[House Report 106-862]
[From the U.S. Government Publishing Office]
106th Congress Rept. 106-862
HOUSE OF REPRESENTATIVES
2d Session Part 1
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DEBT RELIEF LOCK-BOX RECONCILIATION ACT FOR FISCAL YEAR 2001
_______
September 18, 2000.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Archer, from the Committee on Ways and Means, submitted the
following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 5173]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 5173) to provide for reconciliation pursuant to
sections 103(b)(2) and 213(b)(2)(C) of the concurrent
resolution on the budget for fiscal year 2001 to reduce the
public debt and to decrease the statutory limit on the public
debt, having considered the same, report favorably thereon with
an amendment and recommend that the bill as amended do pass.
CONTENTS
Page
I. Summary and Background...........................................5
A. Purpose and Summary................................. 5
B. Background and Need for Legislation................. 5
C. Legislative History................................. 6
II. Explanation of the Bill..........................................6
A. Present Law......................................... 6
B. Reasons for Change.................................. 7
C. Explanation of Provisions........................... 7
III. Votes of the Committee...........................................9
IV. Budget Effects of the Bill......................................10
V. Other Matters To Be Discussed Under the Rules of the House......11
VI. Changes in Existing Law Made by the Bill, as Reported...........12
VII. Additional Views................................................16
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Debt Relief Lock-box Reconciliation
Act for Fiscal Year 2001''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--The Congress finds that--
(1) fiscal discipline, resulting from the Balanced Budget Act
of 1997, and strong economic growth have ended decades of
deficit spending and have produced budget surpluses without
using the social security surplus;
(2) fiscal pressures will mount in the future as the aging of
the population increases budget obligations;
(3) until Congress and the President agree to legislation
that saves social security and medicare, the social security
and medicare surpluses should be used to reduce the debt held
by the public;
(4) until Congress and the President agree on significant tax
reductions, amounts dedicated for that purpose shall be used to
reduce the debt held by the public;
(5) strengthening the Government's fiscal position through
public debt reduction increases national savings, promotes
economic growth, reduces interest costs, and is a constructive
way to prepare for the Government's future budget obligations;
and
(6) it is fiscally responsible and in the long-term national
economic interest to use a portion of the nonsocial security
and nonmedicare surpluses to reduce the debt held by the
public.
(b) Purpose.--It is the purpose of this Act to--
(1) reduce the debt held by the public by $240,000,000,000 in
fiscal year 2001 with the goal of eliminating this debt by
2012;
(2) decrease the statutory limit on the public debt; and
(3) ensure that the social security and hospital insurance
trust funds shall not be used for other purposes.
TITLE I--DEBT REDUCTION LOCK-BOX
SEC. 101. ESTABLISHMENT OF PUBLIC DEBT REDUCTION PAYMENT ACCOUNT.
(a) In General.--Subchapter I of chapter 31 of title 31, United
States Code, is amended by adding at the end the following new section:
``Sec. 3114. Public debt reduction payment account
``(a) There is established in the Treasury of the United States an
account to be known as the Public Debt Reduction Payment Account
(hereinafter in this section referred to as the `account').
``(b) The Secretary of the Treasury shall use amounts in the account
to pay at maturity, or to redeem or buy before maturity, any obligation
of the Government held by the public and included in the public debt.
Any obligation which is paid, redeemed, or bought with amounts from the
account shall be canceled and retired and may not be reissued. Amounts
deposited in the account are appropriated and may only be expended to
carry out this section.
``(c) There is hereby appropriated into the account on October 1,
2000, or the date of enactment of this Act, whichever is later, out of
any money in the Treasury not otherwise appropriated, $42,000,000,000
for the fiscal year ending September 30, 2001. The funds appropriated
to this account shall remain available until expended.
``(d) The appropriation made under subsection (c) shall not be
considered direct spending for purposes of section 252 of Balanced
Budget and Emergency Deficit Control Act of 1985.
``(e) Establishment of and appropriations to the account shall not
affect trust fund transfers that may be authorized under any other
provision of law.
``(f) The Secretary of the Treasury and the Director of the Office of
Management and Budget shall each take such actions as may be necessary
to promptly carry out this section in accordance with sound debt
management policies.
``(g) Reducing the debt pursuant to this section shall not interfere
with the debt management policies or goals of the Secretary of the
Treasury.''.
(b) Conforming Amendment.--The chapter analysis for chapter 31 of
title 31, United States Code, is amended by inserting after the item
relating to section 3113 the following:
``3114. Public debt reduction payment account.''.
SEC. 102. REDUCTION OF STATUTORY LIMIT ON THE PUBLIC DEBT.
Section 3101(b) of title 31, United States Code, is amended by
inserting ``minus the amount appropriated into the Public Debt
Reduction Payment Account pursuant to section 3114(c)'' after
``$5,950,000,000,000''.
SEC. 103. OFF-BUDGET STATUS OF PUBLIC DEBT REDUCTION PAYMENT ACCOUNT.
Notwithstanding any other provision of law, the receipts and
disbursements of the Public Debt Reduction Payment Account established
by section 3114 of title 31, United States Code, shall not be counted
as new budget authority, outlays, receipts, or deficit or surplus for
purposes of--
(1) the budget of the United States Government as submitted
by the President,
(2) the congressional budget, or
(3) the Balanced Budget and Emergency Deficit Control Act of
1985.
SEC. 104. REMOVING PUBLIC DEBT REDUCTION PAYMENT ACCOUNT FROM BUDGET
PRONOUNCEMENTS.
