. The Low Income Energy Assistance Program [LIHEAP]
provides low-income families with help to pay heating bills.
However, States can provide as little as $20 in LIHEAP benefits
in order to increase SNAP benefits (see Categorical Eligibility
above). The most recent Farm Bill reformed this practice, but
did not end the abuse entirely--and this proposal would.
Limit SNAP Account Balances to Reasonable Levels. The SNAP
program allows benefits to be carried over from month to month.
In extreme cases, beneficiaries have accrued balances of more
than $20,000, which goes against the program's purpose as a
source of food for households who urgently need it. The budget
proposes to cap a household's SNAP account balance at three
months' worth of benefits (see Figure 11).
Reform Supplemental Security Income. Welfare programs
typically pay benefits on a sliding scale. Supplemental
Security Income [SSI] is different, paying an average of $630
for each and every child in a household who receives benefits.
This reform would create a sliding scale for children on SSI.
Advocates for individuals with disabilities have expressed
support in the past for such a step. In 1995, Jonathan M.
Stein--the lead advocate attorney in the landmark 1990 Supreme
Court Case expanding SSI eligibility for children and witness
at a 27 October 2011 Ways and Means Subcommittee hearing on
SSI--said the following about this proposal: ``[W]e have a long
list of reforms that we do not have time to get into, but we
would say for very large families there should be some sort of
family cap or graduated sliding scale of benefits.''\227\
Additionally, Congress should review mental health categories
in the children's SSI program, which have been the fastest
growing categories of eligibility. This budget proposes a
Government Accountability Office [GAO] recommendation that
Continuing Disability Reviews be conducted every 3 years for
children on the program who are deemed likely to improve upon
initially receiving benefits. Additionally, benefits should be
linked to school attendance except where the Social Security
Administration finds medical cause. Finally, the budget would
prevent someone with an outstanding warrant from receiving
Supplemental Security Income payments.
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\227\Committee on Ways and Means, Contract with America: Welfare
Reform, Part 2, hearing 2 February 1995 (Serial No. 104-44),
Washington: Government Printing Office, 1995.
FIGURE 11
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Allow State Flexibility for the Foster Care Program.
Significant progress has been made among States, advocates, and
Federal policymakers in developing proposals that would expand
State flexibility in designing programs and pilot projects
meant to better prevent child abuse and neglect. Such proposals
would result in fewer children being removed from their homes,
allowing more funds to be directed toward prevention efforts,
as well as reducing the cost of the Nation's foster care
system.
Give Schools Flexibility for Meeting National School Lunch
Program Standards. The Healthy, Hungry Free Kids Act (Public
Law 111-296) imposed new regulations on the school lunch
program. No one disagrees with ensuring students have
nutritious food, but the mandates on localities have the
unintended consequence of reducing participation in the
program. This budget calls for allowing schools more
flexibility to meet nutrition standards.
Ensure that Certain Groups of Undocumented Workers Remain
Ineligible for Federal Benefits. In his address to the Nation
on 20 November 2014, the President said undocumented workers
receiving deferral of removal under his executive actions
should not be granted the same benefits that citizens receive.
As a result of his executive actions that same month, however,
potentially millions of undocumented workers would become
eligible for Federal benefits, according to Congressional
Budget Office estimates. The budget resolution supports
reversing the overreach of the President's November 2014
actions and ensures that undocumented workers do not create a
bigger burden on an already strained public benefit system.
Strengthen the Earned Income Tax Credit and Child Tax
Credit Program Integrity. The Earned Income Tax Credit [EITC]
program is susceptible to fraud and abuse. According to the
IRS, between 22 percent and 26 percent of EITC payments were
issued improperly in fiscal year 2013 (between $13.3 billion
and $15.6 billion). To reduce these errors in the EITC program,
this budget proposes requiring substantiation of self-
employment income. In addition, the budget would require
individuals seeking the refundable child tax credit to submit a
Social Security number for each child in order to claim the
credit. Under current law, a Social Security number is now
required in order to claim children under the Earned Income Tax
Credit.
Modernize Child Support Enforcement. Enacted in 1975, the
Child Support Enforcement [CSE] program was created to secure
child support payments from non-custodial parents for families
who relied on both the Federal and State governments for
welfare benefits. The CSE program was designed to reimburse the
government for those welfare benefits, as well as assist
families in attaining self-sufficiency. Today, however, two-
thirds of CSE collections are for helping families who have
never received cash welfare payments from the TANF program--
those it was intended to help. To ensure the CSE program is
targeted for those who are most in need, this budget proposes
to return the annual user fee for non-TANF families to its
original value and index it for inflation. In addition, the
budget would better align the financial incentives for States
by modifying the Federal matching rate and the criteria for
States receiving incentive payments to ensure they are truly
rewarding innovation and effectiveness.
Reform Civil-Service Pensions. This budget adopts a policy
proposed by the President's National Commission on Fiscal
Responsibility. The policy calls for Federal employees,
including members of Congress and staff, to make greater
contributions toward their own defined benefit retirement
plans. It would also end the ``special retirement supplement,''
which pays Federal employees the equivalent of their Social
Security benefit at an earlier age. This would achieve
significant savings while recognizing the need for new Federal
employees to transition to a defined contribution retirement
system. The vast majority of private sector employees
participate in defined contribution retirement plans. These
plans put the ownership, flexibility, and portfolio risk on the
employee as opposed to the employer. Similarly, Federal
employees would have more control over their own retirement
security under this option.
FARM SUPPORT AND RELATED PROGRAMS
Function Summary: Direct Spending
While agriculture experienced a period of high market
prices and incomes during the initial years of this decade, net
farm income in 2015 fell sharply from 2013's record-high level
and is projected by the Department of Agriculture to remain
weak again this year. The Agricultural Act of 2014--otherwise
known as the Farm Bill--made a number of reforms to
agricultural policies, most notably by eliminating Direct
Payments which had cost taxpayers almost $91 billion over the
past 18 years and were paid regardless of market conditions.
Significant declines in market prices over the past 2 years are
expected to result in increased levels of assistance under the
Farm Bill's new price- and revenue-based programs. While it is
important to continue reforming agricultural programs, weather
and market challenges continue to highlight the importance of
maintaining a safety net for farmers.
Direct (or ``mandatory'') spending programs in this
category include direct assistance and loans to food and fiber
producers, export assistance, agricultural research, and other
programs.
The Agriculture Committee has made commendable efforts to
reduce overall direct spending in this area (Function 350 of
Table 3). The budget resolution calls for direct spending of
$17.5 billion in budget authority and $18.7 billion in outlays
in fiscal year 2017. The 10-year direct spending totals for
budget authority and outlays are $136.7 billion and $133.9
billion, respectively.
Illustrative Direct Spending Policy Options
Specific policies affecting direct spending in this
function will be determined by the Agriculture Committee. Among
the options it may wish to consider are the following:
Reform Agricultural Programs. The budget proposes that
additional savings be found in this area. Under this option,
mandatory agricultural outlays, other than food and nutrition
programs, would be reduced by $23 billion relative to the
currently anticipated levels for fiscal years 2017 through
2026. These savings could be achieved by continuing to reform
agricultural programs. These proposed savings are coupled with
significant benefits that will be realized from other
provisions in this budget, including regulatory relief,
fundamental tax reform, and stronger economic growth as the
burden of Federal deficits is lifted from the economy.
BANKING, COMMERCE, POSTAL SERVICE,
AND RELATED PROGRAMS
Function Summary: Direct Spending
As with its annually appropriated programs, the Federal
Government has used direct spending in commerce and housing in
a way that moves from healthy and productive support for
industry to over-subsidizing corporations and unfairly exposing
taxpayers to risk. One example is Fannie Mae and Freddie Mac,
which were placed into Federal conservatorship in 2008 and
remain a part of the Federal Government. As a result, taxpayers
remain exposed to Fannie's and Freddie's more than $5 trillion
of outstanding commitments.
On a unified basis, the resolution provides $9.3 billion in
direct spending budget authority and -$5.9 billion in outlays
in this area in fiscal year 2017 (shown in Function 370 of
Table 3, Commerce and Housing Credit). Reforms will be
determined by the Committee on Financial Services, the
Committee on Energy and Commerce, and the Committee on
Oversight and Government Reform. Criteria the committees may
wish to apply include promoting free enterprise and economic
growth in a responsible way, scaling back corporate welfare,
and protecting taxpayers from the risk of future bailouts.
Illustrative Direct Spending Policy Options
ON-BUDGET DIRECT SPENDING
Terminate Corporation for Travel Promotion. In 2010,
Congress established a new annual payment to the travel
industry and created a new government agency, the Corporation
for Travel Promotion (now called Brand USA), to conduct
advertising campaigns encouraging foreign travelers to visit
the United States. This budget recommends ending these
subsidies and eliminating the agency, because it is not a core
responsibility of the Federal Government to pay, and conduct
advertising campaigns, for any industry. Moreover, the travel
industry can and should pay for the advertising from which it
benefits.
Reform the Universal Service Fund. The Universal Service
Fund [USF] provides subsidized telecommunications services
through four main programs: High-Cost Support, E-rate Program,
Lifeline Program, and Rural Health Care. The USF is funded
through mandatory contributions by carriers, who pass these
costs to consumers as fees on subscribers' telephone bills.
This budget resolution aims to reform burdensome programs and
has identified the Lifeline Program, which provides phone
service subsidies to low-income Americans, as one example. The
Lifeline Program, under the jurisdiction of the Federal
Communications Commission, costs taxpayers an estimated $2
billion a year while being plagued by fraud, waste, and abuse.
Reforming this program will significantly reduce the burden on
taxpayers.
Restrict FDIC Authority Provided by Dodd-Frank to Bail Out
Bank Creditors. Dodd-Frank expands and centralizes power in
Washington, exacerbating the root causes of the 2008 financial
crisis. It contains layer upon layer of new bureaucracy sewn
together by complex regulations, yet it fails to address key
problems, such as Fannie Mae and Freddie Mac, that contributed
to the worst financial unraveling in recent history. Although
the law is dubbed ``Wall Street Reform,'' it actually
intensifies the problem of too-big-to-fail by giving large,
interconnected financial institutions advantages that small
firms will not enjoy.
Although the proponents of Dodd-Frank went to great lengths
to denounce bailouts, the law only sustains them. The Federal
Deposit Insurance Corporation [FDIC] now has the authority to
access taxpayers' dollars to bail out the creditors of large,
`systemically significant' financial institutions. The
resolution calls for ending this regime, now enshrined into
law, which paves the way for future bailouts. House Republicans
put forth an enhanced bankruptcy alternative that, instead of
rewarding corporate failure with taxpayer dollars, would place
the responsibility for large, failing firms in the hands of the
shareholders who own them, the managers who run them, and the
creditors who finance them.
The resolution also supports cancelling the ability of the
Bureau of Consumer Financial Protection (created by Dodd-Frank)
to fund its operations by spending from the Federal Reserve's
yearly remittances to the Treasury Department. Dodd-Frank was
written to provide off-budget financing for the new bureau,
which is housed within the Federal Reserve but enjoys complete
autonomy. To preserve its independence as the Nation's monetary
authority, the Federal Reserve is off budget, and its excess
earnings from monetary operations are returned to the Treasury
to reduce the deficit. Now, instead, Dodd-Frank requires
diverting a portion of those remittances to pay for a new
bureaucracy with the authority to write far-reaching rules on
financial products and restrict credit to the very customers it
seeks to `protect,' outside the annual oversight of Congress
through the appropriations process.
Privatize the Business of Government-Controlled Mortgage
Giants Fannie Mae and Freddie Mac. In 2008, the Federal
Government placed Fannie Mae and Freddie Mac\228\ into
conservatorship to prevent them from going bankrupt. The
Treasury has already provided $187 billion in bailouts to
Fannie and Freddie and, as mentioned above, taxpayers remain
exposed to more than $5 trillion in Fannie's and Freddie's
outstanding commitments as long as the entities remain in
conservatorship. The Congressional Budget Office [CBO] has
recorded Fannie and Freddie as explicit financial components of
the Federal budget, accounting for their liabilities as
liabilities of the government. In contrast, the administration
does not fully account for taxpayer exposure to Fannie and
Freddie, leaving them off budget. Despite recent dividend
payments by Fannie and Freddie, both enterprises continue to
assume outsized risks that place taxpayers in jeopardy in the
event of future downturns in the housing market.
---------------------------------------------------------------------------
\228\Formally the Federal National Mortgage Association [FNMA] and
the Federal Home Loan Mortgage Corporation [FHLMC].
---------------------------------------------------------------------------
This budget suggests putting an end to corporate subsidies
and taxpayer bailouts in housing finance. It envisions the
eventual elimination of Fannie Mae and Freddie Mac, winding
down their government guarantee, and ending taxpayer subsidies.
In the interim, this resolution seeks to remove distortions to
allow an influx of private capital back into the housing credit
marketplace and to advance various measures that would bring
transparency and accountability to these two government-
sponsored enterprises, which could include measures described
in H.R. 2767, the Protecting American Taxpayers and Homeowners
Act of 2013.
Incorporate Fair-Value Accounting Principles in the Credit
Reform Act. Not only are taxpayers exposed to the risks of
Fannie and Freddie, but they are also vulnerable to having to
bail out another housing giant, the Federal Housing
Administration [FHA]. The capital ratio of the FHA's Mutual
Mortgage Insurance fund has remained below the congressionally
mandated 2 percent level for seven years. Recently, the FHA
Actuarial Report released on 16 November 2015 notes FHA has
achieved its 2 percent statutorily-required capital reserve
ratio, but the report also highlights that FHA continues to
support more than $1 trillion in mortgage credit risk.\229\
Given the precarious financial condition of the FHA, the
government should adopt measures to control the assumption of
risk by the FHA as other government-backed entities (such as
Fannie and Freddie) are wound down. Right now, the government
accounts for the risks carried by the FHA differently than it
accounts for those of Fannie Mae and Freddie Mac. These
differences simply encourage just such a shift in risk.
---------------------------------------------------------------------------
\229\Committee on Financial Services, U.S. House of
Representatives, Views and Estimates, 8 February 2016.
---------------------------------------------------------------------------
The cost of FHA-insured loans are scored by calculating the
net present value of the cash flows associated with loans and
discounting those flows using a risk-free marketable Treasury
security rate. In contrast, the CBO uses fair-value accounting
for Fannie Mae- and Freddie Mac-guaranteed loans. Fair-value
accounting recognizes that adverse economic events such as
market downturns can cause loan defaults to rise; hence it
reflects the full financial risk incurred by taxpayers for
backing these loans. In other words, the current budgetary
treatment of FHA loans understates the full costs associated
with them, thereby encouraging policymakers to shift risk from
Fannie and Freddie to the FHA.
This resolution requires the CBO to provide supplemental
estimates using fair-value scoring for federally-backed
mortgages and mortgage-backed securities, regardless of which
Federal agency is acting as the insurer or guarantor.
As the government reforms its role in the U.S. housing
market, which this resolution supports, Fannie, Freddie, and
FHA loans should be treated with parity and full transparency.
The current structure of the Federal housing finance system
socializes potential losses in the housing market among all
Americans. The housing-finance system of the future, however,
should allow private-market secondary lenders to fairly,
freely, and transparently compete, with the knowledge that they
will ultimately appropriate risk for the loans they guarantee.
Their viability will be determined by the soundness of their
practices and the value of their services.
OFF-BUDGET DIRECT SPENDING
Reform the U.S. Postal Service. The U.S. Postal Service
[USPS] is expected to be self-sustaining and was statutorily
placed off-budget in the 1989 Omnibus Budget Reconciliation
Act, where it remains today.
The mission of the USPS is to ``. . . provide postal
services to bind the Nation together through . . .
correspondence of the people'' and ``provide prompt, reliable,
and efficient services to patrons in all areas.''\230\ It
boasts an iconic brand name, universal service, and certain
efficiency advantages in package delivery. In recent decades,
however, the USPS has faced financial challenges stemming
largely from reduced demand for its services. Electronic mail
is ubiquitous, while demand for paper mail has waned. From 2005
to 2015, for example, first-class mail volume dropped by 36
percent.\231\ Further, USPS has suffered from inefficiencies in
its business model. The organization faces financial challenges
that threaten its long-term viability and will ultimately lead
to a taxpayer bailout if significant reforms are not
implemented.
---------------------------------------------------------------------------
\230\Public Law 91-375.
\231\United States Postal Service, ``First-Class Mail Volume Since
1926,'' http://about.usps.com/who-we-are/postal-history/first-class-
mail-since-1926.pdf.
---------------------------------------------------------------------------
The USPS is unable to meet its financial obligations
through its own business-like operation and desperately needs
structural reforms. Since fiscal year 2007, the USPS has run
annual operating losses; in fiscal year 2015 it defaulted on
another $5.7 billion payment to prefund the retirement health
care of its employees.\232\ In 2009, the Government
Accountability Office added the USPS to its ``high-risk'' list
due to the Postal Service's ``deteriorating financial
situation,'' and found that the ``USPS urgently needs to
restructure to reflect changes in its customers' use of the
mail, to align its costs with revenues, generate sufficient
funding for capital investment, and manage its debt.''\233\ In
its most recent high-risk report update, GAO still has the USPS
on its list as needing attention by Congress and the
administration.\234\ According to GAO, as of the close of
fiscal year 2015, the USPS has approximately $125.0 billion in
unfunded long-term debt, including accrued health-benefit
compensation for postal retirees, workers' compensation, and
debt owed to the Treasury.\235\
---------------------------------------------------------------------------
\232\Government Accountability Office, ``U.S. Postal Service:
Financial Challenges Continue,'' testimony before the Senate Committee
on Homeland Security and Governmental Affairs, 21 January 2016: http://
www.gao.gov/assets/680/674728.pdf.
\233\Government Accountability Office, High-Risk Series: An Update,
February 2013: http://www.gao.gov/assets/660/652133.pdf.
\234\Government Accountability Office, High-Risk Series: An Update,
February 2015: http://www.gao.gov/assets/670/668415.pdf.
\235\Government Accountability Office, U.S. Postal Service
Financial Challenges Continue, testimony before the Committee on
Homeland Security and Governmental Affairs, U.S. Senate, 21 January
2016: http://www.gao.gov/assets/680/674728.pdf.
---------------------------------------------------------------------------
The budget recommends giving the Postal Service the
flexibility that any business needs to respond to changing
market conditions, including declining mail volume. Examples of
the flexibility that should be considered have been included in
several reform proposals approved by the House Committee on
Oversight and Government Reform and by the administration,
including calls to modify both the frequency and type of mail
delivery. The budget also recognizes the need to reform
compensation of postal employees who currently pay a smaller
share of the costs of their health and life insurance premiums
than do other Federal employees. Taken together, these reforms
are estimated to save more than $40 billion over 10 years and
would help restore the Postal Service's solvency.
STUDENT LOANS, SOCIAL SERVICES,
AND RELATED PROGRAMS
Function Summary: Direct Spending
For many, earning a college degree brings undeniable, long-
lasting benefits, including better employment prospects and
higher wages.\236\ Thereafter, such financial security enables
individuals to pursue professional and personal goals, such as
launching a small business, climbing the career ladder,
starting a family, and saving for their own children's college
education. College students enjoy being able to choose within a
vast arrange of disciplines as well as seize opportunities to
take courses online and in other contemporary formats.
Technology will only continue to develop, and new business
models for delivering instruction will be devised and tested,
to the benefit of students.
---------------------------------------------------------------------------
\236\Pew Research Center, The Rising Cost of Not Going to College,
11 February 2014: http://www.pewsocialtrends.org/files/2014/02/SDT-
higher-ed-FINAL-02-11-2014.pdf.
---------------------------------------------------------------------------
A strong higher education system--one that increases the
competitiveness of America's workers--is a benefit to students,
families, and the Nation as a whole. Recognizing these
benefits, the Federal Government has provided substantial
support for higher education, particularly student loans, since
the 1960s. While support for higher education is important,
government policies that were designed to help more Americans
go to college have been accompanied by several troubling
trends. Federal lending has expanded dramatically, consuming an
ever-larger share of the student loan market. The government's
direct loan portfolio has increased from roughly $106 billion
outstanding in fiscal year 2007 to more than $840 billion
today. As the Federal Government has broadened access to aid,
colleges have consistently raised tuition and fees at a rate
well above inflation. College has become more expensive for
many Americans and thus less accessible--exactly the opposite
of what the Federal policies were intended to do. Additionally,
this dynamic can present students with two unwelcome options:
choose not to go to college, or take on a sizeable amount of
debt to pay for surging tuition. Under the former, students may
miss out on achieving their highest educational potential and
the lasting benefits college can offer. Taking the latter
route, students may struggle to pay off their loans, especially
in today's weak job market.
FIGURE 12
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Equally problematic is that the way the government
currently accounts for student loans (and most other Federal
loan and loan guarantee programs) does not take market risk
into account. Under these accounting procedures, established in
the Federal Credit Reform Act of 1990 [FCRA], student loans
appear less risky and less expensive than they really are. In
fact, FCRA's rules make issuing loans appear profitable. In a
report about the budget effects of student loans, the
Congressional Budget Office explains: ``FCRA accounting does
not consider some costs borne by the government. In particular,
it omits the risk taxpayers face because Federal receipts from
interest and principal payments on student loans tend to be low
when economic and financial conditions are poor and resources
therefore are more valuable.''\237\ The Federal Government has
a perverse incentive to issue more loans, according to FCRA's
rules, regardless of whether that is what is best for students
and their families. Further, this accounting structure
penalizes public policy decisions that would protect students,
such as by placing annual limits on certain borrowing, because
they are estimated to cost the government money. Unrealistic
assumptions in the currently-used accounting methodology cause
the spending for this section of the resolution--which is bound
by the same estimating conventions--to be negative: in fiscal
year 2017, budget authority totals -$7.8 billion, and outlays
are -$1.7 billion. As explained previously, these figures are
misleading.
---------------------------------------------------------------------------
\237\Congressional Budget Office, Options to Change Interest Rates
and Other Terms on Student Loans, June 2013, p. 2: https://www.cbo.gov/
sites/default/files/113th-congress-2013-2014/reports/44318-
StudentLoans-1Column.pdf.
---------------------------------------------------------------------------
Rather than foster a system that accelerates tuition
increases and presents too many students with the difficult
choice between crippling debt or stopping short of their
highest educational attainment, this resolution envisions a
framework that uses Federal dollars more efficiently, accounts
for student loans in a way that reflects their true cost, and
invests in a sustainable higher education system that is good
for students, institutions of higher education, and taxpayers.
Student loans are a major component of direct spending in
this category, shown as Function 500 in Table 3. In addition,
the function reflects numerous other programs supporting higher
education, and some others that fund social services.
Illustrative Direct Spending Policy Options
The transformation of programs in this area will be
determined primarily by the Committee on Education and the
Workforce. Committee members may be guided by some of the
principles described above. Potential policy options include
those below.
Repeal New Funding from the Student Aid and Fiscal
Responsibility Act of 2010. During the debate on the Student
Aid and Fiscal Responsibility Act [SAFRA], the Congressional
Budget Office provided estimates showing that projected future
savings from a government takeover of all Federal student loans
decreased dramatically when ``market risk'' was taken into
account. Since that time, the President's National Commission
on Fiscal Responsibility and the Pew-Peterson Commission on
Budget Reform have recommended the incorporation of fair-value
accounting for all Federal loan and loan-guarantee programs to
enable a true assessment of their cost to taxpayers.
SAFRA, however, exploited the higher non-adjusted savings
projection to help subsidize the new health care law and to
increase spending on several education programs. Although much
of the funding allocations have already been spent, Congress
could cancel some of the future spending by repealing recent
expansions to some Federal income-based repayment programs. The
Income-Based Repayment Program, created by the College Cost
Reduction and Access Act of 2007, and accelerated by the Obama
Administration, is still relatively new. Nevertheless, there
are concerns that the expansions could disproportionately
benefit graduate and professional students; they would have
considerable amounts of debt forgiven, at a steep cost to
taxpayers. Moreover the expansions could encourage students to
borrow too much, which is the opposite signal policymakers
should be sending to them.\238\ Congress should reform these
programs to ensure they are meeting their intended goals and
are designed to give students proper incentives and protect
taxpayer dollars.
---------------------------------------------------------------------------
\238\See American Enterprise Institute, Balancing Risk and
Responsibility: Reforming Student Loan Repayment, 19 November 2015, p.
6-7.
Accept the Fiscal Commission's Proposal to Eliminate In-
School Interest Subsidies for Undergraduate Students. The
Federal Government focuses aid decisions on family income prior
to a student's enrollment and then provides a number of
repayment protections and, in some cases, loan forgiveness
after graduation. There is no evidence that in-school interest
---------------------------------------------------------------------------
subsidies are critical to individual matriculation.
Simplify the Existing Higher Education Programs to Protect
Students and Taxpayers. The current Federal aid system is
unduly complicated and contains provisions that treat students
inconsistently. Making up the complex system are myriad
programs offering different types of aid to different eligible
groups of people, unique requirements that must be fulfilled,
and an array of repayment options in the case of loans. As the
House Committee on Education and the Workforce describes it:
``Many students, particularly first-generation and low-income
students, are bogged down with the complexity of the current
system, which ultimately deters them from accessing aid that
will make college an affordable reality.''\239\ Correcting the
disparate treatment of students and simplifying both the aid
and repayment options available to students and parents is of
paramount importance. Actions taken by the committee of
jurisdiction to reduce duplication and preferential treatment,
and make the system less complicated, could include ending the
Public Service Loan Forgiveness Program and the Teacher Loan
Forgiveness Program.
---------------------------------------------------------------------------
\239\Committee on Education and the Workforce, Budget Views and
Estimates for Fiscal Year 2017, 4 February 4, 2016.
Phase out Eligibility for TEACH Grants. Understanding all
of the Federal aid options available is a difficult, time-
consuming endeavor. Students must consider different
eligibility criteria, program requirements, and penalties. The
budget supports consolidating current Federal student aid
programs. One option for the committee of jurisdiction would be
to phase out the Teacher Education Assistance for College and
Higher Education [TEACH] Grant Program. TEACH Grants are aimed
at encouraging promising undergraduate and graduate students to
teach in high-needs fields in low-income schools. Under the
program, undergraduate students can receive up to $16,000
total, and graduate students can receive up to $8,000. They
must teach subjects such as math, science, and foreign language
for 4 years within 8 years of graduating. If grant recipients
do not fulfill the requirement, their grants are converted into
loans with interest. That means recipients can pursue a
teaching degree with the expectation of receiving thousands of
dollars in grant aid to pay for school, only to find themselves
in a situation, due to any number of factors, in which they
have a sizeable loan on their hands.\240\ The Government
Accountability Office has reported several concerning findings
about the program: one-third of TEACH grants have been
converted to loans--some erroneously; the program has only a
19-percent utilization rate among eligible students; and the
Department of Education does not yet adequately evaluate
whether or not the program is effective.\241\
---------------------------------------------------------------------------
\240\Factors ranging from securing and then maintaining a teaching
position at a qualifying school for four years to completing necessary
paperwork can make fulfilling the program requirements a challenge. For
further discussion, see United States Government Accountability Office,
``Better Management of Federal Grant and Loan Forgiveness Programs for
Teachers Needed to Improve Participant Outcomes,'' February 2015,
http://gao.gov/assets/670/668634.pdf.
\241\Ibid.
Terminate the Duplicative Social Services Block Grant. The
Social Services Block Grant is an annual payment sent to
States--without any matching, accountability, or evaluation
requirements--intended to help achieve a range of social goals,
including by providing child care, health, and employment
services. Most of these activities are also funded by other
Federal programs designed to support these same services.
States are given wide discretion to determine how to spend this
money and are not required to demonstrate the outcomes of this
spending, so there is no evidence of its effectiveness. The
budget assumes the elimination of this duplicative spending,
which saves $17 billion over 10 years
FEDERAL LANDS AND OTHER RESOURCES
Function Summary: Direct Spending
The fiscal year 2017 budget resolution continues to support
policies that will make America's natural resources available
to producers who can provide a fair return to taxpayers. In
addition to the receipts the Federal Government collects from
royalties, rents, and bonus bids, increased economic activity
on Federal land will create jobs and boost economic output.
Farm security and rural investment programs and the Fish
and Wildlife Service's Federal aid in wildlife restoration
programs are among the largest direct spending programs in this
category. The remainder is distributed among numerous smaller
programs. The direct spending budget totals for these programs
are $2.5 billion in budget authority and $3.1 billion in
outlays for fiscal year 2017; over 10 years, the figures are
$7.7 billion in budget authority and $10.7 billion in outlays.
(See Function 300 in Table 3.)
Oil and gas production on Federal land has fallen
significantly under the Obama Administration. Production on
private lands has increased, however, more than offsetting the
drop on Federal land. In fiscal year 2009, the U.S. produced
5.2 million barrels of oil per day, with production on Federal
property accounting for 33 percent of the total.\242\ By fiscal
year 2013, the U.S. was producing 7.2 million barrels per day,
but production on Federal lands represented only 23 percent of
the total.\243\
---------------------------------------------------------------------------
\242\Marc Humphries, U.S. Crude Oil and Natural Gas Production in
Federal and Non-Federal Areas, Congressional research Service, 10 April
2014.
\243\Ibid.
---------------------------------------------------------------------------
Similarly, timber harvests on Federal land have been
declining for decades since peaking in the late 1980s and early
1990s. In fiscal year 1988, 14.6 million board feet of timber
were harvested on Federal land, with a total value of roughly
$2.5 billion (in 2013 dollars).\244\ In fiscal year 2014, only
2.4 million board feet were harvested, generating less than
$150 million.\245\ This dramatic reduction in economic activity
in States and counties that have Federal lands within their
borders has wreaked havoc on their ability to fund local
services, such as schools.
---------------------------------------------------------------------------
\244\Katie Hoover, National Forest System Management: Overview,
Appropriations, and Issues for Congress, Congressional Research
Service, 29 January 2015.
\245\Ibid.
---------------------------------------------------------------------------
One large culprit: The administration is keeping Federal
lands under lock and key, while it continues its politically-
motivated climate change agenda. On 15 January 2016, the Obama
Administration unilaterally imposed a moratorium on new leases
for coal mined from Federal land.\246\ This halt deals another
crushing blow to the coal industry. Mining on Federal lands
accounts for 40 percent of the coal production in America, and
approximately 33 percent of U.S. coal reserves is located on
Federal lands. The Bureau of Land Management itself estimates
that nearly 1.9 billion tons of coal reserves in nine States
will be placed off limits due to the Secretarial Order.
Moreover, Federal coal leases provide thousands of jobs as well
as revenue for State and local communities. This budget rejects
the administration's war on coal.
---------------------------------------------------------------------------
\246\Joby Warrick and Juliet Eilperin, ``Obama Announces Moratorium
on New Federal Coal Leases,'' The Washington Post, 15 January 2016:
https://www.washingtonpost.com/news/energy-environment/wp/2016/01/14/
obama-administration-set-to-announce-moratorium-on-some-new-federal-
coal-leases/.
---------------------------------------------------------------------------
The Federal Government owns ``somewhere between 635-640
million acres of land--almost a third of the United
States.''\247\ The government cannot properly manage all this
land and, as a result, Federal agencies estimate a $19 billion
maintenance backlog.\248\ The budget resolution supports giving
States and localities more control over the resources within
their borders. This will lead to increased resource production
and allow States and localities to take advantage of the
benefits of increased economic activity.
---------------------------------------------------------------------------
\247\House Committee on Natural Resources, Views and Estimates for
Fiscal Year 2016.
\248\Ibid.
---------------------------------------------------------------------------
Illustrative Direct Spending Options
As it develops policies in these areas, the Committee on
Natural Resources may wish to consider the factors above. Below
are options that could emerge from such consideration.
Maintaining Existing Land Resources. The President's budget
seeks to convert certain Federal land acquisition accounts from
discretionary to direct spending. The Federal Government
already struggles with a maintenance backlog on the millions of
acres it controls--a backlog totaling between $17 billion and
$22 billion--but the administration is seeking to acquire even
more land. This budget keeps funding for land acquisition under
congressional oversight, giving States and localities more
control over the land and resources within their borders.
Expand Access to Federal Land for Timber Harvest. Timber
harvest rates on Federal land have been declining for nearly 30
years. As a result, the States and localities that depend on
their share of the receipts have been shortchanged the funding
they expected to receive to pay for schools and other local
priorities. Increased timber harvests will generate economic
growth in localities throughout the country, increase receipts
to the Federal Government, States, and localities, and reduce
the need for funding replacement programs, such as Secure Rural
Schools.
Expand Onshore and Offshore Energy Production. Despite the
existence of abundant domestic resources, the Federal
Government has adopted policies that hinder American production
of oil and natural gas on Federal lands and in Federal waters.
Breaking free of future dependence on energy supplies from
countries whose interests differ from those of the U.S.
requires producing more energy at home.
Unlocking domestic energy supplies in a safe,
environmentally-responsible manner will increase receipts from
bonus bids, rental payments, royalties, and fees. The budget
allows for greater access in areas such as Alaska, the Outer
Continental Shelf, the Gulf of Mexico, and the Intermountain
West.
In addition, the budget rejects the Obama Administration's
proposal to redirect funds allocated to the Gulf States through
the Gulf of Mexico Energy Security Act to the U.S. Treasury.
This policy, proposed in the President's recent fiscal year
2017 budget request, would negatively affect State and local
communities with diverse coastal ecosystems.
OTHER DIRECT SPENDING
General Science, Space, and Technology
Almost all the government's science and technology funding
is discretionary. Nevertheless, there is a small amount of
direct spending within the National Science Foundation that
funds the Directorate for Education and Human Resources [EHR].
The EHR focuses on science, technology, engineering, and math
[STEM] programs at all educational levels.
The resolution calls for $107 million in direct spending
budget authority and $106 million in outlays in fiscal year
2017. The 10-year totals are $1.0 billion for both budget
authority and outlays. The figures appear in Table 3, Function
250.
Community and Regional Development
The main direct spending component of this function
(Function 450 in Table 3) is the National Flood Insurance
Program [NFIP]. The NFIP reauthorization will expire 30
September 2017. The Committee on Financial Services says:
``[T]here is little to no private sector alternative to the
NFIP, exposing taxpayers to virtually all of the Nation's
insured flood risk. In 1968, Congress recognized that the
inherent challenges of managing flood risk were too great for
the private sector and that no viable private sector insurance
alternative existed. But 47 years later, given the dynamics of
the market and the information now available, the Committee
believes the biggest impediment to the development of a private
flood insurance market is the subsidized monopoly of the NFIP.
The Committee will explore legislative initiatives to
facilitate the establishment of a private flood insurance
market that serves the needs of all Americans and reduces the
significant financial risk faced by taxpayers.''\249\ Other
direct spending programs within the function include activities
such as Community Development Financial Institutions, Rural
Energy for America, the Bureau of Indian Affairs and Indian
Education, and activities of the Gulf Coast Restoration Trust
Fund. The resolution calls for -$597 million in direct spending
budget authority and $656 million in outlays in fiscal year
2017. The 10-year totals for direct spending budget authority
and outlays are -3.0 billion and $7.6 billion, respectively.
---------------------------------------------------------------------------
\249\Committee on Financial Services, U.S. House of
Representatives, Views and Estimates, 8 February 2016.
---------------------------------------------------------------------------
A potential savings option here is to reduce energy
subsidies for commercial interests. The budget recommends
spending reductions for rural green-energy loan guarantees.
These loan guarantees come with Federal mandates that channel
private investments into financing the administration's
preferred interests at taxpayers' expense.
Financial Management
----------
The remaining categories chiefly concern major non-
programmatic financing mechanisms for the Federal Government.
Net Interest, for example, represents payments resulting from
the government's prior borrowing. Allowances is a placeholder
function for budgetary effects that the Congressional Budget
Office has not yet assigned to other specific categories.
Undistributed Offsetting Receipts represents payments to the
government that are recorded as negative budget authority and
outlays. These three functions round out the spending
components of the budget overall.
NET INTEREST
Function Summary
One of the worst effects of large, chronic budget deficits
is the high interest cost it produces. Interest payments yield
no government services or benefits; they are simply excess
costs resulting from a history of spending beyond the
government's means. These costs are reflected in this category
(Function 900 in Tables 1 and 3), which presents the interest
paid for the Federal Government's borrowing less the interest
received by the Federal Government from trust fund investments
and loans to the public. It is a mandatory payment, in the true
sense of the word, with no policy options and no discretionary
components.
According to CBO, if government programs are not reformed,
net interest payments are projected to nearly quadruple, from
$223 billion in fiscal year 2015 to $830 billion by 2026. At
this rate, interest costs are projected to grow at an average
annual rate of approximately 12.7 percent--the fastest growing
major component of the Federal budget. Net interest spending is
projected to exceed the entire amount spent on the national
defense base budget by 2024.
Reducing interest costs will require sustained spending
restraint. This budget resolution provides such restraint, and
it reduces net interest by $974.8 billion over 10 years
compared with the CBO baseline.
Summary of Net Interest Payments
The resolution calls for $306.5 billion of direct spending
for net interest payments in fiscal year 2017. The proposed 10-
year total for net interest payments are $4.8 trillion.
On-budget direct spending--or net interest payments
unrelated to Social Security--is $393.7 billion in fiscal year
2017 and $5.6 trillion over 10 years. The on-budget figure is
larger than the budget Function 900 total, because the former
is offset by off-budget interest payments to the Social
Security Trust Fund. These off-budget interest payments are
presented as negative numbers, because they reflect money
coming into, rather than flowing out of, the Treasury.
Off-budget direct spending is -$87.2 billion in fiscal year
2017 and -$823.1 billion over 10 years.
ALLOWANCES
Function Summary
The Allowances categories represent place-holders for
certain budgetary impacts that the CBO has yet to assign to a
specific budget function. They are presented as Function 920 in
the summary tables. The particulars of the categories are
described below.
In August 2011, the President and Congress enacted the
Budget Control Act [BCA] of 2011 (Public Law 112-25), which
provided for significant spending reductions, enforced by
statutory spending caps, and an automatic enforcement
procedure. The BCA did not specify a distribution of spending
reductions in specific budget functions other than for National
Defense (Function 050) and Medicare (Function 570), even though
the law does require reductions in non-defense and non-Medicare
areas of the budget. At the time of its January 2016 baseline
release, CBO did not provide forward-looking, function-level
information on what non-defense and non-Medicare reductions are
under the terms of the BCA. The CBO has, instead, assigned the
non-defense and non-Medicare reductions required by the BCA to
Function 920.
The budget resolution recommends no changes in this
function, leaving it instead at the CBO baseline levels. The
CBO baseline for Function 920 includes a total of $587.6
billion and $530.1 billion in reductions for budget authority
and outlays over 10-years, respectively, to reflect the impact
of the BCA on non-defense and non-Medicare spending. The
following two components are included in the baseline:
A reduction of $567.9 billion in budget authority
and $512.3 billion in outlays for non-defense activities,
needed to comply with the discretionary spending caps set by
section 101 of the BCA;
A $19.7 billion and $17.8 billion reduction in
budget authority and outlays, respectively, to non-Medicare and
non-defense direct spending programs, necessary to comply with
the automatic-enforcement procedure (the sequester) mandated by
the BCA.
UNDISTRIBUTED OFFSETTING RECEIPTS
Function Summary
Offsetting receipts to the Treasury are recorded in this
category as negative budget authority and outlays. Receipts
appearing here are either intra-budgetary (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 kind of business transaction with the
government). The main types of receipts presented are the
payments Federal agencies make to employee retirement and
health care funds; 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
public property or resources, such as the electromagnetic
spectrum. The category also contains an off-budget component
that reflects the Federal Government's share of Social Security
contributions for Federal employees.
All transactions in this area are recorded as direct
spending and appear in Function 950 of Table 3. The resolution
calls for -$105.5 billion in budget authority and outlays in
fiscal year 2017 (the minus sign indicates receipts flowing
into the Treasury). Over 10 years, budget authority and outlays
total -$1.2 trillion.
On-budget amounts are -$88.6 billion in budget authority
and outlays in fiscal year 2017, and -$966.6 billion in budget
authority and -$970.0 billion in outlays over 10 years.
Off-budget amounts are -$16.9 billion in budget authority
and outlays in fiscal year 2017, and -$196.3 billion in budget
authority and outlays over 10 years. The major program in the
off-budget category is Federal agency matching payments for
retirement contributions on behalf of Federal employees to the
Federal Old Age and Survivors and Disability Insurance Trust
Fund--or Social Security. The budget resolution recommends no
policy changes to the off-budget portion of Function 950.
Illustrative Policy Options
Federal Real-Property Sales. The Fiscal Commission
highlighted potential budget savings from another area where
the mismanagement of taxpayer-owned assets and the sheer amount
of unnecessary costs are staggering: Federal real estate and
other property. The Federal real-property inventory is so
massive that the report accounting for it lags 2 years behind
the current budget year. Complex procedural requirements, lack
of organization, and delayed data reporting provide agencies
with few incentives to dispose of unneeded properties and even
fewer repercussions for holding onto these properties
indefinitely. Real-property management has been on the
Government Accountability Office's list of ``high risk''
government activities since 2003. According to the most recent
Federal Real Property Profile, from fiscal year 2014, the
Federal Government owns or leases more than 275,000 buildings
and 481,000 structures.\250\
---------------------------------------------------------------------------
\250\General Services Administration, Federal Real Property
Profile, Fiscal Year 2014: http://www.gsa.gov/portal/content/102880.
---------------------------------------------------------------------------
The government has a poor track record for real-estate
asset sales. The fiscal year 2014 report shows that of the
18,619 assets the Federal Government disposed of in that year,
5,473, or almost 30 percent, were disposed of by way of
demolition. Just under 5 percent were disposed of through a
sale. Many assets were conveyed, or given away, at below-market
value or for free.\251\
---------------------------------------------------------------------------
\251\Ibid.
---------------------------------------------------------------------------
The resolution urges the Office of Management and Budget to
streamline the asset-sale process; loosen regulations for the
disposal and sale of Federal property to eliminate red tape and
waste; set enforceable targets for asset sales; and hold
government agencies accountable for the buildings they oversee.
If these actions are done correctly, the Federal Government
could save billions of dollars from selling unused government
property.
Federal Land. Currently, the Federal Government owns nearly
650 million acres of land--almost 30 percent of the land area
of the United States. In addition to Federal fleet and real-
property sales, this resolution supports examining Federal
lands, in consultation with State and local communities, to
identify where certain lands may be more efficiently managed,
thus reducing the burden on the Federal Government. Excluded
from this policy are National Parks, wilderness areas, wildlife
refuges, and wild and scenic rivers.
Reduce Strategic Petroleum Reserve [SPR] Through Asset
Sales. The SPR was created following the energy crisis of 1973
when OPEC members proclaimed an oil embargo. Since then the
U.S. has significantly reduced its dependence on overseas oil.
Furthermore, the recent significant expansion of U.S. oil
supplies allows the Federal Government to safely draw down the
number of barrels it holds in reserve. The United States is
required to hold in reserve a number of barrels equal to 90
days of net imports, pursuant to an agreement with
International Energy Agency [IEA] member countries. This policy
option would draw down reserves within the SPR in accordance
with its international agreements.
REVENUE AND TAX REFORM
----------
The U.S. tax code is notoriously complex, patently unfair,
and highly inefficient. Its complexity distorts decisions to
work, save, and invest, which leads to slower economic growth,
lower wages, and less job creation. This budget proposes to
address these problems with a reformed tax code that is simpler
and fairer, and that promotes growth. A revamped tax code could
raise just as much revenue as does the system in place today,
without the harmful tax policies embedded in current law (such
as the Affordable Care Act). A restructured and more efficient
tax code would also spark greater economic growth and job
creation.
