Congress Takes First Steps in March Toward Spending-Cut Goal

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The Republican-led 104th Congress continued its march toward spending cuts last week with a host of hearings on 1995 budget revisions, cost-saving program changes, and a proposed balanced-budget amendment to the U.S. Constitution.

But resistance from Democrats and some moderate Republicans forced G.O.P. leaders to delay floor action on the balanced-budget measure until later this month.

In his first appearance as the chairman of the House Appropriations Committee, Rep. Robert L. Livingston, R-La., produced a 24-inch machete to dramatize his desire to cut the appropriations for fiscal 1995 that Congress approved last year.

"The goal is to find very specific, programmatic cuts that make sense, to create a government which is lean, but not mean," he said.

Asked about rumors that the committee was aiming to cut 25 percent of the current fiscal year's discretionary budget, he said: "Don't believe any rumors unless you hear them from me."

Education Department rescissions are on the agenda for a Jan. 18 hearing of the panel's Labor, Health and Human Services, and Education Subcommittee. Secretary of Education Richard W. Riley is slated to testify.

"I think the Secretary will face philosophical questions on why the department exists," the subcommittee's chairman, Rep. John Edward Porter, R-Ill., said in an interview. "It will be top to bottom...what can be eliminated or block-granted."

On the Senate side, the Budget Committee canceled a hearing late last week on "program terminations."

Multiple Fronts

Meanwhile, the House Budget Committee organized work groups to draft sections of a so-called reconciliation bill, which would reduce spending with changes in program rules to help pay for tax cuts proposed in the House G.O.P.'s "Contract With America."

A Republican aide said the rescission and reconciliation plans will be sent to the House floor in an omnibus bill early this spring. But the Senate appears to be moving at a slower pace.

"They can pass resolutions till they are blue in the face, but until the Senate passes something too, they don't mean a thing," a Democratic Senate aide said.

Lawmakers on various subcommittees of the House Judiciary, Budget, and Ways and Means committees also held multiple hearings last week on the balanced-budget amendment.

Some analysts have estimated that such an amendment would require some $1.36 trillion in domestic-spending cuts over seven years. Only Social Security would escape the fiscal scalpel under broad outlines released by the G.O.P. leadership.

Democrats have threatened an all-out effort to sink the amendment--which requires two-thirds approval in both houses of Congress before going to the states for ratification--unless proponents detail how they intend to comply with it.

"When we say, 'What gets cut, and whose belt gets tightened?' they change the topic altogether," said Rep. Richard A. Gephardt, D-Mo., the House minority leader.

Another sticky issue is language in the Contract With America version of a balanced-budget amendment that would prohibit Congress from increasing taxes without the support of a three-fifths majority of the House and the Senate.

Moderates Rebel

Rep. Charles W. Stenholm, D-Texas, a fiscal conservative who supports a balanced-budget amendment, told the House Subcommittee on the Constitution that the supermajority requirement would limit flexibility to manage the nation's finances.

Faced with opposition to the provision from moderate Republicans as well, G.O.P. leaders in both houses delayed floor action and said lawmakers will be able to vote to delete it.

Meanwhile, although a balanced-budget amendment has the support of many Republican governors, a recent study prepared for the National Governors' Association by the Treasury Department warns state leaders that they could face a massive loss of federal money if one passes.

For example, the study said that in California alone, $7.7 billion in federal grants could be lost by 2002. In order to foot the bill for those services--in such areas as transporation, Medicaid, welfare, and education--California would have to impose a 9.2 percent tax increase, the study maintains.

That is the kind of dire prediction that has the education community worried about the prospects for federal school programs under a balanced-budget mandate.

Republican leaders have argued that the likely impact of such an amendment have been exaggerated by Democrats, and note that a separate piece of legislation under consideration by Congress would limit federal lawmakers' ability to pass on costs to the states by making it harder to impose federal mandates without paying for them. (See related story)

Vol. 14, Issue 17

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