(a) In General.--Any official statement issued by the Office of
Management and Budget, the Congressional Budget Office, or any other
agency or instrumentality of the Federal Government of surplus or
deficit totals of the budget of the United States Government as
submitted by the President or of the surplus or deficit totals of the
congressional budget, and any description of, or reference to, such
totals in any official publication or material issued by either of such
Offices or any other such agency or instrumentality, shall exclude the
outlays and receipts of the Public Debt Reduction Payment Account
established by section 3114 of title 31, United States Code.
(b) Separate Public Debt Reduction Payment Account Budget
Documents.--The excluded outlays and receipts of the Public Debt
Reduction Payment Account established by section 3114 of title 31,
United States Code, shall be submitted in separate budget documents.
SEC. 105. REPORTS TO CONGRESS.
(a) Reports of the Secretary of the Treasury.--(1) Within 30 days
after the appropriation is deposited into the Public Debt Reduction
Payment Account under section 3114 of title 31, United States Code, the
Secretary of the Treasury shall submit a report to the Committee on
Ways and Means of the House of Representatives and the Committee on
Finance of the Senate confirming that such account has been established
and the amount and date of such deposit. Such report shall also include
a description of the Secretary's plan for using such money to reduce
debt held by the public.
(2) Not later than October 31, 2002, the Secretary of the Treasury
shall submit a report to the Committee on Ways and Means of the House
of Representatives and the Committee on Finance of the Senate setting
forth the amount of money deposited into the Public Debt Reduction
Payment Account, the amount of debt held by the public that was
reduced, and a description of the actual debt instruments that were
redeemed with such money.
(b) Report of the Comptroller General of the United States.--Not
later than November 15, 2002, the Comptroller General of the United
States shall submit a report to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the Senate
verifying all of the information set forth in the reports submitted
under subsection (a).
TITLE II--SOCIAL SECURITY AND MEDICARE LOCK-BOX
SEC. 201. PROTECTION OF SOCIAL SECURITY AND MEDICARE SURPLUSES.
(a) Protection of Social Security and Medicare Surpluses.--Section
201 of the concurrent resolution on the budget for fiscal year 2001 (H.
Con. Res. 290, 106th Congress) is amended as follows:
(1) In the section heading, by inserting ``AND MEDICARE''
before ``SURPLUSES''.
(2) By striking subsection (c) and inserting the following
new subsection:
``(c) Lock-box for Social Security and Hospital Insurance
Surpluses.--
``(1) Concurrent resolutions on the budget.--It shall not be
in order in the House of Representatives or the Senate to
consider any concurrent resolution on the budget, or conference
report thereon or amendment thereto, that would set forth a
surplus for any fiscal year that is less than the surplus of
the Federal Hospital Insurance Trust Fund for that fiscal year.
``(2) Subsequent legislation.--(A) Except as provided by
subparagraph (B), it shall not be in order in the House of
Representatives or the Senate to consider any bill, joint
resolution, amendment, motion, or conference report if--
``(i) the enactment of that bill or resolution as
reported;
``(ii) the adoption and enactment of that amendment;
or
``(iii) the enactment of that bill or resolution in
the form recommended in that conference report,
would cause the on-budget surplus for any fiscal year to be
less than the projected surplus of the Federal Hospital
Insurance Trust Fund (as assumed in the most recently agreed to
concurrent resolution on the budget) for that fiscal year or
increase the amount by which the on-budget surplus for any
fiscal year would be less than such trust fund surplus for that
fiscal year.
``(B) Subparagraph (A) shall not apply to social security
reform legislation or medicare reform legislation.''.
(3) By redesignating subsections (e) and (f) as subsections
(g) and (h), respectively, and inserting after subsection (d)
the following new subsections:
``(e) Content of Concurrent Resolution on the Budget.--The concurrent
resolution on the budget for each fiscal year shall set forth
appropriate levels for the fiscal year beginning on October 1 of such
year and for at least each of the 4 ensuing fiscal years of the surplus
or deficit in the Federal Hospital Insurance Trust Fund.
``(f) Definitions.--As used in this section:
``(1) The term `medicare reform legislation' means a bill or
a joint resolution to save Medicare that includes a provision
stating the following: `For purposes of section 201(c) of the
concurrent resolution on the budget for fiscal year 2001, this
Act constitutes medicare reform legislation.'.
``(2) The term `social security reform legislation' means a
bill or a joint resolution to save social security that
includes a provision stating the following: `For purposes of
section 201(c) of the concurrent resolution on the budget for
fiscal year 2001, this Act constitutes social security reform
legislation.'.''.
(4) In the first sentence of subsection (h) (as
redesignated), by striking ``(1)''.
(5) At the end, by adding the following new subsection:
``(i) Effective Date.--This section shall cease to have any force or
effect upon the enactment of social security reform legislation and
medicare reform legislation.''.
(b) Protection of Social Security and Medicare Surpluses.--(1) If the
budget of the United States Government submitted by the President under
section 1105(a) of title 31, United States Code, recommends an on-
budget surplus for any fiscal year that is less than the surplus of the
Federal Hospital Insurance Trust Fund for that fiscal year, then it
shall include proposed legislative language for social security reform
legislation or medicare reform legislation.
(2) Paragraph (1) shall cease to have any force or effect upon the
enactment of social security reform legislation and medicare reform
legislation as defined by section 201(f) of the concurrent resolution
on the budget for fiscal year 2001 (H. Con. Res. 290, 106th Congress).
(c) Conforming Amendment.--The item relating to section 201 in the
table of contents set forth in section 1(b) of the concurrent
resolution on the budget for fiscal year 2001 (H. Con. Res. 290, 106th
Congress) is amended to read as follows:
``Sec. 201. Protection of social security and medicare surpluses.''.