The budget resolution's revenue projections--$3.521
trillion in fiscal year 2017, and $42.385 trillion through
2026--are built on a tax reform model derived from the
principles below.
The Challenge
The current tax code is needlessly complex. It is estimated
that individuals, families, and employers spend more than 6
billion hours and more than $160.0 billion a year trying to
negotiate a labyrinth of special rules, deductions, and tax
schedules. Over the past decade alone, there have been 4,107
changes to the tax code. Many of the major changes made over
the years have carved out special preferences, exclusions, or
deductions for various activities or groups. These loopholes
exceed $1.0 trillion per year. To put that figure in
perspective, the government collected about $1.5 trillion in
individual income taxes last year.
As the tax code has grown in complexity, the Internal
Revenue Service has increased its funding requests to support
an army of tax examiners and agents. To cite just one example,
the Treasury Department requested about $452.0 million in
fiscal year 2015 simply to administer the tax elements of the
Affordable Care Act over those 12 months. Nina E. Olson, the
National Taxpayer Advocate [NTA], has consistently cited the
complexity of the tax code as one of the most serious problems
facing individuals and businesses. In the NTA's 2014 annual
report to Congress, Olson said: ``I believe we need fundamental
tax reform, sooner rather than later, so the entire system does
not implode.''\252\
---------------------------------------------------------------------------
\252\National Taxpayer Advocate, Annual Report to Congress, Vol. 1,
2014: http://www.taxpayeradvocate.irs.gov/Media/Default/Documents/2014-
Annual-Report/Volume-One.pdf.
---------------------------------------------------------------------------
The large amount of tax preferences that pervade the code
end up narrowing the tax base. A narrow tax base requires much
higher tax rates to raise a given amount of revenue. Standard
economic theory shows that high marginal tax rates dampen
incentives to work, save, and invest, which reduces economic
output and job creation. Lower economic output, in turn, drains
off the intended revenue gain from higher marginal tax rates.
The top tax rate has actually risen and fallen dramatically
throughout U.S. history, with little effect on tax revenue as a
share of the economy. For instance, the top U.S. tax rate has
been as high as 90 percent and as low as 28 percent. Income tax
revenue has remained fairly steady, despite these sharp rate
swings. It turns out that the biggest driver of Federal revenue
is not higher tax rates, but economic growth. A sizable
majority of economists point out that a broad base and low
rates are key in a tax system that fosters economic growth and
competitiveness. Legislators on both sides of the aisle agree
on this basic principle.
One hallmark of the U.S. economy is the role of smaller,
unincorporated businesses. Roughly half of U.S. active business
income and half of private sector employment are derived from
business entities (such as partnerships, S corporations, and
sole proprietorships) that are taxed on a ``pass-through''
basis. This means the income flows through to the tax returns
of the individual owners and is taxed at the individual rate
structure rather than at the corporate rate. Small businesses,
in particular, tend to choose this form for Federal tax
purposes, and the top effective Federal tax rate on such small
business income can reach nearly 45 percent. For these reasons,
sound economic policy requires lowering marginal rates on these
pass-through entities.
The U.S. corporate income tax rate (including Federal,
State, and local taxes) sums to slightly more than 39 percent.
This is the highest rate in the industrialized world. The tax
itself raises relatively little revenue: only about 10 percent
of the total Federal tax take comes from taxing corporate
income. Furthermore, corporate income is taxed twice: first at
the corporate entity level, as it is earned, and also as the
shareholder level, when corporations distribute earnings. This
tax structure discourages investment and job creation, distorts
business activity, and puts American businesses at a
competitive disadvantage against foreign competitors.
Policymakers should consider options to limit such double
taxation when comprehensive tax reform is considered. Any tax
that raises little revenue and creates a lot of economic
distortions is particularly ripe for reform.
A high corporate tax rate hinders American competitiveness
by making the U.S. a less desirable destination for investment
and jobs. Decisions about where to locate a business and make
investments are becoming more sensitive to country tax rates,
as global integration increases. Foreign investment is
important to an economy, because it is a key source of funding
to finance innovation and jobs. Many countries have been
lowering their business taxes to increase their
competitiveness. The U.S. risks falling behind, as it maintains
a high tax rate while other countries lowering theirs. The U.S.
corporate tax constrains economic growth and job creation,
because it deters potential investment. Also, the U.S. tax rate
differential with other countries fosters a variety of
complicated multinational corporate behaviors intended to avoid
the tax--profit shifting, corporate inversions, and transfer
pricing--which have the effect of moving the tax base offshore,
destroying American jobs, and decreasing corporate revenue.
The structure of U.S. international taxation is also out of
sync with the international standard used by the majority of
other countries, putting U.S. businesses operating abroad at a
competitive disadvantage. Most countries operate under a so-
called ``territorial'' system of international taxation,
whereby their businesses operating abroad are only subject to
the tax of the country where they do business. The U.S. has an
antiquated ``worldwide'' system of international taxation, in
which U.S. multinational businesses operating abroad pay both
the foreign-country tax and U.S. corporate taxes when profits
are repatriated. They are essentially taxed twice. This puts
them at an obvious competitive disadvantage.
Reforming the U.S. tax code to a more competitive
international system would boost the competitiveness of U.S.
companies operating abroad and would also reduce incentives for
tax avoidance.
Solution: Pro-Growth Tax Reform
Given the many problems with the current system, Congress
should enact legislation that provides for a comprehensive
reform of the U.S. tax code to promote economic growth, create
American jobs, and increase wages. While the Committee on Ways
and Means will develop the particular policies, these aims can
be achieved through revenue-neutral, fundamental tax reform
that does the following:
LSimplifies the tax code to make it fairer to
American families and businesses and reduces the amount of time
and resources necessary to comply with tax laws;
LSubstantially lowers tax rates for individuals,
and consolidates the current seven individual income tax
brackets into fewer brackets;
LRepeals the Alternative Minimum Tax;
LReduces the corporate tax rate;
LTransitions the tax code to a more competitive
system of international taxation.
Economists have shown that lowering overall rates and
broadening the tax base would create greater economic growth
and support more job creation by the private sector. A faster-
growing economy would help reduce the budget deficit. According
to CBO, raising real GDP growth by just 0.1 percentage point
per year would reduce the deficit by $327 billion over the next
decade.
This resolution calls for comprehensive tax reform and lays
out several principles, but it does not assume any particular
plan. There are many good ideas on this front--growth-oriented
tax plans that could strengthen the economy and support the
Nation's spending priorities.
Representative Woodall (R-GA), for instance, has submitted
a fundamental tax-reform plan for consideration by the Ways and
Means Committee. It would eliminate taxes on wages,
corporations, self-employment, and capital gains, as well as
gift and death taxes, in favor of a personal consumption tax
that would provide the economic certainty that American
businesses, entrepreneurs, and taxpayers desire.
Representative Goodlatte (R-VA) has also submitted
legislation that calls for fundamental, pro-growth tax reform.
This legislation would shape the debate on tax reform by
establishing a structure to provide for a tax system that
encourages job creation and a healthy economy. Without
prescribing any specific tax system, it calls for a low tax
rate for all Americans, tax relief for working individuals,
protection for the rights of taxpayers and a reduction in tax
collection abuses. Additionally, under this legislation, a tax
system would support savings and investment, and would not
penalize marriage or families. Similar legislation has twice
passed the House of Representatives in previous Congresses. The
114th Congress should consider enacting this legislation.
The committee report recognizes a number of possible
solutions as Congress works to enact comprehensive tax reform.
Congress should recognize the many factors businesses consider
when they make property and capital investment decisions in the
United States, such as cash flow impact, the macro-economic
outlook, duration of investment, and costs of goods and
services, and the regulatory environment.
It is no secret that Washington has a spending problem, not
a revenue problem. (The Congressional Budget Office projects
Federal revenue will hover right around 18.0 percent of gross
domestic product throughout the next decade, well above the
17.4-percent average annual level of the past half century.)
This is primarily due to the growing costs of health and
retirement benefits. Therefore, this report discourages
proposals offered by some members of Congress that seek to
raise revenue to finance out of control spending, such as a
financial transaction tax, a bank excise tax, or a carbon tax.
These proposals would discourage savings and investment and
increase the costs of individual, family, and employee
retirement accounts.
This committee report recognizes that one way to relieve
the ever-increasing burden of automatic spending is to
encourage individuals and families to save. Maintaining and
strengthening the critical role of the private sector in
helping all Americans achieve retirement security is important.
Tax reform that encourages taxpayers to save is pro-growth
economic policy that would consequently enable individuals and
families to rely less on the Federal Government.
Congress should consider these and the full myriad of pro-
growth plans as it moves toward implementing the tax reform
called for under this budget.
DIRECT SPENDING TRENDS AND REFORMS
----------
Background
Direct spending remains the fastest growing part of the
spending-driven debt crisis the Nation faces.
The Congressional Budget Office [CBO] reports that total
non-interest mandatory spending in fiscal year 2015 was $2.299
trillion, and will grow to $4.142 trillion by 2026, reflecting
an average annual growth rate of 5.5 percent--faster than both
CBO's projection of 2015 nominal economic growth of 3.4 percent
and CBO's longer-term projection of economic growth of 4.0
percent. Within overall non-interest mandatory spending, the
entitlements of Medicare and Social Security are projected to
continue growing faster than the economy as a whole, with
Social Security expected to grow from $882 billion in 2015 to
$1.6 trillion in 2026 and Medicare expected to grow from $634
billion in 2015 to $1.3 trillion in 2026.
Over the next decade, the major means-tested automatic (or
``direct'') spending programs are expected to grow by 4.3
percent per year--from $744 billion in 2016 to $1.1 trillion in
2026. Not only are these programs expected to grow in the
future, but they have grown significantly over the past 40
years. The Congressional Research Service calculated that
spending on low-income assistance programs was $2.66 billion in
inflation-adjusted dollars in 1962, or approximately 2.6
percent of total Federal outlays and 0.5 percent of gross
domestic product [GDP]. Over just the past 10 years, major
means-tested automatic spending programs have grown 7.3 percent
per year, from $386 billion in 2007 to $744 billion in 2016.
There are a number of reasons for this growth. Most
recently, the recession caused significant increases in
spending on low-income programs. Spending is projected to
remain at elevated levels for several programs--most notably,
the Supplemental Nutrition Assistance Program, or SNAP
(formerly known as food stamps). Over the past 10 years, the
SNAP program grew at 8.1 percent annually, ballooning from $35
billion in 2007 to $75 billion in 2016. While this amount is
projected to remain steady over the next 10 years, it remains
at elevated levels compared to prerecession levels.
Other programs have also seen large increases. Supplemental
Security Income was created as a needs-based program that
provides cash benefits to aged, blind, or disabled persons with
limited income and assets. When the program began, the majority
of payments went toward the aged. As it matured, however, a
much greater percentage of beneficiaries were under age 18 or
between the ages of 18 to 64. Over the past decade, spending on
SSI has grown by 4.8 percent per year.
The largest means-tested program in the Federal budget is
Medicaid, the Federal-State low-income health program. Medicaid
spending- and its related State Children's Health Insurance
Program [SCHIP]--doubled from $197 billion in 2007 to $394
billion in 2016. Going forward, the Congressional Budget Office
[CBO] projects Federal Medicaid and SCHIP spending to reach
$648 billion in fiscal year 2026. Absent reform, Medicaid will
not be able to deliver on its promise to provide a sturdy
health care safety net for society's most vulnerable. Because
of the flawed incentives in this program, Medicaid grew at 7.7
percent a year over the past 10 years, and it is projected to
grow 5.4 percent a year over the next 10 years. This level of
growth is clearly unsustainable.
The Fiscal Year 2017 Budget
The fiscal year 2017 budget addresses both non-means-tested
and means-tested direct spending. Most important, it tackles
the primary drivers of debt and deficits: the government's
health programs. For Medicare, this budget advances policies to
put seniors, not the Federal Government, in control of their
health care decisions. This resolution provides future retirees
with the freedom to choose a plan best suited for them, and
guarantees health security throughout their retirement years.
Under this program, traditional Medicare and private plans--
providing the same level of health coverage--compete for
seniors' choices, just as Medicare Advantage does today. This
improved Medicare program would also adopt the competitive
structure of Part D, prescription drug benefit program,
providing beneficiaries with a defined contribution to purchase
coverage and, through competition, deliver savings for seniors
in the form of lower monthly premium costs. By allowing seniors
to choose the best plan for them, plans are required to compete
against each other on price and quality. This means the program
works better for patients and will save the program for future
generations of seniors. The program also includes additional
protections for the most vulnerable. Adjustments would be made
to the Federal contribution based on the health of the
beneficiary so that those with illnesses would receive higher
payments if their condition worsened; lower-income seniors
would receive additional assistance to help cover out-of-pocket
costs; and wealthier seniors would assume responsibility for a
greater share of their premiums.
For Medicaid, this budget converts the Federal share of
Medicaid spending into allotments that give States the
flexibility to tailor their programs to meet their fiscal
needs, as well as serve the worst off in society. State
Flexibility Funds would end the misguided one-size-fits-all
approach that ties the hands of State governments trying to
make their Medicaid programs as effective as possible. In
addition, the budget proposes to advance a work requirement for
all able-bodied adults who are enrolled in Medicaid. Work not
only provides a source of income and self-sufficiency, but also
has been demonstrated as a valuable source of self-worth and
dignity for individuals. Moreover, this budget repeals the
Medicaid expansions in the President's health care law.
For the Supplemental Nutrition Assistance Program, this
budget also calls for converting the current program into a
flexible allotment tailored to meet each State's needs.
Additionally, in keeping with a recommendation from the
National Commission on Fiscal Responsibility and Reform, this
budget calls for Federal employees--including Members of
Congress and their staffs--to make greater contributions toward
their own retirement.
This budget is premised on the belief that the prospect of
upward mobility should be in the reach of every American, and
that priority must be given to maximizing the effectiveness of
anti-poverty programs across Federal, State, and local
governments. Congress should work to remove the barriers and
obstacles that prevent the most vulnerable Americans from
taking advantage of economic and educational opportunities and
from moving up the ladder of opportunity to join the middle
class. By balancing the budget, implementing comprehensive tax
reform, and reforming means-tested entitlement programs, this
resolution is designed to accomplish exactly these goals.
Improving the Accuracy of Budget Estimates
In addition, the CBO should constantly strive to improve
and update its estimating practices with respect to both fiscal
and economic effects. This requires a willingness by the agency
to advance its methodologies--as it has done in the past. For
instance, in February of 2014, CBO estimated a significantly
larger negative employment impact from the Affordable Care Act
than it had previously done. It did so in part because of the
work of University of Chicago Economist Casey B. Mulligan, who
has done extensive work in the area.\253\ Another example is
the treatment of this budget resolution, which does reflect the
positive impact of its overall deficit-reducing fiscal policy,
though it is still based on CBO's independent analysis.
---------------------------------------------------------------------------
\253\See Congressional Budget Office, The Budget and Economic
Outlook: 2014 to 2024, February 2014, Appendix C.
---------------------------------------------------------------------------
Inaccuracies in cost estimates for direct spending
legislation are to some degree unavoidable. This is due, in
part, to the nature of the process. CBO must provide estimates
in a short period of time for legislation that is sometimes
very complex. Moreover, the estimates often depend on a wide
array of difficult-to-predict variables such as individuals'
behavioral responses to changes in program benefits. Though CBO
routinely uses probability-based scoring techniques to estimate
the cost of major legislation, accurate cost estimates for
direct spending legislation remain elusive. CBO endeavors to
communicate to the Congress the uncertainty of the agency's
estimates. The agency also monitors the budgetary effects of
enacted legislation to help improve projections of spending and
receipts under current law, as well as to improve cost
estimates for new legislative proposals.
Members of Congress have an important role to play as well.
The Budget Committees in the House and Senate have oversight
responsibilities over CBO. The committees should make greater
use of this responsibility, conducting regular review of CBO's
estimating accuracy of previous and future direct spending
legislation, as Representative Foxx (R-NC) has proposed. The
committees should work with CBO to provide the Congress with
periodic analyses of such inaccuracies in CBO cost estimates
and subsequent adjustments going forward.
TABLE 9.--HISTORICAL MEANS-TESTED AND NON-MEANS-TESTED DIRECT SPENDING
[Outlays by fiscal year, billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Average
----------- annual
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 growth
2016 ----------
2006-2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
Means-Tested Programs:
Health Care Programs:
Medicaid............................ 181 191 201 251 273 275 251 265 301 350 381 7.7
Medicare Part D Low-Income Subsidies 11 17 17 19 21 24 20 22 22 24 28 9.6
Health insurance subsidies\a,b\..... 0 0 0 0 0 0 0 0 13 27 39 n.a.
Children's Health Insurance Program. 5 6 7 8 8 9 9 9 9 9 13 8.7
-----------------------------------------------------------------------------------------------------
Subtotal.......................... 197 213 225 277 302 308 279 297 346 411 460 8.8
Income Security:
Earned income and child tax 52 54 75 67 77 78 77 79 82 81 83 4.8
credits\b\.........................
SNAP................................ 35 35 39 56 70 77 80 83 76 76 75 8.1
Supplemental Security Income........ 37 36 41 45 47 53 47 53 54 55 59 4.8
Family support and foster care\c\... 30 31 32 33 35 33 30 32 31 31 31 0.3
Child nutrition..................... 14 14 15 16 17 18 19 20 20 22 23 5.1
-----------------------------------------------------------------------------------------------------
Subtotal.......................... 168 170 202 217 247 260 254 266 263 264 271 4.9
Veterans' Pensions.................... 4 3 4 4 4 5 5 5 6 5 6 5.5
Pell Grants\d\........................ 0 0 1 2 4 14 12 16 8 10 7 n.a.
Subtotal, Means-Tested Programs... 369 386 431 501 557 587 550 584 623 690 744 7.3
Non-Means-Tested Programs\e\............ 1,188 1,242 1,349 1,787 1,553 1,648 1,710 1,752 1,753 1,865 1,959 5.1
Total Mandatory Outlays\f\........ 1,556 1,628 1,780 2,288 2,110 2,236 2,260 2,336 2,376 2,555 2,703 5.7
Memorandum:
Pell Grants (Discretionary)............. 13 13 15 13 20 21 21 17 23 20 23 5.8
Means-Tested Programs:
Adjusted for Timing Shifts............ 368 389 431 501 557 581 556 584 623 690 737 7.2
Non-Means-Tested Programs:
Adjusted for Timing Shifts............ 1,202 1,241 1,349 1,787 1,553 1,627 1,731 1,752 1,753 1,865 1,927 4.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office; staff of the Joint Committee on Taxation.
The average annual growth rate over the 2007-2016 period encompasses growth in outlays from the amount recorded in 2006 through the amount projected for
2016.
Data on spending for benefit programs in this table exclude administrative costs that are classified as discretionary but generally include
administrative costs that are classified as mandatory.
SNAP = Supplemental Nutrition Assistance Program; n.a. = not applicable.
a. Differs from the amounts reported in Table 3-2 in The Budget and Economic Outlook: Fiscal Years 2016 to 2026 in that it does not include payments to
health insurance plans for risk adjustment (amounts paid to plans that attract less healthy enrollees) and reinsurance (amounts paid to plans that
enroll people with high health care costs). Spending for grants to States to establish exchanges is also excluded.
b. Does not include amounts that reduce tax receipts.
c. Includes the Temporary Assistance for Needy Families program, the Child Support Enforcement program, the Child Care Entitlement program, and other
programs that benefit children.
d. Includes mandatory spending designed to reduce the discretionary budget authority needed to support the maximum award amount set in the appropriation
act plus mandatory spending that, by formula, increases the total maximum award above the amount set in the appropriation act.
e. Does not include offsetting receipts.
f. Does not include outlays associated with Federal interest payments.
TABLE 10.--PROJECTED MEANS-TESTED AND NON-MEANS-TESTED DIRECT SPENDING
[Outlays by fiscal year, billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average
annual
growth
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 (percent)
----------
2017-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
Means-Tested Programs:
Health Care Programs:
Medicaid.............................. 381 401 420 439 460 484 509 536 564 593 642 5.4
Medicare Part D Low-Income Subsidies.. 28 28 27 32 34 37 44 44 45 53 57 7.4
Health insurance subsidies\a,b\....... 39 57 67 70 71 74 79 82 86 89 93 9.1
Children's Health Insurance Program... 13 13 11 6 6 6 6 6 6 6 6 -7.6
---------------------------------------------------------------------------------------------------
Subtotal............................ 460 499 525 546 571 601 637 668 700 740 798 5.7
Income Security:
Earned income and child tax 83 82 82 84 86 88 91 93 95 97 99 1.8
credits\b,c\.........................
SNAP.................................. 75 74 73 73 72 72 72 72 72 73 74 -0.1
Supplemental Security Income.......... 59 56 53 60 61 63 70 67 64 71 74 2.2
Family support and foster care\d\..... 31 32 32 33 33 33 34 34 34 35 35 1.1
Child nutrition....................... 23 24 25 26 27 28 29 30 32 33 34 4.2
---------------------------------------------------------------------------------------------------
Subtotal............................ 271 267 265 274 280 285 296 296 297 309 317 1.6
Veterans' pensions...................... 6 6 6 7 7 7 8 7 7 8 8 2.9
Pell Grants\e\.......................... 7 6 8 8 8 8 8 8 8 8 8 2.3
---------------------------------------------------------------------------------------------------
Subtotal, Means-Tested Programs..... 744 778 804 835 865 901 948 979 1,012 1,065 1,130 4.3
Non-Means-Tested Programs\f\.............. 1,959 2,018 2,076 2,238 2,377 2,519 2,720 2,829 2,933 3,156 3,362 5.5
Total Mandatory Outlays\g\.......... 2,703 2,796 2,880 3,073 3,243 3,419 3,669 3,808 3,944 4,221 4,492 5.2
Memorandum:
Pell Grants (Discretionary)\h\............ 23 25 28 23 24 24 25 25 26 26 27 1.8
Means-Tested Programs:
Adjusted for Timing Shifts.............. 737 778 811 835 865 901 939 979 1,021 1,065 1,130 4.4
Non-Means-Tested Programs:
Adjusted for Timing Shifts.............. 1,927 2,015 2,111 2,238 2,377 2,519 2,669 2,825 2,988 3,156 3,362 5.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office; staff of the Joint Committee on Taxation.
The projections shown here are the same as those reported in Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2016 to 2026
(January 2016).
The average annual growth rate over the 2017-2026 period encompasses growth in outlays from the amount projected for 2016 through the amount projected
for 2026.
Projections of spending for benefit programs in this table exclude administrative costs that are classified as discretionary but generally include
administrative costs that are classified as mandatory.
SNAP = Supplemental Nutrition Assistance Program.
Because October 1 will fall on a weekend in 2016, 2017, 2022, and 2023, certain Federal payments that are due on those dates will instead be made at the
end of the preceding September and thus be shifted into the previous fiscal year. Those shifts primarily affect outlays for Supplemental Security
Income, veterans' compensation benefits and pensions, and Medicare.
a. Differs from the amounts reported in Table 3-2 in The Budget and Economic Outlook: Fiscal Years 2016 to 2026 in that it does not include payments to
health insurance plans for risk adjustment (amounts paid to plans that attract less healthy enrollees) and reinsurance (amounts paid to plans that
enroll people with high health care costs). Spending for grants to States to establish exchanges is also excluded.
b. Does not include amounts that reduce tax receipts.
c. Differs from the amounts reported in Table 3-2 in The Budget and Economic Outlook: Fiscal Years 2016 to 2026 in that it does not include other tax
credits that were included in that table.
d. Includes the Temporary Assistance for Needy Families program, the Child Support Enforcement program, the Child Care Entitlement program, and other
programs that benefit children.
e. Includes mandatory spending designed to reduce the discretionary budget authority needed to support the maximum award amount set in the appropriation
act plus mandatory spending that, by formula, increases the total maximum award above the amount set in the appropriation act.
f. Does not include offsetting receipts.
g. Does not include outlays associated with Federal interest payments.
h. The discretionary baseline does not represent a projection of expected costs for the discretionary portion of the Federal Pell Grant Program. As with
all other discretionary programs, the budget authority is calculated by inflating the budget authority appropriated for fiscal year 2016. Outlays for
future years are based on those amounts of budget authority and also reflect a temporary surplus of budget authority provided in 2016.
THE LONG-TERM BUDGET OUTLOOK
----------
The growing probability of a debt crisis is an urgent
challenge the United States faces today. The source of the
crisis is the drift toward ever-expanding government. To avert
a future debt crisis, Congress needs to stop this encroachment
and to revive community in American civil society.
This budget would turn the tide. If the policies
incorporated in the budget were enacted, they would yield $6.5
trillion in spending reductions over the next 10 years. It
reforms government spending programs responsibly. It protects
key priorities while eliminating waste. It avoids sudden and
arbitrary cuts to current services, such as those the country
would experience in a debt crisis.
These reductions are hardly draconian. Over the years,
Congress has put two-thirds of the budget on auto-pilot, and
spending in those areas grows each year. The Congressional
Budget Office [CBO] has said the current laws and policies
cannot be sustained. Yet any effort to restrain the growth in
this spending is cast as a ``cut.''
Under current policy, the Federal Government will spend
$50.6 trillion over the next 10 years. Under this proposal, it
will spend roughly $44.1 trillion. This budget does not make
sudden cuts. Instead, it increases spending at a more
manageable rate. For instance, on the current path, spending
will rise by an annual average of 4.8 percent. Under this
budget, it will rise by only 2.7 percent.
Washington cannot keep spending money it does not have. So
this budget achieves balance in 2026 by bringing spending down
relative to the size of economy, to 18.3 percent of GDP in
2026. To achieve this outcome, it puts in place fundamental
reforms to protect and strengthen Medicare by gradually
transitioning the program to a premium support model. Along
with Medicaid and other spending reforms, these changes are
critical to putting the Nation on sound financial footing.
The spending path assumed in this budget will result in a
balanced budget in 10 years and, according to CBO, a growing
surplus that will lead to a sharp reduction in the national
debt. CBO says a small budget surplus in 2026 will eventually
grow to 1.8 percent of GDP by 2040. At the same time, debt held
by the public will decline from more than 74 percent of GDP
today to 57 percent of GDP in 2026 and to just 22 percent of
GDP by 2040--a glide path to fully paying off the national
debt.
Over the long term, the budget assumes revenue generally
follows CBO's extended baseline and is allowed to grow from
18.1 percent of GDP in 2026 to 19.0 percent of GDP by 2035.
After that, the budget holds revenue at 19.0 percent of GDP.
The United States has dealt with financial problems in the
past. In 1997, a Democratic president and a Republican Congress
passed the Balanced Budget Act of 1997, which resulted in four
years of balanced budgets. This budget follows that model. It
incorporates ideas from both parties to address a pressing
issue of the day: America's national debt.
BUDGET PROCESS REFORM
----------
There is no doubt congressional budget procedures are
failing. Before last year, Congress had gone 5 straight years
without passing a budget resolution, the key instrument for
setting fiscal policy (although the House did pass its own
budgets for fiscal years 2012 through 2015).
Yet the lack of budget resolutions is only one symptom of
congressional failure. As the practice eroded, budget deadlines
were routinely missed (sometimes deliberately), spending limits
were breached, oversight was ignored, and separate spending
bills were typically combined into massive, omnibus measures
that Members had too little time to study before they must vote
on them. Although the House and Senate last year did pass a
reconciliation bill pursuant to the budget resolution--the
measure repealed the Affordable Care Act--the budget's
discretionary spending levels were supplanted by a bipartisan
spending agreement.
Budgeting is inherently difficult, but current budget
procedures contribute to the failures cited above. The process
is complex, immensely time-consuming, frustrating, and
difficult to understand--and far too often it fails to produce
the results intended. As a result, over the past several years,
legislators and policy experts have proposed a variety of
specific, incremental changes to the process that they believe
will make it more efficient and effective. Among the ideas
proposed have been a joint budget resolution--which would call
for the President's signature or veto--automatic continuing
resolutions, 2-year budgets and appropriations, and reform of
budget baselines. What is needed, however, is a thorough
overhaul of the congressional budget process: ``[T]he time for
incremental reforms in the budget process is over. The Congress
should blow it up and start over from first principles.''\254\
---------------------------------------------------------------------------
\254\Alice M. Rivlin, first director of the Congressional Budget
Office, testimony to the Committee on the Budget, U.S. House of
Representatives, 21 September 2011.
---------------------------------------------------------------------------
The following are some key principles for guiding a
reevaluation of congressional budgeting procedures.
Exercising Constitutional Government
Although America's Founders had little sense of formalized
budget practices, they knew control over spending and taxation
was one of the most powerful instruments of government--one
that should rest with the legislature. ``This power of the
purse,'' Madison wrote, ``may, in fact, be regarded as the most
complete and effectual weapon with which any constitution can
arm the immediate representatives of the people, for obtaining
a redress of every grievance, and for carrying into effect
every just and salutary measure.''\255\
---------------------------------------------------------------------------
\255\The Federalist, No. 58.
---------------------------------------------------------------------------
With today's budgets at nearly $4 trillion a year--more
than one-fifth of the Nation's total economic output--budget
matters affect nearly every aspect of government. ``The
importance of conflicts over the size and distribution of the
budget--failure to pass a budget on time or at all has become a
sign of inability to govern--testifies to the overwhelming
importance of budgeting. Nowadays the State of the Union and
the state of the budget have become essentially
equivalent.''\256\
---------------------------------------------------------------------------
\256\Aaron B. Wildavsky, The New Politics of the Budgetary Process
- Third Edition (New York: Addison-Wesley Educational Publishers Inc.,
1997) p. xxiii.
---------------------------------------------------------------------------
Most process reform proposals focus on practical matters,
aiming to establish a process that is more effective,
efficient, and enforceable. This is perfectly understandable
and appropriate. A budget process, however skillfully designed,
is pointless if Congress cannot or will not use it, or if it
fails to improve management of fiscal policy.
Still, reformers should view these characteristics in a
broader context that recognizes the role of budgeting as a
principal exercise of governing. The process should reinforce
the American constitutional framework, treating it not as an
impediment to efficient budgeting but as the fundamental
platform for public policy.
LIMITING GOVERNMENT
If the Constitution is intended to provide a framework for
a limited government, a practice of budgeting aimed at limiting
spending is one of the best ways to achieve it.
Spending is how government does what it does, the reason
government taxes and borrows. Hence, spending is the root cause
of every other fiscal consequence. Total spending also is one
of the best measures of the size and scope of government and
its burden on the economy.\257\ As longtime budget expert Allen
Schick has put it: ``In a fundamental sense, the Federal
Government is what it spends.''\258\
---------------------------------------------------------------------------
\257\See Douglas J. Holtz-Eakin, testimony in hearing, Economic
Effects of Long-Term Federal Obligations, Committee on the Budget, U.S.
House of Representatives, 108th Cong., 1st Sess., July 24, 2003, http:/
/www.gpo.gov/fdsys/pkg/CHRG-108hhrg88592/html/CHRG-108hhrg88592.htm.
\258\Schick, The Federal Budget, p. 2.
---------------------------------------------------------------------------
Controlling spending is therefore a principal means of
limiting government and should be a focus of the budget
process. Therefore, measures such as spending caps are
important, especially if applied to both automatic and
discretionary spending. They should help control spending and
force frequent review of automatic spending programs. The main
point is to recognize that spending is a fundamental expression
of the size, scope, and nature of government. To limit spending
is to limit government itself and to validate the principle
that ``budgeting is governing.''
ENHANCING CONGRESS'S POLICYMAKING ROLE
Budgeting should be viewed as more than merely a mechanical
process. It should reinforce Congress's constitutional role as
the policymaking institution of the Federal Government.
Therefore, the budget resolution--the only legislative vehicle
that views the government comprehensively--should define the
priorities guiding its allocation of resources. It should
reflect the delegation of powers between the Federal and State
governments as envisioned in the Constitution. Embracing these
principles gives meaning to the budget resolution as an
instrument for governing, and provides coherence to the
spending and tax bills that follow. The budget process also
should promote the practice of budgeting itself. It should
compel Congress to exercise this fundamental governing
responsibility. The best incentive, of course, is simply a firm
commitment by lawmakers to fulfill their legislative
obligations, but the process should support that conviction to
the greatest extent possible.
REINFORCING THE BALANCE OF POWERS
The role of budget procedures in maintaining the
constitutional order was clearly stated in 1918, as policy
advocates were promoting the establishment of an executive
budget process (which came to pass in 1921).\259\ ``When you
have decided upon your budget procedure you have decided on the
form of government you will have as a matter of fact. Make the
executive the dominating and controlling factor in budget-
making and you have, irrespective of what label you put on it,
an autocratic actual government. If . . . you give the
dominating and controlling influence to the representatives of
the people elected to the legislature, you have, irrespective
of what label you put on it, a democratic or a representative
actual government.''\260\
---------------------------------------------------------------------------
\259\The Budget and Accounting Act of 1921 created the Federal
Government's first formal budget process based in the Executive Branch.
The act also created the Bureau of the Budget, now the Office of
Management and Budget.
\260\Edward Augustus Fitzpatrick, Budget Making in a Democracy (New
York: The Macmillan Company, 1918).
---------------------------------------------------------------------------
The Congressional Budget Act of 1974 made the budget a
concurrent resolution, not requiring the President's signature,
for a reason. The President still prepares his budget--an
expression of his own agenda, his own priorities and policy
proposals--independently of Congress. The President also has
the important role of either signing or vetoing the spending
and tax bills that implement the congressional budget. Through
veto messages, he can encourage--but not compel--changes in
those measures.
When Congress fails to conduct its own regular budget
procedures, it cedes to the administration more control over
budgetary decisions through its execution of spending and tax
policies. This is especially true with automatic spending
programs and their effectively permanent authorizations.
Because they are not subject to regular congressional review,
this major part of the budget is arguably controlled by the
administration and its regulatory apparatus.
The congressional budget should assertively define the
allocation of resources in a way that aligns with Congress's
vision of national priorities. Congress also should
periodically review all spending programs, especially those
funded with automatic spending.
It is worth noting, too, that before 1974, only the
President had a comprehensive fiscal plan for the government.
Congress acted on spending and tax bills separately, and they
were made part of the President's plan, sometimes with
modifications. With the creation of the budget resolution under
the Congressional Budget Act of 1974, Congress had its own
comprehensive fiscal plan, and the President's actions in
signing spending and tax bills became piecemeal. This
represented a significant shift in governing authority.
CONTROLLING THE ADMINISTRATIVE STATE
A huge expansion of the Executive Branch bureaucracy has
accompanied the growth of the Federal Government's role in
American society during the 20th century. The Progressive
impulses that promoted this trend relied largely on policy
``experts'' shielded from political influence. In their
regulatory capacities, these bureaucrats have come to assume
authorities of all three branches of government: legislative,
executive, and judicial. Thus, America's constitutional
government has increasingly become an administrative state
largely run by unelected career government employees. Indeed,
most of the laws passed by Congress simply authorize
bureaucrats to devise regulations that will control Americans'
lives.\261\
---------------------------------------------------------------------------
\261\Jonathan Turley, ``The Rise of the Fourth Branch,'' The
Washington Post, 26 May 2013: http://articles.washingtonpost.com/2013-
05-24/opinions/39495251_1_federal-agencies-federal-government-fourth-
branch.
---------------------------------------------------------------------------
Whether the regulatory agencies are `executive agencies,'
`executive departments,' `Federal departments,' or `independent
regulatory commissions' is irrelevant. In whatever form they
may take, the myriad agencies and departments that make up this
administrative state operate as a `fourth branch' of government
that typically combines the powers of the other three and makes
policy with little regard for the rights and opinions of
citizens.\262\
---------------------------------------------------------------------------
\262\Joseph Postell, ``From Administrative State to Constitutional
Government,'' Heritage Foundation Special Report No. 116, 7 December
2012. p. 5: http://www.heritage.org/research/reports/2012/12/from-
administrative-state-to-constitutional-government.
---------------------------------------------------------------------------
In addition to taking firmer control of the regulatory
process itself,\263\ Congress could address this problem
through budgeting. ``Congress funds the administrative state,
providing financial support that the bureaucracy values highly.
As a result of Congress's substantial powers, agencies and
departments listen carefully when Congress speaks to
them.''\264\
---------------------------------------------------------------------------
\263\Ibid., pp. 25-26.
\264\Ibid., p. 25.
---------------------------------------------------------------------------
Promoting and Sustaining Fiscal Responsibility
Budgets exist because resources are finite and needs are
not. Both individuals and governments go to great lengths
through budgeting to understand what resources are available
and how best to allocate them among competing needs. A good
budget should lead to sustainability, in which resources match
needs over long periods of time even if temporary imbalances
occur.
There also must be honesty in recognizing the true
difference between ``investments''--that is, legitimate cases
in which needs temporarily exceed resources, but produce long-
term returns--and chronic deficits where over-consumption
eventually leads to financial ruin. A good budget must also
recognize the willingness of participants to provide
resources--to be taxed--and force reconciliation with spending
when chronic imbalances occur. The Federal budget is failing to
provide either sustainability or a rational process that aligns
spending with taxes.
Targets for budget sustainability have become a hotly
debated, partisan topic. The most straight-forward model--one
that prevailed as a governing standard for most of the Nation's
history until the 1970s--is a balanced budget, a rapidly
declining ratio of debt to gross domestic product [GDP], and
eventual liquidation of the national debt. On the other side,
sustainability is defined as maintaining the current debt-to-
GDP ratio. Similarly, there is no agreement on the level of
spending vs. the willingness to be taxed. Spending has averaged
20.5 percent of GDP over the past 40 years, while revenue has
averaged 17.4 percent--meaning a chronic deficit of about 3
percent of total economic output has persisted.
The current budget process contains no formal rules or
default targets concerning either sustainability or levels of
spending and taxation when the two parties cannot agree on
levels. In theory, budget alignment could be brought about at
any time by the Congress and President, but in practice it will
be achieved only when one political party controls both Houses
of Congress and the Presidency, and even then it is uncertain.
The absence of default targets for debt, taxes, and spending
reinforces the status quo, supporting biases in favor of higher
spending, leading to spending levels that far exceed taxes, an
ever growing level of debt, and ultimately an unsustainable
budget outlook.
A strong argument can be made that the current budget
system is fatally flawed because it cannot self-correct an
unsustainable outlook. Many developed countries facing similar
problems have adopted fiscal rules to deal with this problem.
Similarly, 49 of the 50 States of the U.S. have adopted some
type of balanced budget requirement. A critical element of
these requirements is that they apply regardless of the party
in power, which guarantees a sensible fiscal outcome even if
the specific policies in question are hotly debated.
Given the real risk of an approaching Federal debt crisis
and the inability of the current political environment to
prevent it, now is the time to examine whether formal fiscal
rules that guarantee sustainability and match spending with the
taxes can be adopted within the Federal budget process.
Restoring Congressional Control of Spending and Taxation
For most of the Nation's history, Congress exercised its
``power of the purse'' through a process in which periodic
votes on spending was the norm, fixed allotments of funds were
appropriated, and programs were authorized for finite periods
of time. With the dramatic growth of automatic spending
programs as a share of total outlays, Congress has gradually
lost control of spending, and--perhaps unintentionally--has
ceded much of its fiscal authority to the Executive Branch.
The Federal Government's major health, retirement, and
economic security programs--including Social Security,
Medicare, and Medicaid--operate on the mechanism of automatic
spending (formally ``direct'' or ``mandatory'' spending).\265\
Typically, once such a program is authorized, the payments flow
automatically to eligible recipients and continue indefinitely,
with no limit on total outlays and without regular
congressional oversight. These automatic spending programs,
coupled with net interest (a mandatory payment in the truest
sense of the term) now constitute roughly two-thirds of total
Federal spending, compared with about one-third in 1965, at the
dawn of President Johnson's Great Society programs. The share
of direct spending (including interest) is projected to
continue increasing relentlessly, reaching 78 percent of the
budget in just 10 years. This spending threatens to consume all
Federal tax revenue in the near future if no reforms are made.
---------------------------------------------------------------------------
\265\Although ``mandatory spending'' is the more common term, it is
direct spending that has an actual definition in the Balanced Budget
and Emergency Deficit Control Act of 1985 (Public Law 99-177), which
describes it as budget authority provided in law other than
appropriations acts; entitlement authority; and the Supplemental
Nutrition Assistance Program (formerly food stamps).
---------------------------------------------------------------------------
Conversely, annually appropriated, or ``discretionary''
spending, has plunged from two-thirds of total spending in 1965
to one-third now, and is projected to continue shrinking
(Figure 2). These discretionary accounts--which finance
activities such as national defense, Washington's support for
K-12 education, veterans' hospitals, homeland security, and the
operations of government agencies, along with many others--are
the only form of spending in which Congress directly controls
the allocation of resources and the total amounts.
Automatic spending programs, in contrast, are designed to
evade any semblance of budget discipline: they have an
unlimited source of funds, most are permanently authorized, and
they do not require regular votes by Congress to continue
operating. These features ironically flip the power of the
purse on its head: money is taken from citizens and spent by
the government, even without consent from the current Congress.
Congress can change these programs by changing the underlying
authorizing legislation, but the changes can take effect only
if the President agrees and signs the legislation. As a result,
Congress has lost control over the majority of the budget.
Many argue that direct spending as currently structured
explains chronic budget deficits and the growth in national
debt. Indeed, the budget has been balanced only five times in
the past 50 years, while at the same time automatic spending
surged. Clearly, Congress needs to re-establish control over
automatic spending if it intends to avoid deficits and
dangerous levels of debt in the future. The specific details of
how to reform these programs remain vexing, but basic
principles such as fixed amounts of budgetary resources, finite
authorizations, and regular votes to continue authorized
programs should be adopted.
Emphasizing Regular Oversight and
Review of all Federal Spending
To gain control of fiscal policy, the budget process should
encourage regular review of all Federal spending. This is
especially true with the budget dominated by direct, or
mandatory, spending. Authorizing committees, who have
jurisdiction over direct spending programs, hold many hearings
on programs under their jurisdiction, but it is not clear that
oversight and review of the effectiveness of direct spending is
an ongoing priority. This may be partly due to how direct
spending programs are treated under the budget process. Over
the next decade, Social Security and the major health
programs--Medicare, Medicaid, the Affordable Care Act, and the
State Children's Health Insurance Program--will spend roughly
$28.2 trillion, representing nearly 90 percent of all expected
mandatory spending over this period.\266\
---------------------------------------------------------------------------
\266\Congressional Budget Office, The Budget and Economic Outlook:
2016 to 2026, January 2016, Table 3-2, pp. 68-69.
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While the authorizing committees with jurisdiction over
these programs could make changes--for example, in a budget
reconciliation bill pursuant to a budget resolution--such
permanently authorized direct spending programs tend to reduce
the incentive for oversight and review of spending. The Social
Security Program is permanently authorized and is also off
budget. Consequently, Congress cannot consider changes to
Social Security under the regular budget or reconciliation
process.
Most of the remaining 20 percent of expected direct
spending is accounted for by programs that are authorized for
finite periods. The Congress must reauthorize such programs
when they face expiration if it wishes for them to continue. In
such cases, there is more incentive for oversight activity by
the relevant authorizing committees. Nevertheless, the budget
baselines generated by the Congressional Budget Office assume
that most direct spending programs will continue, even if their
authorizations are set to expire.\267\ As a result, when the
programs are reauthorized, the estimates show little or no
increase in spending. This situation tends to reinforce the
status quo and lessens the incentive to review direct spending.
