September 27, 1983 EXTENSIONS OF REMARKS 25971 EXTENSIONs-oF REMARKS LINE-ITEM LEASH ON RUNAWAY many believe have a very questionable place record, the idle hope that Congress can SPENDING in the Constitution. Its spending and taxing somehow be induced to return to responsi restraints may not allow for an emergency, bility or to discipline itself. What we desper such as a war or a natural disaster. ately need is an outside curb on the current HON. PHIUP M. CRANE Perhaps the main objection to the bal unrestrained power of Congress to spend. OF ILLINOIS anced-budget amendment is that it puts at How has this license come about? Doesn't IN THE HOUSE OF REPRESENTATIVES least as much emphasis on obliging Con the president have the same power to veto gress to raise taxes to achieve a balance as it Tuesday, September 27, 1983 appropriation bills as he has to veto other does on cutting expenditures. This mistakes measures? Theoretically he does. But Con e Mr. PHILIP M. CRANE. Mr. Speak the nature of the problem. The real evil in gress has perfected the device of throwing er, with a $200 billion deficit in fiscal the budgets of the past half century has in pork-barrel, log-rolling and other vote year 1983 the Federal Government is been growing, reckless outlays, and not the buying appropriations with those that the heading into the worst economic disas deficits per se. president needs to carry on the government. If federal expenditures are at a reasonable In addition, Congress has perfected the ter our Nation has ever faced. It is our level, there isn't any great problem in find runaway spending that has put us in practice of passing its appropriation bills at ing the taxes to pay for them. But the the very end of a session, so that if the this situation and if we continue down higher the spending, the more formidable president vetoed a typical omnibus spending this path, I fear that America as we the taxing problem becomes. Taxes always bill in order to get rid of an objectionable know it will not be here for our grand undermine incentives, sales, employment item, he would be left without any money at children to enjoy. It is time to face and production. The higher the taxes, the all. So far as appropriations bills are con this fact and it is time to take action. greater the harm they do to the whole econ cerned, Congress has usurped total power. Henry Hazlitt offers us hope in an omy. Beyond a certain point, raising tax The presidential veto has been reduced to a inspiring commentary, which appeared rates brings in lower revenues. nullity. in the Wall Street Journal on Septem LIPPMANN'S PROPOSED REMEDY The cure for this would be a constitution ber 9. He correctly points out that the All this may seem too obvious to mention, al amendment granting the president power problem rests with Congress. In order but it is persistently overlooked. This first to reduce or veto individual items in appro struck me forcefully when I encountered a priation bills. to please constituents and interest New York Herald-Tribune column on March This isn't a new proposal; it has a long his groups, Congress all too readily in 5, 1959, in which Walter Lippmann com tory. There isn't any evidence, it is true, cludes extraneous appropriations in plained: "Both parties are pretending that that the question was even discussed in the the budget it passes. Because the they are struggling to balance the budget. Constitutional Convention of 1787. But by President must accept or reject an ap In fact neither the Administration nor the the time of the Civil War, when the Confed propriations bill in its entirety, he has Congress shows any sign of being willing to erate states delegates met to frame their no choice other than to pass these vote the taxes which are absolutely essen own constitution, the problem had been rec padded bills in order to insure vital ap tial if the budget is to be balanced." ognized. And they specifically provided for propriations. Since Congress will never Mr. Lippmann's proposed remedy followed the presidential item veto. In 1867, Presi from his initial assumption that all the dent Andrew Johnson complained that Con stop its pork-barreling, Mr. Hazlitt spending already going on, plus a great deal gress had thrown, objectionable provisions contends that a constitutional amend more, was absolutely necessary. into a section of an appropriations act that ment granting the President line-item The fallacy of trying to balance the "virtually deprives the President of his con veto power on appropriations bills is budget mainly with increased taxes can stitutional functions as Commander in necessary to put an end to this non most easily be recognized if we look at the Chief of the Army." He felt forced, never sense. Someone must stand up and budget record since, say, this Lippmann pro theless, to give his approval to the measure, take responsibility-it is clear that posal. "but to accompany it with my protest." Congress will not. Mr. Hazlitt suggests In fiscal 1959 the deficit was $12.9 billion Then, President ffiysses S. Grant asked because, though budget receipts were $79.2 Congress in 1873 to amend the Constitution that we allow the President to do so. billion, outlays were $92.1 billion. In 1960 "to authorize the Executive to approve of so I urge my colleagues to take a few taxes were higher, and revenues jumped to much of any measure passing the two minutes to read the following article. $92.4 billion, enough to have balanced the