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Washington, D.C.

The task force met, pursuant to call, at 10:20 a.m., in room H313, the Capitol, Hon. Anthony C. Beilenson (chairman of the task force) presiding.

Present: Representatives Beilenson, Bonior, Hall, Jones, Panetta, Rhodes, and Regula.

OPENING STATEMENT OF HON. ANTHONY C. BEILENSON, CHAIRMAN OF THE TASK FORCE ON THE BUDGET PROCESS Mr. BEILENSON. Today the Task Force on the Budget Process is holding the first of a series of hearings on a subject which affects nearly all the legislative activity here in Congress-the budget process. Additional hearings are scheduled for Friday, September 17; Thursday, September 23; and Wednesday, September 29, during which time we hope to further our understanding of the issues involved in this broad and complex topic.

We appreciate the fact that so many of our colleagues are taking the time during these busy last days of the session to share with us their views on various budgeting issues and their ideas about how some specific problems might be resolved. We are eager to hear from our witnesses but, before we do, I would like to talk briefly about the purpose of our task force and the work we have been doing up to this point.

In March of this year, Rules Committee Chairman Richard Bolling appointed six of us on the Rules Committee to review some of the problems that have emerged since Congress adopted the Congressional Budget and Impoundment Control Act in 1974, and to make recommendations to the full committee.

In addition, Chairman Bolling also asked nine members from Budget and other committees to serve on the task force so that we could study the subject from a broader perspective than would be possible with only Rules Committee members. Although Rules has jurisdiction over the Budget Act, other committees, especially Budget, have the bulk of responsibility for carrying out the provisions of the act and, as a result, their members are more familiar with some of the specific problems involved in the budget process than we are on the Rules Committee.

Our task force has operated as an informal working group. We have spent the last few months holding roundtable work sessions


at which we took a careful look at budget process problems and discussed the merits and drawbacks of various proposals to change the way in which Congress develops its budgetary, spending, and revenue legislation.

However, we have not yet reached any conclusions about what changes, if any, should be made. In fact, we wanted to wait until we heard from our colleagues before making any decisions.

With these hearings this month, we hope to learn how other Members of Congress feel about the process and to gain new insight into issues we have found difficult to resolve. For instance, is there a way to lessen our growing need to resort to continuing resolutions to fund a large portion of Government activities? Can we process legislation in a more timely manner without impeding the careful deliberation needed to produce well-balanced and wellthought-out legislation? Can we better enforce our budget decisions without hindering the flexibility we need to deal with a constantly changing economy?

We recognize that the budgeting issues before us do not lend themselves to simple resolution. No process, regardless of how it looks on paper, will work well unless Congress has the will to make it work. Nevertheless, we hope to find ways to improve the process, and hope that these hearings will help us to reach that goal.

Does anyone else care to make a comment at the beginning? He or she is certainly welcome to do so. Mr. Jones?

Mr. JONES. I would just make a short comment, Mr. Chairman. I want to commend you for the thorough effort that you and the staff have made in this area so far. Yesterday in the Budget Committee, as you know, they had hearings on the combined subjects of the budget process and the constitutional amendment to balance the budget. Those were helpful hearings, and our members have been provided helpful information. I congratulate you on holding these hearings.

Mr. BEILENSON. Thank you, Mr. Jones. Perhaps whatever conclusions your group reaches, you will share with us.

Our first witness today is Hon. Norman Mineta, a Representative from California, member of the Budget Committee and a good friend of all of us. Mr. Mineta?


Mr. MINETA. Mr. Chairman, I want to thank you very, very much for the leadership that you are showing by undertaking this very difficult task of examining the Budget Act as the chairperson of this Rules Committee Task Force on the Budget Process.

My full statement is before you, and I would request that that be made a part of the record.

Mr. BEILENSON. Without objection, the entire statement will be part of the record.

Mr. MINETA. As you are very well aware, I have a great deal of interest in the budget process. As chairman of the Budget Committee Task Force on the Budget Process for the past 4 years, I have conducted several oversight hearings on the Budget Act, and I ap

preciate this opportunity to present my proposals for reforming the Budget Act.

Since its inception in 1975, the budget process has been faced with a series of challenges, but none of these challenges were as difficult as those presented in the past 2 years. In February 1981, President Reagan proposed a broad economic initiative which included massive cutbacks in taxes and Federal spending.