---------------------------------------------------------------------------
\267\This is pursuant to section 257 of the Balanced Budget and
Emergency Deficit Control Act of 1985.
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The budget process could be changed by enacting explicit
long-term targets and an annual review for Medicare, Medicaid,
and Social Security as well as other direct spending
programs.\268\ Statutory spending caps are currently
established only for discretionary spending. Establishing
statutory limits for direct spending programs would tend to
encourage more regular oversight and review of all Federal
spending. It could also encourage legislators to reach
conclusions in a timely manner.
---------------------------------------------------------------------------
\268\This idea extends Recommendation 2 as discussed on pages 13-14
of the Bipartisan Policy Center's June 2015 report, ``Proposal for
Improving the Congressional Budget Process'' to all direct spending
programs.
---------------------------------------------------------------------------
Another problem is that even if Congress identifies
wasteful or obsolete programs, it is difficult to get estimates
of the savings that could result from eliminating them. This
diminishes the incentive to pursue such oversight.
Reflecting the True Costs of Programs
One of the successes of the Congressional Budget Act of
1974 was the Congressional Budget Office [CBO], created to
provide Congress with independent fiscal and economic analysis.
Prior to 1974, Congress had to rely on the administration for
such information.
Some of CBO's estimates fail to reflect the true costs of
government programs or legislative proposals, or misrepresent
likely fiscal outcomes. In many cases, this is due to
estimating conventions that have been approved by Congress--
some of which contribute toward biases in favor of higher
spending. Many of these conventions were created by a
commission convened nearly a half century ago--in 1967, under
President Johnson--yet they remain in use today.\269\
---------------------------------------------------------------------------
\269\See the Report of the President's Commission on Budget
Concepts, 10 October 1967.
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One example is the use of budget baselines. Although
baselines are an important means of estimating the direction of
Federal spending and revenue, they tend to assume all spending
will continue to grow, maintaining its relative share of the
Nation's economic resources. Consequently, the baseline builds
in assumptions of ever-increasing spending.
A second example lies in estimates of Federal credit
programs. Current methodologies understate the costs of Federal
loans and loan guaranties, because they do not account for
credit risks arising from these programs. This technique leads
estimators to conclude the government's direct student loan
program will result in savings for the government when in fact,
if default risks were suitably included--by using fair value
accounting--they would likely show costs to the government.
A third example is the treatment of user fees and other
government collections outside of taxes. Many of these fees are
counted not as additional revenue to the government, but as
``negative outlays,'' or reductions in spending. This practice
gives the impression that increasing a fee decreases spending,
when in fact it does just the opposite: it uses the fees to
support an increase in spending that is masked by a misleading
estimating convention.
Some of these practices also encourage the exploitation of
estimating conventions to make legislative proposals appear
less expensive than they are. The gimmicks include timing
shifts--moving costs into subsequent fiscal years or outside
the 10-year budget estimating window--or temporary or illusory
spending offsets.
In addition, some government-backed entities--such as the
Federal National Mortgage Association [Fannie Mae] and the
Federal Home Loan Mortgage Corporation [Freddie Mac] are not
included in the regular budget accounts, even though they
represent enormous exposures to taxpayers.
One other failing in the budget is a lack of accounting for
regulation. Regulations clearly impose costs, both in direct
costs for implementation, and also the burden of economic
costs. The latter are difficult to quantify, but even if it
were possible, there is no place in the budget to reflect them.
(This subject is further addressed in the next section of this
report.)
Conclusion
Considering the great importance of restoring an effective
and vigorous practice of congressional budgeting--one built on
the principles described above--the Committee plans to
undertake a thorough rewrite of the Congressional Budget Act of
1974, with the hope of enacting a new process early in 2017.
REGULATORY BUDGETING
----------
The restoration of sound budgeting for how the Federal
Government spends taxpayer dollars is critical to the promotion
of economic growth, debt reduction, federalism, and ordered
liberty. So too is the introduction of budgeting for how the
Federal Government directs others to spend: regulatory
budgeting.
Excessive and unnecessary regulation is a hidden tax on
Americans. It regressively taxes the poor, leaves displaced
workers unemployed or in lower-paying jobs, and often inflicts
concrete pain in search of illusory benefits. It is one of the
biggest reasons America's growth rate has failed to yield a
sufficient recovery during the Obama years.
Growing research shows that the cumulative burden of
Federal regulation--and high regulatory uncertainty about what
regulation may come next--drains America's economy of the
growth it needs to reduce and eliminate Federal debt. Precious
manpower and financial resources that productive sectors could
otherwise spend on innovating, hiring new workers, and rolling
out new products and services is wasted every day on compliance
with extensive amounts of new regulation--and the enormous
numbers of regulations already on the books.
All too often, this serves only the administrative state,
not families in search of a living, the poor in search of
opportunity, and workers in need of a job. Washington's
regulatory bureaucracy rarely knows both the monetized costs
and the monetized benefits of even new major regulations that
it issues. Frequently, the benefits claimed for new regulation
are not the direct benefits Congress directly sought when it
passed the relevant regulatory statutes. Instead, they are
purported ``co-benefits''--side effects--that the bureaucracy
argues serve some other end.
None of this can be afforded by an America that must rely
on private sector growth to help pay down almost $20 trillion
in Federal Government debt. None of it should be countenanced
by a Nation founded on the principles of limited government and
personal liberty.
None of this, moreover, has to continue. When regulation is
needed, it can be done in more cost-effective ways. Before it
is imposed, Congress can budget for how much new regulation, if
any, can sustainably be imposed on America's economy year by
year. The undue brake on economic growth that Federal
regulation sets must be controlled. It makes eminent sense to
do that using the kinds of budgeting tools Congress applies to
put the brakes on runaway Federal spending. To date, Congress
has not adopted regulatory budgeting tools to manage the
Federal regulatory footprint in the way that it manages the
Federal spending footprint. Neither has it imposed robust
statutory controls against Federal regulators' abilities to
burden America's workers and economy with excessively expensive
and insufficiently effective Federal regulations. The time has
come that it should do both.
SECTION-BY-SECTION DESCRIPTION
----------
The concurrent resolution on the budget for fiscal year
2017 establishes an overall budgetary framework. As required
under the Congressional Budget Act of 1974 [the Budget Act],
the framework includes aggregate levels of new budget
authority, outlays, revenues, the amount by which revenues
should be changed, the surplus or deficit, new budget authority
and outlays for each major functional category, debt held by
the public, and debt subject to the statutory limit. This
resolution also sets forth appropriate budgetary levels for
fiscal years 2018 through 2026.
This resolution provides reconciliation instructions to
authorizing committees to achieve specified deficit reduction
targets. It includes rulemaking provisions necessary to enforce
the resolution, procedures for adjusting the budget resolution,
provisions to accommodate legislation not assumed in the budget
resolution, and specifies certain policy assumptions underlying
the budget resolution.
Section 1. Concurrent Resolution on the Budget for Fiscal Year 2017.
Subsection (a) establishes the budgetary levels for fiscal
year 2017 and each of the nine ensuing fiscal years, 2018
through 2026. Section 301(a) of the Budget Act stipulates that
the budget resolution establish budgetary levels for the fiscal
year for which such resolution is adopted and at least for each
of the four ensuing fiscal years.
In addition to the levels set forth in the fiscal year 2017
budget resolution, this report provides allocations of budget
authority and outlays, as required under section 302 of the
Budget Act, to the Committee on Appropriations. The Committee
on Appropriations, in turn, suballocates this among its twelve
subcommittees for spending on the various programs, projects,
and activities within the jurisdiction of the subcommittees.
This report provides allocations to each of the authorizing
committees, with jurisdiction over entitlements and other forms
of mandatory spending. In addition to an allocation for fiscal
year 2017, the authorizing committees receive an allocation of
spending authority over the 10-year period provided for by this
budget resolution and may not spend more than the allocation
for the budget year or over the 10-year period.
Subsection (b) sets out the table of contents of the
resolution.
TITLE I--RECOMMENDED LEVELS AND AMOUNTS
Section 101. Recommended Levels and Amounts.
Section 101, as required by section 301 of the Budget Act,
establishes the recommended levels for revenue, the amount
revenue should be changed, total new budget authority, total
budget outlays, surpluses or deficits, debt subject to the
statutory limit, and debt held by the public.
The revenue level operates as a floor against which all
revenue bills are measured pursuant to section 311 of the
Budget Act. Similarly, the recommended levels of new budget
authority and budget outlays serve as a ceiling for spending
legislation. The surplus or deficit levels include only on-
budget outlays and revenue and do not include most outlays and
receipts related to the Social Security Program and United
States Postal Service operations.
Debt subject to the statutory limit aggregates generally
refers to the portion of gross Federal debt issued by the
Treasury to the public or another government fund or account,
whereas debt held by the public is the amount of debt issued
and held by entities or individuals other than the U.S.
Government.
Section 102. Major Functional Categories.
Section 102, as required by section 301(a) of the Budget
Act, establishes the budgetary levels for each major functional
category for fiscal year 2017 and establishes these levels for
each of fiscal years 2018 through 2026.
These major functional categories are the following:
050 National Defense
150 International Affairs
250 General Science, Space, and Technology
270 Energy
300 Natural Resources and Environment
350 Agriculture
370 Commerce and Housing Credit
400 Transportation
450 Community and Regional Development
500 Education, Training, Employment, and Social
Services
550 Health
570 Medicare
600 Income Security
650 Social Security
700 Veterans Benefits and Services
750 Administration of Justice
800 General Government
900 Net Interest
920 Allowances
930 Government-Wide Savings
950 Undistributed Offsetting Receipts
970 Overseas Contingency Operations/Global War on
Terrorism
TITLE II--RECONCILIATION AND OTHER MATTERS
Section 201. Fiscal Year 2017 Budgetary Agenda.
Section 201 sets forth, in a policy statement, the
budgetary agenda for the House for the second session of the
114th Congress. Under this framework, the House intends to
consider legislation achieving savings in mandatory spending
both through and outside of the reconciliation process,
controls on new mandatory spending, and other reforms to the
Federal budget process.
Paragraph (1) states that the House will consider
reconciliation legislation as the first step in balancing the
Federal budget by fiscal year 2026. Paragraph (2) states that
the House will consider a bill outside of reconciliation to
achieve $30 billion in savings in fiscal year 2017 and 2018.
Paragraph (3) states that the House will similarly consider a
measure to control mandatory spending. Under paragraph (4), the
appropriate committees will consider each of three budget
process reforms specified in section 205.
Section 202. Reconciliation in the House of Representatives.
Subsection (a) specifies a deadline of 90 calendar days
after the adoption of the budget resolution for the authorizing
committees to submit reconciliation legislation to the
Committee on the Budget. These instructions are optional
procedures permitted under section 301(b) of the Budget Act.
Subsection (b) sets forth reconciliation instructions to 12
authorizing committees, pursuant to section 310 of the Budget
Act, to achieve specified amounts of deficit reduction. The
instructed committees have jurisdiction over direct spending
programs for which savings are assumed in the budget
resolution. The instructed committees and the amount of savings
are:
Committee on Agriculture............................... $1,000,000,000
Committee on Armed Services............................ $100,000,000
Committee on Education and the Workforce............... $1,000,000,000
Committee on Energy and Commerce....................... $1,000,000,000
Committee on Financial Services........................ $1,000,000,000
Committee on Homeland Security......................... $15,000,000
Committee on the Judiciary............................. $1,000,000,000
Committee on Natural Resources......................... $100,000,000
Committee on Oversight and Government Reform........... $1,000,000,000
Committee on Transportation and Infrastructure......... $100,000,000
Committee on Veterans' Affairs......................... $1,000,000,000
Committee on Ways and Means............................ $1,000,000,000
This budget resolution follows the convention of not
reconciling Senate committees and assumes that the Senate
budget resolution will include such instructions and be carried
in the conference agreement nor does it include any instruction
increasing the debt limit.
The committees are instructed to achieve specified deficit
reduction targets rather than changes in budget authority,
outlays, or revenue. While this instruction provides
flexibility as to how the savings may be scored, the budget
resolution assumes savings will be achieved through reductions
in direct spending. The reconciled amounts are intended to
serve as a floor on required savings, not a ceiling. The
targets are for the total of the ten-year period of fiscal
years 2017 through 2026. These targets will provide the
committees maximum flexibility in the construction of savings
while ensuring the budget is balanced within the 10-year
window.
The reconciled committees are required to markup
legislation that meets their reconciliation target and submit
legislation to the Committee on the Budget instead of reporting
it directly to the House. Other than submitting their
legislation to the Committee on the Budget, committees are
expected to follow regular order in complying with House and
Committee rules related to markup procedures and reporting
requirements.
The Committee on the Budget will then combine the
submissions and report the bill to the House. Under section
310(b) of the Budget Act, the Committee on the Budget must
report the submissions without substantive revision. The
committees determine their own policies as long as they meet
the reconciliation targets.
Subsection (c) authorizes the Chair of the Committee on the
Budget to revise the appropriate allocations, aggregates, and
functional levels of this budget resolution upon the
consideration of a reconciliation measure under section 310 of
the Budget Act or amendment thereto or the submission of a
conference report to the House, if such measure is in
compliance with its reconciliation instructions by virtue of
section 310(c) of the Budget Act.
Section 203. Policy Statement on Mandatory Savings Outside of the
Reconciliation Process.
Section 203(a) establishes a second option for achieving
mandatory savings in this budget resolution in the form of a
policy statement. It states that the House will consider early
in this session legislation that would achieve not less than
$30 billion in savings over fiscal years 2017 and 2018 and $140
billion over the 10-year period of fiscal years 2017 through
2026.
This process will begin immediately, with several
committees reporting the week of 14 March 2016 and other
committees to follow in subsequent weeks.
Subsection (b) lists the five committees that will
participate in moving this legislation. The committees are:
Committee on Agriculture
Committee on Energy and Commerce
Committee on Financial Services
Committee on the Judiciary
Committee on Ways and Means
Subsection (c) lists three potential policies that are
expected to be part of the package of savings assembled under
this section:
Recovering improper Obamacare subsidy payments.
Eliminating enhanced Medicaid payments for prisoners.
Ending Medicaid payments for lottery winners.
This mandatory savings legislative package in this
resolution is a high priority and the Committee's goal is to
ensure that the House advances this legislation through the
Congress. To that end, subsection (d) sets forth a procedure
for consideration of this mandatory savings package that starts
with a stand-alone measure that the House would pass. The
Senate frequently does not act on House legislation. To avoid
the outcome where this stand-alone bill languishes in the
Senate, this subsection calls on the House to add the savings
to one or more other measures with a fiscal impact. For the
purposes this section, a measure with a fiscal impact is a bill
that the Joint Committee on Taxation estimates would have a
revenue impact, a bill that the Congressional Budget Office
[CBO] estimates would have a budget impact under section 402 of
the Congressional Budget Act, or an appropriations bill.
Subsection (e) clarifies that if the House considers an
omnibus measure containing mandatory savings, the proceeds from
those savings will be credited to the appropriate committees of
jurisdiction.
Section 204. Policy Statement on New Mandatory Spending
Controls.
Section 204 provides a third option for controlling
mandatory spending assumed in this budget resolution. Again in
the context of a policy statement, it allows the House to
consider procedural reforms in connection with new mandatory
spending programs.
This section mentions five specific measures that the
appropriate committee will consider as it seeks to provide the
tools necessary to control spending not subject to annual
appropriations. The first is a limitation on the
reauthorization of new mandatory spending programs. Such a
control could take the form of a rule prohibiting the
authorization of new entitlement programs or retooling obsolete
rules from the Budget Act.
A second measure that could be considered is a requirement
that mandatory programs be periodically reviewed or even
reauthorized. Much of the Federal budget is consumed by
programs that have permanent indefinite appropriations or where
the authorizations are permanent and the appropriations are
only nominally provided through the annual appropriations
process.
A third measure that may be considered by the Committee on
the Budget would be a modification of the existing Pay-As-You-
Go [PAYGO] requirements set forth in section 252 of the
Balanced Budget and Emergency Deficit Control Act of 1985. It
would modify PAYGO from a rule mandating that the sum of
legislation increasing direct or mandatory spending or reducing
revenue must be deficit-neutral or an automatic sequester is
triggered across a narrow base of mandatory spending programs.
A fourth measure meriting consideration would modify the
reconciliation process set forth in section 310 of the Budget
Act to permit the inclusion of legislation submitted by the
Committee on the Budget to impose controls over different
facets of the Federal budget, including statutory limits on
discretionary spending, Pay-As-You-Go requirements for
legislation that would increase mandatory spending and
limitations on measures to authorize new mandatory programs.
A fifth measure that will be considered would be a
limitation on the ability to reclassify historically
discretionary spending programs into mandatory spending
programs as a means of circumventing the discretionary spending
limits.
Section 205. Policy Statement on Other Budget Process Reforms.
Section 205 provides a fourth option for increasing
scrutiny of and control over the budget. It states that is the
policy of the House that during the second session of the 114th
Congress the appropriate committees of jurisdiction and the
Congress consider the following reforms of the budget process:
an amendment to the United States Constitution requiring a
balanced budget, a baseline budgeting measure, requirements
relating to unauthorized appropriations, and other reforms that
may be recommended by the appropriate committees of
jurisdiction.
These individual measures represent only incremental steps
to reform the Federal budget process. The Chair of the
Committee on the Budget has already announced his intention to
consider a comprehensive overhaul of the Federal budget process
during the 115th Congress and the Committee on the Budget has
already held a number of hearings to that end in the 114th
Congress.
TITLE III--BUDGET ENFORCEMENT
Subtitle A--Budget Enforcement in the
House of Representatives
Section 301. Limitation on Long-Term Spending.
Subsection (a) requires the Congressional Budget Office, to
the extent practicable, to prepare an estimate of whether a
measure would cause a net increase in direct spending in excess
of $5 billion over the long-term. The applicable periods for
this section are any of the 4 consecutive 10-fiscal-year
periods beginning in fiscal year 2026.
Subsection (b) establishes a point of order against the
consideration of any measure other than an appropriation
measures (or amendment thereto or conference report thereon)
that increases direct spending by $5 billion over the long-
term. The applicable periods for this section are any of the 4
consecutive 10-fiscal-year periods beginning in fiscal year
2026.
Subsection (c) states that application of this section in
the House shall not apply to any measure for which the Chair of
the Committee on the Budget adjusts the appropriate levels of
this budget resolution pursuant to section 402 or 410 of this
resolution. In other words, the adjusted levels ``snap back''
after the measure is considered. This would prevent the
creation of headroom under which the spending legislation could
be considered. The adjustment only becomes permanent once the
measure is enacted.
Subsection (d) stipulates that for purposes of this
section, the levels of net increases in direct spending shall
be determined on the basis of estimates provided by the Chair
of the Committee on the Budget.
Section 302. Allocation for Overseas Contingency
Operations/Global War on Terrorism.
Subsection (a) provides the Committee on Appropriations
with a separate allocation for the purposes of Overseas
Contingency Operations/Global War on Terrorism [OCO/GWOT] under
section 302(a) of the Budget Act, which is included in the
allocation tables in this report.
Subsection (b) stipulates that this separate allocation is
the exclusive allocation for OCO/GWOT under section 302(b) of
the Budget Act and permits the Committee on Appropriations to
suballocate such separate allocation pursuant to section 302(b)
of the Budget Act.
Subsection (c) stipulates that, for purposes of enforcing
the point of order under section 302(f) of the Budget Act, the
``first fiscal year'' and the ``total of fiscal years'' refers
to fiscal year 2017 only. This separate allocation is the
exclusive allocation for OCO/GWOT under section 302(a) of the
Budget Act. It also stipulates that section 302(c) of the
Budget Act does not apply to this separate allocation.
Subsection (d) provides that only appropriations designated
in an appropriations bill for OCO/GWOT and that are subject to
the statutory spending limits will be counted against the OCO/
GWOT allocation.
Subsection (e) ensures that the budget resolution levels
are not inadvertently adjusted for any OCO/GWOT appropriations
because these appropriations are already accommodated in the
separate 302(a) allocation for OCO/GWOT. It specifically
provides that no adjustment will be made under section 314(a)
of the Budget Act if an adjustment would be made under section
251(b)(2)(A)(ii) of the Deficit Control Act.
Subsection (f) authorizes the Chair of the Committee on the
Budget to adjust the appropriate budgetary levels related to
OCO/GWOT in this budget resolution or the Committee on
Appropriations' 302(a) allocation set forth in this report to
account for new information.
Section 303. Limitation on Changes in Certain Mandatory Programs.
Subsection (a) defines the term ``change in mandatory
programs'' as a provision that: (1) would have been estimated
as affecting direct spending or receipts under section 252 of
the Deficit Control Act (as in effect prior to 30 September
2002) if such provision was included in legislation other than
appropriation Acts; and (2) results in a net decrease in budget
authority in the budget year, but does not result in a net
decrease in outlays over the period of the total of the current
year, budget year, and all fiscal years covered under the most
recently agreed to budget resolution.
Subsection (b) establishes a point of order against any
provision in a bill or joint resolution or amendment thereto or
conference report thereon making appropriations for a full
fiscal year that proposes a change in mandatory programs that,
if enacted, would cause the absolute value of all such change
in mandatory programs enacted in relation to a full fiscal year
to be more than the amount specified under this section. The
amounts under this subsection are as follows:
Fiscal Year 2017: $19,100,000,000;
Fiscal Year 2018: $17,000,000,000; and
Fiscal Year 2019: $15,000,000,000.
Subsection (c) stipulates that, for purposes of this
section, budgetary levels shall be determined on the basis of
estimates provided by the Chair of the Committee on the Budget.
Section 304. GAO Report.
Subsection (a) requires the Comptroller General, in
consultation with the Chair of the Committee on the Budget, the
Director of the Congressional Budget Office, and the Director
of the Office of Management and Budget, to submit a
comprehensive list of all current direct spending programs at a
date to be specified by the Chair of the Committee on the
Budget.
Subsection (b) requires the Chair of the Committee on the
Budget to publish this comprehensive list of direct spending
programs in the Congressional Record and on the Committee's
website in a searchable, sortable, and downloadable format.
There is not a commonly accepted definition of a
``program'' in budget and appropriations law. Consequently,
individual programs, projects and activities are classified by
each agency according to a variety of standards.
A comprehensive list of such programs will prove useful in
developing new procedures governing legislation that
establishes new mandatory programs, enforcing rules relating to
earmarks, and in interpreting exemptions to the rules governing
extension of expiring programs in section 257 of The Deficit
Control Act.
A list of accounts will not be received by the Committee on
the Budget as a fulfillment of this requirement. The Committee
understands that Executive agencies may have failed to fulfill
similar requirements in other laws, but views that as
immaterial to this requirement.
As part of this project, the Committee on the Budget will
work closely with the Comptroller General to develop a workable
definition of a ``program'' and to establish criteria for
determining what constitutes a ``new program.''
Section 305. Estimates of Debt Service Costs.
Section 305 authorizes the Chair of the Committee on the
Budget to direct the Congressional Budget Office to include an
estimate of debt service costs (if any) resulting from carrying
out legislation in any estimate prepared pursuant to section
402 of the Budget Act. Estimated debt service costs will be
advisory and will not be used for determining whether a measure
complies with the limits established in the budget resolution
or other budget rules. This requirement is not intended to
apply to authorizations of discretionary programs or
appropriation bills. However, it is intended to apply to
changes in the authorization level of appropriated
entitlements.
The Chair will only request such estimates with large bills
that could have a noticeable effect on debt service costs.
Section 306. Fair-Value Credit Estimates.
This section was revised for clarity but the section
operates in an identical manner to section 3105 of the
conference report accompanying S. Con. Res. 11, the Fiscal Year
2016 Concurrent Resolution on the Budget.
Subsection (a) requires the Congressional Budget Office to
include a supplemental fair-value estimate, to the extent
practicable, in its estimate of any legislation that
establishes or modifies a program providing loans or loan
guarantees if requested by the Chair of the Committee on the
Budget.
Subsection (b) requires the Congressional Budget Office to
provide a similar supplemental fair-value estimate of any
legislation providing loans or loan guarantees for student
financial assistance or housing (including residential
mortgage).
Subsection (c) requires the Congressional Budget Office, to
the extent practicable, to include in its Budget and Economic
Outlook: 2018 to 2027, a comparison baseline projection for
student financial assistance, housing (including residential
mortgage) and other such credit programs on a fair value and
credit reform basis.
Section 307. Estimates of Major Direct Spending Legislation.
Section 307 requires the Congressional Budget Office, to
the extent practicable, to estimate outlay changes during the
second and third decades of enactment for any direct spending
legislative provision that either: (1) proposes a change or
changes to law that the Congressional Budget Office determines
has an outlay impact exceeding 0.25 percent of the GDP of the
United States during the first decade or in the tenth year or
(2) upon the request of the Chair of the Committee on the
Budget.
Section 308. Estimates of Macroeconomic Effects of Major Legislation.
This rule is essentially identical to section 3112 of the
conference report accompanying S. Con. Res. 11, the Fiscal Year
2016 Concurrent Resolution on the Budget), which effectively
superseded an earlier version of the rule set forth in clause 8
of House rule XIII.
Subsection (a) directs the Congressional Budget Office and
Joint Committee on Taxation, as applicable, to incorporate in
the cost estimates for major legislation, to the extent
practicable, the macroeconomic effects of such legislation
during the 114th and 115th Congresses.
Subsection (b) stipulates that these macroeconomic
estimates are to include, to the extent practicable, a
qualitative assessment of the budgetary effects of major
legislation in the 20-fiscal year period beginning after the
last fiscal year of the most recently agreed to budget
resolution and an identification of the assumptions and source
data underlying the estimate.
Subsection (c) defines major legislation as legislation
that causes a gross budgetary effect (before incorporating
macroeconomic effects) and not including timing shifts in any
fiscal year covered by the budget resolution equal to or
greater than 0.25 percent of the current projected gross
domestic product of the United States for that fiscal year.
Under this subsection, the Chair of the Committee on the Budget
of the House or Senate, as applicable for direct spending
legislation, and the Chair or Vice Chair of the Joint Committee
on Taxation, as applicable for revenue legislation, may
designate major legislation for which estimates must
incorporate macroeconomic effects.
The term ``budgetary effects'' is defined as changes in
revenues, direct spending outlays, and deficits. Subsection (c)
defines ``timing shifts'' as provisions that either: (1) cause
a delay of the date in which outlays flowing from direct
spending would otherwise occur from one fiscal year to the next
fiscal year; or (2) cause an acceleration of the date on which
revenues would otherwise occur from one fiscal year to the
prior fiscal year.
Section 309. Adjustments for Improved Control of Budgetary Resources.
Section 309, a long-time feature of budget resolutions, is
intended to remove a disincentive to subjecting existing
mandatory programs to annual appropriations. It would
effectively hold the Appropriations Committee harmless for any
such conversion and prevent the responsible authorizing
committee from reaping a windfall that it could otherwise use
to offset other increases in mandatory spending.
Under subsection (a), if an authorizing committee reports a
bill that subjects a mandatory program to annual
appropriations, the Chair of the Budget Committee can increase
the 302(a) allocation to the Appropriations Committee by the
amount of mandatory spending that was previously provided for
that program. At the same time, the Chair would reduce 302(a)
allocation of the authorizing committee that reported the bill
by the same amount. These adjustments would be made upon
enactment of the legislation.
Subsection (b) authorizes the Chair to both make the
adjustments under (a) and affirm the Chair's authority to
determine the cost estimates used to execute this section.
Section 310. Limitation on Advance Appropriations.
Section 310 provides a limit on appropriations that first
become effective in fiscal year 2018.
Subsection (a) prohibits the consideration of any general
or continuing appropriations measure from making advance
appropriations unless the appropriation is included in a list
of exceptions in the joint statement of managers accompanying
this report.
Subsection (b) specifies the list of excluded accounts that
are eligible for advance appropriations, are referred to in
this report or joint explanatory statement, as applicable, in
the section designated as ``Accounts Identified for Advance
Appropriations.''
Subsection (c) sets an overall limit for allowable advance
appropriations. It permits advance appropriations of up to
$66,385,032,000 for the veterans accounts referenced in
subsection (b) and referred to in this report. This amount is
equal to the President's advanced appropriations request for
fiscal year 2018. It also allows up to $28,852,000,000 in
advance appropriations for other accounts referenced in
subsection (b) and referred to in this report.
Subsection (d) defines an ``advance appropriation'' as any
new discretionary budget authority provided in a bill, joint
resolution, amendment, or conference report making general or
continuing appropriations for a fiscal year following fiscal
year 2017.
Section 311. Scoring Rule for Energy Savings Performance Contracts.
This section would estimate in today's dollars the net cash
flows, both savings and costs, associated with Energy
Performance Contracts and Utility Service Contracts [ESPC] over
the period of the contract. This scoring rule would have the
effect of capturing any long-term energy and budgetary savings
resulting from these contracts, which cash-based accounting
does not since most of these savings occur outside of the ten-
year window of cash-based estimates. The scoring rule clarifies
that these contracts are to be scored as direct spending and
that no budgetary savings resulting from an ESPC contract may
be used as an offset for budget enforcement. This scoring rule
is designed to be policy neutral regarding future ESPCs.
At the same time, this rule preserves the important
budgetary principle that these costs are mandatory if imposed
by an authorization bill and if there is a net cost associated
with these contracts the costs are attributed to the
authorizing committee reporting the legislation and with it the
obligation to cover the cost of the contracts. The rule does
not change the fact that actual payments made by Federal
agencies are made through discretionary appropriations.
Subsection (a) requires the Director of the Congressional
Budget Office to estimate the net present value basis of any
legislation that expands the Federal Government's authority to
enter into ESPCs.
Subsection (b) stipulates that the net present value is
calculated as follows: (1) the discount rate must reflect
market risk; (2) cash flows must include, whether mandatory or
discretionary spending, payments to contractors under the terms
of their contracts, payments to contractors for other services,
and direct savings in energy and energy-related costs; and (3)
the stream of payments must cover the period of the contracts
but not to exceed 25 years.
Subsection (c) defines ``covered energy savings contract''
as either: (1) an energy savings performance contract
authorized under section 801 of the National Energy
Conservation Policy Act or (2) a utility energy service
contract as described in the Office of Management and Budget
Memoranda on Federal use of energy savings performance
contracting (M-98-13) or Federal use of energy saving
performance contracts and utility energy service contracts (M-
12-21) or any successor to either memorandum.
Subsection (d) prohibits the use of any savings calculated
as a net present value calculation under this section as an
offset for purposes of budget enforcement in the House.
Subsection (e) requires that, for purposes of budget
enforcement, the estimated net present value of the budget
authority provided by the legislation and outlays flowing
therefrom to be classified as direct spending.
Subsection (f) expresses the sense of the House that the
Director of the Office of Management and Budget, in
consultation with the Director of the Congressional Budget
Office, should separately identify the cash flows under
subsection (b)(2) and include such information in the
President's annual budget submission to Congress. It further
specifies that this model should not be extended to other
areas.
Section 312. Estimates of Land Conveyances.
Section 312 provides for greater transparency in the
Congressional Budget Office's estimates for land conveyances.
The Congressional Budget Office is required to estimate the
budgetary impact of reported legislation as well as conference
reports under section 308 of the Budget Act. These estimates
are used by the Committees on the Budget to enforce the
spending and revenue limits in the budget resolution during the
consideration of spending and tax legislation.
Section 312 specifically requires the Director of the
Congressional Budget Office to include in the cost estimate for
any measure conveying Federal land to a non-Federal entity the
following: (1) the methodology used to calculate the estimate;
(2) a detailed justification of its estimate of any change in
revenue, offsetting receipts, or offsetting collections
resulting from such a conveyance; (3) any information, provided
by the applicable Federal agency that supports the estimate of
the Congressional Budget Office must document the source of the
information and to the extent practicable, the date it was
compiled by the agency; (4) a description of any efforts to
independently verify the agency estimate; and (5) a statement
of assumptions underlying the estimate of budgetary effects
that would be generated by the transfer of a parcel of land in
the Congressional Budget Office's baseline projections as of
the most recent publication or update.
The Committee intends that the term ``conveyance'' is to be
interpreted broadly to include, but not limited to, transfers,
sales, directed sales, and donations.
Section 313. Limitation on Transfers from the General Fund of the
Treasury to the Highway Trust Fund.
Section 313 stipulates that, for purposes of budget
enforcement, transfers of funds from the general fund of the
Treasury to the Highway Trust Fund will count as new budget
authority and outlays equal to the amount of the transfer in
the fiscal year in which the transfer occurs.
Section 314. Prohibition on the Use of Guarantee Fees as an Offset.
Section 314 provides that legislation increasing guarantee
fees will not be counted in the determination of whether such
legislation complies with the limits established in the budget
resolution and the accompanying report. The Congressional
Budget Office's estimates will continue to display the fees,
but these fees could not be used to offset other provisions. It
is the intent of the Committee that the savings would also not
be included in the Current Level reports required by the Budget
Act, which means that the savings cannot be used to offset
spending in measures that might be considered after the
enactment the bill increasing the fees.
Section 315. Prohibition on the use of Federal Reserve Surpluses as an
Offset.
Similar to section 314, section 315 directs the Committee
on the Budget to not take into consideration the proceeds from
transfers of surpluses held by the Federal Reserve to the
Department of the Treasury. Notwithstanding the Congressional
Budget Office's estimates of these transactions, the Committee
views the transfer of the Federal Reserves' surpluses as
essentially a timing shift. It is the intent of the Committee
that the savings would also not be included in the Current
Level reports required by the Budget Act, which means that the
savings cannot be used to offset spending in measures that
might be considered after the enactment the bill transferring
the surpluses.
Subtitle B--Other Provisions
Section 321. Budgetary Treatment of Administrative Expenses.
Subsection (a) provides that the administrative expenses of
the Social Security Administration and the United States Postal
Service are reflected in the allocation to the Committee on
Appropriations even though both are technically off-budget.
This language is necessary to ensure the Committee on
Appropriations retains control over administrative expenses for
the agencies through the annual appropriations process. This
budgetary treatment of administrative expenses for these
entities is based on the long-term practice of the House and
Senate Budget Committees.
Subsection (b) requires administrative expenses to be
included in the cost estimates for the relevant appropriations
measure, which are used to determine if a measure exceeds the
spending limits in the budget resolution.
Section 322. Application and Effect of Changes in Allocations and
Aggregates.
Subsection (a) specifies the procedure for making
adjustments to the levels established by the budget resolution
under various reserve funds and other special procedures in
this resolution. It provides that the adjustments apply while
the legislation is under consideration and take effect upon
enactment of the legislation. These adjustments must be printed
in the Congressional Record.
Subsection (b) requires, for purposes of budget
enforcement, that the aggregate and allocation levels resulting
from adjustments made according to the terms of this resolution
to have the same effect as if adopted in the originally adopted
aggregates and allocations.
Subsection (c) provides that, for purposes of this
resolution, the appropriate budgetary levels for a fiscal year
or period of fiscal years shall be determined on the basis of
estimates made by the Chair of the Committee on the Budget.
Subsection (d) effectively permits the Chair of the
Committee on the Budget to exempt legislative measures for
which adjustments are made under the reserve funds in title IV
of this budget resolution from the Cut-As-You-Go point of order
(clause 10 of rule XXI of the Rules of the House of
Representatives) or section 301 of this resolution.
Section 323. Adjustments to Reflect Changes in Concepts and
Definitions.
Section 323 authorizes the Chair of the Committee on the
Budget to adjust the appropriate aggregates, allocations, and
other budgetary levels of this resolution to for any change in
budgetary concepts and definitions in accordance with section
251(b)(1) of the Deficit Control Act of 1985. This does not
include authority to adjust allocations for any statutory
change in the discretionary spending limits.
Section 324. Adjustments to Reflect Updated Budgetary Estimates.
Section 324 authorizes the Chair of the Committee on the
Budget to revise the appropriate aggregates, allocations, and
other budgetary levels of this resolution to reflect any
adjustments to the baseline made by the Congressional Budget
Office in March 2016.
Section 325. Adjustment for Certain Emergency Designations.
Section 325 clarifies that the Chair of the Committee on
the Budget has authority to make adjustments to the appropriate
levels in the budget resolution that are designated as an
emergency and therefore exempt from the Statutory Pay-As-You-Go
Act of 2010. It is rare, though not unprecedented, that a
legitimate emergency requires changes in tax law or direct
spending programs. A similar process already exists in the
Budget Act for exempting emergency designated appropriations
from the budget resolution.
Section 326. Rulemaking Powers.
Section 326 affirms that the adoption of this budget
resolution as an exercise of the House's rulemaking power and
that the House has the constitutional right to change these
rules.
TITLE IV--RESERVE FUNDS
Title IV establishes 10 reserve funds for health, tax
reform, trade, education, retirement, and transportation
legislation. Reserve funds are special procedures that provide
the committee reporting specific legislation flexibility as to
the timing and composition of offsets in the measure. The
mechanism for achieving the flexibility is through adjustments
the Chair of the Committee on the Budget makes to the
appropriate levels in the budget resolution to accommodate the
legislation. Usually, certain conditions must be met to qualify
for the adjustment--the most frequent being that the measure
must be for a specified purpose and must be offset over a
period of 10 years (fiscal years 2017 through 2026). The
adjustments are usually made to the 302(a) allocations of the
appropriate committee, the overall ceiling on spending (both
new budget authority and outlays) and the floor on revenue.
Section 401. Deficit-Neutral Reserve Fund to Reduce Poverty and
Increase Opportunity and Upward Mobility for Struggling
Americans.
Section 401 permits the Chair to adjust the levels in the
budget resolution for legislation that reduces poverty, and
increases opportunity and upward mobility. Adjustments may be
made for bills, joint resolutions, conference reports and
amendments. The amount of the adjustment would be equal to the
amount the measure increases budget authority and outlays or
reduces revenue. To qualify for the adjustment, the measure may
not increase the deficit over the ten-year period or adversely
impact job creation.
Section 402. Reserve Fund for the Repeal of the President's Health Care
Law.
Section 402 permits the Chair to adjust the levels in the
budget resolution for legislation that repeals the Patient
Protection and Affordable Care Act (Public Law 111-148) and the
healthcare-related provisions of the Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152). Adjustments
may be made for bills, joint resolutions, conference reports
and amendments. The amount of the adjustment is equal to the
amount the measure increases budget authority and outlays or
reduces revenue. A legislative measure need not be deficit
neutral to qualify for an adjustment under this section.
Section 403. Deficit-Neutral Reserve Fund for Promoting Real Health
Care Reform.
Section 403 permits the Chair to adjust the levels in the
budget resolution for legislation that promotes real health
care reform. Adjustments may be made for bills, joint
resolutions, conference reports and amendments. The amount of
the adjustment is equal to the amount the measure increases
budget authority and outlays or reduces revenue. To qualify for
the adjustment, the measure may not increase the deficit over
the ten-year period.
Section 404. Deficit-Neutral Reserve Fund for Graduate Medical
Education.
Section 404 permits the Chair to adjust the levels in the
budget resolution for legislation that reforms, expands, access
to, and improves, as determined by such Chair. Adjustments may
be made for bills, joint resolutions, conference reports and
amendments. The amount of the adjustment is equal to the amount
the measure increases budget authority and outlays or reduces
revenue. To qualify for the adjustment, the measure may not
increase the deficit over the ten-year period.
Section 405. Deficit-Neutral Reserve Fund for Trade Agreements.
Section 405 permits the Chair to adjust the levels in the
budget resolution for legislation that such Chair determines is
necessary to implement a trade agreement. Adjustments may be
made for bills, joint resolutions, conference reports and
amendments. The amount of the adjustment is equal to the amount
the measure increases budget authority and outlays or reduces
revenue. To qualify for the adjustment, the measure may not
increase the deficit over the ten-year period.
Section 406. Deficit-Neutral Reserve Fund for Reforming the Tax Code.
Section 406 permits the Chair to adjust the levels in the
budget resolution for legislation that reforms the Internal
Revenue Code of 1986. Adjustments may be made for bills, joint
resolutions conference reports and amendments. The amount of
the adjustment is equal to the amount the measure increases
budget authority and outlays or reduces revenue. To qualify for
the adjustment, the measure may not increase the deficit over
the ten-year period.
Section 407. Deficit-Neutral Reserve Fund for Revenue Measures.
Section 407 permits the Chair to adjust the levels in the
budget resolution for legislation that reduces revenue.
Adjustments may be made for bills, joint resolutions,
conference reports and amendments. The amount of the adjustment
is equal to the amount the measure increases budget authority
and outlays or reduces revenue. To qualify for the adjustment,
the measure may not increase the deficit over the ten-year
period.
Section 408. Deficit-Neutral Reserve Fund for Federal Retirement
Reform.
Section 408 permits the Chair to adjust the levels in the
budget resolution for legislation that reforms, improves and
updates the Federal retirement system. To qualify for the
adjustment, the measure may not increase the deficit over the
ten-year period.
Section 409. Deficit-Neutral Reserve Fund for Coal Miner Pension and
Health Care Funds.
Section 409 permits the Chair to adjust the levels in the
budget resolution for legislation that addresses the immediate
funding shortfall in coal miner pension and health care funds.
Adjustments may be made for bills, joint resolutions,
conference reports and amendments. The amount of the adjustment
is equal to the amount the measure increases budget authority
and outlays or reduces revenue. To qualify for the adjustment,
the measure may not increase the deficit over the ten-year
period.
Section 410. Reserve Fund for Commercialization of Air Traffic Control.
Section 410 removes scoring impediments that may otherwise
preclude the consideration of legislation that commercializes
the operations of the air traffic control system and decreases
the discretionary spending limits under section 251(c) of the
Deficit Control Act of 1985 by the amount appropriated to the
Federal Aviation Administration for air traffic control. This
reserve fund is necessary because it is anticipated that the
Congressional Budget Office will score the legislation as if it
remains a function of the Federal Government.
Section 410 permits the Chair to adjust the levels in the
budget resolution for legislation that commercializes the
operations of the air traffic control system and decreases the
discretionary spending limits under section 251(c) of the
Deficit Control Act of 1985 by the amount appropriated to the
Federal Aviation Administration for air traffic control.
Adjustments may be made for bills, joint resolutions conference
reports and amendments. The amount of the adjustment is equal
to the amount the measure increases budget authority and
outlays or reduces revenue. Adjustments may be made under this
section even if the measure is estimated by the Congressional
Budget Office to increase the deficit.
TITLE V--ESTIMATES OF DIRECT SPENDING
Title V is required under section 3(h) of the Separate
Orders of H. Res. 5 (114th Congress), which implements the
Rules of the House of Representatives, and is a requirement for
the consideration of a concurrent resolution on the budget in
the 114th Congress. See the section designated ``Direct
Spending Trends and Reforms'' within this report for more
information on Title V.
Section 501. Direct Spending.
Subsection (a) provides the average and estimated average
rate of growth in means-tested direct spending for the 10-year
periods before and after fiscal year 2017, respectively. It
also proposes reforms to the means-tested category of direct
spending.
Subsection (b) provides the average and estimated average
rate of growth in non-means-tested direct spending for the 10-
year periods before and after fiscal year 2017, respectively.
It also proposes reforms to the non-means-tested category of
direct spending.
TITLE VI--POLICY STATEMENTS
Section 601. Policy Statement on Developing a Bold Agenda
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution that, in the 115th Congress, the
appropriate committees of jurisdiction in the House should
consider recommendations developed by the Speaker's task forces
on health care reform; reducing regulatory burdens; poverty,
opportunity, and upward mobility; national security; tax
reform; and restoring constitutional authority.