SEC. 202. REMOVING SOCIAL SECURITY FROM BUDGET PRONOUNCEMENTS.
(a) In General.--Any official statement issued by the Office of
Management and Budget, the Congressional Budget Office, or any other
agency or instrumentality of the Federal Government of surplus or
deficit totals of the budget of the United States Government as
submitted by the President or of the surplus or deficit totals of the
congressional budget, and any description of, or reference to, such
totals in any official publication or material issued by either of such
Offices or any other such agency or instrumentality, shall exclude the
outlays and receipts of the old-age, survivors, and disability
insurance program under title II of the Social Security Act (including
the Federal Old-Age and Survivors Insurance Trust Fund and the Federal
Disability Insurance Trust Fund) and the related provisions of the
Internal Revenue Code of 1986.
(b) Separate Social Security Budget Documents.--The excluded outlays
and receipts of the old-age, survivors, and disability insurance
program under title II of the Social Security Act shall be submitted in
separate Social Security budget documents.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 5173, the Debt Relief Lock-Box
Reconciliation Act for Fiscal Year 2001, provides for
reconciliation pursuant to sections 103(b)(2) and 213(b)(2)(C)
of the concurrent resolution on the budget for fiscal year 2001
to reduce the publicly held debt and to decrease the statutory
limit on the public debt.
The purpose of H.R. 5173 is to reduce the publicly held
debt by $240 billion in fiscal year 2001 and to protect the
projected Social Security and Medicare Hospital Insurance Trust
Fund surpluses.
The bill establishes an off-budget account in the U.S.
Treasury, called the Public Debt Reduction Payment Account and
deposits $42 billion of the projected on-budget surplus in the
account in fiscal year 2001. Funds in the account could be used
only to reduce the debt held by the public. H.R. 5173 would
reduce the statutory debt limit by $42 billion. The reduction
in the debt limit emphasizes Congress's intent to reverse years
of increasing debt and rising debt limits. The bill also would
require the Secretary of the Treasury and U.S. Comptroller
General of the United States to report to Congress on how the
funds were used to reduce the debt.
To protect fiscal year 2001 surpluses that are projected in
the Social Security and the Medicare Hospital Insurance Trust
Funds, the bill provides a point of order in the House of
Representatives or the Senate against any bill, amendment, or
resolution that would reduce the Medicare Hospital Insurance
Trust Fund's surplus in any fiscal year. An exception is made
for legislation that saves Social Security or Medicare.
B. Background and Need for Legislation
The gross federal debt consists of debt held by the public
and debt held by government accounts, including the Social
Security trust funds. Almost all of this debt is subject to a
``debt limit,'' which was first established in statute in 1917.
This limit represents the maximum amount the U.S. Treasury may
borrow without receiving additional authority from Congress.
The current statutory debt limit is $5.95 trillion. The
outstanding debt subject to the limit was $5.568 trillion at
the end of 1999. Of this amount, $3.633 trillion was held by
the public, and $1.973 trillion was held by government
accounts. Although the debt held by the public has decreased in
recent years, the gross federal debt continues to rise because
of increases in the government-held debt.
Under present law, any budget surpluses remaining at the
end of the fiscal year are used to reduce the debt held by the
public. Thus, spending throughout the fiscal year limits the
amount available for public debt reduction. Present law
includes several mechanisms to limit spending, such as pay-as-
you-go scorekeeping rules and discretionary spending limits.
Although these tools have effectively controlled spending in
the past, they have been less effective in controlling spending
during an era of budget surpluses. The current legislation is
needed to help prevent additional surpluses from being spent as
they arise, making it more likely that these surpluses will be
used to reduce the debt held by the public. Increased efforts
to limit spending are particularly important as estimates of
the on-budget surplus continue to increase.
Under present law, surpluses in the Social Security and
Medicare Trust Funds are available to pay for government
operating expenses not related to the Social Security and
Medicare programs. The current legislation will make it more
difficult to use these surpluses to finance other government
expenses, making it more likely that Congress will balance the
budget without using the Social Security and Medicare
surpluses. As a result, these surpluses will automatically be
used to pay down the public debt until legislation is passed to
save Social Security and Medicare.
C. Legislative History
The bill, H.R. 5173, was introduced by Mr. Fletcher et al.
on September 14, 2000. The Committee marked up the bill on
September 14, 2000, and approved the bill with a Chairman's
amendment in the nature of a substitute, by a rollcall vote of
33-0.
II. EXPLANATION OF THE BILL
A. Present Law
The public debt outstanding comprises the total face amount
or principal of marketable and non-marketable securities
currently outstanding. With the exception of certain debt,\1\
currently representing less than $100 billion, the Congress has
established a public debt limit that represents the maximum
amount of money the Federal Government is allowed to borrow
without receiving additional authority from the Congress. Debt
subject to the public debt limit generally includes debt owed
to the public that comprises all Federal securities held by
individuals, corporations, State and local governments, foreign
governments, and other foreign persons, and debt held by the
Federal Government that comprises Federal securities held by
Government trust funds, revolving funds, and special funds.
---------------------------------------------------------------------------
\1\ Debt not subject to the public debt limit includes unamortized
discount on Treasury bills and zero-coupon Treasury bonds, certain old
debt, held by the Federal Financing Bank, and certain guaranteed debt.
---------------------------------------------------------------------------
The statutory limit on the public debt currently is $5.95
trillion. It was set at this level in the Balanced Budget Act
of 1997 (P.L. 105-33), enacted into law on August 5, 1997.
