Statement of Administration Policy: H.R. 842 - Truth In Budgeting Act

(House)
(Shuster (R) Pennsylvania and 225 cosponsors)

The Administration strongly opposes enactment of H.R. 842, which would remove the majority of transportation programs from the unified Federal Budget. The Administration is committed to Balancing the Federal Budget within the next seven years and, in fact, has proposed a plan that achieves balance by 2002. Enactment of H.R. 842 would jeopardize this shared national objective. It could also force cuts in other General Fund programs in the coming years of up to $50 billion.

The unified Federal Budget ensures that all receipts and outlays are presented in one place, that they are considered as progress is measured toward a balanced budget, and that decisions between public and private spending and among budgetary priorities are made clear.

H.R. 842, which would remove the transportation.trust funds from the unified Federal Budget, is objectionable because it:

• Could force up to $50 billion in cuts to other programs from 1997 to 2002, according to OMB, in addition to already planned reductions, if the'budget is to be balanced by 2002. (Through 2000 alone, CBO estimated in 1995 that the cuts could total $20 billion, while OMB currently estimates they could total $38 billion.) This would have serious consequences for other programs that are funded by the General Fund — including not only other transportation programs and Federal grants to state and local governments, but also important programs in education and training, the environment, science and technology, and law enforcement that will help raise living standards and the quality of life for average Americans.
  
  
• Includes no effective means to assure that trust fund expenditures do not exceed trust fund receipts. (The provisions in H.R. 842 to control trust fund spending would not be effective because they only affect authorized spending, not actual spending. Trust fund outlays in any year can easily exceed income, including income from interest.)
  
  
• Fails to acknowledge significant General Fund expenditures for highways, airports, and other transportation needs. Since 1956 more than $40 billion in highway spending alone has come from the General Fund — more than twice the cash balance of the Highway Trust Fund in 1995.
  
  
• Generates corresponding pressure to remove other programs from the unified Budget, placing still greater pressure on programs not accorded such favored treatment

The Administration supports a balanced approach to infrastructure spending and deficit reduction. The President's FY 1997 Budget achieves this by requesting an increase over FY 1996 for Department of Transportation programs, while balancing the budget by FY 2002.

Pay-As-You-Go Scoring

H.R. 842 would normally be subject to the pay-as-you-go requirements of the Omnibus Budget Reconciliation Act of 1990. H.R. 842, however, exempts the transportation trust funds from the pay-as-you-go and other constraints on deficit spending associated with the unified budget.