Section 602. Policy Statement on a Balanced Budget Amendment.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution that Congress should propose a balanced
budget amendment for ratification by the States.
Section 603. Policy Statement on Reforming the Congressional Budget
Process.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution that Congress should restructure its
procedures for making budgetary decisions and reassert its role
as the government's spending authority by promoting prudent
spending control, efficient action and greater transparency.
Subsection (c) states that the Committee on the Budget
intends to draft legislation during the 115th Congress that
rewrites the Congressional Budget and Impoundment Control Act
of 1974.
Section 604. Policy Statement on Economic Growth and Job Creation.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution to promote economic growth and job
creation through tax reform and reducing regulatory burdens.
Section 605. Policy Statement on Federal Regulatory Budgeting and
Reform.
Subsection (a) sets out findings.
Subsection (b) states that the policy of this concurrent
resolution on Federal regulatory budgeting and reform is to
promote economic growth, cut red tape, protect the poor and
working class, and strengthen transparency of regulations.
Section 606. Policy Statement on Tax Reform.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution that Congress should enact comprehensive
tax reform that promotes economic growth, creates American
jobs, increases wages, and benefits American consumers,
investors, and workers.
Section 607. Policy Statement on Trade.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution to pursue international trade, global
commerce, a modern and competitive tax system in order to
promote job creation in the United States; continued pursuit of
economic opportunities for American workers and businesses
through trade agreements that satisfy negotiating objectives;
and that any trade agreement entered into on behalf of the
United States should reflect the negotiating objective and
improved consultation with Congress.
Section 608. Policy Statement on Social Security.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy on Social
Security assumed by this concurrent resolution to ensure
sustainable solvency of the fund.
Subsection (c) states that it is the policy of this
resolution to reform disability insurance and work to address
its looming insolvency before in occurs in 2022.
Subsection (d) states that any legislation that improves
the solvency of the Disability Insurance Trust Fund must also
improve the long-term solvency of the combined Old Age and
Survivors Disability Trust Fund.
Section 609. Policy Statement on Replacing the President's Health Care
Law and Promoting Real Health Care Reform.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution that the President's health care law
should be fully repealed and Congress should pursue real health
care reforms that put patients, families and doctors in charge
rather than Washington, DC and encourage increased competition
and transparency while protecting the ability of all Americans
to afford health coverage.
Section 610. Policy Statement on Medicare.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution to preserve the program for those in or
near retirement and strengthen the program for future
beneficiaries.
Subsection (c) sets forth the assumptions of this
concurrent resolution for an improved Medicare program.
Section 611. Policy Statement on Medical Discovery, Development,
Delivery and Innovation.
Subsection (a) sets out findings on medical discovery,
development, delivery and innovation.
Subsection (b) states that it is the policy of this
concurrent resolution to support the work of medical innovators
through continued strong funding for the agencies that engage
in life saving research and development and for Washington to
unleash the power of innovation by removing obstacles that
impede the adoption of medical technologies.
Section 612. Policy Statement on Public Health Preparedness.
Subsection (a) sets out findings on public health
preparedness.
Subsection (b) states that it is the policy of this
concurrent resolution that the House should, within available
budgetary resources, provide continued support for research,
prevention, and public health preparedness programs to ensure
the Nation efficiently and effectively responds to potential
public health threats.
Section 613. Policy Statement on Addressing the Opioid Abuse Epidemic.
Subsection (a) sets out findings on the opioid abuse
epidemic.
Subsection (b) states that it is the policy of this
concurrent resolution that Congress should support, using
available budgetary resources, essential activities, including
rehabilitation, to reduce and prevent substance abuse.
Section 614. Policy Statement on Higher Education and Workforce
Development Opportunity.
Subsection (a) sets out findings on higher education.
Subsection (b) states that it is the policy on higher
education affordability assumed by this concurrent resolution
targets Federal financial aid, streamlines aid programs,
stabilizes Pell Grants and removes regulatory barriers.
Subsection (c) sets out findings on workforce development.
Subsection (d) states that it is the policy on workforce
development assumed by this concurrent resolution builds upon
the Workforce Innovation and Opportunity Act by streamlining
job-training programs and allowing States to tailor programs to
their constituencies.
Section 615. Policy Statement on the Department of Veterans' Affairs.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution that the House Committee on Veterans'
Affairs should continue its oversight efforts and that the
Committees on Veterans' Affairs and the Budget should continue
to monitor the Department of Veterans' Affairs progress to
ensure its resources are sufficient and efficiently provided to
veterans.
Section 616. Policy Statement on Federal Accounting.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy on Federal
accounting in this concurrent resolution is to reform current
budget and accounting practices to allow for greater
transparency through the use of fair-value accounting for
credit programs.
Section 617. Policy Statement on Reducing Unnecessary and Wasteful
Spending.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution that each authorizing committee should,
as part of its annual Views and Estimates letter to the
Committee on the Budget, identify duplicate programs and submit
recommendations for programs that should be reduced or
eliminated, review all programs with unauthorized
appropriations and reauthorize those that should continue
receiving funding.
Section 618. Policy Statement on Deficit Reduction Through the
Cancellation of Unobligated Balances.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution that the House adopt the following
principles: greater Congressional oversight to review and
identify potential savings from cancelling unobligated balances
of funds that are no longer needed; the appropriate committees
of the House should identify and review accounts with
unobligated balances and rescind such balances that would not
impede or disrupt the fulfillment of important Federal
commitments; the House should, with the assistance of the
Government Accountability Office, the Inspectors General, and
appropriate agencies, continue to review unobligated balances
and identify savings for deficit reduction; and unobligated
balances in dormant accounts should not be used to finance
increases in spending.
Section 619. Policy Statement on Responsible Stewardship of Taxpayer
Dollars.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution that the House should be a model for the
responsible stewardship of taxpayer dollars and identify any
savings that can be achieved through greater productivity and
efficiency gains in the operation and maintenance of House
services and resources.
Section 620. Policy Statement on Expenditures from Agency Fees and
Spending.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution for Congress to reassert its
constitutional prerogative to control spending and conduct
oversight.
Section 621. Policy Statement on Border Security.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution that Congress should enact legislation to
improve border security by utilizing technology along the
southern and northern borders, constructing fencing along
southern border, and maintaining or increasing border
personnel.
Section 622. Policy Statement on Preventing the Closure of the
Guantanamo Bay Detention Facility.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of this
concurrent resolution for Congress to support policies that
prevent the closure of the Guantanamo Bay detention facility
and prevent the transfer or release of detainees.
Section 623. Policy Statement on Refugees from Conflict Zones.
Subsection (a) sets out findings.
Subsection (b) states that it is policy of this concurrent
resolution that the United States should suspend admission of
refugees from high-risk areas such as Syria and Iraq until it
can ensure that terrorists cannot exploit its refugee
resettlement programs and vetting processes. While the United
States should continue its proud tradition of refugee
resettlement, it should make protecting Americans its highest
priority before resettling additional refugees.
Section 624. Policy Statement on Moving the United States Postal
Service on Budget.
Subsection (a) sets out findings.
Subsection (b) states it is policy of this concurrent
resolution that all receipts and disbursements of the USPS
should be included in the congressional budget and the budget
of the Government.
Section 625. Policy Statement on Budget Enforcement.
Section 625 states that it is the policy of this concurrent
resolution that the House should strictly enforce this budget
resolution by adopting the budget resolution before considering
any spending or tax legislation, enforcing rules preventing the
authorization of new direct spending programs, complying with
the discretionary spending limits of the Balanced Budget and
Emergency Deficit Control Act of 1985, modifying scoring to
encourage the commercialization of government activities that
can best be provided by the private sector, and discouraging
the use of savings identified in the budget resolution as
offsets for spending or tax legislation.
Section 626. Policy Statement on Unauthorized Appropriations.
Subsection (a) sets out findings.
Subsection (b) states that it is the policy of the
concurrent resolution that unauthorized appropriations should
be reviewed and reformed to ensure that unauthorized programs
are reauthorized, reformed, or terminated.
THE CONGRESSIONAL BUDGET PROCESS
----------
The spending and revenue levels established in the budget
resolution are implemented through two parallel, but separate,
mechanisms: allocations to the authorizing and appropriations
committees and, when necessary, reconciliation directives to
the authorizing committees.
As required under section 302(a) of the Congressional
Budget Act of 1974, the direct spending levels in the budget
resolution are allocated to each of the authorizing committees
in each House of Congress with direct spending authority. The
resolution's discretionary spending levels are allocated to the
Committee on Appropriations. These allocations are included in
the report (or joint statement of managers for a conference
report) accompanying the concurrent resolution on the budget
and are enforced through points of order (see the section of
this report titled: ``Enforcing the Budget Resolution'').
Amounts provided under ``current law'' encompass programs
that affect direct spending--for example, health, retirement,
and other programs that have spending authority or offsetting
receipts. Amounts subject to discretionary action refer to
programs that require subsequent legislation to provide the
necessary spending authority. Amounts provided under
``reauthorizations'' reflect amounts assumed to be provided in
subsequent legislation reauthorizing expiring direct spending
programs.
Section 302 of the Congressional Budget Act of 1974, as
modified by the Balanced Budget Act of 1997, requires that
allocations of budget authority be provided in the report
accompanying a budget resolution for the fiscal year for which
it is adopted and at least the 4 ensuing fiscal years (except
for the Committee on Appropriations, which receives an
allocation for only the budget year). This budget resolution
provides allocations of budget authority and outlays for fiscal
year 2017 and each of the 9 ensuing fiscal years, fiscal years
2018 through 2026.
Authorizing Committees--302(a) Allocations
The report accompanying the concurrent resolution on the
budget, or the joint statement of managers for a conference
report, allocates to the authorizing committees an amount of
new budget authority along with the attendant outlays required
to fund the direct spending within each authorizing committee's
jurisdiction. If increases in spending are required within a
committee's jurisdiction, then the committee may be allocated
additional budget authority. This occurs when the budget
resolution assumes a new or expanded direct spending program.
Such spending authority must be provided through subsequent
legislation and is not controlled through the annual
appropriations process.
Because the spending authority for authorizing committees
is multi-year or permanent, the allocations established in the
budget resolution are for the fiscal year for which it is
adopted and the 9 ensuing fiscal years. As noted, this budget
resolution provides allocations for authorizing committees for
fiscal year 2017, commencing on 1 October 2016, and fiscal
years 2018 through 2026.
Unlike the Committee on Appropriations, each authorizing
committee is provided a single allocation of new budget
authority (divided between current law and expected policy
action) not provided through annual appropriations. These
committees are not required to file 302(b) allocations. Bills
first effective in fiscal year 2017 are measured against the
level for that year included in the fiscal year 2017 budget
resolution and also the 10-year period of fiscal years 2017
through 2026.
Committee on Appropriations
Unlike authorizing committees, the Committee on
Appropriations receives a lump sum of discretionary budget
authority and corresponding outlays in the report accompanying
a concurrent resolution on the budget, or joint statement of
managers for a conference report, for the fiscal year for which
it is adopted. This allocation provides the Committee on
Appropriations with the amount of discretionary spending for
appropriations measures for that fiscal year. Once a 302(a)
allocation is provided to the Committee on Appropriations, the
Committee is then required, in full Committee, to divide this
allocation among its 12 subcommittees into 302(b)
suballocations.
302(a) ALLOCATIONS
This budget resolution provides allocations to the
Committee on Appropriations for fiscal year 2017, commencing on
1 October 2016.
302(b) ALLOCATIONS
Once a 302(a) allocation is provided to the Committee on
Appropriations by the budget resolution for the fiscal year for
which it is adopted, the Committee on Appropriations, in full
Committee, is required to divide this allocation among its 12
subcommittees. The amount each subcommittee receives
constitutes its suballocation, pursuant to section 302(b) of
the Congressional Budget Act of 1974. Each subcommittee's
regular appropriations bill is capped at the level of the
reporting subcommittee's 302(b) suballocation and the bill
would be subject to a point of order if it exceeds this amount.
Under this system, while it may seem obvious that the sum
of the 12 302(b) suballocations must equal the Committee on
Appropriations' 302(a) allocation, this has not always been the
case. Under section 314 of the Congressional Budget Act, the
chair of the Committee on the Budget may adjust the budget
resolution levels for appropriations measures for continuing
disability reviews, for combatting health care fraud, and for
natural disasters. The Committee on Appropriations, however,
does not always make corresponding adjustments to the
appropriate 302(b) suballocations. The House is then left with
unenforceable 302(b) suballocations because these
suballcoations do not equal the 302(a) allocation of the
Committee on Appropriations and do not reflect the House's
actions on the applicable appropriations bills. Without these
adjustments to the 302(b) suballocations, the House can only
enforce the overall 302(a) allocation, rendering the entire
enforcement scheme useless because, even if 11 of the
appropriations bills are over budget, the 302(a) allocation
would only be breached by the last bill enacted.
The Committee on the Budget believes that the Committee on
Appropriations should be granted greater flexibility in how to
adjust its 302(b) suballocations. Recognizing that it may
sometimes be impracticable for the full Appropriations
Committee to convene and report out revisions to the 302(b)
suballocations, the Budget Committee believes the applicable
rules should be modified to give the Committee on
Appropriations maximum flexibility in making these adjustments.
One approach would be to grant the Committee on Appropriations
the authority to choose among the following options: acting as
a full committee on each adjustment; empowering the Chair of
the Committee on Appropriations to unilaterally make the
adjustment (as the Budget Committee does); or making the
adjustment automatic based on the actual amount of
appropriations provided in each bill.
Under section 302(c) of the Congressional Budget Act of
1974, appropriations acts may not be considered on the floor of
the House before these 302(b) suballocations are made.
In general, unless enacted, bills and conference reports
cease to exist at the end of each Congress (in the House of
Representatives). Concurrent resolutions that have been enacted
also cease to exist at the end of each Congress, but when a new
Congress convenes, concurrent resolutions are extended through
the organizing resolution of the new Congress. In this way, the
budget resolution is extended into the new Congress. Hence the
budget year may change, but for purposes of enforcement, the
first fiscal year for the budget resolution remains the same.
TABLE 11.--ALLOCATION OF SPENDING AUTHORITY TO HOUSE COMMITTEE ON
APPROPRIATIONS
[In millions of dollars]
------------------------------------------------------------------------
2017
------------------------------------------------------------------------
Base Discretionary Action:
BA....................................................... 1,069,599
OT....................................................... 1,164,425
Global War on Terrorism:
BA....................................................... 73,693
OT....................................................... 38,485
Current Law Mandatory:
BA....................................................... 1,009,960
OT....................................................... 998,819
------------------------------------------------------------------------
TABLE 12.--RESOLUTION BY AUTHORIZING COMMITTEE
[On-budget amounts in millions of dollars]
------------------------------------------------------------------------
2017 2017-2026
------------------------------------------------------------------------
Agriculture:
Current Law:
BA.................................. 17,630 719,257
OT.................................. 16,465 712,700
Resolution Change:
BA.................................. -4,522 -242,646
OT.................................. -2,514 -237,902
-------------------------------
Total:
BA................................ 13,108 476,611
OT................................ 13,951 474,798
===============================
Armed Services:
Current Law:
BA.................................. 160,810 1,855,353
OT.................................. 160,641 1,849,185
Resolution Change:
BA.................................. -527 -12,892
OT.................................. -509 -12,796
-------------------------------
Total:
BA................................ 160,283 1,842,461
OT................................ 160,132 1,836,389
===============================
Financial Services:
Current Law:
BA.................................. 13,643 99,110
OT.................................. -300 -58,804
Resolution Change:
BA.................................. -4,475 -46,706
OT.................................. -4,287 -46,286
-------------------------------
Total:
BA................................ 9,168 52,404
OT................................ -4,587 -105,090
===============================
Education & Workforce:
Current Law:
BA.................................. -777 22,323
OT.................................. -6,072 -4,811
Resolution Change:
BA.................................. -16,113 -297,126
OT.................................. -8,474 -273,605
-------------------------------
Total:
BA................................ -16,890 -274,803
OT................................ -14,546 -278,416
===============================
Energy & Commerce:
Current Law:
BA.................................. 451,015 6,026,510
OT.................................. 445,796 6,032,709
Resolution Change:
BA.................................. -76,515 -2,289,673
OT.................................. -71,883 -2,281,392
-------------------------------
Total:
BA................................ 374,500 3,736,837
OT................................ 373,913 3,751,317
===============================
Foreign Affairs:
Current Law:
BA.................................. 36,173 310,022
OT.................................. 30,652 296,267
Resolution Change:
BA.................................. 0 0
OT.................................. 0 0
-------------------------------
Total:
BA................................ 36,173 310,022
OT................................ 30,652 296,267
===============================
Oversight & Government Reform:
Current Law:
BA.................................. 118,281 1,361,661
OT.................................. 116,567 1,327,423
Resolution Change:
BA.................................. -14,298 -216,846
OT.................................. -14,297 -216,788
-------------------------------
Total:
BA................................ 103,983 1,144,815
OT................................ 102,270 1,110,635
===============================
Homeland Security:
Current Law:
BA.................................. 2,570 26,861
OT.................................. 2,351 27,731
Resolution Change:
BA.................................. -270 -21,020
OT.................................. -270 -21,020
-------------------------------
Total:
BA................................ 2,300 5,841
OT................................ 2,081 6,711
===============================
House Administration:
Current Law:
BA.................................. 41 341
OT.................................. 12 106
Resolution Change:
BA.................................. 0 0
OT.................................. 0 0
-------------------------------
Total:
BA................................ 41 341
OT................................ 12 106
===============================
Natural Resources:
Current Law:
BA.................................. 5,371 57,898
OT.................................. 5,706 60,073
Resolution Change:
BA.................................. -797 -13,901
OT.................................. -581 -12,694
-------------------------------
Total:
BA................................ 4,574 43,997
OT................................ 5,125 47,379
===============================
Judiciary:
Current Law:
BA.................................. 30,073 136,477
OT.................................. 13,950 143,827
Resolution Change:
BA.................................. -12,737 -62,654
OT.................................. -1,495 -62,655
-------------------------------
Total:
BA................................ 17,336 73,823
OT................................ 12,455 81,172
===============================
Transportation & Infrastructure:
Current Law:
BA.................................. 74,688 735,056
OT.................................. 16,662 178,415
Resolution Change:
BA.................................. -98 -114,318
OT.................................. -59 -1,109
-------------------------------
Total:
BA................................ 74,590 620,738
OT................................ 16,603 177,306
===============================
Science, Space & Technology:
Current Law:
BA.................................. 108 1,017
OT.................................. 106 1,017
Resolution Change:
BA.................................. 0 0
OT.................................. 0 0
-------------------------------
Total:
BA................................ 108 1,017
OT................................ 106 1,017
===============================
Small Business:
Current Law:
BA.................................. 0 0
OT.................................. 0 0
Resolution Change:
BA.................................. 0 0
OT.................................. 0 0
-------------------------------
Total:
BA................................ 0 0
OT................................ 0 0
===============================
Veterans Affairs:
Current Law:
BA.................................. 1,314 112,141
OT.................................. 7,790 120,113
Resolution Change:
BA.................................. -3,113 -48,802
OT.................................. -1,911 -46,288
-------------------------------
Total:
BA................................ -1,799 63,339
OT................................ 5,879 73,825
===============================
Ways & Means:
Current Law:
BA.................................. 1,065,279 15,185,324
OT.................................. 1,063,848 15,179,732
Resolution Change:
BA.................................. -67,917 -1,648,434
OT.................................. -67,578 -1,647,819
-------------------------------
Total:
BA................................ 997,362 13,536,890
OT................................ 996,270 13,531,913
------------------------------------------------------------------------
RECONCILIATION
----------
Section 310 of the Congressional Budget Act of 1974 (2
U.S.C. 641) sets out a special procedure that allows a
concurrent resolution on the budget to direct one or more
authorizing committees to produce legislation that changes
direct spending, revenue, or the debt limit, to bring these
levels into compliance with assumed changes in direct spending
and revenue in the budget resolution. Reconciliation directives
must be included in a concurrent resolution on the budget
adopted by both Houses to be valid.
In general, reconciliation directives include the amount of
budgetary change to be achieved; the time period over which
such budgetary change should be measured; and a deadline by
which the authorizing committees must report legislation. When
more than one authorizing committee receives reconciliation
directives, each committee considers legislation to comply with
these directives as it would any other bill, but the
legislative text and other materials are submitted to the
Committee on the Budget instead of being reported to the House.
The Committee on the Budget then incorporates all submissions
together, without any substantive revision, into a single
measure and reports it to the House. If the reconciliation
directives instruct only a single authorizing committee, then
that committee's bill is reported directly to the House and is
not submitted to the Committee on the Budget.
In the House, the Committee on Rules reports a special rule
governing the consideration of a reconciliation bill.
Typically, the rule will allow for 2 or 3 hours of general
debate equally divided between majority and minority. The
Committee on the Budget determines whether an authorizing
committee is in compliance with its reconciliation directives
and relies solely on the Congressional Budget Office's
estimates when determining compliance. Under section 310 of the
Congressional Budget Act of 1974, authorizing committees must
comply with reconciliation directives. If an authorizing
committee does not comply with its directives, the Committee on
Rules may make in order amendments that achieve the required
budgetary changes pursuant to section 311(d)(5) of the
Congressional Budget Act of 1974.
A reconciliation bill is a privileged measure in the
Senate. Distinct from most Senate bills, debate is limited to
20 hours and only requires a simple majority to pass (51 votes)
rather than the 60 votes otherwise required for cloture.
In the Senate, the ``Byrd Rule'' (section 313 of the
Congressional Budget Act of 1974) limits the content of a
reconciliation bill. Under the Byrd Rule, provisions that are
considered ``extraneous'' can be stricken from the bill unless
60 Senators vote to waive it. If a provision is found to
violate the Byrd Rule, it is removed from the bill or
conference report unless 60 Senators vote to waive the rule.
This Concurrent Resolution on the Budget for Fiscal Year
2017, as reported by the Committee on the Budget, provides for
such reconciliation legislation. It instructs 12 authorizing
committees to submit changes in law necessary to achieve
specified amounts of deficit reduction. Each authorizing
committee must submit legislative text and associated material
to the Committee on the Budget no later than 90 calendar days
after the adoption of this concurrent resolution.
For a detailed description of the reconciliation directives
included in this concurrent resolution on the budget, see Title
II of the Section-by-Section Description.
STATUTORY CONTROLS OVER THE BUDGET
----------
Since 1985, a series of statutory budget controls have been
superimposed over the congressional budget process through the
enactment of, and subsequent amendments to, the Balanced Budget
and Emergency Deficit Control Act of 1985 [Deficit Control
Act]. This law has been amended several times and generally
serves as the primary vehicle for statutory controls over the
budget.
The Balanced Budget and Emergency
Deficit Control Act of 1985
The Balanced Budget and Emergency Deficit Control Act of
1985 [Deficit Control Act] initially was intended to reduce
deficits by establishing annual maximum deficit limits. These
limits were enforced through `sequestration,' which involved
automatic, across-the-board spending reductions required by
Presidential order if the deficit targets were exceeded. Under
the Deficit Control Act, a Presidential sequestration order
must occur within 15 days after the end of a session of
Congress. Sequestration remained in force for laws enacted
through the end of fiscal year 2002.
The Budget Enforcement Act of 1990
The Budget Enforcement Act [BEA] of 1990 replaced the
maximum spending limits originally in the Deficit Control Act
with annual limits on discretionary spending and controls over
increases in the deficit, calculated by adding together, for
each fiscal year, increases in direct spending and decreases in
revenues, termed ``pay-as-you-go.'' The BEA established
separate limits for discretionary appropriations, separated
into three separate categories: domestic, defense, and
international affairs. These discretionary categories were
applied through fiscal year 1993, and then combined into a
single limit on all appropriations for fiscal years 1994 and
1995.
Under pay-as-you-go, if the cumulative effect of
legislation enacted through the end of a session of Congress
increased the deficit, the amount of that deficit increase for
the fiscal year following that session would cause a
sequestration of direct spending by that amount. As with the
Maximum Deficit Amounts before it, most spending defined as
`direct' was exempt from any reductions. Other spending
programs had limitations on the reductions. For example,
spending decreases in the Medicare program, under pay-as-you-
go, were limited to 4 percent of the program costs.
The Omnibus Budget Reconciliation Act of 1993
The Omnibus Budget Reconciliation Act [OBRA] of 1993
extended a single limit on discretionary spending through
fiscal year 1998. Any breach of the limit would cause a
sequestration (again, an across-the-board cut in all nonexempt
discretionary programs). Programs under these spending limits
were held harmless for changes in inflation, emergencies,
estimating differences, and changes in concepts and
definitions. OBRA 1993 also extended the pay-as-you-go
enforcement procedures for legislation enacted through fiscal
year 1998.
The Balanced Budget Act of 1997
The Balanced Budget Act of 1997 [BBA 1997] again revised
and extended the levels of the discretionary spending limits.
As amended by OBRA 1993, these limits would have expired at the
end of fiscal year 1998. BBA 1997 modified the discretionary
spending limits for fiscal year 1998 and extended them through
fiscal year 2002. Similarly, the pay-as-you-go requirements
were extended for legislation enacted through the end of fiscal
year 2002. The sequestration enforcement mechanism lasted
through the end of fiscal year 2006 for such legislation, but
it was turned off by Public Law 107-312, enacted 2 December
2002.
BBA 1997 also made numerous technical changes in both the
congressional budget process and sequestration procedures that
enforce the discretionary spending limits and pay-as-you-go
requirements.
BBA 1997 established separate limits on defense and non-
defense discretionary spending for fiscal years 1998 and 1999.
These limits were combined into a single limit on discretionary
spending in fiscal years 2000, 2001, and 2002. Separate
discretionary spending limits were designed to prevent Congress
and the President from using savings in one category to offset
an increase in another category.
BBA 1997 repealed automatic adjustments in the spending
limits for changes in inflation and estimating differences
between the Office of Management and Budget and the
Congressional Budget Office on budget outlays. It retained
adjustments for emergencies, estimating differences in budget
authority, continuing disability reviews and added adjustments
for the International Monetary Fund, international arrearages,
and an Earned Income Tax Credit compliance initiative. The
adjustments are made in the President's final sequestration
report issued 15 days after the end of a session of Congress.
Subsequently, additional spending categories for certain
transportation and conservation spending were added and
provided for specific spending amounts for these programs.
While the transportation spending limit was ostensibly a limit
on funding, it also served the purpose of calculating the
levels of spending that flowed from the Highway Trust Fund.
The Statutory Pay-As-You-Go Act of 2010
No further legislation was enacted to reestablish statutory
controls on spending and revenue until 2010, when on 10
February of that year, the Statutory Pay-As-You-Go Act of 2010
was signed as part of Public Law 111-139, which raised the
statutory limit on the public debt. The measure amended
sections of the Deficit Control Act, including the sequester
base, but it did not establish new discretionary spending
limits.
The Budget Control Act Of 2011
Enacted on 2 August 2011, the Budget Control Act [BCA] of
2011 set statutory controls on spending, primarily making the
Deficit Control Act permanent in its entirety, and it
reestablished discretionary spending limits for fiscal years
2012 through 2021. These discretionary spending limits for
fiscal years 2012 and 2013 were divided into `security' and
`non-security' categories.\270\ The remaining years were set as
a single discretionary general category. The BCA also
authorized an increase in the public debt limit.
---------------------------------------------------------------------------
\270\Section 102 of the act defines the ``security'' category as
comprising discretionary appropriations for the Department of Defense,
the Department of Homeland Security, the Department of Veterans
Affairs, the National Nuclear Security Administration, the intelligence
community management account, and all budget accounts in Function 150,
International Affairs. All other discretionary appropriations were
grouped together in the non-security category. These were replaced with
``revised'' security and nonsecurity limits on spending for programs
which fall inside Function 050, Defense, and outside that function.
---------------------------------------------------------------------------
The BCA also included additional procedures that had the
effect of altering the discretionary spending limits under
section 251(c) of the Deficit Control Act, in particular, by
extending the security/non-security categories through the end
of the period.
The Congressional Budget Office estimated that the
discretionary spending limits under the BCA would reduce the
deficit, including savings from debt service, by $917 billion
over the 10-fiscal-year period covering 2012 through 2021.
The BCA also established a Joint Select Committee on
Deficit Reduction tasked with reporting legislation to reduce
the Federal deficit by an additional $1.5 trillion over a 10-
year period ending in fiscal year 2021, which would have been
considered under procedures limiting amendment and debate.
Under the BCA, if legislation reported by the Joint Committee
reducing the deficit by at least $1.2 trillion was not enacted,
then a sequestration would be ordered, adjusting the
discretionary spending limits downward and calculating an
amount of reductions in direct spending necessary to achieve
this amount (or a portion thereof if legislation from the Joint
Committee achieving some deficit reduction was enacted). The
Joint Committee failed to report any proposals reducing the
deficit by any amount, and no legislation to that purpose was
enacted by the required 15 January 2012 deadline. As a result,
the Joint Committee ceased to exist and the automatic spending
reduction process was triggered.
This process established new discretionary spending limits
and definitions of security and nonsecurity (now effectively
defense and nondefense, though the previous terms are still
used) and replaced the statutory discretionary spending limits.
These categories have replaced the discretionary general
category through 2021.
This process had two components: sequestration and reducing
the discretionary spending limits. To achieve the $1.2 trillion
in deficit reduction, spending reductions, calculated by the
Office of Management and Budget, were scheduled to occur absent
a change in law.
Because the Joint Committee did not achieve any deficit
reduction, the calculation begins with a spending reduction of
the full $1.2 trillion from fiscal year 2013 through fiscal
year 2021. According to the BCA formula, this number is then
reduced by 18 percent to account for the reduced cost of debt
service attributable to the lower level of spending. The
remaining amount is then divided by nine to account for each of
fiscal years 2013 through 2021. This amount is then divided by
two to evenly distribute reductions between defense and
nondefense accounts.
The spending reductions are then further divided between
direct spending and discretionary spending within the defense
and nondefense accounts.
The implementation of the spending reductions is distinct
from the calculation of the amounts. Once the amount is
calculated, the BCA requires reductions through sequestration
and reductions to the revised discretionary spending limits.
The sequestration order affected both discretionary and
mandatory spending for fiscal year 2013. As a result,
discretionary amounts appropriated for fiscal year 2013 were
sequestered by the calculated amount without regard for the
amount appropriated--i.e., it was not sequestered as a function
of the discretionary spending limit for that fiscal year. In
addition, for fiscal years 2013 through 2021, a direct spending
sequester of nonexempt accounts is ordered.
This is distinct from the spending reductions for the
discretionary spending limits for fiscal years 2014 through
2021: these reductions occur through revising the spending
limits downward for each of those fiscal years.
The American Taxpayer Relief Act of 2012
As part of an agreement to make permanent most tax policies
first enacted in 2001 and 2003 but scheduled to expire at the
end of 2012,\271\ the American Taxpayer Relief Act [ATRA] of
2012 included certain budget process provisions. ATRA reduced
the BCA fiscal year 2013 sequester by $24 billion--from $109.33
billion to $85.33 billion for that fiscal year.
---------------------------------------------------------------------------
\271\These tax policies were temporary because they were enacted
under the budget reconciliation process. Section 313 of the
Congressional Budget Act--known as the ``Byrd Rule''--prohibits
spending and tax legislation enacted through reconciliation from
increasing the projected deficit outside the 10-year budget window
compared to what it would have been without those tax policies.
Consequently, those tax relief policies were required to expire.
---------------------------------------------------------------------------
It postponed the BCA sequester (under section 251A of the
Deficit Control Act) by two months, from 2 January 2013 to 1
March 2013. It also postponed the Deficit Control Act sequester
(a separate sequestration under section 251(a), which normally
occurs 15 days after the end of a session of Congress) until 17
March 2013. This Deficit Control Act sequester enforces the
spending limit categories rather than requiring a sequester of
a nominal amount for fiscal year 2013 as under the BCA--and
applied regardless of where spending is relative to the
spending limits. It also reset discretionary spending limit
categories for fiscal years 2013 and 2014, lowering the total
by $4 billion and $8 billion, respectively.
The President ordered the fiscal year 2013 BCA sequester,
as required by law, on 1 March 2013.
The Bipartisan Budget Act of 2013
As a result of the budget conference negotiations between
House Chairman Ryan and Senate Chairman Murray, the Bipartisan
Budget Act [BBA] of 2013 increased the discretionary spending
limits for fiscal years 2014 and 2015 by amending section 251
of the Deficit Control Act. The BBA 2013 agreement provided $63
billion in sequester relief over 2 years, split evenly between
defense and non-defense programs. BBA 2013 set defense
discretionary spending at $520.5 billion and non-defense
discretionary spending at $491.8 billion for fiscal year 2014.
For fiscal year 2015, defense discretionary spending was set at
$521.3 billion, and non-defense discretionary spending was set
at $492.4 billion.
The sequester relief was fully offset by reductions in
direct spending elsewhere in the budget. BBA 2013 included
dozens of specific deficit-reduction provisions with mandatory
savings and non-tax revenue totaling approximately $85 billion.
This included $28 billion in reductions stemming from a
provision requiring the President to sequester the same
percentage of mandatory budgetary resources in 2022 and 2023 as
will be sequestered in 2021 under current law.
The Bipartisan Budget Act of 2015
The Bipartisan Budget Act [BBA] of 2015 amended section 251
of the Deficit Control Act to increase the fiscal year 2016 and
2017 discretionary spending limits by $50 billion and $30
billion, respectively, equally divided between defense and non-
defense spending each year. These increases in the spending
categories were offset through reforms reducing direct spending
spread over a decade elsewhere in the budget. These reforms
included the following: establishing an overall rate of return
for insurance providers under the Standard Reinsurance
Agreement; authorizing the sale of 58 million barrels of oil
from the Strategic Petroleum Reserve; raising premium rates for
single employer pension plans; accelerating the due date for
pension premiums; maintaining the 2016 Medicare Part B premium;
and rescinding and permanently cancelling $746 million from the
Department of Justice's Asset Forfeiture Fund among other
provisions. Additionally, BBA 2015 increased program integrity
adjustments for Social Security continuing disability reviews
by $484 million through fiscal year 2021. In the Senate only,
it provided for allocations, aggregates and other spending
levels to have the force and effect as the fiscal year 2017
concurrent resolution on the budget for purposes of the
Congressional Budget Act of 1974. BBA 2015 also temporarily
suspended the debt limit through 15 March 2017.
ENFORCING BUDGETARY LEVELS
----------
The Concurrent Resolution on the Budget
The concurrent resolution on the budget establishes
allocations of spending authority and aggregate levels of both
spending authority and revenues that are binding on Congress
when it considers subsequent spending and tax legislation. Any
legislation that would breach the levels set forth in the
budget resolution is subject to points of order on the floor of
the House of Representatives. The concurrent resolution on the
budget is established pursuant to the Congressional Budget Act
of 1974, which includes various requirements as to its content
and enforcement. While a budget resolution sets levels of
spending, revenue, deficits and debt, it may also include
special procedures in order to enforce Congressional budgetary
decisions.
The levels established in the budget resolution are not
self-enforcing. Members of the House must raise points of order
against legislation that breaches the allocations and aggregate
spending levels established in the budget resolution. If a
point of order is sustained, the House is precluded from
further consideration of the measure. It has been the practice
of the House to waive all points of order in the resolution
that provides for House consideration of a bill.
Provisions of the Congressional Budget Act
SECTION 302(f)
Section 302(f) of the Congressional Budget Act of 1974
prohibits the consideration of legislation that exceeds a
committee's allocation of budget authority. For authorizing
committees, this section applies to the fiscal year for which a
concurrent resolution on the budget is agreed to and the period
of fiscal years covered by the budget resolution in force. For
appropriations bills, however, the test measures the budget
effects in the first fiscal year.
SECTION 303
Section 303 of the Congressional Budget Act prohibits the
consideration of spending and revenue legislation before the
House has passed a concurrent resolution on the budget for a
fiscal year. Legislation that changes revenue or increases
budget authority in a fiscal year for which a budget resolution
has not been agreed to violates section 303(a). Section 303(a)
does not apply to budget authority and revenue provisions first
effective in a year following the first fiscal year to which a
budget resolution would apply, or to appropriation bills after
15 May.
SECTION 311
Under this section, the House is prohibited from
considering legislation that would exceed the aggregate
spending limits of budget authority and outlays, or cause
revenue levels to fall below the revenue floor, established by
the concurrent resolution on the budget. If a measure would
cause budget authority or outlays to be greater than the
ceiling established for the first fiscal year of a budget
resolution, a section 311 violation occurs.
Additionally, if a measure would cause revenue to be lower
than the revenue floor in the first fiscal year or the period
of years covered by the budget resolution, a section 311
violation occurs. Section 311 does not apply to measures that
provide budget authority but do not exceed a committee's 302(a)
allocations.
SECTION 314(f)
Section 314(f) of the Congressional Budget Act prohibits
the consideration of any bill, joint resolution, amendment, or
conference report that would cause the statutory spending
category limits established in section 251(c) of the Balanced
Budget and Emergency Deficit Control Act of 1985 (as adjusted
by procedures set out in section 251A of that Act) to be
exceeded.
SECTION 401(a)
Section 401(a) of the Congressional Budget Act prohibits
the consideration of any bill, joint resolution, amendment, or
conference report that provides: (1) new authority that the
Government is obligated to make outlays; (2) new authority to
incur indebtedness; or (3) new credit authority unless such
measure is subject to the availability of appropriations. It is
a strict rule because, similar to the House Cut-As-You-Go Rule
and statutory Pay-As-You-Go, a bill would violate the rule even
if the budget resolution specifically assumed the increase in
mandatory spending.
SECTION 401(b)
Section 401(b)(1) of the Congressional Budget Act prohibits
the consideration of any bill, joint resolution, amendment, or
conference report that provides new entitlement authority first
effective in the current fiscal year. This point of order
prevented Congress from prematurely increasing new entitlement
authority before the Congress agreed to a budget resolution for
the forthcoming fiscal year.
Section 401(b)(2) requires the referral to the Committee on
Appropriations of any reported authorization bill that
increases entitlement spending in the forthcoming fiscal year
if it exceeds the reporting Committee's 302(a) allocation.
Under this section, the Committee on Appropriations is
empowered to limit the total amount of new entitlement
authority provided by that bill.
The well-intentioned rules under section 401 of the
Congressional Budget Act have proven ineffective. Congress has
passed numerous bills that have increased one or more of the
categories of direct or mandatory spending specified in section
401. These increases in mandatory spending have included
entirely new programs, programmatic expansions in existing
programs, and increases in existing programs that occur under
current law.
Section 401(b) was effectively discarded in the 110th
Congress, when it was last waived by H. Res. 1218. Section
401(b)(2) was never fully implemented. The referral authority
under this section has not been used since 1991, during the
102nd Congress. In its 42-year history, approximately 10 to 15
bills were referred to the Committee on Appropriations and not
once did the Committee on Appropriations actually report the
bill with a spending limitation, as the rule envisioned. The
Balanced Budget Act of 1997 amended section 401(b) of the
Congressional Budget Act to make this referral authority to the
Committee on Appropriations permissive rather than mandatory.
Since that time, no referrals have been made to the Committee
on Appropriations under this authority.
These rules and procedures have failed to control direct
spending and were effectively sidelined for several reasons.
First, the rules were so strict that Congress was unwilling to
enforce them and waived them repeatedly over the years; the
rule prohibited the creation of certain types of new
entitlement programs even if the spending was within the
permissible limits established by the budget resolution and was
for a preexisting program. Second, the focus on separate
categories of mandatory spending became obsolete with the
enactment of the Budget Enforcement Act of 1990 [BEA]. The BEA
effectively replaced these separate categories of mandatory
spending with the concept of direct spending, which refers to
all forms of spending not subject to annual appropriations.
Finally, the failure of these rules to prevent increases in
mandatory spending may be attributed to how they are enforced.
In the House, these rules are waived as part of a resolution
that provides for the consideration of a bill. The vote on a
rule is seen as a test of the majority party's discipline and,
as a result, the rule usually passes on a party line vote.
The referral process under section 401(b)(2) has also
proven ineffective in combatting increases in entitlement
programs. It is not entirely clear why the Committee on
Appropriations has neither sought referrals of mandatory
spending bills nor reported the few that have been referred to
it. The Committee on Appropriations has a disincentive to mark
up these bills because it would have to stretch limited
spending authority across more programs or face the enmity of
proponents of those programs.
A more mundane reason bills have not been referred to the
Committee on Appropriations is that it would impose untenable
timing delays. The Leadership sometimes schedules bills for
consideration on the House floor shortly after they are
reported by a Committee. A 15-day referral to the Committee on
Appropriations would obviously slow the legislative process and
the Leadership would have to build these time delays into the
House's legislative schedule.
The Committee on the Budget believes that the regimen for
handling new entitlement authority needs to be reevaluated. It
will begin by reassessing the appropriate level at which the
rule under section 401 of the Congressional Budget Act should
apply. One option would be to apply the existing rules at the
programmatic level. This would preclude entirely new programs
but allow existing programs to be expanded or reformed if they
are within the limits established by the budget resolution or
are offset by reductions in entitlement spending. One obstacle
to enforcing the rule at the programmatic level, however, is
that there is no clear definition of what constitutes a
``program'': There is no commonly accepted definition of the
term ``program'' in budget or appropriations law. As a result,
agencies aggregate program, projects, and activities under
different standards.
At a minimum, these rules and procedures need to be updated
to encompass all mandatory spending programs rather than just
the four obsolete categories for borrowing authority, contract
authority, credit authority, and new entitlement authority. The
Committee on the Budget will undertake this update with budget
process reform.
Budget-Related Provisions in the House
In addition to budget enforcement controls in the
Congressional Budget Act of 1974, as applied through the
concurrent resolution on the budget, additional budget
enforcement rules may be found in the Rules of the House of
Representatives and in the Separate Orders of the House.
CLAUSE 8 OF RULE XIII
This clause requires the Congressional Budget Office and
Joint Committee on Taxation to incorporate the macroeconomic
effects of major legislation into official cost estimates used
for budget enforcement and other rules of the House. The
operation of this rule has been superseded by section 308 of
this resolution.
CLAUSE 7 OF RULE XXI
This clause prohibits the consideration of a concurrent
resolution on the budget containing reconciliation directives
(under section 310 of the Congressional Budget Act of 1974)
that would cause a net increase in direct spending.
CLAUSE 10 OF RULE XXI
This clause prohibits the consideration of legislation that
increases direct spending over a 6-year period or an 11-year
period. If such spending is increased in either of these time
periods, then it must be offset by corresponding decreases in
direct spending. If an amendment is offered to a measure that
decreases direct spending in either of these periods, then the
amendment must also decrease net direct spending by at least
the same amount. This rule is commonly referred to as Cut-As-
You-Go.
CLAUSE 4 OF RULE XXIX
This clause specifies that the Chair of the Committee on
the Budget is responsible for providing authoritative guidance
concerning the impact of a legislative proposition related to
the levels of new budget authority, outlays, direct spending,
and new entitlement authority.
SECTION 3 OF THE SEPARATE ORDERS OF HOUSE RESOLUTION 5 OF THE 114TH
CONGRESS
House Resolution 5 adopted the rules from the 113th
Congress and incorporated additional provisions related to the
budget process.
Section 3(d) maintains the requirement, from the 112th and
113th Congresses, that each general appropriations bill include
a ``spending reduction'' account. This ``spending reduction
account'' provides a recitation of the amount by which, through
the amendment process, the House has reduced spending in other
portions of the bill and indicates that those savings be
counted toward spending reduction. It also provides that any
amendment increasing spending relative to the underlying bill
must include an offset of an equal or greater amount.