With the approval of the President, the Secretary of the
Treasury may use money received from the sale of bonds or notes
of the United States and other money in the general fund of the
Treasury to make purchases, redemptions, or refunds of bonds,
notes, certificates of indebtedness, Treasury bills, or savings
certificates of the United States Government at or before
maturity of such instruments of indebtedness.
By June 1 of each year, the Secretary of the Treasury must
submit a report to the Congress regarding the Treasury's public
debt activities.
The Concurrent Resolution on the Budget for Fiscal Year
2001 requires that the House Committee on Ways and Means report
to the House a reconciliation bill that reduces the debt held
by the public for fiscal year 2001 (sec. 103(b)(2)). In
addition, the Concurrent Resolution permits adjustments in the
amount of debt reduction if the amount of the on-budget surplus
exceeds the on-budget surplus set forth in the Congressional
Budget Office's March 2000 budget and economic outlook.
B. Reasons for Change
The U.S. economy continues its healthy growth. As a result,
what were reasonable projections of the Federal Government's
surplus have been revised upwards. In particular, the non-
social security, non-Medicare (part A) portion of the Federal
budget is in surplus. Although government bookkeeping provides
that revenues unspent by the government by the close of a
fiscal year result in a reduction in debt held by the public,
the Committee believes the reduction of the debt held by the
public is a priority of the Congress and should not be left as
a residual after other policy initiatives. The Committee
believes the Congress should pro-actively set aside a portion
of the non-social security, non-Medicare surplus for this
purpose. Accordingly, the Committee believes that to help
enforce fiscal discipline $42 billion from the projected non-
Social Security and non-Medicare surpluses for fiscal year 2001
should be appropriated to a newly established account from
which the Secretary of the Treasury should draw funds to retire
debt held by the public.
The Committee also believes it is important to reduce the
statutory limit on the public debt to mark the progress the
Federal Government has made in maintaining fiscal discipline.
The bill also contains language directing the Secretary of
the Treasury and the Director of the OMB to use the money to
pay down the debt in a manner consistent with sound debt
management. In its management of the public debt, Treasury
generally adheres to three goals: (1) ensuring adequate cash
balances to the government can pay its day-to-day operating
expenses, (2) financing the debt at the lowest cost to
taxpayers, and (3) promoting efficient capital markets. The
bill provides Treasury with maximum flexibility in using the
funds to pay down the debt so that none of these goals are
compromised.
In addition to dedicating $42 billion of the projected on-
budget surplus for debt reduction, the Committee also believes
that the Social Security and Medicare Trust Fund surpluses
should be used to reduce the publicly-held debt until
legislation to save these programs is enacted. In the past,
these surpluses were used to finance government operating
expenses unrelated to Social Security and Medicare. However,
fiscal discipline and a strong economy have allowed Congress to
balance the budget without using the Social Security and
Medicare surpluses. The Committee believes that the Social
Security and Medicare surpluses should not be used to finance
other government operating expenses. Instead, these surpluses
should be used to pay down the publicly-held debt or to pay for
Social Security and Medicare reform.
C. Explanation of Provisions
Debt reduction lock-box
H.R. 5173 establishes an account in the Treasury to be
called the Public Debt Reduction Payment Account (``the
Account''). Under the bill, $42 billion is appropriated on the
later of October 1, 2000, or the date of enactment and
deposited into the Account from the General Fund for the 2001
fiscal year. Amounts appropriated to the Account may only be
expended to pay at maturity, or to redeem or buy before
maturity, any obligation of the Federal government held by the
public and included in the public debt. Any such obligation
paid, redeemed, or bought would be canceled and could not be
reissued.
The bill provides that the establishment of the Account and
the appropriation of funds to the Account do not affect trust
fund transfers that are authorized under any other provision of
the law.
The amounts appropriated to the Account will not be
considered direct spending for purposes of the Balanced Budget
and Emergency Deficit Control Act of 1985. In addition, the
bill provides that the Account has off-budget status for
purposes of the budget submitted by the President, the
Congressional budget, and the Balanced Budget and Emergency
Deficit Control Act of 1985.
The bill provides that any official statement regarding
surplus or deficit totals of the Federal Government issued by
the Office of Management and Budget, the Congressional Budget
Office, or any other agency of the Federal Government exclude
the outlays and receipts of the Account. The outlays and
receipts of the Account are to be submitted in separate budget
documents.
The bill reduces the statutory limit on the public debt by
the amount deposited into the Account. That is, the current
statutory debt limit of $5.95 trillion is reduced by $42
billion.
The bill requires the Secretary of the Treasury to make two
reports to the House Committee on Ways and Means and Senate
Committee on Finance related to the Account. The first report
is due within 30 days after the appropriation is deposited into
the Account. This report requires the Secretary to confirm the
establishment of the Account and provide a description of the
Secretary's plan for using the money deposited into the Account
to retire debt held by the public. The second report is due no
later than October 31, 2002. This report requires the Secretary
to provide a detailed accounting of the debt redeemed from
amounts deposited into the Account. The proposal further
requires that the Comptroller General verify the accuracy of
the Secretary's report not later than November 15, 2002.
Social Security and Medicare lock-box
The bill provides a point of order in the House of
Representatives or the Senate against consideration of any
concurrent budget resolution or conference report or amendment
to a concurrent budget resolution that would set forth an on-
budget surplus for any fiscal year that is less than the
projected surplus of the Federal Hospital Insurance Fund for
that fiscal year (as assumed in such resolution).