houses of Congress as his judgment may dic Mr. Hazlitt gives us a viable solution 1959 budget. They did achieve a small sur tate, without approving the whole, the dis one that warrants serious consider plus-for one year. But in 1961 spending was approved portion or portions to be subject ation by each and every Member of raised to $97.8 billion, and deficits came to the same rules as now." Presidents Ruth Congress. back. erford B. Hayes, in 1879, and Chester A. [From the Wall Street Journal, Sept. 9, If we now look at 1983, the estimate of Arthur, in 1882, repeated this recommenda 1983] budget receipts is $598.3 billion, nearly eight tion, though confining it to appropriation times such receipts in 1959. But to no avail. measures. LINE-ITEM LEASH ON RUNAWAY SPENDING Spending has increased far more, leaving us Franklin D. Roosevelt was the next presi (By Henry Hazlitt) with a prospective deficit of $210 billion, the dent to ask for the item veto, followed by We have had 45 federal deficits in the highest ever. Dwight D. Eisenhower. Harry S Truman in past 53 years, and uninterrupted deficits in If we carry the record back to 1931, when his "Memoirs" wrote: "One important lack the past 15 years. our string of deficits began, we find we have in the presidential veto power, I believe, is There are two ways of preventing or increased our revenues 193 times. Even al authority to veto individual items in appro ending deficits. One is to cut spending, and lowing for the inflation that the deficits priation bills." the other to increase taxes. We can, of themselves have largely brought about, Despite this long history, Congress has course, try a little of both. Congress has increased our tax burden 30 done precisely nothing. The apparently in This is the approach contemplated in the times in real terms-without stopping the soluble problem that confronts us is how to balanced-budget constitutional amendment deficits. get congressmen voluntarily to give up or before Congress. Even many of those people So let us finally drop the delusion that we share a power that they have managed to who have reservations favor this amend can pay for any level of spending by raising usurp. ment on the ground that something is taxes. That myth has been leading us only If we can't get two-thirds of Congress vol better than nothing. But the proposal raises toward increased unemployment and eco untarily to submit to the states an amend serious questions. It is complicated. It im nomic stagnation. And let us finally put ment giving the president the item veto, poses detailed directions on Congress that aside, also, after the past half century's how can we get around this obstacle?
e This "bullet" symbol identifies statements or insertions which are not spoken by the Member on the floor. 25972 EXTENSIONS OF REMARKS September 27, 1983 There is a glimmer of hope. The item veto sage of the Small Business Investment ever developed by the Government. is so essential to fiscal discipline that in 42 Act of 1958, paving the way for the de For every taxpayer dollar invested in of our 50 states the governor already has velopment of an entirely new type of the SBIC program, the Government this power. In at least some cases, he must have got it through voluntary action by the financial framework. The program has has received $110 back in the form of legislature.
11-059 Q-87-11 (Pt. 19) 25998 EXTENSIONS OF REMARKS September 27, 1983 In short. Japan•s tax on corporations developing the South Bronx and is a employ more people than Hearns did, and is about twice the U.S. rate. worthy model for other urban areas SOBRO is working on leasing the upper Thus bites the dust another reason facing similar challenges. floors for back office operations of banks or securities firms. Patterson thinks the South given for many American companies• After a decade of progress, SOBRO Bronx is ideal for back office operations, failure to compete well with the Japa President Patterson and Chairman J. since it affords low-rental space and accessi nese. Bruce Llewellyn deserve our congratu bility to many modes of transportation In a recent book on tax reform. "In lations. I am including in the REcoRD within the city and from Westchester and equity and Decline;• the authors made an article which appeared in the most New Jersey. the point in passing that Japan's tax recent edition of Metropolis. The arti In October, a second major structure code was more or less copied from cle reports on the many successes of given a new life by SOBRO will open. ours, "before the onset of 'loophole SOBRO and its plans for the near The Phillips-Jones Building is a 120,000 square-foot building which was taken by the mania' among America's political and future. city for non-payment of taxes, had been business leaders." I asked the Congres SOBRO SPURS PROGRESS IN THE vacant since 1976 and was once scheduled sional Research Service whether this REDEVELOPMENT OF SOUTH BRONX for demolition. With $2.5 million in grants assertion was accurate, and Jane Gra SOBRO, newest acronym in New York from the Federal Economic Development velle. specialist in industry analysis City's geography, is the nickname for the Administration and the Department of and finance, economics division, re South Bronx Overall Economic Develop Energy, SOBRO bought the building and plied that Japanese depreciation prac ment Corporation. With a nod to SOHO has converted it into an energy-efficient in tices and other subsidies appear to be