Section 3(h) maintains the requirement from the 113th
Congress that a concurrent resolution on the budget include a
section related to ``Means-Tested and Non-Means-Tested Direct
Spending'' programs. Additionally, the Chair of the Committee
on the Budget must submit for printing in the Congressional
Record a statement defining these terms prior to the
consideration of such concurrent resolution. This requirement
also applies to any amendments to or conference reports on a
concurrent resolution on the budget.
Section 3(q) prohibits the consideration of any legislation
that reduces the actuarial balance of the Federal Old-Age and
Survivors Insurance Trust Fund unless such legislation improves
the overall financial health of the combined Social Security
Trust Funds.
ACCOUNTS IDENTIFIED FOR
ADVANCE APPROPRIATIONS
----------
Accounts Identified for Advance Appropriations
for Fiscal Year 2018
(SUBJECT TO A GENERAL LIMIT OF $28,852,000,000)
Labor, Health and Human Services, and Education
Employment and Training Administration
Education for the Disadvantaged
School Improvement
Career, Technical, and Adult Education
Special Education
Transportation, Housing and Urban Development
Tenant-based Rental Assistance
Project-based Rental Assistance
Veterans Discretionary Accounts Identified for
Advance Appropriations for Fiscal Year 2018
(SUBJECT TO A SEPARATE LIMIT OF $66,385,032,000)
Military Construction, Veterans Affairs
Veterans Medical Services
Veterans Medical Support and Compliance
Veterans Medical Facilities
Veterans Medical Community Care
VOTES OF THE COMMITTEE
----------
Clause 3(b) of House Rule XIII requires each committee
report to accompany any bill or resolution of a public
character, ordered to include the total number of votes cast
for and against on each rollcall vote, on a motion to report
and any amendments offered to the measure or matter, together
with the names of those voting for and against. Listed below
are the rollcall votes taken in the Committee on the Budget on
the Concurrent Resolution on the Budget for Fiscal Year 2017.
On March 16, 2016 the Committee met in open session, a
quorum being present.
Mr. Rokita asked unanimous consent that the Chair be
authorized, consistent with clause 4 of House Rule XVI, to
declare a recess at any time during the Committee meeting.
There was no objection to the unanimous consent request.
Chairman Price asked unanimous consent to dispense with the
first reading of the budget aggregates, function levels and
other appropriate matter; that the aggregates, function totals
and other appropriate matter be open for amendment; and that
amendments be considered as read.
There was no objection to the unanimous consent request.
The committee adopted and ordered reported the Concurrent
Resolution on the Budget for Fiscal Year 2017. The Committee on
the Budget took the following votes:
1. An amendment offered by Representatives Van Hollen,
Yarmuth, Pascrell, Castor, McDermott, Lee, Pocan, Lujan
Grisham, Dingell, Norcross and Moulton to insert a policy
statement on women's health care.
The amendment was not agreed to by a rollcall vote of 10
ayes and 22 noes.
Representatives Ryan and Pascrell asked unanimous consent,
after the closing of the vote, that the record reflect they
would have voted aye on rollcall vote no. 1.
There was no objection to the unanimous consent requests.
ROLLCALL VOTE NO. 1
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH)
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA)
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA)
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
2. An amendment offered by Chairman Price making technical
changes to the Chairman's mark.
The amendment was agreed to by voice vote.
3. An amendment offered by Representatives Dingell, Van
Hollen, Yarmuth, Moore, Castor, McDermott, Lee, Pocan, Lujan
Grisham and Moulton to provide assistance for residents of
Flint, Michigan. The amendment would also permit Michigan and
any other State with an emergency declaration because of
contaminants contained in public drinking water to use its 2016
Drinking Water State Revolving Fund allotment to offset any
outstanding debt on loans incurred before this fiscal year, as
well as lift the 20 percent limit on the amount of such
allotment that may be used to offset any principal.
The amendment would increase outlays for Functions 300,
450, 500 and 550. Outlays for Function 300 would increase by
the following amounts: $89.967 million for fiscal year 2017,
$51.609 million for fiscal year 2018, $15.821 million for
fiscal year 2019, $5.050 million for fiscal year 2020 and
$4.244 million for fiscal year 2021.
Outlays for Function 450 would increase by the following
amounts: $11.907 million for fiscal year 2017, $6.831 million
for fiscal year 2018, $2.094 million for fiscal year 2019,
$0.668 million for fiscal year 2020 and $0.562 million for
fiscal year 2021.
Outlays for Function 500 would increase by the following
amounts: $119.074 million for fiscal year 2017, $68.306 million
for fiscal year 2018, $20.940 million for fiscal year 2019,
$6.684 million for fiscal year 2020 and $5.617 million for
fiscal year 2021.
Outlays for Function 550 would increase by the following
amounts: $21.169 million for fiscal year 2017, $12.143 million
for fiscal year 2018, $3.723 million for fiscal year 2019,
$1.188 million for fiscal year 2020 and $0.999 million for
fiscal year 2021.
The amendment was not agreed to by a rollcall vote of 14
ayes and 21 noes.
ROLLCALL VOTE NO. 2
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
4. An amendment offered by Representatives Yarmuth, Van
Hollen, Pascrell, Castor, McDermott, Lee, Pocan, Lujan Grisham,
Dingell and Moulton to adjust revenue and Function 920 levels
to reflect the adoption of the Border Security, Economic
Opportunity and Immigration Modernization Act, which was
proposed in the 113th Congress.
The amendment would increase aggregate levels of revenue by
the following amounts: $2.1 billion for fiscal year 2017, $11.5
billion for fiscal year 2018, $28.0 billion for fiscal year
2019, $39.1 billion for fiscal year 2020, $45.0 billion for
fiscal year 2021, $47.7 billion for fiscal year 2022, $55.3
billion for fiscal year 2023, $65.0 billion for fiscal year
2024, $77.7 billion for fiscal year 2025 and $87.6 billion for
fiscal year 2026.
The amendment would also increase budget authority and
outlays for Function 920 each by the following amounts: $4.6
billion for fiscal year 2017, $6.8 billion for fiscal year
2018, $14.0 billion for fiscal year 2019, $19.8 billion for
fiscal year 2020, $24.6 billion for fiscal year 2021, $26.6
billion for fiscal year 2022, $32.2 billion for fiscal year
2023, $37.4 billion for fiscal year 2024, $44.4 billion for
fiscal year 2025 and $51.4 billion for fiscal year 2026.
The amendment would also insert a policy statement on
immigration reform.
The amendment was not agreed to by a rollcall vote of 15
ayes and 19 noes.
ROLLCALL VOTE NO. 3
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
5. An amendment offered by Representatives Pascrell, Van
Hollen, Yarmuth, McDermott, Lee, Pocan, Lujan Grisham, Dingell
and Moore to increase mandatory budget authority and outlays in
Function 550 relating to Medicaid.
The amendment would increase mandatory budget authority and
outlays for Function 550 each by the following amounts: $7.0
billion for fiscal year 2017, $67.0 billion for fiscal year
2018, $82.0 billion for fiscal year 2019, $88.0 billion for
fiscal year 2020, $97.0 billion for fiscal year 2021, $109.0
billion for fiscal year 2022, $121.0 billion for fiscal year
2023, $135.0 billion for fiscal year 2024, $151.0 billion for
fiscal year 2025 and $169.0 billion for fiscal year 2026.
The amendment would adjust the aggregate levels of revenue
by amounts equal to the aforementioned changes in outlays by
eliminating tax deductions for oil production and U.S.
businesses with international operations, changing the
depreciation schedules for certain equipment, closing loopholes
in the international corporate tax system, raising taxes on
high-income individuals and reforming the tax code by repealing
certain business expense deductions.
The amendment was not agreed to by a rollcall vote of 14
ayes and 20 noes.
ROLLCALL VOTE NO. 4
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
6. An amendment offered by Representatives McDermott, Van
Hollen, Yarmuth, Pascrell, Lee, Pocan, Lujan Grisham, Dingell
and Norcross to strike section 610 of the Chairman's mark and
insert a policy statement on Medicare.
The amendment was not agreed to by a rollcall vote of 13
ayes and 21 noes.
ROLLCALL VOTE NO. 5
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) MOULTON
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
7. An amendment offered by Representatives Moore, Van
Hollen, Yarmuth, McDermott, Lee, Pocan and Dingell to strike
Title II of the Chairman's mark.
The amendment was not agreed to by a rollcall vote of 11
ayes and 21 noes.
ROLLCALL VOTE NO. 6
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) MOULTON
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
8. An amendment offered by Representatives Lee, Van Hollen,
Yarmuth, Pascrell, Moore, McDermott, Pocan and Dingell to
insert a policy statement relating to poverty and increased
opportunity.
The amendment was not agreed to by a rollcall vote of 13
ayes and 22 noes.
ROLLCALL VOTE NO. 7
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
9. An amendment offered by Representatives Lujan Grisham,
Van Hollen, Yarmuth, Castor, McDermott, Lee, Pocan and Dingell
to insert a policy statement relating to prescription drug
costs.
The amendment was not agreed to by a rollcall vote of 13
ayes and 21 noes.
ROLLCALL VOTE NO. 8
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
10. An amendment offered by Representatives Castor, Van
Hollen, Yarmuth, Pascrell, McDermott, Lee, Pocan, Dingell,
Norcross and Moulton to increase mandatory budget authority and
outlays in Function 550 for scientific jobs and biomedical
research.
The amendment would increase mandatory budget authority in
Function 550 by $0.720 billion in fiscal year 2017.
Outlays in Function 550 would increase by the following
amounts: $0.381 billion for fiscal year 2017, $0.219 billion
for fiscal year 2018, $0.067 billion for fiscal year 2019,
$0.021 billion for fiscal year 2020 and $0.018 billion for
fiscal year 2021.
The amendment would adjust the aggregate levels of revenue
by amounts equal to the aforementioned changes in outlays by
eliminating tax deductions for oil production and U.S.
businesses with international operations, changing the
depreciation schedules for certain equipment, closing loopholes
in the international corporate tax system, raising taxes on
high-income individuals and reforming the tax code by repealing
certain business expense deductions.
The amendment was not agreed to by a rollcall vote of 12
ayes and 21 noes.
ROLLCALL VOTE NO. 9
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT
(TN) (WA)
------------------------------------------------------------------------
WOODALL LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
11. An amendment offered by Representatives Pocan, Van
Hollen, Yarmuth, Pascrell, Ryan, Castor, McDermott, Lee,
Dingell, Norcross and Moulton to insert a policy statement
relating to higher education.
The amendment was not agreed to by a rollcall vote of 12
ayes and 21 noes.
ROLLCALL VOTE NO. 10
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT
(TN) (WA)
------------------------------------------------------------------------
WOODALL LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
12. An amendment offered by Representatives Lieu, Van
Hollen, Yarmuth, Pascrell, Ryan, McDermott, Lee, Pocan, Lujan
Grisham, Dingell and Norcross to increase mandatory budget
authority and outlays for Function 300 and Function 550
relating to safe drinking water and the prevention of childhood
lead exposure.
The amendment would increase mandatory budget authority for
Function 300 by $3.13 billion in fiscal year 2017. Outlays for
Function 300 would increase by the following amounts: $1.656
billion for fiscal year 2017, $0.950 billion for fiscal year
2018, $0.291 billion for fiscal year 2019, $0.093 billion for
fiscal year 2020 and $0.078 billion for fiscal year 2021.
The amendment would increase mandatory budget authority for
Function 550 by $19.8 billion in fiscal year 2017. Outlays for
Function 550 would increase by the following amounts: $10.478
billion for fiscal year 2017, $6.011 billion for fiscal year
2018, $1.843 billion for fiscal year 2019, $0.588 billion for
fiscal year 2020 and $0.494 billion for fiscal year 2021.
The amendment would adjust the aggregate levels of revenue
by amounts equal to the aforementioned changes in outlays by
eliminating tax deductions for oil production and U.S.
businesses with international operations, changing the
depreciation schedules for certain equipment, closing loopholes
in the international corporate tax system, raising taxes on
high-income individuals and reforming the tax code by repealing
certain business expense deductions.
The amendment was not agreed to by a rollcall vote of 13
ayes and 20 noes.
ROLLCALL VOTE NO. 11
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT
(TN) (WA)
------------------------------------------------------------------------
WOODALL LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
13. An amendment offered by Representatives Ryan, Van
Hollen, Yarmuth, Pascrell, McDermott, Lee, Pocan, Lujan
Grisham, Dingell, Norcross and Moulton to increase mandatory
budget authority and outlays in Function 550 relating to
prescription opioid and heroin abuse.
The amendment would increase mandatory budget authority for
Function 550 by $0.500 billion for fiscal year 2017 and $0.500
billion for fiscal year 2018. Outlays for Function 550 would
change by the following amounts: $0.265 billion for fiscal year
2017, $0.416 billion for fiscal year 2018, $0.198 billion for
fiscal year 2019, $0.061 billion for fiscal year 2020, $0.027
billion for fiscal year 2021 and $0.012 billion for fiscal year
2022.
The amendment would adjust the aggregate levels of revenue
by amounts equal to the aforementioned changes in outlays by
eliminating tax deductions for oil production and U.S.
businesses with international operations, changing the
depreciation schedules for certain equipment, closing loopholes
in the international corporate tax system, raising taxes on
high-income individuals and reforming the tax code by repealing
certain business expense deductions.
The amendment was not agreed to by a rollcall vote of 12
ayes and 18 noes.
ROLLCALL VOTE NO. 12
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK McDERMOTT
(TN) (WA)
------------------------------------------------------------------------
WOODALL LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
14. An amendment offered by Representatives Moulton, Van
Hollen, Yarmuth, Pascrell, McDermott, Lee, Pocan, Lujan
Grisham, Dingell, Norcross and Moore to increase mandatory
budget authority and outlays for Function 700 relating to
veterans programs.
The amendment would increase mandatory budget authority for
Function 700 by $0.643 billion for fiscal year 2017 and $1.792
billion for fiscal year 2018. Outlays for Function 700 would
increase by the following amounts: $0.340 billion for fiscal
year 2017, $1.144 billion for fiscal year 2018, $0.604 billion
for fiscal year 2019, $0.186 billion for fiscal year 2020,
$0.069 billion for fiscal year 2021 and $0.045 billion for
fiscal year 2022.
The amendment would also make all discretionary programs at
the Department of Veterans Affairs subject to advance
appropriations.
The amendment would adjust the aggregate levels of revenue
by amounts equal to the aforementioned changes in outlays by
eliminating tax deductions for oil production and U.S.
businesses with international operations, changing the
depreciation schedules for certain equipment, closing loopholes
in the international corporate tax system, raising taxes on
high-income individuals and reforming the tax code by repealing
certain business expense deductions.
The amendment was not agreed to by a rollcall vote of 11
ayes and 19 noes.
ROLLCALL VOTE NO. 13
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH)
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT
(TN) (WA)
------------------------------------------------------------------------
WOODALL LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) .........
------------------------------------------------------------------------
MOONEY .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
15. An amendment offered by Representatives Norcross, Van
Hollen, Yarmuth, Pascrell, Castor, McDermott, Lee, Pocan, Lujan
Grisham and Dingell to increase mandatory budget authority and
outlays for Function 500 to reflect the enactment of the
Paycheck Fairness Act.
The amendment would increase mandatory budget authority for
Function 500 by $0.050 billion for fiscal year 2017. Outlays
for Function 500 would increase by the following amounts:
$0.028 billion for fiscal year 2017, $0.013 billion for fiscal
year 2018, $0.004 billion for fiscal year 2019, $0.002 billion
for fiscal year 2020 and $0.001 billion for fiscal year 2021.
The amendment would adjust the aggregate levels of revenue
by amounts equal to the aforementioned changes in outlays by
eliminating tax deductions for U.S. businesses with
international operations and closing loopholes in the
international corporate tax system.
The amendment would also insert a policy statement calling
for the passage of the Paycheck Fairness Act.
The amendment was not agreed to by a rollcall vote of 13
ayes and 20 noes.
ROLLCALL VOTE NO. 14
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT
(TN) (WA)
------------------------------------------------------------------------
WOODALL LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
16. An amendment offered by Representatives Yarmuth, Van
Hollen, Pascrell, Castor, McDermott, Lee, Pocan, Dingell and
Moulton to insert a policy statement relating to the minimum
wage.
The amendment was not agreed to by a rollcall vote of 12
ayes and 17 noes.
ROLLCALL VOTE NO. 15
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT
(TN) (WA)
------------------------------------------------------------------------
WOODALL LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) .........
------------------------------------------------------------------------
MOONEY .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
17. An amendment offered by Representatives Moore, Van
Hollen, Yarmuth, Pascrell, Ryan, Castor, McDermott, Lee, Pocan,
Lujan Grisham and Dingell to increase budget authority and
outlays for Function 600 relating to nutrition assistance.
The amendment would increase budget authority and outlays
for Function 600 each by the following amounts: $5.3 billion
for fiscal year 2017, $9.2 billion for fiscal year 2018, $9.3
billion for fiscal year 2019, $9.5 billion for fiscal year
2020, $20.3 billion for fiscal year 2021, $21.1 billion for
fiscal year 2022, $22.0 billion for fiscal year 2023, $23.0
billion for fiscal year 2024, $24.2 billion for fiscal year
2025 and $25.4 billion for fiscal year 2026.
The amendment would adjust the aggregate levels of revenue
by amounts equal to the aforementioned changes in outlays by
eliminating tax deductions for oil production and U.S.
businesses with international operations, changing the
depreciation schedules for certain equipment, closing loopholes
in the international corporate tax system, raising taxes on
high-income individuals and reforming the tax code by repealing
certain business expense deductions.
The amendment was not agreed to by a rollcall vote of 12
ayes and 20 noes.
ROLLCALL VOTE NO. 16
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA)
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
18. An amendment offered by Representatives Pascrell, Van
Hollen, Yarmuth, Moore, McDermott, Lee, Pocan and Dingell to
insert a policy statement relating to Social Security.
The amendment was not agreed to by a rollcall vote of 12
ayes and 20 noes.
ROLLCALL VOTE NO. 17
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA)
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
19. An amendment offered by Representatives Van Hollen,
Yarmuth, Moore, McDermott, Lee, Pocan, Lujan Grisham, Dingell
and Norcross to insert a policy statement relating to Social
Security benefits.
The amendment was not agreed to by a rollcall vote of 11
ayes and 17 noes.
ROLLCALL VOTE NO. 18
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK McDERMOTT
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA)
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
20. An amendment offered by Representatives Pocan, Van
Hollen, Yarmuth, Pascrell, Moore, Castor, McDermott, Lee, Lujan
Grisham, Dingell, Norcross and Moulton to increase mandatory
budget authority and outlays for Function 500 relating to
student loans.
The amendment would increase mandatory budget authority and
outlays in Function 500. Mandatory budget authority would
increase by the following amounts: $15.524 billion for fiscal
year 2017, $19.550 billion for fiscal year 2018, $20.805
billion for fiscal year 2019, $21.402 billion for fiscal year
2020, $21.955 billion for fiscal year 2021, $22.926 billion for
fiscal year 2022, $19.960 billion for fiscal year 2023, $20.675
billion for fiscal year 2024, $21.359 billion for fiscal year
2025 and $22.006 billion for fiscal year 2026.
Outlays for Function 500 would increase by the following
amounts: $7.500 billion for fiscal year 2017, $17.085 billion
for fiscal year 2018, $19.112 billion for fiscal year 2019,
$20.070 billion for fiscal year 2020, $20.693 billion for
fiscal year 2021, $21.225 billion for fiscal year 2022, $20.186
billion for fiscal year 2023, $19.153 billion for fiscal year
2024, $19.558 billion for fiscal year 2025 and $20.143 billion
for fiscal year 2026.
The amendment would adjust the aggregate levels of revenue
by amounts equal to the aforementioned changes in outlays by
eliminating tax deductions for oil production and U.S.
businesses with international operations, changing the
depreciation schedules for certain equipment, closing loopholes
in the international corporate tax system, raising taxes on
high-income individuals and reforming the tax code by repealing
certain business expense deductions.
The amendment would also insert a deficit-neutral reserve
fund and policy statement relating to refinancing student
loans.
The amendment was not agreed to by a rollcall vote of 12
ayes and 19 noes.
ROLLCALL VOTE NO. 19
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA)
(GA)
------------------------------------------------------------------------
HARTZLER POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
21. An amendment offered by Representatives Castor, Van
Hollen, Yarmuth, Pascrell, Ryan, McDermott, Lee, Pocan, Lujan
Grisham, Dingell, Norcross and Moulton to increase budget
authority and outlays for Function 400 relating to
transportation infrastructure.
The amendment would increase budget authority by the
following amounts: $22.684 billion for fiscal year 2017,
$32.254 billion for fiscal year 2018, $34.061 billion for
fiscal year 2019, $41.966 billion for fiscal year 2020, $38.570
billion for fiscal year 2021, $33.223 billion for fiscal year
2022, $27.672 billion for fiscal year 2023, $20.022 billion for
fiscal year 2024, $11.317 billion for fiscal year 2025 and
$10.010 billion for fiscal year 2026.
Outlays for Function 400 would increase by the following
amounts: $5.392 billion for fiscal year 2017, $14.616 billion
for fiscal year 2018, $22.470 billion for fiscal year 2019,
$30.463 billion for fiscal year 2020, $35.485 billion for
fiscal year 2021, $35.877 billion for fiscal year 2022, $33.848
billion for fiscal year 2023, $29.479 billion for fiscal year
2024, $22.730 billion in fiscal year 2025 and $16.669 billion
for fiscal year 2026.
The amendment would adjust the aggregate levels of revenue
by amounts equal to the aforementioned changes in outlays by
eliminating tax deductions for oil production and U.S.
businesses with international operations, changing the
depreciation schedules for certain equipment, closing loopholes
in the international corporate tax system, raising taxes on
high-income individuals and reforming the tax code by repealing
certain business expense deductions.
The amendment was not agreed to by a rollcall vote of 12
ayes and 21 noes.
ROLLCALL VOTE NO. 20
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
22. An amendment offered by Representatives McDermott, Van
Hollen, Yarmuth, Pascrell, Castor, Lee, Pocan and Dingell to
increase mandatory budget authority and outlays in Function 550
to keep health care coverage affordable.
The amendment would increase mandatory budget authority and
outlays for Function 550 each by the following amounts: $46.0
billion for fiscal year 2017, $54.0 billion for fiscal year
2018, $56.0 billion for fiscal year 2019, $58.0 billion for
fiscal year 2020, $60.0 billion for fiscal year 2021, $65.0
billion for fiscal year 2022, $67.0 billion for fiscal year
2023, $70.0 billion for fiscal year 2024, $73.0 billion for
fiscal year 2025 and $76.0 billion for fiscal year 2026.
The amendment would adjust the aggregate levels of revenue
by amounts equal to the aforementioned changes in outlays by
eliminating tax deductions for oil production and U.S.
businesses with international operations, changing the
depreciation schedules for certain equipment, closing loopholes
in the international corporate tax system, raising taxes on
high-income individuals and reforming the tax code by repealing
certain business expense deductions.
The amendment was not agreed to by a rollcall vote of 13
ayes to 21 noes.
ROLLCALL VOTE NO. 21
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
23. An amendment offered by Representatives Lee, Van
Hollen, Yarmuth, McDermott, Pocan and Moulton relating to the
Overseas Contingency Operations designation.
The amendment was not agreed to by a rollcall vote of 15
ayes and 21 noes.
ROLLCALL VOTE NO. 22
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
24. An amendment offered by Representatives Ryan, Van
Hollen, Pascrell, McDermott, Lee, Pocan, Lujan Grisham,
Dingell, Norcross and Moulton to increase mandatory budget
authority and outlays in Function 370 for manufacturing
programs in the United States.
The amendment would increase budget authority for Function
370 by $3.140 billion in fiscal year 2017. Outlays for Function
370 would change by the following amounts: $0.255 billion for
fiscal year 2018, $0.565 billion for fiscal year 2019, $0.665
billion for fiscal year 2020, $0.715 billion for fiscal year
2021, $0.350 billion for fiscal year 2022, $0.300 billion for
fiscal year 2023, $0.200 billion for fiscal year 2024 and
$0.090 billion for fiscal year 2025.
The amendment would adjust the aggregate levels of revenue
by amounts equal to the aforementioned changes in outlays by
eliminating tax deductions for oil production and U.S.
businesses with international operations, changing the
depreciation schedules for certain equipment, closing loopholes
in the international corporate tax system, raising taxes on
high-income individuals and reforming the tax code by repealing
certain business expense deductions.
The amendment was not agreed to by a rollcall vote of 14
ayes and 22 noes.
ROLLCALL VOTE NO. 23
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
25. An amendment offered by Representatives Lujan Grisham,
Van Hollen, Yarmuth, Pascrell, Castor, McDermott, Lee, Pocan
and Dingell to insert a deficit-neutral reserve fund to support
initiatives aimed at improving the economy and creating jobs.
The amendment was not agreed to by a rollcall vote of 14
ayes and 21 noes.
ROLLCALL VOTE NO. 24
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
26. An amendment offered by Representatives Dingell, Van
Hollen, Yarmuth, Pascrell, Castor, McDermott, Lee and Pocan to
insert a deficit-neutral reserve fund for long term care
services and supports.
The amendment was not agreed to by a rollcall vote of 14
ayes and 20 noes.
ROLLCALL VOTE NO. 25
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) .........
------------------------------------------------------------------------
MOONEY .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
27. An amendment offered by Representatives Lieu, Van
Hollen, Yarmuth, McDermott, Lee, Pocan, Norcross and Moulton to
prevent cyber-attacks by establishing the Information
Technology Modernization Fund.
The amendment would increase mandatory budget authority for
Function 800 by $3.0 billion for fiscal year 2017.
Outlays for Function 800 would increase by the following
amounts: $1.5 billion for fiscal year 2017, $0.60 billion for
fiscal year 2018 and $0.750 billion for fiscal year 2019.
The amendment would adjust the aggregate levels of revenue
by amounts equal to the aforementioned changes in outlays by
eliminating tax deductions for oil production and U.S.
businesses with international operations, changing the
depreciation schedules for certain equipment, closing loopholes
in the international corporate tax system, raising taxes on
high-income individuals and reforming the tax code by repealing
certain business expense deductions.
The amendment was not agreed to by a rollcall vote of 14
ayes and 22 noes.
ROLLCALL VOTE NO. 26
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
28. An amendment offered by Representative Norcross, Van
Hollen, Yarmuth, Pascrell, Moore, McDermott, Lee, Pocan, Lujan
Grisham and Moulton to prevent gun violence and provide mental
health services to victims.
The amendment would increase mandatory budget authority for
Function 750 by $0.035 billion for fiscal year 2017. Outlays
for Function 750 would increase by the following amounts:
$0.019 billion for fiscal year 2017, $0.011 billion for fiscal
year 2018, $0.003 billion for fiscal year 2019, $0.001 billion
for fiscal year 2020 and $0.001 billion for fiscal year 2021.
The amendment would also increase mandatory budget
authority for Function 550 by $0.250 billion for fiscal year
2017 and $0.250 billion for fiscal year 2018. Outlays for
Function 550 would increase by the following amounts: $0.132
billion for fiscal year 2017, $0.208 billion for fiscal year
2018, $0.099 billion for fiscal year 2019, $0.031 billion for
fiscal year 2020, $0.014 billion for fiscal year 2021 and
$0.006 billion for fiscal year 2022.
The amendment would adjust the aggregate levels of revenue
by amounts equal to the aforementioned changes in outlays by
eliminating tax deductions for oil production and U.S.
businesses with international operations, changing the
depreciation schedules for certain equipment, closing loopholes
in the international corporate tax system, raising taxes on
high-income individuals and reforming the tax code by repealing
certain business expense deductions.
The amendment would also insert a policy statement urging
the passage of the Denying Firearms and Explosives to Dangerous
Terrorists Act of 2015.
The amendment was not agreed to by a rollcall vote of 14
ayes and 22 noes.
ROLLCALL VOTE NO. 27
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
29. An amendment offered by Representatives Moulton, Van
Hollen, Yarmuth, Moore, McDermott, Lee and Pocan to insert a
deficit-neutral reserve fund relating to the Corporation for
National and Community Service.
The amendment was not agreed to by a rollcall vote of 14
ayes and 22 noes.
ROLLCALL VOTE NO. 28
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
30. An amendment offered by Representative Garrett to
specify the procedures for considering mandatory savings
outside of reconciliation, which may include a stand-alone
measure or in conjunction with another measure or measures with
a fiscal impact.
The amendment was agreed to by a rollcall vote of 22 ayes
and 14 noes.
ROLLCALL VOTE NO. 29
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
31. Representative Rokita made a motion that the Committee
adopt the aggregates, functional categories and other
appropriate matter, with any amendments.
The motion offered by Representative Rokita was agreed to
by voice vote.
Chairman Price called up the Concurrent Resolution on the
Budget for Fiscal Year 2017 incorporating the aggregates,
function totals and other appropriate matter as previously
agreed.
32. Representative Rokita made a motion that the Committee
order the Concurrent Resolution reported with a favorable
recommendation and that the Concurrent Resolution do pass.
The motion offered by Representative Rokita was agreed to
by a rollcall vote of 20 ayes to 16 noes.
ROLLCALL VOTE NO. 30
------------------------------------------------------------------------
Name & Answer Name & Answer
State Aye No Present State Aye No Present
------------------------------------------------------------------------
PRICE X VAN X
(GA) HOLLEN
(Chairma (MD)
n) (Ranking
)
------------------------------------------------------------------------
ROKITA X YARMUTH X
(IN) (KY)
------------------------------------------------------------------------
GARRETT X PASCRELL X
(NJ) (NJ)
------------------------------------------------------------------------
DIAZ-BALA X RYAN (OH) X
RT (FL)
------------------------------------------------------------------------
COLE (OK) X MOORE X
(WI)
------------------------------------------------------------------------
McCLINTOC X CASTOR X
K (CA) (FL)
------------------------------------------------------------------------
BLACK X McDERMOTT X
(TN) (WA)
------------------------------------------------------------------------
WOODALL X LEE (CA) X
(GA)
------------------------------------------------------------------------
HARTZLER X POCAN X
(MO) (WI)
------------------------------------------------------------------------
STUTZMAN X LUJAN X
(IN) GRISHAM
(NM)
------------------------------------------------------------------------
GUINTA X DINGELL X
(NH) (MI)
------------------------------------------------------------------------
SANFORD X LIEU (CA) X
(SC)
------------------------------------------------------------------------
WOMACK X NORCROSS X
(AR) (NJ)
------------------------------------------------------------------------
BRAT (VA) X MOULTON X
(MA)
------------------------------------------------------------------------
BLUM (IA) X .........
------------------------------------------------------------------------
MOONEY X .........
(WV)
------------------------------------------------------------------------
GROTHMAN X .........
(WI)
------------------------------------------------------------------------
PALMER X .........
(AL)
------------------------------------------------------------------------
MOOLENAAR X .........
(MI)
------------------------------------------------------------------------
WESTERMAN X .........
(AR)
------------------------------------------------------------------------
RENACCI X .........
(OH)
------------------------------------------------------------------------
JOHNSON X
(OH)
------------------------------------------------------------------------
Representative Rokita asked for unanimous consent that the
Chairman be authorized to make a motion to go to conference
pursuant to clause 1 of House Rule XXII, the staff be
authorized to make any necessary technical and conforming
corrections in the resolution and any committee amendments and
calculate any remaining elements required in the resolution,
prior to filing the resolution.
There was no objection to the unanimous consent requests.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
OTHER MATTERS UNDER THE
RULES OF THE HOUSE
----------
Committee on the Budget
Oversight Findings and Recommendations
Clause 3(c)(1) of rule XIII of the Rules of the House of
Representatives requires each committee report to contain
oversight findings and recommendations pursuant to clause
2(b)(1) of rule X. The Committee on the Budget has no findings
to report at the present time.
New Budget Authority, Entitlement Authority,
and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives provides that committee reports must contain
the statement required by Section 308(a) of the Congressional
Budget Act of 1974. This report does not contain such a
statement because as a concurrent resolution setting forth a
blueprint for the Congressional budget, the budget resolution
does not provide new budget authority, new entitlement
authority, or change revenues.
General Performance Goals and Objectives
Clause 3(c)(4) of rule XIII of the Rules of the House of
Representatives requires each committee report to contain a
statement of general performance goals and objectives,
including outcome-related goals and objectives, for which the
measure authorizes funding. The Committee on the Budget has no
such goals and objectives to report at this time.
Views of Committee Members
Clause 2(l) of rule XI of the Rules of the House of
Representatives requires each committee to afford a two-day
opportunity for members of the committee to file minority,
additional, dissenting, or supplemental views and to include
the views in its report. The following views were submitted:
MINORITY VIEWS
----------
2017 Republican Budget Divides Americans, Disinvests in America,
Rewards the Wealthy, and Punishes Everyone Else
This 2017 Republican budget is a budget that divides
Americans. It divides Americans because it continues to provide
great benefits to those who are already doing very well in
America, but for everyone else--a struggling working family, a
senior on Medicare, a student trying to go to college and come
out debt-free--this budget hits you squarely between the eyes.
This is another Republican budget that helps those who are
doing just fine at the expense of everyone else in America.
The Republican budget once again is based on a continued
failed theory of trickle-down economics. The idea is that as
long as people at the top get tax breaks, that will somehow
lift everybody else up. What we've seen--and the record is
pretty clear--is that it has not lifted all boats. It has
lifted only the yachts.
This budget also fails to reflect the ``healthy and
functioning budget process'' that the majority claimed to want.
This year marks the first time in 40 years of bipartisan budget
process that this Committee has refused to hear from the
President's representative. That had been a bipartisan
tradition, whether you had a Democratic President or a
Republican President, a Democratically controlled House of
Representatives or Republican-controlled House of
Representatives. This Committee has to be ashamed that this
year, for the first time, we broke with that long-standing
bipartisan tradition.
It is also troubling that this budget exists only because
of the deal that was made for the Tea Party caucus to use the
other committees to make significant reductions in important
investments in this country. For example, the Ways and Means
Committee is eliminating the Social Services Block Grant--half
of which helps vulnerable kids, and half supports vulnerable
adults. It funds services such as the Meals on Wheels program.
It supports things like child protective services. The great
irony is that when former Budget Committee Chairman and now
Speaker Ryan talked about trying to help people who are
struggling and poor families, he talked about programs that
provide local flexibility. That is exactly what the Social
Services Block Grant does--it's a block grant that provides
flexibility.
Democrats have always worried that once you block-grant
programs, Republicans will then eliminate them. That's exactly
what Republicans have done with the Social Services Block
Grant. Republican proposals currently in the Ways and Means
Committee are going to hit child tax credits for three million
kids from working families. That was the price that was paid in
the Republican caucus to even consider a budget resolution this
year.
And it is a bad Republican budget. It does not close a
single tax break to reduce the deficit. If you're a hedge fund
manager, you continue to get a better tax rate than school bus
drivers and people who are working out there every day. It does
not touch the tax break for corporate jets. It does not stop
the problem of American corporations that are moving their
address overseas to escape their responsibilities here at home.
Instead of stopping those tax breaks, the Republican budget
cuts Medicaid by $1 trillion. Two thirds of Medicaid goes to
seniors and people with disabilities.
It cuts Medicare by $487 billion. Seniors will have to go
back to paying co-pays for preventive services. It reopens the
prescription drug donut hole.
On the discretionary side starting in 2018, the Republican
budget dramatically disinvests in America. It doubles the size
of the non-defense discretionary sequester cuts in 2018. The
Chairman of the Republican House Appropriations Committee
rightly has said that current levels are unsustainable, and yet
this doubles the sequester cuts next year. By 10 years out, it
cuts nondefense funding by almost five times the size of the
sequester cuts. This is disinvesting in innovation and science
and research. It is also disinvesting in early education,
college student assistance and disinvesting in programs for
transportation when we need to be modernizing our
infrastructure to compete globally.
Even after all that, once again, this Republican budget
does not balance. It is based on gimmicks that would make the
Enron accountants blush. Republicans continue to keep all of
the revenues from the Affordable Care Act in this budget while
they claim that they are repealing the Affordable Care Act.
That just does not square.
In summary, this is another budget that is great for people
at the very top of the income ladder, but at the expense of
everybody else in America and of our competitiveness. It does
not close a single tax break for special interests to help
reduce the deficit but everybody else in the country pays the
price for a budget that only rhetorically balances.
Chris Van Hollen.
John Yarmuth.
Bill Pascrell.
Tim Ryan.
Gwen Moore.
Kathy Castor.
Jim McDermott
Barbara Lee.
Mark Pocan.
Michelle Lujan Grisham.
Debbie Dingell.
Ted Lieu.
Donald Norcross.
Seth Moulton.
114th CONGRESS
2d Session
H. CON. RES. ___
Establishing the congressional budget for the United States Government
for fiscal year 2017 and setting forth the appropriate budgetary levels
for fiscal years 2018 through 2026.
CONCURRENT RESOLUTION
Resolved by the House of Representatives (the Senate concurring),
SECTION 1. CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2017.
(a) Declaration.--The Congress determines and declares that this
concurrent resolution establishes the budget for fiscal year 2017 and
sets forth appropriate budgetary levels for fiscal years 2018 through
2026.
(b) Table of Contents.--The table of contents for this concurrent
resolution is as follows:
Sec. 1. Concurrent resolution on the budget for fiscal year 2017.
TITLE I--RECOMMENDED LEVELS AND AMOUNTS
Sec. 101. Recommended levels and amounts.
Sec. 102. Major functional categories.
TITLE II--RECONCILIATION AND RELATED MATTERS
Sec. 201. Fiscal year 2017 budgetary agenda.
Sec. 202. Reconciliation in the House of Representatives.
Sec. 203. Policy statement on mandatory savings outside of the
reconciliation process.
Sec. 204. Policy statement on new mandatory spending controls.
Sec. 205. Policy statement on other budget process reforms.
TITLE III--BUDGET ENFORCEMENT
Subtitle A--Budget Enforcement in the House of Representatives
Sec. 301. Point of order against increasing long-term direct spending.
Sec. 302. Allocation for Overseas Contingency Operations/Global War on
Terrorism.
Sec. 303. Limitation on changes in certain mandatory programs.
Sec. 304. GAO report.
Sec. 305. Estimates of debt service costs.
Sec. 306. Fair-value credit estimates.
Sec. 307. Estimates of major direct spending legislation.
Sec. 308. Estimates of macroeconomic effects of major legislation.
Sec. 309. Adjustments for improved control of budgetary resources.
Sec. 310. Limitation on advance appropriations.
Sec. 311. Scoring rule for Energy Savings Performance Contracts.
Sec. 312. Estimates of land conveyances.
Sec. 313. Limitation on transfers from the general fund of the Treasury
to the Highway Trust Fund.
Sec. 314. Prohibition on the use of guarantee fees as an offset.
Sec. 315. Prohibition on use of Federal Reserve surpluses as an offset.
Subtitle B--Other Provisions
Sec. 321. Budgetary treatment of administrative expenses.
Sec. 322. Application and effect of changes in allocations and
aggregates.
Sec. 323. Adjustments to reflect changes in concepts and definitions.
Sec. 324. Adjustments to reflect updated budgetary estimates.
Sec. 325. Adjustment for certain emergency designations.
Sec. 326. Exercise of rulemaking powers.
TITLE IV--RESERVE FUNDS IN THE HOUSE OF REPRESENTATIVES
Sec. 401. Deficit-neutral reserve fund to reduce poverty and increase
opportunity and upward mobility for struggling Americans.
Sec. 402. Reserve fund for the repeal of the President's health care
law.
Sec. 403. Deficit-neutral reserve fund for promoting health care reform.
Sec. 404. Deficit-neutral reserve fund for graduate medical education.
Sec. 405. Deficit-neutral reserve fund for trade agreements.
Sec. 406. Deficit-neutral reserve fund for reforming the tax code.
Sec. 407. Deficit-neutral reserve fund for revenue measures.
Sec. 408. Deficit-neutral reserve fund for Federal retirement reform.
Sec. 409. Deficit-neutral reserve fund for coal miner pension and health
care funds.
Sec. 410. Reserve fund for commercialization of Air Traffic Control.
TITLE V--ESTIMATES OF DIRECT SPENDING IN THE HOUSE OF REPRESENTATIVES
Sec. 501. Direct spending.
TITLE VI--POLICY STATEMENTS IN THE HOUSE OF REPRESENTATIVES
Sec. 601. Policy statement on developing a bold agenda.
Sec. 602. Policy statement on a balanced budget amendment.
Sec. 603. Policy statement on reforming the congressional budget
process.
Sec. 604. Policy statement on economic growth and job creation.
Sec. 605. Policy statement on Federal regulatory budgeting and reform.
Sec. 606. Policy statement on tax reform.
Sec. 607. Policy statement on trade.
Sec. 608. Policy statement on Social Security.
Sec. 609. Policy statement on repealing the President's health care law
and promoting real health care reform.
Sec. 610. Policy statement on Medicare.
Sec. 611. Policy statement on medical discovery, development, delivery,
and innovation.
Sec. 612. Policy statement on public health preparedness.
Sec. 613. Policy statement on addressing the opioid abuse epidemic.
Sec. 614. Policy statement on higher education and workforce development
opportunity.
Sec. 615. Policy statement on the Department of Veterans Affairs.
Sec. 616. Policy statement on Federal accounting.
Sec. 617. Policy statement on reducing unnecessary and wasteful
spending.
Sec. 618. Policy statement on deficit reduction through the cancellation
of unobligated balances.
Sec. 619. Policy statement on responsible stewardship of taxpayer
dollars.
Sec. 620. Policy statement on expenditures from agency fees and
spending.
Sec. 621. Policy statement on border security.
Sec. 622. Policy statement on preventing the closure of the Guantanamo
Bay detention facility.
Sec. 623. Policy statement on refugees from conflict zones.
Sec. 624. Policy statement on moving the United States Postal Service on
budget.
Sec. 625. Policy statement on budget enforcement.
Sec. 626. Policy statement on unauthorized appropriations.
TITLE I--RECOMMENDED LEVELS AND AMOUNTS
SEC. 101. RECOMMENDED LEVELS AND AMOUNTS.
The following budgetary levels are appropriate for each of fiscal
years 2017 through 2026:
(1) Federal revenues.--For purposes of the enforcement of
this concurrent resolution:
(A) The recommended levels of Federal revenues are
as follows:
Fiscal year 2017: $2,692,937,000,000.
Fiscal year 2018: $2,799,875,000,000.
Fiscal year 2019: $2,902,418,000,000.
Fiscal year 2020: $3,040,763,000,000.
Fiscal year 2021: $3,168,226,000,000.
Fiscal year 2022: $3,301,656,000,000.
Fiscal year 2023: $3,443,940,000,000.
Fiscal year 2024: $3,595,338,000,000.
Fiscal year 2025: $3,762,041,000,000.
Fiscal year 2026: $3,936,429,000,000.
(B) The amounts by which the aggregate levels of
Federal revenues should be changed are as follows:
Fiscal year 2017: $10,700,000,000.
Fiscal year 2018: $26,000,000,000.
Fiscal year 2019: $43,000,000,000.
Fiscal year 2020: $41,400,000,000.
Fiscal year 2021: $42,000,000,000.
Fiscal year 2022: $41,900,000,000.
Fiscal year 2023: $43,400,000,000.
Fiscal year 2024: $43,400,000,000.