In addition, the bill provides a point of order in the
House of Representatives or the Senate to consider any bill,
joint resolution, amendment, motion, or conference report if
the enactment of such bill, etc., would cause the on-budget
surplus for any fiscal year to be less than the projected
surplus of the Federal Hospital Insurance Trust Fund for such
year or increase the amount by which the on-budget surplus for
any fiscal year would be less than such trust fund surplus for
that year.
The point of order is not applicable to social security
reform legislation or Medicare reform legislation.
The bill requires any official Federal Government statement
of the Federal or congressional budget surplus or deficit
totals to exclude the outlays and receipts of the Old Age,
Survivors, and Disability Insurance Program under the Social
Security Act. The bill requires such receipts and outlays to be
submitted in separate social security documents.
Effective Date
The provisions of the bill relating to the Public Debt
Reduction Payment Account are effective on the later of October
1, 2000, or the date of enactment. The provisions of the bill
relating to the Social Security and Medicare lock box are
effective on the date of enactment and cease to have any force
or effect upon the enactment of Social Security reform
legislation and Medicare reform legislation.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statements are made
concerning the votes of the Committee on Ways and Means in its
consideration of the bill, H.R. 5173.
Motion To Report the Bill
The bill, H.R. 5173, as amended, was ordered favorably
reported by a rollcall vote of 33 yeas to 0 nays (with a quorum
being present). The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representatives Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Archer..................... X ........ ......... Mr. Rangel....... X ........ .........
Mr. Crane...................... X ........ ......... Mr. Stark........ X ........ .........
Mr. Thomas..................... X ........ ......... Mr. Matsui....... ........ ........ .........
Mr. Shaw....................... X ........ ......... Mr. Coyne........ X ........ .........
Mrs. Johnson................... X ........ ......... Mr. Levin........ X ........ .........
Mr. Houghton................... X ........ ......... Mr. Cardin....... X ........ .........
Mr. Herger..................... X ........ ......... Mr. McDermott.... X ........ .........
Mr. McCrery.................... X ........ ......... Mr. Kleczka...... X ........ .........
Mr. Camp....................... X ........ ......... Mr. Lewis (GA)... ........ ........ .........
Mr. Ramstad.................... X ........ ......... Mr. Neal......... ........ ........ .........
Mr. Nussle..................... X ........ ......... Mr. McNulty...... ........ ........ .........
Mr. Johnson.................... X ........ ......... Mr. Jefferson.... ........ ........ .........
Ms. Dunn....................... X ........ ......... Mr. Tanner....... X ........ .........
Mr. Collins.................... X ........ ......... Mr. Becerra...... ........ ........ .........
Mr. Portman.................... X ........ ......... Mrs. Thurman..... X ........ .........
Mr. English.................... X ........ ......... Mr. Doggett...... X ........ .........
Mr. Watkins.................... X ........ ......... ................. ........ ........ .........
Mr. Hayworth................... X ........ ......... ................. ........ ........ .........
Mr. Weller..................... X ........ ......... ................. ........ ........ .........
Mr. Hulshof.................... X ........ ......... ................. ........ ........ .........
Mr. McInnis.................... X ........ ......... ................. ........ ........ .........
Mr. Lewis (KY)................. X ........ ......... ................. ........ ........ .........
Mr. Foley...................... X ........ ......... ................. ........ ........ .........
----------------------------------------------------------------------------------------------------------------
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimates of Budgetary Effects
In compliance with clause 3(d)(2) of rule XIII of the Rules
of the House of Representatives, the following statement is
made concerning the effects on the budget of the bill, H.R.
5173, as reported.
The Committee has provided the estimate of the
Congressional Budget Office, which is below.
B. Statement Regarding New Budget Authority and Tax Expenditures
Budget authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority.
Tax expenditures
In compliance with clause 2(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no increased tax expenditures.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the Congressional Budget Office (``CBO''), the
following statement by CBO is provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 18, 2000.
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5173, the Debt
Relief Lock-box Reconciliation Act for Fiscal Year 2001.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Paul
Cullinan.
Sincerely,
Dan L. Crippen, Director.
Enclosure.
H.R. 5173.--Debt Relief Lock-box Reconciliation Act for Fiscal Year
2001
H.R. 5173 would establish the Public Debt Reduction Payment
Account, a new account in the Treasury of the United States,
and would appropriate $42 billion into that account for fiscal
year 2001. Transactions of the new account would be off-budget,
and funds in the account would be used to retire or purchase
outstanding federal debt held by the public. The bill would
also reduce the statutory limit on the public debt by $42
billion. In addition, H.R. 5173 would create additional
procedures--so-called ``lockboxes''--to deter legislation that
would result in total budget surpluses that were less than the
combined surpluses of the Social Security and Medicare Hospital
Insurance programs. The bill also would prohibit the Office of
Management and Budget (OMB), the Congressional Budget Office,
and any other federal agency from including in budgetary totals
the outlays and receipts of the Social Security program.
This bill would not affect the total spending, receipts, or
surplus of the federal government. This bill is intended to
increase the off-budget surplus by reducing the on-budget
surplus. Whether it would affect the allocation of the budget
surplus between the on-budget and off-budget categories would
depend on the budgetary treatment chosen by OMB.
H.R. 4601 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would have no effect on the budgets of state, local, or tribal
governments.
Budgetary implications
Although H.R. 5173 would have no overall budgetary effect,
the bill could change the on-budget and off-budget surpluses
depending on OMB's treatment of the transactions. If the
treatment parallels the budgetary treatment of subsidiary
appropriations to the Postal Service and interest payments to
the Social Security trust funds, the on-budget outlays would be
offset by off-budget receipts or collections. In that case, the
bill would reduce the on-budget surplus, increase the off-
budget surplus, but leave the total federal surplus unaffected.
