Budget Watch

A newsletter covering budget reform and the latest news and views on the federal budget, published by The National Center for Public Policy Research, 501 Capitol Court, N.E., Washington, D.C. 20002 (202) 543-4110, Fax (202) 543-5975, and the Small Business Survival Foundation, 1320 18th St. NW, Washington, D.C. 20036 (202) 785-0238, Fax (202) 822-8118.

Issue # 19 - November 15, 1995 * David A. Ridenour and Karen Kerrigan, Editors

The Budget Stalemate: Update on Furlough of Non-Essential Workers

President Declares Solidarity With Seniors While Preparing to Raid Pension Trust Funds

At the very time President Clinton was portraying himself as a defender of America's seniors by vowing to reject any stop-gap spending measure or debt ceiling extension bill that "cuts" Medicare, his Secretary of the Treasury, Robert Rubin, was making plans to raid the $350 billion Civil Service Retirement and Disability fund and a $21 billion federal government employees retirement investment fund to avoid default on obligations due this week. So much for concern for the elderly -- or, for that matter, the furloughed federal workers whose retirement funds the Administration will be raiding.

And so much for the facts: Contrary to claims made by the President, Congress' seven-year plan to balance the budget does not cut Medicare benefits -- it actually increases them. It also does not -- as the President would have the public believe -- massively increase the Medicare Part B premiums. Under the Continuing Resolution (CR), beginning January 1, Medicare Part B would be frozen at 31.5% of program costs rather than decreasing them (under current law) to 25% of the total costs. According to most Medicare experts, dropping the premium would be irresponsible, as the program is going bankrupt. The premium freeze would translate into a $7 monthly premium "increase" (or about $5-$6 if indexed to inflation) -- a "price" most seniors seem willing to pay to save Medicare and the country from bankruptcy. Even the AARP is uncharacteristically muted on the measure.

There have been other mischaracterizations of the budget stalemate as well: A. The President and his supporters have implied that Republicans broke with tradition by adding extraneous provisions to the CR and the Debt Ceiling Extension bill in an underhanded attempt to push through their agenda. Congress has a long tradition of sending CRs to the President that aren't "clean." Funding restrictions attached to a CR approved in 1974 essentially ended the Vietnam War. B. Congress has been accused of cutting vital programs to pay for a tax cut for the rich. But according to a recent study by the Joint Economic Committee, 36.8% of taxpayers reporting capital gains income last year had incomes of $30,000 or less and 74.4% had incomes of $75,000 or less. C. The President asserts that he is committed to balancing the budget, but that he wants to do so in ten years rather than seven to make cuts less draconian. But according to the Congressional Budget Office, the President's plan wouldn't balance the budget 10 years or any time in the near future.

It's time to stop the deception. It's time to balance the budget.

Top Five Fallacies of the Budget Stand-Off

  1. Fallacy: The President supports a balanced budget, but wants to do it in 10 years rather than 7. Fact: Under the President's budget, the annual deficit would still be $200 billion 10 years from now.
  2. Fallacy: By refusing to approve the Continuing Resolution and Debt Extension bills, the President is standing up for the elderly. Fact: By so doing, he must raid federal pension funds to avert government default. Somuch for concern for the elderly.
  3. Fallacy: Congress is resorting to a unprecedented, unfair tactic to impose their priorities on the public. Fact: In 1974, Congress used a Continuing Resolution to end the Vietnam War.
  4. Fallacy: Republicans in Congress are attempting to significantly raise Medicare premiumsfor the elderly. Fact: The GOP proposal would effectively freeze the proportion of Medicare costs seniors must pay out-of-pocket.
  5. Fallacy: Congress is cutting programs to pay for tax cuts for the rich. Fact: All Americans win under the tax cuts, according to the Joint Economic Committee.

Hill Watch: Update on Budgetary Issues on Capitol Hill

House to Take Up Measure to Curb Lobbying by Federal Officials --Tomorrow, November 16

The House of Representatives may consider a proposed amendment to the Lobby Disclosure Act of 1995 (H.R. 2564) that would sharply curtail lobbying activities by federal agencies as early as tomorrow, November 16. The amendment, the Federal Agency Anti-Lobbying Amendment, sponsored by Representative William Clinger (R-PA), Chairman of the Government Reform and Oversight Committee, would bar agencies from all activities intended to promote public support or opposition to legislation, including such activities as preparing kits, pamphlets, booklets, and speeches. The measure would also require government officials that violate these anti-lobbying rules to reimburse the government. Chairman Clinger is introducing the amendment to respond to increasing incidences of lobbying by Executive branch employees. For example, employees of the Department of Veterans Affairs received a note from Secretary Jesse Brown urging opposition to the House budget plan. Balanced budget advocates are urging calls to Capitol Hill tomorrow in support of the Clinger Amendment.

Small Business Survival Foundation
1320 18th Street, N.W.
Washington, D.C. 20036
(202)785-0238
Fax: (202)822-8118

The National Center for Public Policy Research
501 Capitol Ct NE
Washington, D.C. 20002
(202) 543-4110
Fax: (202)543-5975
E-mail [email protected]

Nothing written here should be construed as an attempt to help or hinder legislation before the U.S. Congress.

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