The administration unexpectedly used the budget process to achieve not only these economic goals but also to implement a series of philosophical changes. Despite what I would consider this misuse, the somewhat battered congressional budget process did manage to survive the trials of the past 2 years, and I am going to work to make sure that it continues to survive.

This country faces unprecedented large budget deficits for the next several years, and Congress will be forced to make extraordinarily difficult budget choices. If used correctly, the budget process can assist us in making these difficult choices and in producing a suitable Federal budget.

In my view, the budget process does work. Congress has adhered to the basic outline of the Budget Act and has used its inherent flexibility to adopt new procedures to deal with emerging problems. The objectives behind enactment of the Budget Act were quite diverse, and criticisms of the act have resulted because the different expectations of Members and interest groups have not been met. Self-discipline is always uncomfortable. Ordering priorities is difficult, and saying "No" is unpopular. But the alternative of uncontrolled Federal spending is vastly worse. The budget process is necessary. This country cannot afford to return to the practice of uncontrollable Federal spending.

I believe that Congress has made remarkable progress in the way it acts on the Federal budget. The budget process is now an accepted part of the congressional legislative process. By most assessments, the budget process has been very successful.

Before the adoption of the Budget and Impoundment Control Act of 1974, Congress was ill equipped to take an overall look at the economic environment. The only budget was the President's budget and it served as a basis for all fiscal policy discussion and for some legislative action.

Under the Budget Act, Congress has a set of procedures which provide order, guidance, and information in assessing the relative merits of Federal spending with the overall needs of the economy. To this end, the budget process has basically proven to be a procedural and informational success. It is now, however, being treated as a fiscal policy tool, and there is some dissatisfaction that Congress is not exerting effective budgetary control. Many of those dissatisfied with the budget process have claimed that adopting a constitutional amendment to balance the budget will resolve our fiscal problems.

I believe that to achieve fiscal and budgetary control Congress needs a strong and enforceable budget process, not a politically inspired constitutional amendment that has no enforcement mechanisms and no provisions for economic stability.

The budget process is still evolving as a fiscal policy tool, and after almost 8 years of experience with the budget process, the

time is right for examining it and for considering ways in which it might be strengthened and improved.

Congress should incorporate changes that experience has shown are needed to improve the process, and steps should be taken to expand the coverage of the Budget Act. The Congress has avoided amending the Budget Act for fear of opening up Pandora's box.

The fear is that opening up the act for amendments would allow Members who have been unhappy with the budget process to damage or even dismantle the Budget Act. Until now, I also have refrained from introducing comprehensive legislation to amend the Budget Act. The budget process has been flexible enough to meet the increasing demands placed upon it.

Many changes to the budget process have been tried on a trial basis through provisions of section 301(b)(2) of the Budget Act. However, given the current balanced budget craze, I fear that if the Budget Act is not amended carefully in order to strengthen and improve the budget process, we may see the Budget Act ignored and possibly replaced with a toothless balanced budget constitutional amendment.

After years of review and study of the budget process through my work as chairman of the Budget Process Task Force, and more importantly, after 6 years of experience with the budget process as a member of the Budget Committee, I have several recommendations for improving and expanding the Budget Act. In the next few weeks, I plan to introduce legislation that amends the Budget Act to incorporate these recommendations including:

Binding first budget resolution: Make the budget aggregates of the first budget resolution binding and eliminate the need for a second budget resolution unless significant change occurs in the economic outlook or unforeseen needs arise for legislative action.

Reconciliation in the first resolution: If reconciliation is needed, it should be used in the first budget resolution to allow committees sufficient time to achieve legislative savings. In addition, procedures for using reconciliation need to be established.

Appropriations process reform: On September 15 the Appropriation Committees begin to work on an omnibus appropriations bill which contains the following: One, the appropriations bills reported by the committees but not enacted by the Congress; two, the appropriations bills not reported by the Appropriations Committees; and three, the appropriation bills which are held at the desk because they exceed their committee 302(b) allocations.

Credit budget: One of the most important steps Congress can take to improve the Budget Act would be to make the credit budget a required part of the budget resolution.

Off-budget agencies: To improve the coverage of the Budget Act, off-budget agencies should be made a part of the unified budget.

Binding multiyear budget totals: Expand Congress' planning horizon by making the outyear targets in the budget resolution binding.

Capital budget: To allocate scarce funds for our Nation's infrastructure in the most efficient way possible, Congress needs to provide a capital budget providing information on the condition of existing infrastructure and estimates of future infrastructure needs.

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