(It is possible, however, that OMB would choose an alternative
approach, which could result in no change in either the on-
budget or off-budget surplus.)
To the extent that any on-budget surplus is not used for
additional spending or for reductions in taxes, it would
automatically be used to reduce the federal debt. This bill,
therefore, would help reduce the public debt by reducing the
reported on-budget surplus, but only if it inhibits the use of
some of that surplus for spending increases or tax reductions.
Budgetary treatment
For Congressional scorekeeping purposes, CBO would record
payments from the general fund of the Treasury to the off-
budget Public Debt Reduction Payment Account as direct
spending. H.R. 5173, however, specifies that the appropriation
to the amount would not be classified as direct spending.
Therefore, once the bill is enacted into law, pay-as-you-go
procedures would not apply to the appropriation. However, that
language does not affect the treatment of the bill for
Congressional scorekeeping purposes.
The CBO staff contact for H.R. 5173 is Paul Cullinan. This
estimate was approved by Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee advises that it was the result of the Committee's
oversight review concerning the statutory limit on the public
debt that the Committee concluded that it is appropriate and
timely to enact the provisions included in the bill as
reported. On January 20, 1999, the Committee on Ways and Means
held a public hearing on ``the Outlook for the State of the
U.S. Economy in 1999'' which discussed the benefits of using
budget surpluses to reduce the debt held by the public. On
September 29, 1999, the Committee on Ways and Means held a
public hearing on ``Treasury's Debt Buyback Proposal'' which
discussed Treasury's debt management policies.
B. Summary of Findings and Recommendations of the Committee on
Government Reform
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that no
oversight findings or recommendations have been submitted to
this Committee by the Committee on Government Reform with
respect to the provisions contained in the bill.
C. Constitutional Authority Statement
With respect to clause (3)(d)(1) of rule XIII of the Rules
of the House of Representatives (relating to Constitutional
Authority), the Committee states that the Committee's action in
reporting this bill is derived from Article I of the
Constitution, Section 8 (``The Congress shall have the Power To
lay and collect Taxes, Duties, Imposts and Excises * * *''),
and from the 16th Amendment to the Constitution.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
TITLE 31, UNITED STATES CODE
* * * * * * *
SUBTITLE III--FINANCIAL MANAGEMENT
* * * * * * *
CHAPTER 31--PUBLIC DEBT
SUBCHAPTER I--BORROWING AUTHORITY
Sec.
3101. Public debt limit.
* * * * * * *
3114. Public debt reduction payment account.
SUBCHAPTER I--BORROWING AUTHORITY
Sec. 3101. Public debt limit
(a) * * *
(b) The face amount of obligations issued under this chapter
and the face amount of obligations whose principal and interest
are guaranteed by the United States Government (except
guaranteed obligations held by the Secretary of the Treasury)
may not be more than $5,950,000,000,000 minus the amount
appropriated into the Public Debt Reduction Payment Account
pursuant to section 3114(c) outstanding at one time, subject to
changes periodically made in that amount as provided by law
through the congressional budget process described in Rule XLIX
of the Rules of the House of Representatives or otherwise.
* * * * * * *
Sec. 3114. Public debt reduction payment account
(a) There is established in the Treasury of the United States
an account to be known as the Public Debt Reduction Payment
Account (hereinafter in this section referred to as the
``account'').
(b) The Secretary of the Treasury shall use amounts in the
account to pay at maturity, or to redeem or buy before
maturity, any obligation of the Government held by the public
and included in the public debt. Any obligation which is paid,
redeemed, or bought with amounts from the account shall be
canceled and retired and may not be reissued. Amounts deposited
in the account are appropriated and may only be expended to
carry out this section.
(c) There is hereby appropriated into the account on October
1, 2000, or the date of enactment of this Act, whichever is
later, out of any money in the Treasury not otherwise
appropriated, $42,000,000,000 for the fiscal year ending
September 30, 2001. The funds appropriated to this account
shall remain available until expended.
(d) The appropriation made under subsection (c) shall not be
considered direct spending for purposes of section 252 of
Balanced Budget and Emergency Deficit Control Act of 1985.
(e) Establishment of and appropriations to the account shall
not affect trust fund transfers that may be authorized under
any other provision of law.
(f) The Secretary of the Treasury and the Director of the
Office of Management and Budget shall each take such actions as
may be necessary to promptly carry out this section in
accordance with sound debt management policies.
(g) Reducing the debt pursuant to this section shall not
interfere with the debt management policies or goals of the
Secretary of the Treasury.
* * * * * * *
----------
CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2001
[H. Con. Res. 290, 106th Congress]
SECTION 1. CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2001.
(a) * * *
(b) Table of Contents.--
Sec. 1. Concurrent resolution on the budget for fiscal year 2001.
* * * * * * *
TITLE II--BUDGET ENFORCEMENT AND RULEMAKING
Subtitle A--Budget Enforcement
[Sec. 201. Lock-box for Social Security surpluses.]
Sec. 201. Protection of social security and medicare surpluses.
* * * * * * *
TITLE II--BUDGET ENFORCEMENT AND RULEMAKING
Subtitle A--Budget Enforcement
SEC. 201. LOCK-BOX FOR SOCIAL SECURITY AND MEDICARE SURPLUSES.
(a) * * *
* * * * * * *
[(c) Point of Order.--
[(1) In general.--It shall not be in order in the
House of Representatives or the Senate to consider any
revision to this resolution or a concurrent resolution
on the budget for fiscal year 2002, or any amendment
thereto or conference report thereon, that sets forth a
deficit for any fiscal year.