Fiscal year 2025: $42,200,000,000.
Fiscal year 2026: $41,000,000,000.
(2) New budget authority.--For purposes of the enforcement
of this concurrent resolution, the appropriate levels of total
new budget authority are as follows:
Fiscal year 2017: $3,086,332,000,000.
Fiscal year 2018: $2,984,016,000,000.
Fiscal year 2019: $3,084,551,000,000.
Fiscal year 2020: $3,192,964,000,000.
Fiscal year 2021: $3,254,411,000,000.
Fiscal year 2022: $3,319,284,000,000.
Fiscal year 2023: $3,443,779,000,000.
Fiscal year 2024: $3,551,204,000,000.
Fiscal year 2025: $3,624,651,000,000.
Fiscal year 2026: $3,704,462,000,000.
(3) Budget outlays.--For purposes of the enforcement of
this concurrent resolution, the appropriate levels of total
budget outlays are as follows:
Fiscal year 2017: $3,072,428,000,000.
Fiscal year 2018: $2,990,509,000,000.
Fiscal year 2019: $3,071,424,000,000.
Fiscal year 2020: $3,182,999,000,000
Fiscal year 2021: $3,252,237,000,000.
Fiscal year 2022: $3,321,899,000,000.
Fiscal year 2023: $3,420,907,000,000.
Fiscal year 2024: $3,509,889,000,000.
Fiscal year 2025: $3,578,931,000,000.
Fiscal year 2026: $3,675,084,000,000.
(4) Deficits (on-budget).--For purposes of the enforcement
of this concurrent resolution, the amounts of the deficits (on-
budget) are as follows:
Fiscal year 2017: -$379,491,000,000.
Fiscal year 2018: -$190,634,000,000.
Fiscal year 2019: -$169,006,000,000.
Fiscal year 2020: -$142,236,000,000.
Fiscal year 2021: -$84,011,000,000.
Fiscal year 2022: -$20,243,000,000.
Fiscal year 2023: $23,033,000,000.
Fiscal year 2024: $85,449,000,000.
Fiscal year 2025: $183,110,000,000.
Fiscal year 2026: $261,345,000,000.
(5) Debt subject to limit.--The appropriate levels of debt
subject to limit are as follows:
Fiscal year 2017: $19,848,354,000,000.
Fiscal year 2018: $20,314,389,000,000.
Fiscal year 2019: $20,647,523,000,000.
Fiscal year 2020: $20,904,600,000,000.
Fiscal year 2021: $21,161,285,000,000.
Fiscal year 2022: $21,296,902,000,000.
Fiscal year 2023: $21,510,772,000,000.
Fiscal year 2024: $21,598,523,000,000.
Fiscal year 2025: $21,373,459,000,000.
Fiscal year 2026: $21,412,056,000,000.
(6) Debt held by the public.--The appropriate levels of
debt held by the public are as follows:
Fiscal year 2017: $14,400,000,000,000.
Fiscal year 2018: $14,726,000,000,000.
Fiscal year 2019: $14,976,000,000,000.
Fiscal year 2020: $15,190,000,000,000.
Fiscal year 2021: $15,436,000,000,000.
Fiscal year 2022: $15,576,000,000,000.
Fiscal year 2023: $15,808,000,000,000.
Fiscal year 2024: $15,934,000,000,000.
Fiscal year 2025: $15,812,000,000,000.
Fiscal year 2026: $15,960,000,000,000.
SEC. 102. MAJOR FUNCTIONAL CATEGORIES.
The Congress determines and declares that the appropriate levels of
new budget authority and outlays for fiscal years 2017 through 2026 for
each major functional category are:
(1) National Defense (050):
Fiscal year 2017:
(A) New budget authority, $559,254,000,000.
(B) Outlays, $566,461,000,000.
Fiscal year 2018:
(A) New budget authority, $593,759,000,000.
(B) Outlays, $574,049,000,000.
Fiscal year 2019:
(A) New budget authority, $607,553,000,000.
(B) Outlays, $592,442,000,000.
Fiscal year 2020:
(A) New budget authority, $619,761,000,000.
(B) Outlays, $605,138,000,000.
Fiscal year 2021:
(A) New budget authority, $631,991,000,000.
(B) Outlays, $617,088,000,000.
Fiscal year 2022:
(A) New budget authority, $644,193,000,000.
(B) Outlays, $634,044,000,000.
Fiscal year 2023:
(A) New budget authority, $657,101,000,000.
(B) Outlays, $641,635,000,000.
Fiscal year 2024:
(A) New budget authority, $670,425,000,000.
(B) Outlays, $649,501,000,000.
Fiscal year 2025:
(A) New budget authority, $683,163,000,000.
(B) Outlays, $667,016,000,000.
Fiscal year 2026:
(A) New budget authority, $698,114,000,000.
(B) Outlays, $681,216,000,000.
(2) International Affairs (150):
Fiscal year 2017:
(A) New budget authority, $39,780,000,000.
(B) Outlays, $43,705,000,000.
Fiscal year 2018:
(A) New budget authority, $39,778,000,000.
(B) Outlays, $40,260,000,000.
Fiscal year 2019:
(A) New budget authority, $39,777,000,000.
(B) Outlays, $39,273,000,000.
Fiscal year 2020:
(A) New budget authority, $38,852,000,000.
(B) Outlays, $38,830,000,000.
Fiscal year 2021:
(A) New budget authority, $38,726,000,000.
(B) Outlays, $38,404,000,000.
Fiscal year 2022:
(A) New budget authority, $39,784,000,000.
(B) Outlays, $38,893,000,000.
Fiscal year 2023:
(A) New budget authority, $40,805,000,000.
(B) Outlays, $39,506,000,000.
Fiscal year 2024:
(A) New budget authority, $41,694,000,000.
(B) Outlays, $40,102,000,000.
Fiscal year 2025:
(A) New budget authority, $42,622,000,000.
(B) Outlays, $40,735,000,000.
Fiscal year 2026:
(A) New budget authority, $43,596,000,000.
(B) Outlays, $41,473,000,000.
(3) General Science, Space, and Technology (250):
Fiscal year 2017:
(A) New budget authority, $30,215,000,000.
(B) Outlays, $30,451,000,000.
Fiscal year 2018:
(A) New budget authority, $30,855,000,000.
(B) Outlays, $30,654,000,000.
Fiscal year 2019:
(A) New budget authority, $31,500,000,000.
(B) Outlays, $31,174,000,000.
Fiscal year 2020:
(A) New budget authority, $32,174,000,000.
(B) Outlays, $31,732,000,000.
Fiscal year 2021:
(A) New budget authority, $32,879,000,000.
(B) Outlays, $32,297,000,000.
Fiscal year 2022:
(A) New budget authority, $33,585,000,000.
(B) Outlays, $32,957,000,000.
Fiscal year 2023:
(A) New budget authority, $34,326,000,000.
(B) Outlays, $33,678,000,000.
Fiscal year 2024:
(A) New budget authority, $35,070,000,000.
(B) Outlays, $34,390,000,000.
Fiscal year 2025:
(A) New budget authority, $35,845,000,000.
(B) Outlays, $35,148,000,000.
Fiscal year 2026:
(A) New budget authority, $36,658,000,000.
(B) Outlays, $35,933,000,000.
(4) Energy (270):
Fiscal year 2017:
(A) New budget authority, -$2,914,000,000.
(B) Outlays, $1,442,000,000.
Fiscal year 2018:
(A) New budget authority, $1,601,000,000.
(B) Outlays, $1,119,000,000.
Fiscal year 2019:
(A) New budget authority, $1,675,000,000.
(B) Outlays, $1,239,000,000.
Fiscal year 2020:
(A) New budget authority, $1,683,000,000.
(B) Outlays, $1,155,000,000.
Fiscal year 2021:
(A) New budget authority, $1,747,000,000.
(B) Outlays, $1,164,000,000.
Fiscal year 2022:
(A) New budget authority, $1,816,000,000.
(B) Outlays, $1,186,000,000.
Fiscal year 2023:
(A) New budget authority, $1,888,000,000.
(B) Outlays, $1,218,000,000.
Fiscal year 2024:
(A) New budget authority, $1,959,000,000.
(B) Outlays, $1,243,000,000.
Fiscal year 2025:
(A) New budget authority, $2,029,000,000.
(B) Outlays, $1,263,000,000.
Fiscal year 2026:
(A) New budget authority, -$189,000,000.
(B) Outlays, -$927,000,000.
(5) Natural Resources and Environment (300):
Fiscal year 2017:
(A) New budget authority, $38,641,000,000.
(B) Outlays, $41,170,000,000.
Fiscal year 2018:
(A) New budget authority, $39,185,000,000.
(B) Outlays, $41,109,000,000.
Fiscal year 2019:
(A) New budget authority, $39,720,000,000.
(B) Outlays, $40,846,000,000.
Fiscal year 2020:
(A) New budget authority, $40,862,000,000.
(B) Outlays, $42,022,000,000.
Fiscal year 2021:
(A) New budget authority, $40,712,000,000.
(B) Outlays, $41,151,000,000.
Fiscal year 2022:
(A) New budget authority, $41,518,000,000.
(B) Outlays, $41,802,000,000.
Fiscal year 2023:
(A) New budget authority, $42,878,000,000.
(B) Outlays, $43,057,000,000.
Fiscal year 2024:
(A) New budget authority, $43,874,000,000.
(B) Outlays, $43,489,000,000.
Fiscal year 2025:
(A) New budget authority, $44,845,000,000.
(B) Outlays, $44,369,000,000.
Fiscal year 2026:
(A) New budget authority, $44,026,000,000.
(B) Outlays, $43,059,000,000.
(6) Agriculture (350):
Fiscal year 2017:
(A) New budget authority, $23,809,000,000.
(B) Outlays, $24,912,000,000.
Fiscal year 2018:
(A) New budget authority, $23,344,000,000.
(B) Outlays, $22,883,000,000.
Fiscal year 2019:
(A) New budget authority, $21,067,000,000.
(B) Outlays, $20,267,000,000.
Fiscal year 2020:
(A) New budget authority, $20,012,000,000.
(B) Outlays, $19,399,000,000.
Fiscal year 2021:
(A) New budget authority, $19,674,000,000.
(B) Outlays, $19,097,000,000.
Fiscal year 2022:
(A) New budget authority, $19,600,000,000.
(B) Outlays, $19,021,000,000.
Fiscal year 2023:
(A) New budget authority, $19,934,000,000.
(B) Outlays, $19,502,000,000.
Fiscal year 2024:
(A) New budget authority, $19,961,000,000.
(B) Outlays, $19,463,000,000.
Fiscal year 2025:
(A) New budget authority, $20,283,000,000.
(B) Outlays, $19,760,000,000.
Fiscal year 2026:
(A) New budget authority, $20,724,000,000.
(B) Outlays, $20,195,000,000.
(7) Commerce and Housing Credit (370):
Fiscal year 2017:
(A) New budget authority, -$3,096,000,000.
(B) Outlays, -$17,777,000,000.
Fiscal year 2018:
(A) New budget authority, -$4,977,000,000.
(B) Outlays, -$22,531,000,000.
Fiscal year 2019:
(A) New budget authority, -$7,162,000,000.
(B) Outlays, -$21,735,000,000.
Fiscal year 2020:
(A) New budget authority, -$9,990,000,000.
(B) Outlays, -$23,337,000,000.
Fiscal year 2021:
(A) New budget authority, -$11,207,000,000.
(B) Outlays, -$25,448,000,000.
Fiscal year 2022:
(A) New budget authority, -$11,154,000,000.
(B) Outlays, -$26,187,000,000.
Fiscal year 2023:
(A) New budget authority, -$11,122,000,000.
(B) Outlays, -$28,281,000,000.
Fiscal year 2024:
(A) New budget authority, -$11,361,000,000.
(B) Outlays, -$29,993,000,000.
Fiscal year 2025:
(A) New budget authority, -$10,905,000,000.
(B) Outlays, -$30,126,000,000.
Fiscal year 2026:
(A) New budget authority, -$11,363,000,000.
(B) Outlays, -$30,184,000,000.
(8) Transportation (400):
Fiscal year 2017:
(A) New budget authority, $87,879,000,000.
(B) Outlays, $90,628,000,000.
Fiscal year 2018:
(A) New budget authority, $89,099,000,000.
(B) Outlays, $89,793,000,000.
Fiscal year 2019:
(A) New budget authority, $90,727,000,000.
(B) Outlays, $91,114,000,000.
Fiscal year 2020:
(A) New budget authority, $84,831,000,000.
(B) Outlays, $92,137,000,000.
Fiscal year 2021:
(A) New budget authority, $64,777,000,000.
(B) Outlays, $86,962,000,000.
Fiscal year 2022:
(A) New budget authority, $65,727,000,000.
(B) Outlays, $77,691,000,000.
Fiscal year 2023:
(A) New budget authority, $66,762,000,000.
(B) Outlays, $73,991,000,000.
Fiscal year 2024:
(A) New budget authority, $67,794,000,000.
(B) Outlays, $73,041,000,000.
Fiscal year 2025:
(A) New budget authority, $68,887,000,000.
(B) Outlays, $72,534,000,000.
Fiscal year 2026:
(A) New budget authority, $70,000,000,000.
(B) Outlays, $72,380,000,000.
(9) Community and Regional Development (450):
Fiscal year 2017:
(A) New budget authority, $7,561,000,000.
(B) Outlays, $20,693,000,000.
Fiscal year 2018:
(A) New budget authority, $6,381,000,000.
(B) Outlays, $17,774,000,000.
Fiscal year 2019:
(A) New budget authority, $5,721,000,000.
(B) Outlays, $15,678,000,000.
Fiscal year 2020:
(A) New budget authority, $5,749,000,000.
(B) Outlays, $13,538,000,000.
Fiscal year 2021:
(A) New budget authority, $5,815,000,000.
(B) Outlays, $11,435,000,000.
Fiscal year 2022:
(A) New budget authority, $6,021,000,000.
(B) Outlays, $8,929,000,000.
Fiscal year 2023:
(A) New budget authority, $6,250,000,000.
(B) Outlays, $8,113,000,000.
Fiscal year 2024:
(A) New budget authority, $6,683,000,000.
(B) Outlays, $6,908,000,000.
Fiscal year 2025:
(A) New budget authority, $8,183,000,000.
(B) Outlays, $8,278,000,000.
Fiscal year 2026:
(A) New budget authority, $8,374,000,000.
(B) Outlays, $8,442,000,000.
(10) Education, Training, Employment, and Social Services
(500):
Fiscal year 2017:
(A) New budget authority, $78,795,000,000.
(B) Outlays, $91,997,000,000.
Fiscal year 2018:
(A) New budget authority, $84,083,000,000.
(B) Outlays, $85,833,000,000.
Fiscal year 2019:
(A) New budget authority, $85,451,000,000.
(B) Outlays, $86,078,000,000.
Fiscal year 2020:
(A) New budget authority, $86,862,000,000.
(B) Outlays, $87,440,000,000.
Fiscal year 2021:
(A) New budget authority, $88,102,000,000.
(B) Outlays, $88,757,000,000.
Fiscal year 2022:
(A) New budget authority, $88,818,000,000.
(B) Outlays, $89,802,000,000.
Fiscal year 2023:
(A) New budget authority, $93,490,000,000.
(B) Outlays, $92,500,000,000.
Fiscal year 2024:
(A) New budget authority, $94,414,000,000.
(B) Outlays, $95,172,000,000.
Fiscal year 2025:
(A) New budget authority, $95,476,000,000.
(B) Outlays, $96,493,000,000.
Fiscal year 2026:
(A) New budget authority, $96,049,000,000.
(B) Outlays, $97,506,000,000.
(11) Health (550):
Fiscal year 2017:
(A) New budget authority, $465,184,000,000.
(B) Outlays, $458,633,000,000.
Fiscal year 2018:
(A) New budget authority, $366,670,000,000.
(B) Outlays, $375,603,000,000.
Fiscal year 2019:
(A) New budget authority, $369,978,000,000.
(B) Outlays, $370,695,000,000.
Fiscal year 2020:
(A) New budget authority, $381,404,000,000.
(B) Outlays, $380,274,000,000.
Fiscal year 2021:
(A) New budget authority, $390,584,000,000.
(B) Outlays, $388,437,000,000.
Fiscal year 2022:
(A) New budget authority, $398,225,000,000.
(B) Outlays, $395,694,000,000.
Fiscal year 2023:
(A) New budget authority, $407,107,000,000.
(B) Outlays, $404,121,000,000.
Fiscal year 2024:
(A) New budget authority, $416,534,000,000.
(B) Outlays, $413,211,000,000.
Fiscal year 2025:
(A) New budget authority, $426,598,000,000.
(B) Outlays, $422,901,000,000.
Fiscal year 2026:
(A) New budget authority, $454,051,000,000.
(B) Outlays, $449,930,000,000.
(12) Medicare (570):
Fiscal year 2017:
(A) New budget authority, $590,086,000,000.
(B) Outlays, $590,068,000,000.
Fiscal year 2018:
(A) New budget authority, $583,750,000,000.
(B) Outlays, $583,690,000,000.
Fiscal year 2019:
(A) New budget authority, $643,371,000,000.
(B) Outlays, $643,267,000,000.
Fiscal year 2020:
(A) New budget authority, $684,911,000,000.
(B) Outlays, $684,816,000,000.
Fiscal year 2021:
(A) New budget authority, $731,321,000,000.
(B) Outlays, $731,237,000,000.
Fiscal year 2022:
(A) New budget authority, $817,737,000,000.
(B) Outlays, $817,648,000,000.
Fiscal year 2023:
(A) New budget authority, $834,731,000,000.
(B) Outlays, $834,638,000,000.
Fiscal year 2024:
(A) New budget authority, $839,165,000,000.
(B) Outlays, $839,021,000,000.
Fiscal year 2025:
(A) New budget authority, $914,301,000,000.
(B) Outlays, $914,164,000,000.
Fiscal year 2026:
(A) New budget authority, $973,544,000,000.
(B) Outlays, $973,401,000,000.
(13) Income Security (600):
Fiscal year 2017:
(A) New budget authority, $497,523,000,000.
(B) Outlays, $491,960,000,000.
Fiscal year 2018:
(A) New budget authority, $471,709,000,000.
(B) Outlays, $461,357,000,000.
Fiscal year 2019:
(A) New budget authority, $480,783,000,000.
(B) Outlays, $473,392,000,000.
Fiscal year 2020:
(A) New budget authority, $491,841,000,000.
(B) Outlays, $483,961,000,000.
Fiscal year 2021:
(A) New budget authority, $479,718,000,000.
(B) Outlays, $472,117,000,000.
Fiscal year 2022:
(A) New budget authority, $488,273,000,000.
(B) Outlays, $486,470,000,000.
Fiscal year 2023:
(A) New budget authority, $497,873,000,000.
(B) Outlays, $491,557,000,000.
Fiscal year 2024:
(A) New budget authority, $507,892,000,000.
(B) Outlays, $495,442,000,000.
Fiscal year 2025:
(A) New budget authority, $518,397,000,000.
(B) Outlays, $507,575,000,000.
Fiscal year 2026:
(A) New budget authority, $529,675,000,000.
(B) Outlays, $525,323,000,000.
(14) Social Security (650):
Fiscal year 2017:
(A) New budget authority, $37,199,000,000.
(B) Outlays, $37,227,000,000.
Fiscal year 2018:
(A) New budget authority, $40,124,000,000.
(B) Outlays, $40,141,000,000.
Fiscal year 2019:
(A) New budget authority, $43,373,000,000.
(B) Outlays, $43,373,000,000.
Fiscal year 2020:
(A) New budget authority, $46,627,000,000.
(B) Outlays, $46,627,000,000.
Fiscal year 2021:
(A) New budget authority, $50,035,000,000.
(B) Outlays, $50,035,000,000.
Fiscal year 2022:
(A) New budget authority, $53,677,000,000.
(B) Outlays, $53,677,000,000.
Fiscal year 2023:
(A) New budget authority, $57,540,000,000.
(B) Outlays, $57,540,000,000.
Fiscal year 2024:
(A) New budget authority, $61,645,000,000.
(B) Outlays, $61,645,000,000.
Fiscal year 2025:
(A) New budget authority, $66,076,000,000.
(B) Outlays, $66,076,000,000.
Fiscal year 2026:
(A) New budget authority, $70,376,000,000.
(B) Outlays, $70,376,000,000.
(15) Veterans Benefits and Services (700):
Fiscal year 2017:
(A) New budget authority, $174,766,000,000.
(B) Outlays, $182,047,000,000.
Fiscal year 2018:
(A) New budget authority, $173,539,000,000.
(B) Outlays, $174,275,000,000.
Fiscal year 2019:
(A) New budget authority, $187,777,000,000.
(B) Outlays, $187,312,000,000.
Fiscal year 2020:
(A) New budget authority, $194,202,000,000.
(B) Outlays, $193,407,000,000.
Fiscal year 2021:
(A) New budget authority, $200,763,000,000.
(B) Outlays, $199,856,000,000.
Fiscal year 2022:
(A) New budget authority, $217,151,000,000.
(B) Outlays, $216,047,000,000.
Fiscal year 2023:
(A) New budget authority, $214,690,000,000.
(B) Outlays, $213,505,000,000.
Fiscal year 2024:
(A) New budget authority, $211,449,000,000.
(B) Outlays, $210,297,000,000.
Fiscal year 2025:
(A) New budget authority, $229,055,000,000.
(B) Outlays, $227,790,000,000.
Fiscal year 2026:
(A) New budget authority, $236,447,000,000.
(B) Outlays, $235,210,000,000.
(16) Administration of Justice (750):
Fiscal year 2017:
(A) New budget authority, $64,515,000,000.
(B) Outlays, $58,672,000,000.
Fiscal year 2018:
(A) New budget authority, $59,085,000,000.
(B) Outlays, $59,739,000,000.
Fiscal year 2019:
(A) New budget authority, $60,630,000,000.
(B) Outlays, $62,389,000,000.
Fiscal year 2020:
(A) New budget authority, $62,172,000,000.
(B) Outlays, $64,685,000,000.
Fiscal year 2021:
(A) New budget authority, $63,250,000,000.
(B) Outlays, $64,691,000,000.
Fiscal year 2022:
(A) New budget authority, $64,866,000,000.
(B) Outlays, $65,051,000,000.
Fiscal year 2023:
(A) New budget authority, $66,560,000,000.
(B) Outlays, $66,555,000,000.
Fiscal year 2024:
(A) New budget authority, $68,275,000,000.
(B) Outlays, $68,059,000,000.
Fiscal year 2025:
(A) New budget authority, $70,357,000,000.
(B) Outlays, $69,986,000,000.
Fiscal year 2026:
(A) New budget authority, $73,432,000,000.
(B) Outlays, $73,381,000,000.
(17) General Government (800):
Fiscal year 2017:
(A) New budget authority, $23,367,000,000.
(B) Outlays, $22,749,000,000.
Fiscal year 2018:
(A) New budget authority, $22,293,000,000.
(B) Outlays, $21,650,000,000.
Fiscal year 2019:
(A) New budget authority, $22,087,000,000.
(B) Outlays, $21,516,000,000.
Fiscal year 2020:
(A) New budget authority, $21,924,000,000.
(B) Outlays, $21,629,000,000.
Fiscal year 2021:
(A) New budget authority, $21,758,000,000.
(B) Outlays, $21,565,000,000.
Fiscal year 2022:
(A) New budget authority, $23,680,000,000.
(B) Outlays, $23,221,000,000.
Fiscal year 2023:
(A) New budget authority, $23,932,000,000.
(B) Outlays, $23,647,000,000.
Fiscal year 2024:
(A) New budget authority, $24,183,000,000.
(B) Outlays, $23,924,000,000.
Fiscal year 2025:
(A) New budget authority, $24,426,000,000.
(B) Outlays, $24,177,000,000.
Fiscal year 2026:
(A) New budget authority, $24,620,000,000.
(B) Outlays, $24,391,000,000.
(18) Net Interest (900):
Fiscal year 2017:
(A) New budget authority, $393,678,000,000.
(B) Outlays, $393,678,000,000.
Fiscal year 2018:
(A) New budget authority, $446,615,000,000.
(B) Outlays, $446,615,000,000.
Fiscal year 2019:
(A) New budget authority, $499,334,000,000.
(B) Outlays, $499,334,000,000.
Fiscal year 2020:
(A) New budget authority, $540,201,000,000.
(B) Outlays, $540,201,000,000.
Fiscal year 2021:
(A) New budget authority, $569,849,000,000.
(B) Outlays, $569,849,000,000.
Fiscal year 2022:
(A) New budget authority, $594,309,000,000.
(B) Outlays, $594,309,000,000.
Fiscal year 2023:
(A) New budget authority, $620,683,000,000.
(B) Outlays, $620,683,000,000.
Fiscal year 2024:
(A) New budget authority, $638,813,000,000.
(B) Outlays, $638,813,000,000.
Fiscal year 2025:
(A) New budget authority, $648,404,000,000.
(B) Outlays, $648,404,000,000.
Fiscal year 2026:
(A) New budget authority, $655,665,000,000.
(B) Outlays, $655,665,000,000.
(19) Allowances (920):
Fiscal year 2017:
(A) New budget authority, -$39,520,000,000.
(B) Outlays, -$20,821,000,000.
Fiscal year 2018:
(A) New budget authority, -$52,890,000,000.
(B) Outlays, -$38,653,000,000.
Fiscal year 2019:
(A) New budget authority, -$54,216,000,000.
(B) Outlays, -$48,261,000,000.
Fiscal year 2020:
(A) New budget authority, -$57,006,000,000.
(B) Outlays, -$52,626,000,000.
Fiscal year 2021:
(A) New budget authority, -$59,733,000,000.
(B) Outlays, -$56,411,000,000.
Fiscal year 2022:
(A) New budget authority, -$61,661,000,000.
(B) Outlays, -$59,168,000,000.
Fiscal year 2023:
(A) New budget authority, -$63,814,000,000.
(B) Outlays, -$61,148,000,000.
Fiscal year 2024:
(A) New budget authority, -$65,767,000,000.
(B) Outlays, -$63,141,000,000.
Fiscal year 2025:
(A) New budget authority, -$67,933,000,000.
(B) Outlays, -$65,208,000,000.
Fiscal year 2026:
(A) New budget authority, -$65,057,000,000.
(B) Outlays, -$64,663,000,000.
(20) Government-wide savings and adjustments (930):
Fiscal year 2017:
(A) New budget authority, $34,478,000,000.
(B) Outlays, $14,610,000,000.
Fiscal year 2018:
(A) New budget authority, $32,662,000,000.
(B) Outlays, $46,700,000,000.
Fiscal year 2019:
(A) New budget authority, -$29,983,000,000.
(B) Outlays, -$22,263,000,000.
Fiscal year 2020:
(A) New budget authority, -$37,042,000,000.
(B) Outlays, -$29,889,000,000.
Fiscal year 2021:
(A) New budget authority, -$45,175,000,000.
(B) Outlays, -$37,802,000,000.
Fiscal year 2022:
(A) New budget authority, -
$115,840,000,000.
(B) Outlays, -$107,032,000,000.
Fiscal year 2023:
(A) New budget authority, -$68,634,000,000.
(B) Outlays, -$59,149,000,000.
Fiscal year 2024:
(A) New budget authority, -$13,285,000,000.
(B) Outlays, -$3,260,000,000.
Fiscal year 2025:
(A) New budget authority, -$81,290,000,000.
(B) Outlays, -$74,838,000,000.
Fiscal year 2026:
(A) New budget authority, -
$131,037,000,000.
(B) Outlays, -$113,780,000,000.
(21) Undistributed Offsetting Receipts (950):
Fiscal year 2017:
(A) New budget authority, -$88,561,000,000.
(B) Outlays, -$88,561,000,000.
Fiscal year 2018:
(A) New budget authority, -$89,314,000,000.
(B) Outlays, -$89,314,000,000.
Fiscal year 2019:
(A) New budget authority, -$81,278,000,000.
(B) Outlays, -$81,278,000,000.
Fiscal year 2020:
(A) New budget authority, -$83,732,000,000.
(B) Outlays, -$83,732,000,000.
Fiscal year 2021:
(A) New budget authority, -$87,842,000,000.
(B) Outlays, -$87,842,000,000.
Fiscal year 2022:
(A) New budget authority, -$91,041,000,000.
(B) Outlays, -$91,041,000,000.
Fiscal year 2023:
(A) New budget authority, -$99,201,000,000.
(B) Outlays, -$99,201,000,000.
Fiscal year 2024:
(A) New budget authority, -
$108,213,000,000.
(B) Outlays, -$108,213,000,000.
Fiscal year 2025:
(A) New budget authority, -
$114,167,000,000.
(B) Outlays, -$117,567,000,000.
Fiscal year 2026:
(A) New budget authority, -
$123,243,000,000.
(B) Outlays, -$123,243,000,000.
(22) Overseas Contingency Operations/Global War on
Terrorism (970):
Fiscal year 2017:
(A) New budget authority, $73,693,000,000.
(B) Outlays, $38,485,000,000.
Fiscal year 2018:
(A) New budget authority, $26,666,000,000.
(B) Outlays, $27,762,000,000.
Fiscal year 2019:
(A) New budget authority, $26,666,000,000.
(B) Outlays, $25,573,000,000.
Fiscal year 2020:
(A) New budget authority, $26,666,000,000.
(B) Outlays, $25,592,000,000.
Fiscal year 2021:
(A) New budget authority, $26,666,000,000.
(B) Outlays, $25,598,000,000.
Fiscal year 2022:
(A) New budget authority, $0.
(B) Outlays, $8,884,000,000.
Fiscal year 2023:
(A) New budget authority, $0.
(B) Outlays, $3,240,000,000.
Fiscal year 2024:
(A) New budget authority, $0.
(B) Outlays, $776,000,000.
Fiscal year 2025:
(A) New budget authority, $0.
(B) Outlays, $0.
Fiscal year 2026:
(A) New budget authority, $0.
(B) Outlays, $0.
TITLE II--RECONCILIATION AND RELATED MATTERS
SEC. 201. FISCAL YEAR 2017 BUDGETARY AGENDA.
It is the policy of this concurrent resolution that during the
second session of the 114th Congress, the appropriate committees of
jurisdiction and the House of Representatives will consider the
following:
(1) Reconciliation savings.--Legislation considered
pursuant to section 202 to achieve significant mandatory
savings as a down payment on the deficit reduction necessary to
achieve a balanced budget by fiscal year 2026.
(2) Mandatory savings outside of reconciliation.--
Legislation pursuant to section 203, that achieves mandatory
savings of not less than $30 billion outside of the
reconciliation process.
(3) Controls on new mandatory spending.--A measure to
control new mandatory spending, as described in section 204.
(4) Reform of the Federal budget process.--Each measure to
reform the Federal budget process listed under paragraphs (1)
through (4) of section 205.
SEC. 202. RECONCILIATION IN THE HOUSE OF REPRESENTATIVES.
(a) Submission Providing for Deficit Reduction.--In order to carry
out section 201(1), not later than 90 days after the adoption of this
resolution, the committees named in subsection (b) shall submit their
recommendations on changes in laws within their jurisdictions to the
Committee on the Budget that would achieve the specified reduction in
the deficit for the period of fiscal years 2017 through 2026.
(b) Instructions.--
(1) Committee on agriculture.--The Committee on Agriculture
shall submit changes in laws within its jurisdiction sufficient
to reduce the deficit by $1,000,000,000 for the period of
fiscal years 2017 through 2026.
(2) Committee on armed services.--The Committee on Armed
Services shall submit changes in laws within its jurisdiction
sufficient to reduce the deficit by $100,000,000 for the period
of fiscal years 2017 through 2026.
(3) Committee on education and the workforce.--The
Committee on Education and the Workforce shall submit changes
in laws within its jurisdiction sufficient to reduce the
deficit by $1,000,000,000 for the period of fiscal years 2017
through 2026.
(4) Committee on energy and commerce.--The Committee on
Energy and Commerce shall submit changes in laws within its
jurisdiction sufficient to reduce the deficit by $1,000,000,000
for the period of fiscal years 2017 through 2026.
(5) Committee on financial services.--The Committee on
Financial Services shall submit changes in laws within its
jurisdiction sufficient to reduce the deficit by $1,000,000,000
for the period of fiscal years 2017 through 2026.
(6) Committee on homeland security.--The Committee on
Homeland Security shall submit changes in laws within its
jurisdiction sufficient to reduce the deficit by $15,000,000
for the period of fiscal years 2017 through 2026.
(7) Committee on the judiciary.--The Committee on the
Judiciary shall submit changes in laws within its jurisdiction
sufficient to reduce the deficit by $1,000,000,000 for the
period of fiscal years 2017 through 2026.
(8) Committee on natural resources.--The Committee on
Natural Resources shall submit changes in laws within its
jurisdiction sufficient to reduce the deficit by $100,000,000
for the period of fiscal years 2017 through 2026.
(9) Committee on oversight and government reform.--The
Committee on Oversight and Government Reform shall submit
changes in laws within its jurisdiction sufficient to reduce
the deficit by $1,000,000,000 for the period of fiscal years
2017 through 2026.
(10) Committee on transportation and infrastructure.--The
Committee on Transportation and Infrastructure shall submit
changes in laws within its jurisdiction sufficient to reduce
the deficit by $100,000,000 for the period of fiscal years 2017
through 2026.
(11) Committee on veterans' affairs.--The Committee on
Veterans' Affairs shall submit changes in laws within its
jurisdiction sufficient to reduce the deficit by $1,000,000,000
for the period of fiscal years 2017 through 2026.
(12) Committee on ways and means.--The Committee on Ways
and Means shall submit changes in laws within its jurisdiction
sufficient to reduce the deficit by $1,000,000,000 for the
period of fiscal years 2017 through 2026.
(c) Revision of Budgetary Levels.--
(1) In general.--In the House of Representatives, the chair
of the Committee on the Budget may file appropriately revised
allocations, aggregates, and functional levels upon the
consideration of a reconciliation measure under section 310 of
the Congressional Budget Act of 1974 or amendment thereto, or
the submission of a conference report to the House of
Representatives pursuant to this section, if it is in
compliance with the reconciliation directives by virtue of
section 310(c) of the Congressional Budget Act of 1974.
(2) Revision.--Allocations and aggregates revised pursuant
to this subsection shall be considered to be the allocations
and aggregates established by this concurrent resolution on the
budget pursuant to section 301 of the Congressional Budget Act
of 1974.
SEC. 203. POLICY STATEMENT ON MANDATORY SAVINGS OUTSIDE OF THE
RECONCILIATION PROCESS.
(a) Policy Statement.--In order to carry out section 201(2), it is
the policy of this concurrent resolution that early in the second
session of the 114th Congress the House will consider legislation that
achieves mandatory savings of not less than $30,000,000,000 for the
period of fiscal years 2017 and 2018 and not less than $140,000,000,000
for the period of fiscal years 2017 through 2026 outside of the
reconciliation process.
(b) Savings to Be Achieved by Authorizing Committees.--The
following committees will consider legislation to achieve the savings
set forth in subsection (a):
(1) The Committee on Agriculture.
(2) The Committee on Energy and Commerce.
(3) The Committee on Financial Services.
(4) The Committee on the Judiciary.
(5) The Committee on Ways and Means.
(c) Major Reforms.--The major reforms to implement this section may
include, but are not limited to, the following policies:
(1) Recovering improper Obamacare subsidy payments.
(2) Eliminating enhanced Medicaid payments for prisoners.
(3) Ending Medicaid payments for lottery winners.
(d) Procedures.--Consideration in the House of Representatives of a
measure described in subsection (a) will be pursuant to such procedures
as the House may prescribe, including--
(1) as a stand-alone measure; and
(2) in conjunction with another measure or measures with a
fiscal impact.
(e) Scoring.--In the House of Representatives, for purposes of
budget enforcement of legislation introduced under this section, any
changes in direct spending and outlays resulting from the measure shall
be counted against the appropriate authorizing committee's allocation
under section 302(a) of the Congressional Budget Act of 1974.
SEC. 204. POLICY STATEMENT ON NEW MANDATORY SPENDING CONTROLS.
In order to carry out section 201(3), it is the policy of this
concurrent resolution that during the 114th Congress the appropriate
committees of the House of Representatives will consider a measure to
control new mandatory spending. The measure may include the following:
(1) Limitations on the authorization of new mandatory
spending programs, except for programs authorized to replace or
restructure existing programs as part of welfare reform and
health care reform and other structural reforms of existing
programs.
(2) A requirement that mandatory spending programs are
periodically reviewed or reauthorized.
(3) Focusing statutory pay-as-you-go procedures on
legislation increasing mandatory spending.
(4) Permitting reconciliation bills to include provisions
to control mandatory spending.
(5) Strict limitations on the ability to reclassify
historically discretionary spending programs into mandatory
spending programs as a means of circumventing discretionary
spending limits.
SEC. 205. POLICY STATEMENT ON OTHER BUDGET PROCESS REFORMS.
In order to carry out section 201(4), it is the policy of this
concurrent resolution that during the 114th Congress, the appropriate
committees of the House of Representatives will consider the following
Federal budget process reforms:
(1) An amendment to the Constitution providing for a
balanced budget.
(2) A baseline budgeting measure.
(3) Requirements relating to unauthorized programs.
(4) Such other proposals and reforms addressing budget
process reform as may be recommended by the appropriate
committees of jurisdiction.
TITLE III--BUDGET ENFORCEMENT
Subtitle A--Budget Enforcement in the House of Representatives
SEC. 301. POINT OF ORDER AGAINST INCREASING LONG-TERM DIRECT SPENDING.
(a) Congressional Budget Office Analysis of Proposals.--The
Director of the Congressional Budget Office shall, to the extent
practicable, prepare an estimate of whether a measure would cause a net
increase in direct spending in the House of Representatives, in excess
of $5,000,000,000 in any of the 4 consecutive 10-fiscal year periods
beginning with the first fiscal year that is 10 fiscal years after the
budget year provided for in the most recently agreed to concurrent
resolution on the budget in the House of Representatives, for each bill
or joint resolution other than an appropriation measure and any
amendment thereto or conference report thereon.
(b) Point of Order.--It shall not be in order in the House of
Representatives to consider any bill or joint resolution, or amendment
thereto or conference report thereon, that would cause a net increase
in direct spending in excess of $5,000,000,000 in any of the 4
consecutive 10-fiscal year periods described in subsection (a).
(c) Limitation.--In the House of Representatives, the provisions of
this section shall not apply to any bills or joint resolutions, or
amendments thereto or conference reports thereon, for which the chair
of the Committee on the Budget has made adjustments to the allocations,
levels, or limits contained in this concurrent resolution pursuant to
section 402 or 410.
(d) Determinations of Budget Levels.--For purposes of this section,
the levels of net increases in direct spending shall be determined on
the basis of estimates provided by the chair of the Committee on the
Budget of the House of Representatives.
SEC. 302. ALLOCATION FOR OVERSEAS CONTINGENCY OPERATIONS/GLOBAL WAR ON
TERRORISM.
(a) Separate Allocation for Overseas Contingency Operations/Global
War on Terrorism.--In the House of Representatives, there shall be a
separate allocation of new budget authority and outlays provided to the
Committee on Appropriations for the purposes of Overseas Contingency
Operations/Global War on Terrorism, which shall be deemed to be an
allocation under section 302(a) of the Congressional Budget Act of
1974. Section 302(a)(3) of such Act shall not apply to such separate
allocation.
(b) 302 Allocations.--The separate allocation referred to in
subsection (a) shall be the exclusive allocation for Overseas
Contingency Operations/Global War on Terrorism under section 302(b) of
the Congressional Budget Act of 1974. The Committee on Appropriations
of the House of Representatives may provide suballocations of such
separate allocation under such section 302(b).
(c) Application.--For purposes of enforcing the separate allocation
referred to in subsection (a) under section 302(f) of the Congressional
Budget Act of 1974, the ``first fiscal year'' and the ``total of fiscal
years'' shall be deemed to refer to fiscal year 2017. Section 302(c) of
such Act shall not apply to such separate allocation.
(d) Designations.--New budget authority or outlays shall only be
counted toward the allocation referred to in subsection (a) if
designated pursuant to section 251(b)(2)(A)(ii) of the Balanced Budget
and Emergency Deficit Control Act of 1985.
(e) Adjustments.--For purposes of subsection (a) for fiscal year
2017, no adjustment shall be made under section 314(a) of the
Congressional Budget Act of 1974 if any adjustment would be made under
section 251(b)(2)(A)(ii) of the Balanced Budget and Emergency Deficit
Control Act of 1985.
(f) Adjustments to Fund Overseas Contingency Operations/Global War
on Terrorism.--In the House of Representatives, the chair of the
Committee on the Budget may adjust the allocations, aggregates, and
other appropriate budgetary levels related to Overseas Contingency
Operations/Global War on Terrorism or the allocation under section
302(a) of the Congressional Budget Act of 1974 to the Committee on
Appropriations set forth in the report or joint explanatory statement
of managers, as applicable, accompanying this concurrent resolution to
account for new information.
SEC. 303. LIMITATION ON CHANGES IN CERTAIN MANDATORY PROGRAMS.
(a) Definition.--In this section, the term ``change in mandatory
programs'' means a provision that--
(1) would have been estimated as affecting direct spending
or receipts under section 252 of the Balanced Budget and
Emergency Deficit Control Act of 1985 (as in effect prior to
September 30, 2002) if the provision was included in
legislation other than appropriation Acts; and
(2) results in a net decrease in budget authority in the
budget year, but does not result in a net decrease in outlays
over the period of the total of the current year, the budget
year, and all fiscal years covered under the most recently
agreed to concurrent resolution on the budget.
(b) Point of Order in the House of Representatives.--
(1) In general.--A provision in a bill or joint resolution
making appropriations for a full fiscal year that proposes a
change in mandatory programs that, if enacted, would cause the
absolute value of the total budget authority of all such change
in mandatory programs enacted in relation to a full fiscal year
to be more than the amount specified in paragraph (3), shall
not be in order in the House of Representatives.
(2) Amendments and conference reports.--It shall not be in
order in the House of Representatives to consider an amendment
to, or a conference report on, a bill or joint resolution
making appropriations for a full fiscal year if such amendment
thereto or conference report thereon proposes a change in
mandatory programs that, if enacted, would cause the absolute
value of the total budget authority of all such change in
mandatory programs enacted in relation to a full fiscal year to
be more than the amount specified in paragraph (3).
(3) Amount.--The amount specified in this paragraph is--
(A) for fiscal year 2017, $19,100,000,000;
(B) for fiscal year 2018, $17,000,000,000; and
(C) for fiscal year 2019, $15,000,000,000.
(c) Determination.--For purposes of this section, budgetary levels
shall be determined on the basis of estimates provided by the chair of
the Committee on the Budget.
SEC. 304. GAO REPORT.
(a) GAO Submission.--At a date specified by the chair of the
Committee on the Budget of the House of Representatives, the
Comptroller General, in consultation with the chair, the Director of
the Congressional Budget Office, and the Director of the Office of
Management and Budget, shall submit to the chair a comprehensive list
of all current direct spending programs of the Government.
(b) Publication.--The chair of the Committee on the Budget shall
cause to be printed in the Congressional Record the list submitted
under subsection (a). The chair shall publish such list on the
Committee's public Web site. Such publication shall be searchable,
sortable, and downloadable.
SEC. 305. ESTIMATES OF DEBT SERVICE COSTS.