[(2) Deficit levels.--For purposes of this
subsection, a deficit shall be the level (if any) set
forth in the most recently agreed to concurrent
resolution on the budget for that fiscal year pursuant
to section 301(a)(3) of the Congressional Budget Act of
1974.]
(c) Lock-box for Social Security and Hospital Insurance
Surpluses.--
(1) Concurrent resolutions on the budget.--It shall
not be in order in the House of Representatives or the
Senate to consider any concurrent resolution on the
budget, or conference report thereon or amendment
thereto, that would set forth a surplus for any fiscal
year that is less than the surplus of the Federal
Hospital Insurance Trust Fund for that fiscal year.
(2) Subsequent legislation.--(A) Except as provided
by subparagraph (B), it shall not be in order in the
House of Representatives or the Senate to consider any
bill, joint resolution, amendment, motion, or
conference report if--
(i) the enactment of that bill or resolution
as reported;
(ii) the adoption and enactment of that
amendment; or
(iii) the enactment of that bill or
resolution in the form recommended in that
conference report,
would cause the on-budget surplus for any fiscal year
to be less than the projected surplus of the Federal
Hospital Insurance Trust Fund (as assumed in the most
recently agreed to concurrent resolution on the budget)
for that fiscal year or increase the amount by which
the on-budget surplus for any fiscal year would be less
than such trust fund surplus for that fiscal year.
(B) Subparagraph (A) shall not apply to social
security reform legislation or medicare reform
legislation.
* * * * * * *
(e) Content of Concurrent Resolution on the Budget.--The
concurrent resolution on the budget for each fiscal year shall
set forth appropriate levels for the fiscal year beginning on
October 1 of such year and for at least each of the 4 ensuing
fiscal years of the surplus or deficit in the Federal Hospital
Insurance Trust Fund.
(f) Definitions.--As used in this section:
(1) The term ``medicare reform legislation'' means a
bill or a joint resolution to save Medicare that
includes a provision stating the following: ``For
purposes of section 201(c) of the concurrent resolution
on the budget for fiscal year 2001, this Act
constitutes medicare reform legislation.''.
(2) The term ``social security reform legislation''
means a bill or a joint resolution to save social
security that includes a provision stating the
following: ``For purposes of section 201(c) of the
concurrent resolution on the budget for fiscal year
2001, this Act constitutes social security reform
legislation.''.
[(e)] (g) Social Security Look-Back.--If in fiscal year 2001
the Social Security surplus is used to finance general
operations of the Federal Government, an amount equal to the
amount used shall be deducted from the available amount of
discretionary spending for fiscal year 2002 for purposes of any
concurrent resolution on the budget.
[(f )] (h) Waiver and Appeal.--Subsection (c)[(1)] may be
waived or suspended in the Senate only by an affirmative vote
of three-fifths of the Members, duly chosen and sworn. An
affirmative vote of three-fifths of the Members of the Senate,
duly chosen and sworn, shall be required in the Senate to
sustain an appeal of the ruling of the Chair on a point of
order raised under this section.
(i) Effective Date.--This section shall cease to have any
force or effect upon the enactment of social security reform
legislation and medicare reform legislation.
* * * * * * *
VII. ADDITIONAL VIEWS
H.R. 5173 does very little of substance. Essentially, it
would put into law the non-binding opinion that $42 billion in
federal debt should be retired next year, using money from the
non-Social-Security non-Medicare budget. I agree that debt
reduction is a priority. The American people want to sustain
their prosperity with a prudent fiscal policy. They are willing
to give up the instant gratification of big immediate tax cuts
in order to reduce the debt that they will pass on to their
children. For these reasons, I voted for the bill.
However, claiming that this bill is much more than a
symboled exercise seriously misleads the American people.
Technically, the bill appropriates $42 billion into a new
account for debt reduction. But, what if the Congress, as
constitutionally it is entitled to do, enacts laws that use all
the projected budget surplus money for tax cuts or spending,
and the $42 billion is not left for debt reduction? The
appropriation still occurs, of course, but in that case the
Treasury Department would have to borrow the money to fund the
appropriation in this bill that is supposed to be used to
retire debt.
Clearly, that would be a shell game--borrowing the money to
retire debt. What really produces debt reduction is discipline
in terms of spending and refraining from enacting the too-large
tax cuts that Republicans have put forward. When we do that,
debt is paid down automatically. There is no need for
legislation to make it happen. In other words, we do not need
to say we are for debt reduction, we just need to vote
responsibly on tax and spending bills.
The votes that really count for debt reduction are the
votes on tax cuts and spending bills. Among the votes that have
occurred so far this year, the votes to sustain the President's
vetoes of large tax cuts have been the most consistent with the
stated purpose of this legislation. By sustaining these vetoes,
the Congress made sure that there would be surplus funds for
debt reduction. It is puzzling why, on the same day that
Republican Leaders were demanding that anti-debt-reduction
votes be made on big tax cuts, they were announcing their new
plan to appropriate money for debt reduction.
I hope that the one-week-old Republican emphasis on debt
reduction is not ephemeral. I hope that the Republicans have
reconsidered the merits and decided that paying off the debt by
2012, as the President proposes in his budget, is indeed the
best course of action for the country over enacting imprudent
tax cuts. I hope that they are not simply pushing a one-year
plan until November because public opinion polls place debt
reduction well ahead of big tax cuts on the priority list of
most Americans.
Despite these hopes, I must remain skeptical. For two
years, the Republican Leadership of this Committee and this
House has placed as their top priority a near trillion dollar
tax cut, in which the lion's share of the benefits go to the
top income earners.
This year Republican tactics changed, but their policy did
not. They pursued a tax-cut-bill-a-week plan which, when added
up, constituted almost $1 trillion over 10 years. When higher
debt service costs are counted, this cost exceeds their
original tax cut that so clearly was rejected by the American
public. Now, the American people are expected to believe the
Republicans are serious when, in the same week that they took
to the floor to advocate this fiscally irresponsible tax-
cutting program, they argue that they have changed their ways
and now support a debt reduction plan that is incompatible with
their previous tax cuts.
Thus, while I support the legislation, I remain highly
suspect that the motive now is to distract attention from the
Republican tax policies which they have pursued for nearly 20
months in this Congress. The fact that the legislation's debt
reduction mechanism is for one year only is evidence of this.
If this bill is more than a gimmick, why limit the debt
reduction to one year?
If this legislation is just an opportunity for Republicans
to put out press releases, then I must protest that this
Committee and the Congress should not spend any of our limited
remaining time on it. There are so many important, substantive
matters that this Committee and this Congress so far have left
undone. The new fiscal year begins in two weeks, and yet
Congress has enacted only 2 of 13 appropriations bills. We
still have not passed a bipartisan prescription drug benefit
that can become law. We still have not done anything to help
build new schools and decrease classroom size. The Patients'
Bill of Rights is stuck in conference. This Congress has not
passed any legislation that would strengthen Social Security
and Medicare in the future.
As I have said when this Committee has considered similar
legislation before, it is difficult to vote against a piece of
legislation that does so little.
Clearly, the other body feels this way because they have
not even bothered to take up the debt reduction legislation
that this Committee and the House passed months ago.
Despite my support for H.R. 5173, it is important to record
my objections to some of its components. H.R. 5173 expresses as
``findings'' several provocative opinions with which I
disagree. One is that ``fiscal discipline'' resulting from the
1997 Balanced Budget Act has a major role in producing budget
surpluses without using the Social Security surplus.
According to Congressional Budget Office (CBO) estimates,
the 1997 legislation is doing very little to create surpluses
compared to the 1993 budget legislation passed without a single
Republican vote. The 1993 Democratic-sponsored budget
legislation reduced the 1998 deficit by $122 billion according
to CBO. (1998 is the last year for which an official estimate
was done.) In contrast, CBO reports that for 1998, the 1997
legislation increased the deficit by $21 billion. This is not
surprising; the bill was front-loaded with tax cuts. For 1999,
CBO estimated that the 1997 bill reduced deficits by only $4
billion.
Furthermore, CBO estimates show that legislation enacted by
the 105th and 106th Congresses, both Republican-controlled
Congresses, have reduced the year 2000 surplus by $68 billion,
primarily as a result of appropriations bills.
Bipartisan legislation would be easier to craft without
this kind of provocation that ignores the facts.
H.R. 5173 has a second component, called a ``lock box'' for
Social Security and Medicare. Again, this takes the form of a
promise, this time with fingers crossed behind the back.
The promise comes not as a real bipartisan budget
agreement, but as points of order against consideration of
future budget resolutions and legislation that would result in
a budget surplus, excluding Social Security, that is less than
the Medicare Hospital Insurance surplus.
Budget points of order have their uses. However, the House
Committee on Rules, with only a majority vote from the House,
waives these kinds of rules when they are inconvenient. Perhaps
new rules can be a little more effective in the Senate.
However, these points of order are flawed.
One point of order, which would be added by H.R. 5173,
seems to be an attempt to make it out of order to have an
economic recession. There is an inadequate allowance for
economic recessions under this rule. If we had an economic
recession that reduced budget surpluses too much, it then would
be out of order to admit what was happening in a budget
resolution. Another point of order would create a legislative
sprint race. The first spending or tax-cut bills to get across
the budget finish line would be okay under this new rule, but
too bad for that last bill that used up too much of a projected
budget surplus. Because appropriations bills usually are
considered late in the legislative calendar, I wonder which of
the annual appropriations bills is likely to be held hostage by
this point of order.
Another peculiarity of these points of order is that they
stop short of taking Medicare truly off-budget, even though
some of the rhetoric surrounding this legislation would lead
one to believe that this bill would do so.
Why are fingers crossed behind the back? It is because the
``lock box'' in this bill has a trap door. The key to the trap
door is the magic word ``reform.'' The points of order no
longer would apply to legislation that describes itself as is
either Social Security or Medicare ``reform,'' no matter how
much of a budget deficit might be created by this legislation.
Finally, the bill reduces the statutory ceiling on the
debt. Many people may not realize it, but Treasury securities
held by Social Security, Medicare, and other trust funds count
against the statutory debt ceiling. Too low a debt ceiling
works against protecting and strengthening these trust funds.
Lowering the debt ceiling does not reduce the debt. It is
just a recipe for getting more quickly to the kind of debt
ceiling crisis we had 5 years ago when the Republicans
threatened to ``shut down the government.'' All that happened
was that the Nation's credit rating and the government's
ability to pay Social Security benefits were put at risk. This
legislation would be better for leaving out the debt ceiling
provision.
I have many concerns about specific parts of this
legislation, but the need to protect and preserve Social
Security and Medicare and save our children from a massive
Federal debt run up primarily under Presidents Reagan and Bush
is vitally important. Therefore, I must vote for any
legislation, even if merely symbolic, which promotes this goal.
I can only hope that if this bill moves forward, corrections
will be made, and that somehow the long-term actions of the
Republicans someday will match the nice words they have written
in this legislation.
Charles B. Rangel.