In the House of Representatives, the chair of the Committee on the
Budget may direct the Congressional Budget Office to include in any
estimate prepared under section 402 of the Congressional Budget Act of
1974 with respect to any bill or joint resolution, or an estimate of an
amendment thereto or conference report thereon, an estimate of any
change in debt service costs (if any) resulting from carrying out such
bill or resolution. Any estimate of debt servicing costs provided under
this section shall be advisory and shall not be used for purposes of
enforcement of such Act, the Rules of the House of Representatives, or
this concurrent resolution. This section shall not apply to
authorizations of discretionary programs or to appropriation measures,
but shall apply to changes in the authorization level of appropriated
entitlements.
SEC. 306. FAIR-VALUE CREDIT ESTIMATES.
(a) All Credit Programs.--Whenever the Director of the
Congressional Budget Office provides an estimate of any measure that
establishes or modifies any program providing loans or loan guarantees,
the Director shall, to the extent practicable, provide a supplemental
fair-value estimate of any loan or loan guarantee program if requested
by the chair of the Committee on the Budget.
(b) Student Financial Assistance and Housing Programs.--The
Director of the Congressional Budget Office shall provide a
supplemental fair-value estimate as part of any estimate for any
measure establishing or modifying a program providing loans or loan
guarantees for student financial assistance or housing (including
residential mortgage).
(c) Baseline Estimates.--The Congressional Budget Office shall
include estimates, on a fair-value and credit reform basis, of loan and
loan guarantee programs for student financial assistance, housing
(including residential mortgage), and such other major loan and loan
guarantee programs, as practicable, in its Budget and Economic Outlook:
2018 to 2027.
SEC. 307. ESTIMATES OF MAJOR DIRECT SPENDING LEGISLATION.
The Congressional Budget Office shall prepare, to the extent
practicable, an estimate of the outlay changes during the second and
third decade of enactment for any direct spending legislative
provision--
(1) that proposes a change or changes to law that the
Congressional Budget Office determines has an outlay impact in
excess of 0.25 percent of the gross domestic product of the
United States during the first decade or in the tenth year; or
(2) for which the chair of the Committee on the Budget of
the House of Representatives requests such an estimate.
SEC. 308. ESTIMATES OF MACROECONOMIC EFFECTS OF MAJOR LEGISLATION.
(a) CBO and JCT Estimates.--During the 114th and 115th Congresses,
any estimate provided by the Congressional Budget Office under section
402 of the Congressional Budget Act of 1974 or by the Joint Committee
on Taxation to the Congressional Budget Office under section 201(f) of
such Act for major legislation considered in the House of
Representatives shall, to the extent practicable, incorporate the
budgetary effects of changes in economic output, employment, capital
stock, and other macroeconomic variables resulting from such major
legislation.
(b) Contents.--Any estimate referred to in subsection (a) shall, to
the extent practicable, include--
(1) a qualitative assessment of the budgetary effects
(including macroeconomic variables described in subsection (a))
of major legislation in the 20-fiscal year period beginning
after the last fiscal year of the most recently agreed to
concurrent resolution on the budget that sets forth budgetary
levels required under section 301 of the Congressional Budget
Act of 1974; and
(2) an identification of the critical assumptions and the
source of data underlying that estimate.
(c) Definitions.--In this section:
(1) Major legislation.--The term ``major legislation''
means a bill or joint resolution, or amendment thereto or
conference report thereon--
(A) for which an estimate is required to be
prepared pursuant to section 402 of the Congressional
Budget Act of 1974 and that causes a gross budgetary
effect (before incorporating macroeconomic effects and
not including timing shifts) in a fiscal year in the
period of years of the most recently agreed to
concurrent resolution on the budget equal to or greater
than 0.25 percent of the current projected gross
domestic product of the United States for that fiscal
year; or
(B) designated as such by--
(i) the chair of the Committee on the
Budget of the House of Representatives for all
direct spending and revenue legislation; or
(ii) the Member who is Chairman or Vice
Chairman of the Joint Committee on Taxation for
revenue legislation.
(2) Budgetary effects.--The term ``budgetary effects''
means changes in revenues, direct spending outlays, and
deficits.
(3) Timing shifts.--The term ``timing shifts'' means--
(A) provisions that cause a delay of the date on
which outlays flowing from direct spending would
otherwise occur from one fiscal year to the next fiscal
year; or
(B) provisions that cause an acceleration of the
date on which revenues would otherwise occur from one
fiscal year to the prior fiscal year.
SEC. 309. ADJUSTMENTS FOR IMPROVED CONTROL OF BUDGETARY RESOURCES.
(a) Adjustments of Discretionary and Direct Spending Levels.--In
the House of Representatives, if a committee (other than the Committee
on Appropriations) reports a bill or joint resolution, or any amendment
thereto is offered or any conference report thereon is submitted,
providing for a decrease in direct spending (budget authority and
outlays flowing therefrom) for any fiscal year and also provides for an
authorization of appropriations for the same purpose, upon the
enactment of such measure, the chair of the Committee on the Budget may
decrease the allocation to such committee and increase the allocation
of discretionary spending (budget authority and outlays flowing
therefrom) to the Committee on Appropriations for fiscal year 2017 by
an amount equal to the new budget authority (and outlays flowing
therefrom) provided for in a bill or joint resolution making
appropriations for the same purpose.
(b) Determinations.--In the House of Representatives, for purposes
of enforcing this concurrent resolution, the allocations and aggregate
levels of new budget authority, outlays, direct spending, revenues,
deficits, and surpluses for fiscal year 2017 and the period of fiscal
years 2017 through 2026 shall be determined on the basis of estimates
made by the chair of the Committee on the Budget and such chair may
adjust the applicable levels in this concurrent resolution.
SEC. 310. LIMITATION ON ADVANCE APPROPRIATIONS.
(a) In General.--In the House of Representatives, except as
provided for in subsection (b), any bill or joint resolution, or
amendment thereto or conference report thereon, making a general
appropriation or continuing appropriation may not provide advance
appropriations.
(b) Exceptions.--An advance appropriation may be provided for
programs, projects, activities, or accounts identified in the report or
the joint explanatory statement of managers, as applicable,
accompanying this concurrent resolution under the heading--
(1) General.--``Accounts Identified for Advance
Appropriations''.
(2) Veterans.--``Veterans Accounts Identified for Advance
Appropriations''.
(c) Limitations.--The aggregate level of advance appropriations
shall not exceed--
(1) General.--$28,852,000,000 in new budget authority for
all programs identified pursuant to subsection (b)(1).
(2) Veterans.--$66,385,032,000 in new budget authority for
programs in the Department of Veterans Affairs identified
pursuant to subsection (b)(2).
(d) Definition.--The term ``advance appropriation'' means any new
discretionary budget authority provided in a bill or joint resolution,
or any amendment thereto or conference report thereon, making general
appropriations or continuing appropriations, for the fiscal year
following fiscal year 2017.
SEC. 311. SCORING RULE FOR ENERGY SAVINGS PERFORMANCE CONTRACTS.
(a) In General.--The Director of the Congressional Budget Office
shall estimate provisions of any bill or joint resolution, or amendment
thereto or conference report thereon that affects the use of any
covered energy savings contract on a net present value basis.
(b) NPV Calculations.--The net present value of any covered energy
savings contract shall be calculated as follows:
(1) The discount rate shall reflect market risk.
(2) The cash flows shall include, whether classified as
mandatory or discretionary, payments to contractors under the
terms of their contracts, payments to contractors for other
services, and direct savings in energy and energy-related
costs.
(3) The stream of payments shall cover the period covered
by the contracts but not to exceed 25 years.
(c) Definition.--As used in this section, the term ``covered energy
savings contract'' means--
(1) an energy savings performance contract authorized under
section 801 of the National Energy Conservation Policy Act; or
(2) a utility energy service contract, as described in the
Office of Management and Budget Memorandum on Federal use of
energy savings performance contracting, dated July 25, 1998 (M-
98-13), and the Office of Management and Budget Memorandum on
the Federal use of energy saving performance contracts and
utility energy service contracts, dated September 28, 2012 (M-
12-21), or any successor to either memorandum.
(d) Enforcement in the House of Representatives.--In the House of
Representatives, if any present value calculated under subsection (b)
results in a net savings, then such savings may not be used as an
offset for purposes of budget enforcement.
(e) Classification of Spending.--For purposes of budget
enforcement, the estimated net present value of the budget authority
provided by the measure, and outlays flowing therefrom, shall be
classified as direct spending.
(f) Sense of the House of Representatives.--It is the sense of the
House of Representatives that--
(1) the Director of the Office of Management and Budget, in
consultation with the Director of the Congressional Budget
Office, should separately identify the cash flows under
subsection (b)(2) and include such information in the
President's annual budget submission under section 1105(a) of
title 31, United States Code; and
(2) the scoring method used in this section should not be
used to score any contracts other than covered energy savings
contracts.
SEC. 312. ESTIMATES OF LAND CONVEYANCES.
In the House of Representatives, the Director of the Congressional
Budget Office shall include in any estimate prepared under section 402
of the Congressional Budget Act of 1974 with respect to any measure
that conveys Federal land to any non-Federal entity--
(1) the methodology used to calculate such estimate;
(2) a detailed justification of its estimate of any change
in revenue, offsetting receipts, or offsetting collections
resulting from such conveyance;
(3) if requested by the chair of the Committee on the
Budget, any information provided by the Bureau of Land
Management or other applicable Federal agency, including the
source and date of such information, that supports the estimate
of any change in revenue, offsetting receipts, or offsetting
collections;
(4) a description of any efforts to independently verify
such agency estimate; and
(5) a statement of the assumptions underlying the estimate
of the budgetary effects that would be generated by such parcel
in CBO's baseline projections as of the most recent publication
or update.
SEC. 313. LIMITATION ON TRANSFERS FROM THE GENERAL FUND OF THE TREASURY
TO THE HIGHWAY TRUST FUND.
In the House of Representatives, for purposes of the Congressional
Budget Act of 1974, the Balanced Budget and Emergency Deficit Control
Act of 1985, and the rules or orders of the House of Representatives, a
bill or joint resolution, or an amendment thereto or conference report
thereon, that transfers funds from the general fund of the Treasury to
the Highway Trust Fund shall be counted as new budget authority and
outlays equal to the amount of the transfer in the fiscal year the
transfer occurs.
SEC. 314. PROHIBITION ON THE USE OF GUARANTEE FEES AS AN OFFSET.
In the House of Representatives, any provision of a bill or joint
resolution, or amendment thereto or conference report thereon, that
increases, or extends the increase of, any guarantee fees of the
Federal National Mortgage Association or the Federal Home Loan Mortgage
Corporation shall not be counted for purposes of enforcing the
Congressional Budget Act of 1974, this concurrent resolution, or clause
10 of rule XXI of the Rules of the House of Representatives.
SEC. 315. PROHIBITION ON USE OF FEDERAL RESERVE SURPLUSES AS AN OFFSET.
In the House of Representatives, any provision of a bill or joint
resolution, or amendment thereto or conference report thereon, that
transfers any portion of the net surplus of the Federal Reserve System
to the general fund of the Treasury shall not be counted for purposes
of enforcing the Congressional Budget Act of 1974, this concurrent
resolution, or clause 10 of rule XXI of the Rules of the House of
Representatives.
Subtitle B--Other Provisions
SEC. 321. BUDGETARY TREATMENT OF ADMINISTRATIVE EXPENSES.
(a) In General.--In the House of Representatives, notwithstanding
section 302(a)(1) of the Congressional Budget Act of 1974, section
13301 of the Budget Enforcement Act of 1990, and section 2009a of title
39, United States Code, the report or the joint explanatory statement,
as applicable, accompanying this concurrent resolution shall include in
its allocation under section 302(a) of the Congressional Budget Act of
1974 to the Committee on Appropriations amounts for the discretionary
administrative expenses of the Social Security Administration and the
United States Postal Service.
(b) Special Rule.--In the House of Representatives, for purposes of
enforcing section 302(f) of the Congressional Budget Act of 1974,
estimates of the level of total new budget authority and total outlays
provided by a measure shall include any discretionary amounts described
in subsection (a).
SEC. 322. APPLICATION AND EFFECT OF CHANGES IN ALLOCATIONS AND
AGGREGATES.
(a) Application.--In the House of Representatives, any adjustments
of allocations and aggregates made pursuant to this concurrent
resolution shall--
(1) apply while that measure is under consideration;
(2) take effect upon the enactment of that measure; and
(3) be published in the Congressional Record as soon as
practicable.
(b) Effect of Changed Allocations and Aggregates.--Revised
allocations and aggregates resulting from these adjustments shall be
considered for the purposes of the Congressional Budget Act of 1974 as
the allocations and aggregates contained in this concurrent resolution.
(c) Budget Committee Determinations.--For purposes of this
concurrent resolution, the budgetary levels for a fiscal year or period
of fiscal years shall be determined on the basis of estimates made by
the chair of the Committee on the Budget of the House of
Representatives.
(d) Aggregates, Allocations and Application.--In the House of
Representatives, for purposes of this concurrent resolution and budget
enforcement, the consideration of any bill or joint resolution, or
amendment thereto or conference report thereon, for which the chair of
the Committee on the Budget makes adjustments or revisions in the
allocations, aggregates, and other budgetary levels of this concurrent
resolution shall not be subject to the points of order set forth in
clause 10 of rule XXI of the Rules of the House of Representatives or
section 301 of this concurrent resolution.
SEC. 323. ADJUSTMENTS TO REFLECT CHANGES IN CONCEPTS AND DEFINITIONS.
In the House of Representatives, the chair of the Committee on the
Budget may adjust the appropriate aggregates, allocations, and other
budgetary levels in this concurrent resolution for any change in
budgetary concepts and definitions in accordance with section 251(b)(1)
of the Balanced Budget and Emergency Deficit Control Act of 1985.
SEC. 324. ADJUSTMENTS TO REFLECT UPDATED BUDGETARY ESTIMATES.
In the House of Representatives, the chair of the Committee on the
Budget may revise the appropriate aggregates, allocations, and other
budgetary levels in this concurrent resolution to reflect any
adjustments to the baseline made by the Congressional Budget Office in
March 2016.
SEC. 325. ADJUSTMENT FOR CERTAIN EMERGENCY DESIGNATIONS.
In the House of Representatives, the chair of the Committee on the
Budget may adjust the appropriate aggregates, allocations, and other
budgetary levels for any bill or joint resolution, or amendment thereto
or conference report thereon, that designates an emergency under
section 4(g)(2) of the Statutory Pay-As-You-Go Act of 2010.
SEC. 326. EXERCISE OF RULEMAKING POWERS.
The House of Representatives adopts the provisions of this title
and title II--
(1) as an exercise of the rulemaking power of the House of
Representatives, and as such they shall be considered as part
of the rules of the House of Representatives, and such rules
shall supersede other rules only to the extent that they are
inconsistent with such other rules; and
(2) with full recognition of the constitutional right of
the House of Representatives to change those rules at any time,
in the same manner, and to the same extent as is the case of
any other rule of the House of Representatives.
TITLE IV--RESERVE FUNDS IN THE HOUSE OF REPRESENTATIVES
SEC. 401. DEFICIT-NEUTRAL RESERVE FUND TO REDUCE POVERTY AND INCREASE
OPPORTUNITY AND UPWARD MOBILITY FOR STRUGGLING
AMERICANS.
In the House of Representatives, the chair of the Committee on the
Budget may revise the allocations, aggregates, and other appropriate
budgetary levels in this concurrent resolution for any bill or joint
resolution, or amendment thereto or conference report thereon, that
reduces poverty and increases opportunity and upward mobility for
struggling Americans on the road to personal and financial independence
by the amounts provided in such legislation for those purposes, if such
legislation would neither adversely impact job creation nor increase
the deficit over the period of fiscal years 2017 through 2026.
SEC. 402. RESERVE FUND FOR THE REPEAL OF THE PRESIDENT'S HEALTH CARE
LAW.
In the House of Representatives, the chair of the Committee on the
Budget may revise the allocations, aggregates, and other appropriate
budgetary levels in this concurrent resolution for the budgetary
effects of any bill or joint resolution, or amendment thereto or
conference report thereon, that repeals the Affordable Care Act and the
health care related provisions of the Health Care and Education
Reconciliation Act of 2010.
SEC. 403. DEFICIT-NEUTRAL RESERVE FUND FOR PROMOTING HEALTH CARE
REFORM.
In the House of Representatives, the chair of the Committee on the
Budget may revise the allocations, aggregates, and other appropriate
budgetary levels in this concurrent resolution for the budgetary
effects of any bill or joint resolution, or amendment thereto or
conference report thereon, that promotes health care reform if such
measure would not increase the deficit over the period of fiscal years
2017 through 2026.
SEC. 404. DEFICIT-NEUTRAL RESERVE FUND FOR GRADUATE MEDICAL EDUCATION.
In the House of Representatives, the chair of the Committee on the
Budget may revise the allocations, aggregates, and other appropriate
budgetary levels in this concurrent resolution for any bill or joint
resolution, or amendment thereto or conference report thereon, if such
measure reforms, expands access to, and improves graduate medical
education programs if such measure would not increase the deficit over
the period of fiscal years 2017 through 2026.
SEC. 405. DEFICIT-NEUTRAL RESERVE FUND FOR TRADE AGREEMENTS.
In the House of Representatives, the chair of the Committee on the
Budget may revise the allocations, aggregates, and other appropriate
budgetary levels in this concurrent resolution for the budgetary
effects of any bill or joint resolution reported by the Committee on
Ways and Means, or amendment thereto or conference report thereon, that
such chair determines are necessary to implement a trade agreement, and
the budgetary levels for any companion measure that offsets such trade
measure, if the combined cost of each measure would not increase the
deficit over the period of fiscal years 2017 through 2026.
SEC. 406. DEFICIT-NEUTRAL RESERVE FUND FOR REFORMING THE TAX CODE.
In the House of Representatives, if the Committee on Ways and Means
reports a bill or joint resolution that reforms the Internal Revenue
Code of 1986, the chair of the Committee on the Budget may revise the
allocations, aggregates, and other appropriate budgetary levels in this
concurrent resolution for the budgetary effects of any such bill or
joint resolution, or amendment thereto or conference report thereon, if
such measure would not increase the deficit over the period of fiscal
years 2017 through 2026.
SEC. 407. DEFICIT-NEUTRAL RESERVE FUND FOR REVENUE MEASURES.
In the House of Representatives, the chair of the Committee on the
Budget may revise the allocations, aggregates, and other appropriate
budgetary levels in this concurrent resolution for the budgetary
effects of any bill or joint resolution reported by the Committee on
Ways and Means, or amendment thereto or conference report thereon, that
decreases revenue if such measure would not increase the deficit over
the period of fiscal years 2017 through 2026.
SEC. 408. DEFICIT-NEUTRAL RESERVE FUND FOR FEDERAL RETIREMENT REFORM.
In the House of Representatives, the chair of the Committee on the
Budget may revise the allocations, aggregates, and other appropriate
budgetary levels in this concurrent resolution for any bill or joint
resolution, or amendment thereto or conference report thereon, if such
measure reforms, improves, and updates the Federal retirement system
and would not increase the deficit over the period of fiscal years 2017
through 2026.
SEC. 409. DEFICIT-NEUTRAL RESERVE FUND FOR COAL MINER PENSION AND
HEALTH CARE FUNDS.
In the House of Representatives, the chair of the Committee on the
Budget may revise the allocations, aggregates, and other appropriate
budgetary levels in this concurrent resolution for any bill or joint
resolution, or amendment thereto or conference report thereon, to
address the immediate funding shortfall in coal miner pension and
health care funds if such measure would not increase the deficit over
the period of fiscal years 2017 through 2026.
SEC. 410. RESERVE FUND FOR COMMERCIALIZATION OF AIR TRAFFIC CONTROL.
(a) In General.--In the House of Representatives, the chair of the
Committee on the Budget may make the adjustments under subsection (b)
for a bill or joint resolution, or amendment thereto or conference
report thereon, that commercializes the operations of the air traffic
control system if such measure reduces the discretionary spending
limits in section 251(c) of the Balanced and Emergency Deficit Control
Act of 1985 by the amount that was appropriated to the Federal Aviation
Administration for air traffic control.
(b) Adjustments.--For the measure described in subsection (a), the
chair of the Committee on the Budget may adjust the section 302(a)
allocations of the appropriate committees of jurisdiction by the amount
of new budget authority provided by such measure and outlays flowing
therefrom, make corresponding changes to the aggregate levels of new
budget authority and outlays in this concurrent resolution, and reduce
the revenue aggregate in such resolution by the amount of the reduction
in revenue resulting from such measure.
TITLE V--ESTIMATES OF DIRECT SPENDING IN THE HOUSE OF REPRESENTATIVES
SEC. 501. DIRECT SPENDING.
(a) Means-Tested Direct Spending.--
(1) Findings.--The House of Representatives finds the
following:
(A) For means-tested direct spending, the average
rate of growth in the total level of outlays during the
10-year period preceding fiscal year 2017 is 7.3
percent.
(B) For means-tested direct spending, the estimated
average rate of growth in the total level of outlays
during the 10-year period beginning with fiscal year
2017 is 4.3 percent under current law.
(2) Proposed reforms.--The following reforms are proposed
under this concurrent resolution by the House of
Representatives for means-tested direct spending:
(A) In 1996, a Republican Congress and a Democratic
President reformed welfare by limiting the duration of
benefits, giving States more control over the program,
and helping recipients find work. In the 5 years
following passage, child-poverty rates fell, welfare
caseloads fell, and workers' wages increased. This
concurrent resolution assumes the enactment of
proposals to reduce poverty and increase opportunity
and upward mobility for struggling Americans on the
road to personal and financial independence. Based on
the successful welfare reforms of the 1990s, these
proposals would improve work requirements and provide
flexible funding for States to help those most in need
find gainful employment, escape poverty, and move up
the economic ladder.
(B) For Medicaid, this concurrent resolution is
predicated on a framework proposed by the chairs of the
committees of jurisdiction of the House of
Representatives, to modernize and improve the program
while increasing State flexibility and protecting the
most vulnerable populations. This concurrent resolution
also assumes the repeal of the Medicaid expansions in
the President's health care law.
(b) Nonmeans-Tested Direct Spending.--
(1) Findings.--The House of Representatives finds the
following:
(A) For nonmeans-tested direct spending, the
average rate of growth in the total level of outlays
during the 10-year period preceding fiscal year 2017 is
5.1 percent.
(B) For nonmeans-tested direct spending, the
estimated average rate of growth in the total level of
outlays during the 10-year period beginning with fiscal
year 2017 is 5.5 percent under current law.
(2) Proposed reforms.--For Medicare, this concurrent
resolution advances policies to put seniors, not the Federal
Government, in control of their health care decisions. Putting
seniors in charge of how their health care dollars are spent
will encourage providers to compete against each other on price
and quality. Improvements to Medicare are necessary to extend
the life of the Federal Hospital Insurance Trust Fund and
protect the program for future generations.
TITLE VI--POLICY STATEMENTS IN THE HOUSE OF REPRESENTATIVES
SEC. 601. POLICY STATEMENT ON DEVELOPING A BOLD AGENDA.
(a) Findings.--The House finds the following:
(1) Representative Paul D. Ryan of Wisconsin, the Speaker
of the House of Representatives, has called for a bold, pro-
growth agenda to reestablish a confident America.
(2) Today's challenges require solutions based on the
principles that have served as the cornerstone of American
strength, free enterprise, compassion, and exceptionalism.
(3) On February 4, 2016, the Speaker announced the
formation of 6 task forces. Each task force will submit
recommendations in the following areas:
(A) National security.--This task force is
responsible for developing an overarching strategy and
the required military capabilities to confront 21st
century national security threats.
(B) Tax reform.--This task force will seek to
create jobs, grow the economy, and raise wages by
reducing tax rates, removing special interest
exceptions, and making the tax code simpler and fairer.
(C) Reducing regulatory burdens.--This task force
is charged with reducing bureaucracy in the regulatory
system, facilitating investment and productivity,
constructing infrastructure, and removing regulatory
obstacles on small businesses and employers. These
goals will be achieved while retaining protections for
the environment, public safety, and consumer interests.
(D) Health care reform.--This task force will
review appropriate methods to repeal and replace
Obamacare with a patient-centered system giving
patients more choice and control, increasing quality,
and reducing costs.
(E) Poverty, opportunity, and upward mobility.--
This task force will identify ways to strengthen the
safety net and reform educational programs to make them
more effective and accountable, help people move from
welfare to work, and empower productive lives.
(F) Restoring constitutional authority.--This task
force will strive to reclaim power ceded to the
executive branch by reforming the rulemaking process,
checking agency authority, exercising the power of the
purse, and enhancing congressional oversight.
(4) This concurrent resolution promotes and advances an
agenda to address the Nation's challenges.
(b) Policy on Developing a Bold Agenda.--It is the policy of this
concurrent resolution that the appropriate committees of jurisdiction
in the House should consider in the 115th Congress recommendations
developed by the Speaker's task forces on health care reform; reducing
regulatory burdens; poverty, opportunity, and upward mobility; national
security; tax reform; and restoring constitutional authority.
SEC. 602. POLICY STATEMENT ON A BALANCED BUDGET AMENDMENT.
(a) Findings.--The House finds the following:
(1) The Government will collect approximately $3.4 trillion
in taxes, but spend more than $3.9 trillion to maintain its
operations, borrowing 14 cents of every Federal dollar spent.
(2) At the end of 2015, the national debt of the United
States was more than $18.9 trillion.
(3) A majority of States have petitioned the Government to
hold a constitutional convention to adopt a balanced budget
amendment to the Constitution.
(4) Forty nine States have fiscal limitations in their
State constitutions, including the requirement to annually
balance the budget.
(5) Numerous balanced budget amendment proposals have been
introduced on a bipartisan basis in the House. Currently in the
114th Congress, 17 joint resolutions proposing a balanced
budget amendment have been introduced, including a resolution
offered by Representative Dave Brat of Virginia and a
resolution offered by Representative Tom McClintock of
California.
(6) In the 111th Congress, the House considered H. J. Res.
2, sponsored by Representative Robert W. Goodlatte of Virginia,
although it received 262 aye votes, it did not receive the two-
thirds required for passage.
(7) In 1995, a balanced budget amendment to the
Constitution passed the House with bipartisan support, but
failed to pass by one vote in the United States Senate.
(8) Four States, including Georgia, Alaska, Mississippi,
and North Dakota, have agreed to the Compact for a Balanced
Budget, which is seeking to amend the Constitution to require a
balanced budget through an Article V convention by April 12,
2021.
(b) Policy on a Balanced Budget Constitutional Amendment.--It is
the policy of this concurrent resolution that Congress should propose a
balanced budget constitutional amendment for ratification by the
States.
SEC. 603. POLICY STATEMENT ON REFORMING THE CONGRESSIONAL BUDGET
PROCESS.
(a) Findings.--The House finds the following:
(1) Enactment of the Congressional Budget and Impoundment
Control Act of 1974 was the first step toward restoring
constitutionally endowed legislative responsibility over
fundamental budget decision making.
(2) The Congressional Budget Act of 1974 specifically set
forth its purposes in section 2. It was designed to--
(A) establish congressional control over the budget
process;
(B) provide for annual congressional determination
of a level of taxes and spending;
(C) set important national budget priorities; and
(D) find methods to facilitate the access of
Members of Congress to the most accurate, objective,
and high-quality information available to assist them
in discharging their duties.
(3) However, the congressional budget process has neither
constrained spending nor inhibited the expansion of Government.
The growth of the Government, primarily through a multiplicity
of mandatory programs and other forms of direct spending, has
largely been financed through borrowing and high tax rates.
(4) The enforcement of the current budget process,
including congressional points of order and statutory spending
limits, have been too often waived or circumvented. This
contributes to a lack of accountability, which has led to broad
agreement that reforming the system is a high necessity.
(b) Policy on Reforming the Congressional Budget Process.--It is
the policy of this concurrent resolution that Congress should--
(1) restructure the fundamental procedures of budget
decision making;
(2) reassert congressional power over spending and revenue,
restore the balance of power between Congress and the President
as the Congressional Budget Act of 1974 intended, and attain
the maximum level of accountability for budget decisions
through efficient and rigorous enforcement of budget rules;
(3) improve incentives for lawmakers to budget as intended
by the Congressional Budget Act of 1974, especially by adopting
an annual budget resolution;
(4) encourage more effective control over spending,
especially currently uncontrolled direct spending;
(5) revise the methodology used in developing the baseline,
which is intended to reflect an objective projection of the
budgetary effects of current laws and policies for future
fiscal years, by removing any tendency toward assuming higher
spending levels;
(6) promote efficient and timely budget actions to ensure
lawmakers complete their budget actions before the start of the
new fiscal year;
(7) provide access to the best analysis of economic
conditions available and increase awareness of how fiscal
policy directly impacts economic growth and job creation;
(8) eliminate the complexity of the budget process and the
biases that favor higher spending;
(9) include procedures that treat extensions of current tax
laws on a comparable basis to the extension of mandatory
programs; and
(10) require procedures that make the budgetary effects of
Government policies on individual taxpayers more apparent, such
as requiring the President's annual budget submission to
Congress provide an estimate of the pro rated share of any
projected debt for the current fiscal year to any individual
who files an income tax return.
(c) Legislation.--The Committee on the Budget of the House intends
to draft legislation during the 114th Congress that rewrites the
Congressional Budget and Impoundment Control Act of 1974 to fulfill the
goals of making the congressional budget process more effective in
ensuring taxpayers' dollars are spent wisely and efficiently. Such
legislation shall--
(1) attain greater simplicity without sacrificing the rigor
required to address--
(A) the complex issues of the domestic and world
economy;
(B) national security responsibilities; and
(C) the appropriate roles of rulemaking and
statutory enforcement mechanisms;
(2) establish a new structure that assures the
congressional role in the budget process is applied
consistently without reliance on reactive legislating;
(3) improve the elements of the current budget process that
have fulfilled the original purposes of the Congressional
Budget Act of 1974; and
(4) rebuild the foundation of the budget process to provide
a solid basis from which additional reforms may be developed.
SEC. 604. POLICY STATEMENT ON ECONOMIC GROWTH AND JOB CREATION.
(a) Findings.--The House finds the following:
(1) Although the United States economy technically emerged
from recession nearly 7 years ago, the subsequent recovery has
felt more like a malaise than a rebound. Real gross domestic
product (GDP) growth since 2010 has averaged just over 2
percent annually, well below the 3 percent historical trend
rate of growth in the United States. The Nation remains in the
midst of the weakest economic recovery of the modern era.
Sluggish economic growth has also contributed to the country's
fiscal woes because revenue levels are lower than they would
otherwise be while Government spending (including welfare and
income-support programs) is higher. There is dire need for
policies that will initiate higher rates of economic growth and
greater, higher-quality job opportunities.
(2) Even more disturbing, estimates of future economic
growth have been falling in recent years. In 2010, the
Congressional Budget Office (CBO) expected real GDP to grow by
a relatively brisk 3 percent annual average over the budget
window. In its latest economic forecast, CBO expects growth to
average just 2.1 percent over the next decade. This anemic
growth rate is insufficient to increase job opportunities and
incomes to acceptable levels.
(3) Although the overall trend of job gains has been solid
of late, other aspects of the labor market remain relatively
weak. For example--
(A) the labor force participation rate stands at
just 62.9 percent, down roughly 3 percentage points
since early 2009, and near its lowest level since 1978;
(B) long-term unemployment remains a problem, and
of the 7.8 million people who are currently unemployed,
slightly more than 2 million (28 percent) have been
unemployed for more than 6 months; and
(C) long-term unemployment erodes an individual's
job skills and detaches such individual from job
opportunities, and undermines the long-term productive
capacity of the economy.
(4) Wage gains and income growth have been subpar for
middle-class Americans. Average hourly earnings of private-
sector workers have increased by 2.4 percent over the past
year. Prior to the recession, growth in average hourly earnings
was tracking close to 4 percent. Similarly, average incomes
have remained flat in recent years. Real median household
income has declined by roughly $800 in 2014 to $53,657. This
represents a sharp fall of 6.5 percent, or $3,700, since 2007.
(5) The unsustainable fiscal trajectory casts a shadow on
the country's economic outlook. Investors and businesses make
decisions on a prospective basis. They know that today's high
debt levels are simply tomorrow's tax hikes, interest rate
increases, or inflation--and they act accordingly. This debt
overhang, and the uncertainty it generates, can weigh on
growth, investment, and job creation.
(6) Nearly all economists, including those at CBO, conclude
that reducing budget deficits (thereby bending the curve on
debt levels) is a net positive for economic growth over time.
(7) In contrast, if the Government remains on the current
fiscal path, future generations will face even-higher debt
service costs, a decline in national savings, and a ``crowding
out'' of private investment. This dynamic will eventually lead
to a decline in economic output and a diminution in our
country's standard of living.
(8) The key economic challenge is determining how to expand
the economic pie, not how best to divide up and redistribute a
shrinking pie.
(9) A stronger economy is vital to lowering deficit levels
and eventually balancing the budget. According to CBO, if
annual real GDP growth is just 0.1 percentage point higher over
the budget window, deficits would be reduced by $327 billion.
(b) Policy on Economic Growth and Job Creation.--It is the policy
of this concurrent resolution to promote faster economic growth and job
creation by embracing pro-growth policies, such as fundamental tax
reform, that will help foster a stronger economy, greater
opportunities, and more job creation. By putting the budget on a
sustainable path, this concurrent resolution ends the debt-fueled
uncertainty holding back job creators. Tax reform will put American
businesses and workers in a better position to compete and thrive in
the 21st century global economy. This concurrent resolution targets the
regulatory red tape and cronyism that favor special interests. The
reforms in this concurrent resolution serve as a means to the larger
end of helping the economy grow and expanding opportunity for all
Americans.
SEC. 605. POLICY STATEMENT ON FEDERAL REGULATORY BUDGETING AND REFORM.
(a) Findings.--The House finds the following:
(1) Excessive Federal regulation--
(A) has hurt job creation, investment, wages,
competition, and economic growth, slowing the Nation's
recovery from the economic recession and harming
American households;
(B) operates as a regressive tax on poor and lower-
income households;
(C) displaces workers into long-term unemployment
or lower-paying jobs;
(D) adversely affects small businesses, the primary
source of new jobs; and
(E) impedes the economic growth necessary to
provide sufficient funds to meet vital commitments and
reduce the Federal debt.
(2) Federal agencies routinely fail to identify and
eliminate, minimize, or mitigate excess regulatory costs
through post-implementation assessments of their regulations.
(3) The estimated cost of Federal regulations are as high
as $1.88 to $2.03 trillion per year.
(4) The estimated annual level of Federal regulatory
costs--
(A) equals roughly $15,000 per United States
household, or 30 percent of average household income;
(B) exceeds both individual and corporate Federal
income rates; and
(C) exceeded 11 percent of United States gross
domestic product in 2015.
(5) If regulatory costs represented an independent economy,
the estimated annual level of these costs would qualify as one
of the world's top 10 economies, ranking between India and
Russia, roughly equaling one-half of Germany's economy and 40
percent of Japan's economy.
(6) Since President Obama's inauguration in 2009, the
administration has issued more than 556,000 pages of
regulations and accompanying documentation in the Federal
Register, including 81,910 pages in 2015.
(7) Since 2009, the White House has imposed more than $728
billion in additional Federal regulatory costs, with over $100
billion in further costs proposed since the beginning of 2015.
(8) The United States Code of Federal Regulations now
contains over 175,000 pages of regulations in 235 volumes.
(9) Notwithstanding the size and growth of Federal
regulations, Congress lacks an effective mechanism to manage
the level of new Federal regulatory costs imposed each year.
Other nations, meanwhile, have successfully implemented the use
of regulatory budgeting to control excess regulation and
regulatory costs.
(10) Federal regulatory agencies routinely fail to analyze
both the costs and benefits of new regulations.
(11) While the Obama administration has routinely failed to
analyze both the costs and benefits of its new regulations, the
United States has experienced zero real wage growth since 2007.
(12) While the Obama administration has sharply increased
Federal regulatory costs, it has produced the weakest recovery
from economic recession since World War II.
(13) If the Obama administration had produced even an
average recovery, Americans would have six million more jobs.
Instead, labor force participation is near historic lows and
over 90 million Americans over the age of 16 are out of the
workforce.
(14) Dodd-Frank (Public Law 111-203) alone has resulted in
more than $39.3 billion in regulatory compliance costs and has
imposed as much as 76.6 million hours of proposed and final
regulatory compliance paperwork on job creators.
(15) Implementation of the Affordable Care Act has resulted
in 177.9 million annual hours of regulatory compliance
paperwork, $37.1 billion of regulatory compliance costs on the
private sector, and $13 billion in regulatory compliance costs
on the States.
(16) Agencies impose costly regulations without relying on
sound science through the use of judicial consent decrees and
settlement agreements and the abuse of interim compliance costs
imposed on regulated entities that bring legal challenges
against newly promulgated regulations.
(17) The highest regulatory costs come from rules issued by
the Environmental Protection Agency (EPA). Among major new and
proposed EPA regulations are those that would vastly expand
EPA's control of land use through Clean Water Act permitting
programs, commonly referred to as the Waters of the United
States (WOTUS) rule; limit development in counties in nearly
every State under Clean Air Act ozone regulations; and impose a
de-facto ban on new United States coal-fired power plants.
(18) EPA's power plant rules exemplify the impact of
excessive regulation.
(19) In June 2014, the EPA proposed a rule to cut carbon
pollution from the Nation's power plants. The proposed
standards are unachievable with current commercially available
technology, resulting in a de-facto ban on new coal-fired power
plants.
(20) Coal-fired power plants provide roughly 40 percent of
the United States electricity at a low cost. Unfairly targeting
the coal industry with costly and unachievable regulations will
increase energy prices, disproportionately disadvantaging
energy-intensive industries like manufacturing and
construction. This will make life more difficult for millions
of low-income and middle class families already struggling to
pay their bills.
(21) Three hundred thirty coal units are proposed for
retirement or conversion as a result of EPA regulations.
Combined with the defacto prohibition on new plants, these
retirements and conversions may further increase the cost of
electricity.
(22) A recent study by Energy Ventures Analysis Inc., an
energy market analysis group, estimates the average energy bill
in West Virginia will rise $750 per household by 2020, due in
part to EPA regulations. West Virginia receives 95 percent of
its electricity from coal.
(23) The Heritage Foundation found that a phase out of coal
would cost 600,000 jobs by the end of 2023, resulting in an
aggregate gross domestic product decrease of $2.23 trillion
over the entire period and reducing the income of a family of 4
by $1,200 per year. Of these jobs, 330,000 will come from the
manufacturing sector, with California, Texas, Ohio, Illinois,
Pennsylvania, Michigan, New York, Indiana, North Carolina,
Wisconsin, and Georgia seeing the highest job losses.
(b) Policy on Federal Regulatory Budgeting and Reform.--It is the
policy of this concurrent resolution that the House should, in
consultation with the public, consider legislation that--
(1) promotes--
(A) economic growth, job creation, higher wages,
and increased investment by eliminating unnecessary red
tape and streamlining, simplifying and lowering the
costs of Federal regulations; and
(B) the adoption of least-cost regulatory
alternatives to meet the objectives of Federal
regulatory statutes;
(2) protects--
(A) the poor and lower-income households from the
regressive effects of excessive regulation; and
(B) workers against the unnecessary elimination of
jobs and loss or reduction of wages;
(3) requires--
(A) an annual, congressional regulatory budget that
establishes annual costs of regulations and allocates
these costs amongst Federal regulatory agencies;
(B) cost-benefit and regulatory impact analysis for
new regulations proposed and promulgated by all Federal
regulatory agencies;
(C) advance notice of proposed rulemaking and makes
evidentiary hearings available for critical disputed
issues in the development of new major regulations;
(D) congressional approval of all new major
regulations before the regulations can become
effective, ensuring that Congress can better prevent
the imposition of unsound costly new regulations; and
(E) post-implementation cost-benefit analysis of
all new major regulations on at least a decennial
basis, to ensure that regulations operate as intended
and impose no more costs than necessary;
(4) strengthens--
(A) requirements to assure the use and disclosure
of sound science, including models, data, and other
evidentiary information in the development of new
regulations;
(B) transparency in regulatory development and
improves opportunities for hearings on disputed issues
in high-cost major rulemaking;
(C) requirements to avoid, minimize, and mitigate
significant adverse impacts of new major regulations on
small businesses, the primary source of new jobs;
(D) judicial review of legal, scientific,
technical, and cost-benefit determinations made by
Federal regulatory agencies to support the promulgation
of new regulations;
(E) protections against unnecessary or abusive
imposition of regulatory compliance costs during
litigation challenging the promulgation of new, high-
cost major regulation;
(F) protections against the abuse of regulatory
consent decrees and settlement agreements to force the
unfair imposition of new regulations; and
(G) protections against the abuse of interim
rulemaking;
(5) reduces--
(A) regulatory barriers to entry into markets and
other regulatory impediments to competition and
innovation; and
(B) the imposition of new Federal regulation that
duplicates, overlaps or conflicts with State, local,
and Tribal regulation or that impose unfunded mandates
on State, local, and Tribal governments; and
(6) eliminates the abuse of guidance to evade legal
requirements applicable to the development and promulgation of
new regulations.
SEC. 606. POLICY STATEMENT ON TAX REFORM.
(a) Findings.--The House finds the following:
(1) A world-class tax system should be simple, fair, and
promote (rather than impede) economic growth. The United States
tax code fails on all 3 counts: it is complex, unfair, and
inefficient. The tax code's complexity distorts decisions to
work, save, and invest, which leads to slower economic growth,
lower wages, and less job creation.
(2) Standard economic theory holds that high marginal tax
rates lessen the incentives to work, save, and invest, which
reduces economic output and job creation. Lower economic
output, in turn, mutes the intended revenue gain from higher
marginal tax rates.
(3) Roughly half of United States active business income
and half of private sector employment are derived from business
entities (such as partnerships, S corporations, and sole
proprietorships) that are taxed on a ``pass-through'' basis,
meaning the income is taxed at individual rates rather than
corporate rates. Small businesses, in particular, tend to
choose this form for Federal tax purposes, and the highest
Federal rate on such small business income can reach nearly 45
percent. For these reasons, sound economic policy requires
lowering marginal rates on these pass-through entities.
(4) The top United States corporate income tax rate
(including Federal, State, and local taxes) is slightly more
than 39 percent, the highest rate in the industrialized world.
Tax rates this high suppress wages, discourage investment and
job creation, distort business activity, and put American
businesses at a competitive disadvantage with foreign
competitors.
(5) By deterring potential investment, the United States
corporate tax restrains economic growth and job creation. The
United States tax rate differential fosters a variety of
complicated multinational corporate practices intended to avoid
the tax, which have the effect of moving the tax base offshore,
destroying American jobs, and decreasing corporate revenue.
(6) Recent and coming developments in the global arena,
specifically the Base Erosion and Profit Shifting (BEPS)
project recommendations, heighten the importance of the need to
reform and modernize our international tax system so that
American businesses and workers are not disadvantaged.
(7) The ``world-wide'' structure of United States
international taxation essentially taxes earnings of United
States firms twice, putting them at a significant competitive
disadvantage with competitors that have more competitive
international tax systems.
(8) Reforming the tax code would boost the competitiveness
of United States companies operating abroad and significantly
reduce tax avoidance.
(9) The tax code imposes costs on American workers through
lower wages, consumers in higher prices, and investors in
diminished returns.
(10) Increasing taxes to raise revenue and meet out-of-
control spending would sink the economy and Americans' ability
to save for their children's education and retirement.
(11) Closing tax loopholes to finance higher spending does
not constitute fundamental tax reform.
(12) Tax reform should curb or eliminate loopholes and use
those savings to lower tax rates across the board, not to fund
more wasteful Government spending. Washington has a spending
problem, not a revenue problem.
(13) Many economists believe that fundamental tax reform,
including a broader tax base and lower tax rates, would lead to
greater labor supply and increased investment, which would have
a positive impact on total national output.
(b) Policy on Tax Reform.--It is the policy of this concurrent
resolution that Congress should enact legislation to comprehensively
reform the tax code to promote economic growth, create American jobs,
increase wages, and benefit American consumers, investors, and workers
that--
(1) simplifies the tax code to make it fairer to American
families and businesses and reduces the amount of time and
resources necessary to comply with tax laws;
(2) substantially lowers tax rates for individuals and
consolidates the current seven individual income tax brackets
into fewer brackets;
(3) repeals the Alternative Minimum Tax;
(4) reduces the corporate tax rate; and
(5) transitions the tax code to a more competitive system
of international taxation.
SEC. 607. POLICY STATEMENT ON TRADE.
(a) Findings.--The House finds the following:
(1) Opening foreign markets to American exports is vital to
the United States economy and beneficial to American workers
and consumers. The Commerce Department estimates that every $1
billion of United States exports support more than 5,000 jobs
here at home.
(2) The United States can increase economic opportunities
for American workers and businesses through the elimination of
foreign trade barriers to United States goods and services.
(3) Trade agreements have saved the average American family
of four more than $10,000 per year as a result of lower duties.
Trade agreements also lower the cost of manufacturing inputs by
removing duties.
(4) American businesses and workers have shown that, on a
level playing field, they can excel and surpass international
competition.
(5) When negotiating trade agreements, United States laws
on Intellectual Property (IP) protection should be used as a
benchmark for establishing global IP frameworks. Strong IP
protections have significantly contributed to the United
States' status as a world leader in innovation across sectors
(including in the development of life-saving biologic
medicines). The data protections afforded to biologics under
Federal law, including 12 years of data protection, allow
continued development of pioneering medicines to benefit
patients both in the United States and abroad. To maintain the
cycle of innovation and achieve 21st century trade agreements,
it is vital that our negotiators insist on the highest
standards for IP protections.
(b) Policy on Trade.--It is the policy of this concurrent
resolution--
(1) to pursue international trade, global commerce, and a
modern and competitive tax system to promote domestic job
creation;
(2) that the United States should continue to seek
increased economic opportunities for American workers and
businesses through high-standard trade agreements that satisfy
negotiating objectives, including--
(A) the expansion of trade opportunities;
(B) adherence to trade agreements and rules by the
United States and its trading partners, and
(C) the elimination of foreign trade barriers to
United States goods and services by opening new markets
and enforcing United States rights; and
(3) that any trade agreement entered into on behalf of the
United States should reflect the negotiating objectives and
adhere to the provisions requiring improved consultation with
Congress.
SEC. 608. POLICY STATEMENT ON SOCIAL SECURITY.
(a) Findings.--The House finds the following:
(1) More than 55 million retirees, individuals with
disabilities, and survivors depend on Social Security. Since
enactment, Social Security has served as a vital leg of the
``three-legged stool'' of retirement security, which includes
employer provided pensions as well as personal savings.
(2) Lower-income Americans rely on Social Security for a
larger proportion of their retirement income. Therefore,
reforms should take into consideration the need to protect
lower income Americans' retirement security.
(3) The Social Security Trustees Report has repeatedly
recommended that Social Security's long-term financial
challenges be addressed soon. The financial condition of Social
Security and the threat to seniors and those receiving Social
Security disability benefits becomes more pronounced each year
without reform. For example--
(A) in 2022, the Disability Insurance Trust Fund
will be exhausted and program revenues will be unable
to pay scheduled benefits;
(B) in 2034, the combined Old-Age and Survivors and
Disability Trust Funds will be exhausted, and program
revenues will be unable to pay scheduled benefits; and
(C) with the exhaustion of the Trust Funds in 2034,
benefits will be cut nearly 21 percent across the
board, devastating those currently in or near
retirement and those who rely on Social Security the
most.
(4) The recession and continued low economic growth have
exacerbated the looming fiscal crisis facing Social Security.
The most recent Congressional Budget Office (CBO) projections
find that Social Security will run cash deficits of more than
$1.3 trillion over the next 10 years.
(5) The Disability Insurance program provides an essential
income safety net for those with disabilities and their
families. According to CBO, between 1970 and 2012 the number of
disabled workers and their dependent family members receiving
disability benefits has increased by more than 300 percent from
2.7 million to over 10.9 million. This increase is not due
strictly to population growth or decreases in health. Scholars
David Autor and Mark Duggan have found that the increase in
individuals on disability does not reflect a decrease in self-
reported health. CBO attributes program growth to changes in
demographics and the composition of the labor force as well as
Federal policies.
(6) In the past, Social Security has been reformed on a
bipartisan basis, most notably by the ``Greenspan Commission'',
which helped address Social Security shortfalls for more than a
generation.
(7) Americans deserve action by the President and Congress
to preserve and strengthen Social Security to ensure that
Social Security remains a critical part of the safety net.
(b) Policy on Social Security.--It is the policy of this concurrent
resolution that the House should work on a bipartisan basis to make
Social Security sustainably solvent. This concurrent resolution
assumes, under a reform trigger, that--
(1) if in any year the Board of Trustees of the Federal
Old-Age and Survivors Insurance Trust Fund and the Federal
Disability Insurance Trust Fund annual Trustees Report
determines that the 75-year actuarial balance of the Social
Security Trust Funds is in deficit, and the annual balance of
the Social Security Trust Funds in the 75th year is in deficit,
the Board of Trustees should, no later than September 30 of the
same calendar year, submit to the President recommendations for
statutory reforms necessary to achieve a positive 75-year
actuarial balance and a positive annual balance in the 75th
year, and any recommendations provided to the President must be
agreed upon by both Public Trustees of the Board of Trustees;
(2) not later than December 1 of the same calendar year in
which the Board of Trustees submit their recommendations, the
President should promptly submit implementing legislation to
both Houses of Congress including recommendations necessary to
achieve a positive 75-year actuarial balance and a positive
annual balance in the 75th year, and the majority leader of the
Senate and the majority leader of the House should introduce
the President's legislation upon receipt;
(3) within 60 days of the President submitting legislation,
the committees of jurisdiction should report a bill, which
should be considered by the House or Senate under expedited
procedures; and
(4) legislation submitted by the President should--
(A) protect those in or near retirement;
(B) preserve the safety net for those who count on
Social Security the most, including those with
disabilities and survivors;
(C) improve fairness for participants;
(D) reduce the burden on and provide certainty for
future generations; and
(E) secure the future of the Disability Insurance
program while addressing the needs of those with
disabilities today and improving the determination
process.
(c) Policy on Disability Insurance.--It is the policy of this
concurrent resolution that Congress and the President should enact
legislation on a bipartisan basis to reform the Disability Insurance
program prior to its insolvency in 2022 and should not raid the Social
Security retirement system without reforms to the Disability Insurance
system. This concurrent resolution assumes reform that--
(1) ensures benefits continue to be paid to individuals
with disabilities and their family members who rely on them;
(2) prevents an 11 percent across-the-board benefit cut;
(3) improves the Disability Insurance program; and
(4) promotes opportunity for those trying to return to
work.
(d) Policy on Social Security Solvency.--It is the policy of this
concurrent resolution that any legislation Congress considers to
improve the solvency of the Disability Insurance Trust Fund must also
improve the long-term solvency of the combined Old Age and Survivors
Disability Insurance (OASDI) Trust Fund.
SEC. 609. POLICY STATEMENT ON REPEALING THE PRESIDENT'S HEALTH CARE LAW
AND PROMOTING REAL HEALTH CARE REFORM.
(a) Findings.--The House finds the following:
(1) The President's health care law put Washington's
priorities before those of patients'. The Affordable Care Act
(ACA) has failed to reduce health care premiums as promised.
Instead, the law mandated benefits and coverage levels, denying
patients the opportunity to choose the type of coverage that
best suits their health needs and driving up health coverage
costs. A typical family's health care premiums were supposed to
decline by $2,500; instead, average premiums have increased by
$3,775. A recent study conducted by the nonpartisan
Congressional Budget Office (CBO) estimates premiums to
continue rising over the next decade, projecting an average
increase of 8 percent per year between 2016 and 2018, and
increasing by nearly 60 percent by 2026.
(2) The President pledged, ``If you like your health care
plan, you can keep your health care plan.'' Instead, CBO now
estimates 7 million Americans will lose employment-based health
coverage due to the President's health care law, further
limiting patient choice.
(3) Then-Speaker of the House Pelosi stated that the
President's health care law would create 4 million jobs over
the life of the law and almost 400,000 jobs immediately.
Instead, CBO estimates that by 2025 Obamacare will reduce the
number of hours worked by approximately 2 million full-time
equivalent workers, mostly lower wage workers, compared with
what would have occurred in the absence of the law.
Additionally, a study by the Mercatus Center at George Mason
University estimates that Obamacare will reduce employment by
up to 3 percent, or about 4 million full-time equivalent
workers.
(4) The President has charged the Independent Payment
Advisory Board, a panel of unelected bureaucrats, with cutting
Medicare by an additional $36.4 billion over the next 10 years.
(5) Since the ACA was signed into law, the administration
has repeatedly failed to implement it as written. The
President's unilateral actions have resulted in 43 changes,
delays, and exemptions. The President has signed into law
another 24 changes made by Congress. The Supreme Court struck
down the forced expansion of Medicaid; ruled the individual
``mandate'' could only be characterized as a tax to remain
constitutional; and rejected the requirement that closely held
companies provide health insurance to their employees even if
it violates the companies' religious beliefs. More than 5 years
after enactment, the Supreme Court continues to evaluate the
legality of how the President's administration has implemented
the law. All of these changes prove the folly of the underlying
law; health care in the United States cannot be run from a
centralized bureaucracy.
(6) The President's health care law is unaffordable,
intrusive, overreaching, destructive, and unworkable. Its
complex structure of subsidies, mandates, and penalties
perversely impact individuals, married couples, and families.
Those who previously had insurance along with those who did not
have been funneled into a new system that is providing less
access to doctors and treatments. Millions of Americans have
been added to a broken Medicaid system that is incapable of
providing the care promised. Cuts made to Medicare to fund a
new entitlement are undermining the health security of seniors.
Taxes and mandates are distorting the insurance market and
harming the broader economy, resulting in fewer jobs and less
opportunity. By design, the President's law puts Washington at
the center of our health care system, at the expense of
patients, families, physicians, and businesses. The ACA should
be fully repealed, allowing for real patient-centered health
care reform that puts patients first, not Washington, DC.
(b) Policy on Promoting Real Health Care Reform.--It is the policy
of this concurrent resolution that the President's health care law
should be fully repealed and real health care reform should be enacted
to enhance affordability, accessibility, quality, innovation, choices,
and responsiveness in coverage for all Americans. Real health care
reform should put patients, families, and doctors in charge, not
Washington, DC, and encourage increased competition and transparency.
Under the President's health care law, Government controls Americans'
health care choices. Patient-centered reform should be enacted in
accordance with the following principles:
(1) Affordability.--Real reform should ensure that all
Americans, no matter their age, income, or health status, can
afford health care coverage. Currently, those who receive
insurance through an employer receive assistance through the
tax code, while those purchasing insurance on their own do not
receive the same benefit. Individuals should not be priced out
of the health insurance market due to pre-existing conditions.
Policies should provide protections for patients with pre-
existing conditions to guarantee affordable coverage, reward
those who maintain health coverage, create more equity between
benefits offered through employers to individuals and families
purchasing coverage on their own, and give States, who are
better equipped to respond to the needs of their communities,
more control over insurance regulation. Individuals should also
be allowed to voluntarily join together to pool risk through
mechanisms such as Individual Health Pools and Small Employer
Membership Associations to gain the purchasing power of
thousands.
(2) Accessability.--Instead of Washington dictating the
ways Americans cannot use their health insurance, reforms
should make health coverage more portable. Individuals should
be able to own their insurance and have it follow them in and
out of jobs throughout their career. Small business owners
should be permitted to band together across State lines through
their membership in bona fide trade or professional
associations to purchase health coverage for their families and
employees at a low cost. This will increase small businesses'
bargaining power, volume discounts, and administrative
efficiencies while giving them freedom from State-mandated
benefit packages. Also, insurers licensed to sell policies in
one State should be permitted to offer them to residents in any
other State, and consumers should be permitted to shop for
health insurance across State lines, as they are with other
insurance products online, by mail, by phone, or in
consultation with an insurance agent.
(3) Quality.--Incentives for providers to deliver high-
quality, responsive, and coordinated care will promote better
patient outcomes and drive down health care costs.
Additionally, reforms that restore the patient-physician
relationship by reducing administrative burdens will promote
quality coverage for all Americans and allow physicians to do
what they do best--care for patients. Reforms should also
empower the patient by creating a marketplace for health care,
allowing providers to compete on cost and quality for the
patients' choice.
(4) Choices.--Individuals and families should be free to
secure the health care coverage that best meets their needs,
rather than instituting one-size-fits-all directives from
Federal bureaucracies such as the Internal Revenue Service, the
Department of Health and Human Services, and the Independent
Payment Advisory Board. Patient-centered health care should
enhance, not diminish coverage options for individuals.
Additionally, patients are often unable to compare costs for
health care goods and services due to a lack of price
transparency. The inability of consumers to compare costs
distorts the health marketplace at the expense of patients by
denying them the opportunity to make informed care decisions,
further reducing competition and only serving select special
interests.
(5) Innovation.--Instead of stifling health care
innovation, a reformed health care system should encourage
research, development, and innovation. New technologies provide
patients and providers with instant connection and access to
life saving diagnostic tools and treatments. Groundbreaking
applications, software, and devices not only enhance the
delivery of health care to be more effective and efficient, but
also less costly. Federal regulations, however, too often slow
and prevent widespread adoption of these medical advancements
and hinder the transformation of America's health delivery
system.
(6) Responsiveness.--Reform should return authority to
States where possible to make the system more responsive to
patients and their needs. Instead of tying States' hands with
Federal requirements for Medicaid, the Government should return
control over to the States. Not only does the current Medicaid
program drive up Federal debt and threaten to bankrupt State
budgets, but States are better positioned to provide quality
and affordable care to those who are eligible for the program
and to identify and eliminate waste, fraud and abuse.
Beneficiary choices in the State Children's Health Insurance
Program (SCHIP) and Medicaid should be improved. States should
offer private insurance, Health Savings Accounts, and other
competitive insurance options to their Medicaid and SCHIP
beneficiaries, but should not require enrollment.
(7) Reforms.--Reforms should prevent lawsuit abuse and curb
the practice of defensive medicine, which significantly
increase health care costs. The burden of proof in medical
malpractice cases should be based on compliance with best
practice guidelines, and States should be free to implement
those policies to best suit their needs.
SEC. 610. POLICY STATEMENT ON MEDICARE.
(a) Findings.--The House finds the following:
(1) More than 50 million Americans depend on Medicare for
their health security.
(2) The Medicare Trustees Report has repeatedly recommended
that Congress address Medicare's long-term financial
challenges. Each year without reform, the financial condition
of Medicare becomes more precarious and the threat to those in
or near retirement more pronounced. According to the Medicare
Trustees Report--
(A) the Hospital Insurance Trust Fund will be
exhausted in 2030 and unable to pay the full scheduled
benefits;
(B) Medicare enrollment is expected to increase
more than 50 percent in the next two decades, as 10,000
baby boomers reach retirement age each day;
(C) due to extended life spans, enrollees remain in
Medicare three times longer than at the outset of the
program five decades ago;
(D) notwithstanding the program's Trust Fund
arrangement, current workers' payroll tax contributions
pay for current Medicare beneficiaries;
(E) the number of workers supporting each
beneficiary continues to fall; in 1965, the ratio was
4.5 workers per beneficiary, and by 2030, when the baby
boom generation will have fully aged into the program,
the ratio will be only 2.3 workers per beneficiary;
(F) most Medicare beneficiaries receive about three
dollars in Medicare benefits for every one dollar paid
into the program;
(G) Medicare is growing faster than the economy at
a projected rate of 6 percent per year over the next 10
years; and
(H) by 2026, Medicare spending will reach nearly
$1.3 trillion, almost double the 2015 spending level of
$634 billion.
(3) Failing to address Medicare's collapsing finances will
leave millions of American seniors without adequate health
security and younger generations burdened with having to pay
for these unsustainable spending levels.
(b) Policy on Medicare Reform.--It is the policy of this concurrent
resolution to save Medicare for those in or near retirement and
strengthen the program for future beneficiaries.
(c) Assumptions.--This concurrent resolution assumes transition to
an improved Medicare program that ensures--
(1) Medicare is preserved for current and future
beneficiaries;
(2) future Medicare beneficiaries select, from competing
guaranteed health coverage options, a plan that best suits
their needs, with support from a defined contribution toward
their premiums;
(3) traditional fee-for-service Medicare remains as a plan
option;
(4) Medicare provides additional assistance for lower
income beneficiaries and those with greater health risks; and
(5) Medicare spending is put on a sustainable path and
becomes solvent over the long term.
SEC. 611. POLICY STATEMENT ON MEDICAL DISCOVERY, DEVELOPMENT, DELIVERY,
AND INNOVATION.
(a) Findings.--The House finds the following:
(1) For decades, the Nation's commitment to the discovery,
development, and delivery of new treatments and cures has made
the United States the biomedical innovation capital of the
world, bringing life-saving drugs and devices to patients and
well over a million high-paying jobs to local communities.
(2) Americans were responsible for the first of many
scientific discoveries, including creating the first vaccine
for polio and numerous other scientific and medical
breakthroughs that have improved and prolonged human health and
life for countless people in America and around the world.
(3) The United States has led the way in early discovery
because of visionary and determined innovators throughout the
private and public sectors, including industry, academic
medical centers, and Federally funded activities, such as the
National Institutes of Health (NIH). United States leadership
is threatened, however, when other countries contribute more to
basic research from both public and private sources.
(4) The Organisation for Economic Cooperation and
Development predicts that China, for example, will outspend the
United States in total research and development by the end of
the decade.
(5) Federal policies should foster investment in health
care innovation. America should maintain its world leadership
in medical science by encouraging competition in the delivery
of cures and therapies to patients.
(b) Policy on Medical Innovation.--This concurrent resolution calls
for--
(1) Congress to support the important work of medical
innovators throughout the country through continued strong
funding for the agencies that engage in life saving research
and development; and
(2) Washington to unleash the power of innovation by
removing obstacles that impede the adoption of medical
technologies - the bureaucracy and red-tape in Washington too
often hold back medical innovation, increasing rather than
decreasing costs, and prevent new lifesaving treatments from
reaching patients.
SEC. 612. POLICY STATEMENT ON PUBLIC HEALTH PREPAREDNESS.
(a) Findings.--The House finds the following:
(1) The Nation's ability to respond quickly and effectively
to emergent health care threats must be a top priority.
(2) Through international trade and travel, natural
geographic barriers are removed, increasing the likelihood and
speed of transmission for communicable diseases.
(3) While the health care infrastructure enables rapid
response to domestic public health threats, the most effective
and efficient way to protect American lives from threats that
emerge overseas is to halt the spread of disease before it
reaches America's borders.
(4) United States leadership in international public health
preparedness and response is far reaching. Multiple agencies
support activities to prevent, detect, prepare for, and respond
to emerging threats, as follows:
(A) The Department of Health and Human Services
coordinates with domestic agencies. For example--
(i) the Centers for Disease Control and
Prevention serves as the first line of defense
in global disease detection by providing
domestic and international support through
various activities, including coordinating
technical assistance with partners worldwide in
disease prevention and detection and providing
a multitude of resources, including logistics,
analytics, tracing of data and disease
contacts, laboratory testing, health education,
and more;
(ii) the National Institutes of Health
conducts research activities for treatments and
vaccines for infectious diseases; and
(iii) the Biomedical Advanced Research and
Development Authority provides an integrated
and systematic approach in developing and
acquiring the necessary medical resources in a
public health emergency.
(B) The United States Agency for International
Development assists other nations in building
infrastructure and health systems for surveillance,
identifying, and responding to infectious diseases.
(C) The Department of Defense maintains a
surveillance and response system, as well as a network
of laboratories, domestically and abroad, that support
surveillance and research and development.
(5) Emerging infectious diseases are unpredictable and pose
a continuous threat. The United States must be vigilant and
prepared to act at home and abroad. For example--
(A) in 2003, the Severe Acute Respiratory Syndrome
was first identified, and before the disease was
contained, it spread to more than two dozen countries
in North and South America, Europe, and Asia;
(B) the H1N1 virus, a type of swine flu, caused a
global flu pandemic in 2009, killing thousands;
(C) in 2012, an outbreak of measles resulted in
approximately 122,000 deaths; a disease that was
declared to be eliminated from the United States in
2010;
(D) Ebola was identified in West Africa in March of
2014; due to the highly infectious nature of the
disease, at the peak of the outbreak transmission rates
reached as high as a thousand new cases per week and
resulted in approximately 28,000 cases and over 11,000
deaths; and
(E) on February 1, 2016, the World Health
Organization declared a ``Public Health Emergency of
International Concern'' due to potential health risks
posed by the Zika virus.
(b) Policy on Public Health Preparedness.--It is the policy of this
concurrent resolution that the House should, within available budgetary
resources, provide continued support for research, prevention, and
public health preparedness programs to ensure the Nation's ability to
respond efficiently and effectively to potential public health threats.
SEC. 613. POLICY STATEMENT ON ADDRESSING THE OPIOID ABUSE EPIDEMIC.
(a) Findings.--The House finds the following:
(1) Sixty-one percent of all drug overdose deaths in the
United States were related to opioids in 2014, primarily
prescription pain relievers and heroin. Prescription opioid
overdose deaths have quadrupled since 1999, with 44 deaths
every day.
(2) The Centers for Disease Control and Prevention (CDC)
has found that people in rural counties are almost twice as
likely to overdose on prescription painkillers as those in
large cities.
(3) One of the leading factors in the rise of opioid abuse
is considered to be the ready availability of prescription
painkillers:
(A) From 1999 to 2013, the sale of prescription
painkillers in the United States quadrupled.
(B) In 2012, there were enough opioids prescribed
for every adult in the United States to each have their
own one month's supply.
(C) Nearly 2 million Americans reported opioid
abuse or dependency in 2013.
(4) According to the CDC, every day nearly 7,000 people are
treated in emergency departments for using opioids in a manner
other than as directed.
(5) Prescription opioid abuse is also associated with a
rise in heroin use and overdoses:
(A) From 2002 to 2013, heroin use in the United
States nearly doubled, and heroin-related overdose
deaths nearly quadrupled.
(B) According to the CDC, ``past misuse of
prescription opioids is the strongest risk factor for
heroin initiation and use.''
(b) Policy on Opioid Abuse.--It is the policy of this concurrent
resolution that combating opioid abuse, using available budgetary
resources, is a high priority to assist those who are suffering from
this tragic epidemic. Congress, in a bipartisan manner, should examine
the Federal response to the opioid abuse crisis and support essential
activities, including rehabilitation, to reduce and prevent substance
abuse.
SEC. 614. POLICY STATEMENT ON HIGHER EDUCATION AND WORKFORCE
DEVELOPMENT OPPORTUNITY.
(a) Findings on Higher Education.--The House finds the following:
(1) A well-educated workforce is critical to economic, job,
and wage growth.
(2) Roughly 20 million students are enrolled in American
colleges and universities.
(3) Over the past decade, tuition and fees have been
growing at an unsustainable rate. Between the 2005-2006
Academic Year and the 2015-2016 Academic Year, published
tuition and fees at--
(A) public 4-year colleges and universities
increased at an average rate of 3.4 percent per year
above the rate of inflation;
(B) public 2-year colleges and universities
increased at an average rate of 2.6 percent per year
above the rate of inflation; and
(C) private nonprofit 4-year colleges and
universities increased at an average rate of 2.4
percent per year above the rate of inflation.
(4) Federal financial aid for higher education has
dramatically increased. The portion of the Federal student aid
portfolio composed of Direct Loans, Federal Family Education
Loans, and Perkins Loans with outstanding balances grew by 135
percent between fiscal year 2007 and fiscal year 2015. This
increased spending has failed to make college more affordable.
(5) In his 2012 State of the Union Address, President Obama
noted: ``We can't just keep subsidizing skyrocketing tuition;
we'll run out of money.''
(6) American students are chasing ever-increasing tuition
with ever-increasing debt. According to the Board of Governors
of the Federal Reserve System, total student debt now stands at
$1.3 trillion. This makes student loans the second largest
balance of consumer debt, after mortgage debt.
(7) Students are carrying large debt loads. Too many
students fail to complete college or end up defaulting on their
loans due to high debt burdens and a weak economy and job
market.
(8) The Pell Grant program is on an unsustainable funding
path. The Congressional Budget Office projects that the program
will experience a future multi-billion funding gap that is
predicted to increase in subsequent years in the current budget
window.
(9) Failure to address these problems will jeopardize young
people's access to higher education because it will remain
unaffordable.
(b) Policy on Higher Education Affordability.--It is the policy of
this concurrent resolution to address the root drivers of tuition
inflation and promote college affordability by--
(1) targeting Federal financial aid to those most in need;
(2) streamlining aid programs to increase their
effectiveness and make it easier for students and families to
assess their options for financing postsecondary education;
(3) putting the Pell Grant program on a more stable path
and maintaining the maximum Pell grant award level of $5,815 in
each year of the budget window; and
(4) removing regulatory barriers in higher education that
increase costs, limit access, and restrict innovative teaching,
particularly non-traditional models such as online course work
and competency-based learning.
(c) Findings on Workforce Development.--The House finds the
following:
(1) 7.8 million Americans are currently unemployed.
(2) Despite billions of dollars in spending, those looking
for work are stymied by a broken workforce development system
that fails to connect workers with assistance and employers
with trained personnel.
(3) The House Committee on Education and the Workforce
successfully consolidated 15 job-training programs in the
recently enacted Workforce Innovation and Opportunity Act.
(d) Policy on Workforce Development.--It is the policy of this
concurrent resolution to build on the success of the Workforce
Innovation and Opportunity Act by--
(1) further streamlining and consolidating Federal job-
training programs; and
(2) empowering States with the flexibility to tailor
funding and programs to the specific needs of their workforce.
SEC. 615. POLICY STATEMENT ON THE DEPARTMENT OF VETERANS AFFAIRS.
(a) Findings.--The House finds the following:
(1) For years, there has been serious concern regarding the
Department of Veterans Affairs (VA) bureaucratic mismanagement
and continuous failure to provide veterans timely access to
health care.
(2) In 2015, for the first time, VA health care was added
to Government Accountability Office's (GAO) ``high-risk'' list,
due to mismanagement and oversight failures, which have
resulted in untimely and inefficient health care. According to
GAO, ``the absence of care and delays in providing care have
harmed veterans.''.
(3) The VA's failure to provide timely and accessible
health care to our veterans is unacceptable. While Congress has
done its part for more than a decade by providing sufficient
funding for the VA, the administration has mismanaged these
resources, resulting in proven adverse effects on veterans and
their families.
(b) Policy on the Department of Veterans Affairs.--It is the policy
of this concurrent resolution that--
(1) the House Committee on Veterans' Affairs continue its
oversight efforts to ensure the VA reassesses its core mission,
including--
(A) reducing the number of bureaucratic layers;
(B) reducing the number of senior and middle
managers;
(C) streamlining the disciplinary process;
(D) improving performance measure metrics;
(E) strengthening the administration and oversight
of contractors; and
(F) supporting opportunities for veterans to pursue
other viable options for their health care needs; and
(2) the House Committee on Veterans' Affairs and the
Committee on the Budget should continue to closely monitor the
VA's progress to ensure VA resources are sufficient and
efficiently provided to veterans.
SEC. 616. POLICY STATEMENT ON FEDERAL ACCOUNTING.
(a) Findings.--The House finds the following:
(1) Current accounting methods fail to capture and present
in a compelling manner the full scope of the Government and its
fiscal situation.
(2) Most fiscal analyses produced by the Congressional
Budget Office (CBO) are conducted over a 10-year time horizon.
The use of generational accounting or a longer time horizon
would provide a more complete picture of the Government's
fiscal situation.
(3) The Federal budget currently accounts for most programs
on a cash accounting basis, which records revenue and expenses
when cash is actually paid or received. However, it accounts
for loan and loan guarantee programs on an accrual basis, which
records revenue when earned and expenses when incurred.
(4) The Government Accountability Office has advised that
accrual accounting may provide a more accurate estimate of the
Government's liabilities than cash accounting for some
programs, specifically insurance programs.
(5) Accrual accounting under the Federal Credit Reform Act
of 1990 (FCRA) understates the risk and thus the true cost of
some Federal programs, including loans and loan guarantees.
(6) Fair value accounting better reflects the risk
associated with Federal loan and loan guarantee programs by
using a market based discount rate. CBO, for example, uses fair
value accounting to measure the cost of Fannie Mae and Freddie
Mac.
(7) In comparing fair value accounting to FCRA, CBO has
concluded that ``adopting a fair-value approach would provide a
more comprehensive way to measure the costs of Federal credit
programs and would permit more level comparisons between those
costs and the costs of other forms of Federal assistance''.
(8) The Treasury Department, when reporting the principal
financial statements of the United States entitled Balance
Sheet and Statement of Operations and Changes in Net Position,
may omit some of the largest projected Government expenses,
including social insurance programs. The projected expenses of
these programs are reported by the Treasury Department in a
statement of Social Insurance and Statement of Changes in
Social Insurance Amounts.
(9) This concurrent resolution directs CBO to estimate the
costs of credit programs on a fair value basis to fully capture
the risk associated with Federal credit programs.
(b) Policy on Federal Accounting Methodologies.--It is the policy
of this concurrent resolution that the House should, in consultation
with CBO and other appropriate stakeholders, reform government-wide
budget and accounting practices so Members and the public can better
understand the fiscal situation of the United States and the options
best suited to improving it. Such reforms may include the following:
(1) Providing additional metrics to enhance our current
analysis by considering the Nation's fiscal situation
comprehensively, over an extended time horizon, and how it
affects Americans of various age cohorts.
(2) Expanding the use of accrual accounting where
appropriate.
(3) Accounting for certain Federal credit programs using
fair value accounting to better capture market risk.
SEC. 617. POLICY STATEMENT ON REDUCING UNNECESSARY AND WASTEFUL
SPENDING.
(a) Findings on Reducing Unnecessary and Wasteful Spending.--The
House finds the following:
(1) The Government Accountability Office (GAO) has
identified dozens of examples of waste, duplication, and
overlap in Federal programs.
(2) In its report to Congress on Government Efficiency and
Effectiveness, the Comptroller General has stated that
addressing the identified waste, duplication, and overlap in
Federal programs could ``lead to tens of billions of dollars of
additional savings''.
(3) From 2011 through 2014, the GAO issued reports showing
excessive duplication and redundancy in Federal programs
including--
(A) 209 Science, Technology, Engineering, and
Mathematics education programs in 13 different Federal
agencies at a cost of $3 billion annually;
(B) 200 overlapping Department of Justice grant
programs with an annual cost of $3.9 billion in 2010;
(C) 20 different Federal entities administer 160
housing programs and other forms of Federal assistance
for housing with a total cost of $170 billion in 2010;
(D) 17 separate Homeland Security preparedness
grant programs that spent $37 billion between fiscal
years 2002 and 2011;
(E) 14 grant and loan programs and 3 tax benefits
to reduce diesel emissions that obligated at least $1.4
billion between fiscal years 2007 and 2011;
(F) 94 separate initiatives run by 11 different
agencies to encourage ``green building'' in the private
sector;
(G) 23 agencies implemented approximately 670
renewable energy initiatives in fiscal year 2010 at a
cost of nearly $15 billion; and
(H) 18 separate domestic food and nutrition
assistance programs across 4 agencies at a cost of $90
billion in fiscal year 2010.
(4) The Government spends more than $80 billion each year
for approximately 1,400 information technology investments. GAO
has identified broad acquisition failures, waste, and
unnecessary duplication in the Government's information
technology infrastructure. Experts have estimated that
eliminating these problems could reduce costs by 25 percent or
$20 billion.
(5) GAO has identified strategic sourcing as a potential
source of spending reductions. In 2011, GAO estimated that
saving 10 percent of total Federal procurement could generate
more than $50 billion in savings annually.
(6) Federal agencies reported an estimated $125 billion in
improper payments in fiscal year 2014.
(7) Under clause 2 of rule XI of the Rules of the House of
Representatives, each standing committee must hold at least one
hearing during each 120-day period following its establishment
on waste, fraud, abuse, or mismanagement in Government
programs.
(b) Policy on Reducing Unnecessary and Wasteful Spending.--It is
the policy of this concurrent resolution that--
(1) each authorizing committee of the House should identify
duplicative programs and make recommendations as to which
programs should be reduced or eliminated in its annual Views
and Estimates submission to the Committee on the Budget;
(2) the Committee on the Budget should aggressively
investigate reports of improper payments; and
(3) Federal agencies should be held accountable for their
inability to reduce such inappropriate expenditures.
SEC. 618. POLICY STATEMENT ON DEFICIT REDUCTION THROUGH THE
CANCELLATION OF UNOBLIGATED BALANCES.
(a) Findings.--The House finds the following:
(1) According to the most recent estimate from the Office
of Management and Budget, Federal agencies held $896 billion in
unobligated balances at the end of fiscal year 2015.
(2) These funds comprise both discretionary appropriations
and authorizations of mandatory spending that remain available
for expenditure.
(3) In many cases, agencies are provided appropriations
that remain indefinitely available for obligation.
(4) The Congressional Budget Act of 1974 requires the
Office of Management and Budget to make funds available to
agencies for obligation and prohibits the administration from
withholding or cancelling unobligated funds unless approved by
an Act of Congress.
(b) Policy on Deficit Reduction Through the Cancellation of
Unobligated Balances.--It is the policy of this concurrent resolution
that--
(1) greater congressional oversight is required to review
and identify potential savings from canceling unobligated
balances of funds that are no longer needed;
(2) the appropriate committees in the House should identify
and review accounts with unobligated balances and rescind such
balances that would not impede or disrupt the fulfillment of
important Federal commitments;
(3) the House, with the assistance of the Government
Accountability Office, the Inspectors General, and appropriate
agencies, should continue to review unobligated balances and
identify savings for deficit reduction; and
(4) unobligated balances in dormant accounts should not be
used to finance increases in spending.
SEC. 619. POLICY STATEMENT ON RESPONSIBLE STEWARDSHIP OF TAXPAYER
DOLLARS.
(a) Findings.--The House finds the following:
(1) The budget of the House is $188 million less than it
was when the Republicans last attained the majority in 2011.
(2) The House has achieved significant savings by
consolidating operations and renegotiating contracts.
(b) Policy on Responsible Stewardship of Taxpayer Dollars.--It is
the policy of this concurrent resolution that--
(1) the House should be a model for the responsible
stewardship of taxpayer resources, and identify any savings
that can be achieved through greater productivity and
efficiency gains in the operation and maintenance of House
services and resources, including printing, conferences,
utilities, telecommunications, furniture, grounds maintenance,
postage, and rent;
(2) the House should review policies and procedures for the
acquisition of goods and services to eliminate unnecessary
spending;
(3) the Committee on House Administration should review the
policies pertaining to services provided to Members and
committees of the House, and identify ways to reduce any
subsidies paid for the operation of the House gym, barbershop,
salon, and the House dining room;
(4) no taxpayer funds should be used to purchase first
class airfare or to lease corporate jets for Members of
Congress; and
(5) retirement benefits for Members of Congress should not
include free, taxpayer-funded health care for life.
SEC. 620. POLICY STATEMENT ON EXPENDITURES FROM AGENCY FEES AND
SPENDING.
(a) Findings.--The House finds the following:
(1) A number of Federal agencies and organizations have
permanent authority to collect and spend fees and other
offsetting collections.
(2) The Office of Management and Budget estimated the total
amount of offsetting fees and offsetting collections to be $525
billion in fiscal year 2016.
(3) Agency budget justifications are, in some cases, not
fully transparent about the amount of program activity funded
through offsetting collections or fees. This lack of
transparency prevents effective and accountable Government.
(b) Policy on Agency Fees and Spending.--It is the policy of this
concurrent resolution that Congress should reassert its constitutional
prerogative to control spending and conduct oversight. Congress should
subject all agency fees received from the public to annual
appropriations or authorization legislation, except for such fees that
are for business-like activities or necessary to fund current
operations.
SEC. 621. POLICY STATEMENT ON BORDER SECURITY.
(a) Findings on Border Security.--The House finds the following:
(1) In fiscal year 2015, the United States Customs and
Border Protection apprehended 337,117 persons crossing our
international borders illegally between the ports of entry.
There is no statistical information to determine the number of
persons who were not apprehended and entered the country
illegally.
(2) The Government Accountability Office has reported that
while the number of apprehensions provides a proxy for the flow
of illegal migration, it is not a suitable measure of border
security effectiveness.
(3) The Department of Homeland Security stopped reporting
miles of the border under operational control in 2011, but has
failed to replace that measure with an alternative, or other
reliable indicators that measure border security effectiveness.
(b) Policy on Border Security.--It is the policy of this concurrent
resolution that Congress should pass legislation bolstering our border
security by--
(1) installing technology along the southern and northern
borders of the U.S., including tower-based surveillance,
subterranean detection, radar surveillance, unmanned aerial
vehicles, and other resources in order to gain a full
understanding of the threat and vulnerabilities along the
border;
(2) constructing new fencing and replace ineffective
fencing and barriers, maintain or build vehicle access roads,
and establish forward operating bases along the southern
border; and
(3) increasing the current levels of U.S. Customs and
Border Protection Officers and U.S. Border Patrol Agents.
SEC. 622. POLICY STATEMENT ON PREVENTING THE CLOSURE OF THE GUANTANAMO
BAY DETENTION FACILITY.
(a) Findings.--The House finds the following:
(1) The Guantanamo Bay detention facility is a critical
tool in America's continuing fight against terrorism.
(2) Of the 653 Guantanamo Bay detainees that have left the
facility, 117 (17.9 percent) are ``confirmed'' and 79 (12.1
percent) are ``suspected of reengaging'' in ``terrorist or
insurgent activities'' according to the latest unclassified
report issued in September 2015 by the Office of the Director
of National Intelligence.
(3) President Obama's support of closing the Guantanamo Bay
detention facility would significantly increase risk to our
national security.
(b) Policy on Preventing the Closure of the Guantanamo Bay
Detention Facility.--This concurrent resolution supports policies,
consistent with the National Defense Authorization Act for Fiscal Year
2016 (Public Law 114-92), that would prevent the--
(1) closure of the Guantanamo Bay detention facility;
(2) modifications of facilities in the United States to
house Guantanamo Bay detainees; and
(3) transfer or release of detainees to certain countries.
SEC. 623. POLICY STATEMENT ON REFUGEES FROM CONFLICT ZONES.
(a) Findings.--The House finds the following:
(1) Since the Syrian civil war broke out in March 2011, an
estimated 4.6 million Syrians have fled the country, with
approximately 500,000 attempting to seek asylum in Europe or
elsewhere in the West, including the United States.
(2) According to the House Committee on Homeland Security
report entitled Syrian Refugee Flows: Security Risks and
Counterterrorism Challenges, ``the administration proposal to
resettle Syrian refugees in the United States will have limited
impact on alleviating the refugee crisis; however, it could
have serious ramifications for U.S. homeland security.''.
(3) In response to a letter from chair Michael McCaul of
the House Committee on Homeland Security, the National
Counterterrorism Center stated that, ``the refugee system, like
all immigration programs, is vulnerable to exploitation from
extremist groups seeking to send operatives to the West.''.
(4) In 2011, the FBI arrested two Kentucky-based Iraqi
refugees attempting to send weapons and explosives from
Kentucky to Iraq and conspiring to commit terrorism while in
Iraq. It was later discovered that a flaw in background
screening of Iraqi refugees allowed these two Al Qaeda-linked
terrorists to settle in Kentucky.
(5) On November 13, 2015, the Islamic State of Iraq and
Syria (ISIS) launched a terrorist attack targeting civilians in
Paris, killing at least 129 people, including one American. At
least one of the attackers may have infiltrated France using
the cover of the unprecedented Syrian refugee flow into Europe.
(b) Policy on Refugee Screening and Resettlement.--It is the policy
of this concurrent resolution that the United States should suspend
admission of refugees from such high-risk areas as Syria and Iraq until
it can ensure that terrorists cannot exploit its refugee resettlement
programs and vetting processes. While the United States should continue
its proud tradition of refugee resettlement, it should make protecting
Americans its highest priority before resettling additional refugees.
SEC. 624. POLICY STATEMENT ON MOVING THE UNITED STATES POSTAL SERVICE
ON BUDGET.
(a) Findings.--The House finds the following:
(1) The President's Commission on Budget Concepts
recommends that the budget should ``as a general rule, be
comprehensive of the full range of Federal activity''.
(2) The Omnibus Reconciliation Act of 1989 (Public Law 101-
239) moved the United States Postal Service (USPS) off budget
and exempted it from sequestration.
(3) The USPS has a direct effect on the fiscal posture of
the Government, through--
(A) the receipt of direct appropriations of $96
million in fiscal year 2016;
(B) congressional mandates such as requirements for
mail delivery service schedules;
(C) incurring $15 billion in debt from the
Treasury, the maximum permitted by law;
(D) continued operating deficits since 2007;
(E) defaulting on its statutory obligation to
prefund health care benefits for future retirees; and
(F) carrying $125 billion in total unfunded
liabilities with no foreseeable pathway of funding
these liabilities under current law.
(b) Policy on Moving the USPS on Budget.--It is the policy of this
concurrent resolution that all receipts and disbursements of the USPS
should be included in the congressional budget and the budget of the
Government.
SEC. 625. POLICY STATEMENT ON BUDGET ENFORCEMENT.
It is the policy of this concurrent resolution that the House
should--
(1) adopt an annual budget resolution before spending and
tax legislation is considered in either House of Congress;
(2) assess measures for timely compliance with budget rules
in the House;
(3) pass legislation to strengthen enforcement of the
budget resolution;
(4) comply with the discretionary spending limits set forth
in the Balanced Budget and Emergency Deficit Control Act of
1985;
(5) prevent the use of accounting gimmicks to offset higher
spending;
(6) modify scoring conventions to encourage the
commercialization of Government activities that can best be
provided by the private sector; and
(7) discourage the use of savings identified in the budget
resolution as offsets for spending or tax legislation.
SEC. 626. POLICY STATEMENT ON UNAUTHORIZED APPROPRIATIONS.
(a) Findings.--The House finds the following:
(1) Article I of the Constitution vests all legislative
power in the Congress.
(2) Central to the legislative powers of Congress is the
authorization of appropriations necessary to execute the laws
that establish agencies and programs and impose obligations.
(3) Clause 2 of rule XXI of the Rules of the House of
Representatives prohibits the consideration of appropriations
measures that provide appropriations for unauthorized programs.
(4) More than $310 billion has been appropriated for
unauthorized programs in fiscal year 2016, spanning 256
separate laws.
(5) Agencies such as the Department of State have not been
authorized for 14 years.
(b) Policy on Unauthorized Appropriations.--In the House, it is the
policy of this concurrent resolution that rules relating to
unauthorized appropriations should be reviewed and reformed to ensure
that unauthorized programs are either reauthorized, reformed, or
terminated.
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