IV

107TH CONGRESS

1ST SESSION H. CON. RES. 55

To express the sense of Congress regarding the use of a safety mechanism

to link long-term Federal budget surplus reductions with actual budgetary outcomes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 7, 2001

Mrs. TAUSCHER (for herself, Mr. HOUGHTON, Mr. ROEMER, Mr. UPTON, Mr.

KIND, Mr. CASTLE, Mr. DAVIS of Florida, Mr. GREENWOOD, Mr. FORD,

Mr. MORAN of Virginia, Mr. ISRAEL, and Ms. SANCHEZ) submitted the

following concurrent resolution; which was referred to the Committee on

the Budget

CONCURRENT RESOLUTION

To express the sense of Congress regarding the use of a

safety mechanism to link long-term Federal budget surplus reductions with actual budgetary outcomes.

Whereas the Congressional Budget Office (CBO) has projected that the Federal unified budget surplus over the

10-year period from fiscal year 2002 to fiscal year 2011

will total $5,600,000,000,000;

Whereas the projected Federal on-budget surplus over the

same period of time is projected to be

$3,100,000,000,000, which includes a surplus for the

medicare program in the Federal Hospital Insurance

(HI) Trust Fund of $400,000,000,000;
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Whereas the projected surplus provides Congress with an opportunity to address a variety of pressing national needs,

including Federal debt reduction, tax relief, and increased investment in the shared priorities of the American people, such as national defense, science, health,

education, retirement security, and other areas;

Whereas although CBO projections properly serve as the

basis for budgetary policies in the Congress, actual economic and fiscal outcomes may differ substantially from

projections;

Whereas for example, as CBO indicates in its January 2001

budget update, if the future record is like the past, there

is about a 50 percent chance that errors in the assumptions about economic and technical factors will cause

CBO’s projection of the annual surplus 5 years ahead to

miss the actual outcome by more than 1.8 percent of the

Gross Domestic Product, with a resulting difference in

the surplus estimate of $245,000,000,000 in the fifth

year alone;

Whereas where appropriate, long-term changes to tax and

spending policy that are predicated on the existence of

significant budget surpluses should be linked to actual

fiscal performance, such as meeting specified debt reduction or on-budget surplus targets, to ensure the Federal

Government does not incur on-budget deficits or increase

the publicly-held debt;

Whereas during his testimony before the Senate Budget

Committee on January 25, 2001, Federal Reserve Chairman Alan Greenspan stated, ‘‘In recognition of the uncertainties in the economic and budget outlook, it is important that any long-term tax plan, or spending initiative for that matter, be phased in. Conceivably, it could
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include provisions that, in some way, would limit surplusreducing actions if specified targets for the budget surplus and Federal debt were not satisfied. Only if the

probability was very low that prospective tax cuts or new

outlay initiatives would send the on-budget accounts into

deficit, would unconditional initiatives appear prudent’’,

and he reiterated this testimony before the Senate Banking Committee on February 13, 2001; and

Whereas in light of Chairman Greenspan’s testimony and the

uncertainty of surplus projections, while Members of

Congress agree that the resources are available to address many pressing national needs in the 107th Congress, Congress should exercise great caution and not

pass tax cuts or spending increases that are so large that

they will necessitate future tax increases or significant

spending cuts if anticipated budget surpluses fail to materialize: Now, therefore, be it

1 Resolved by the House of Representatives (the Senate

2 concurring), That it is the sense of Congress that—

3 (1) with respect to any long-term, Federal sur4 plus-reducing actions adopted by the 107th Congress

5 pursuant to the Congressional Budget Office’s pro6 jected surpluses, such actions shall include a legisla7 tive ‘‘trigger’’ or ‘‘safety’’ mechanism that links the

8 phase-in of such actions to actual budgetary out9 comes over the next 10 fiscal years;

10 (2) this legislative mechanism shall outline spe11 cific legislative or automatic action that shall be

12 taken should specified levels of Federal debt reduc-
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1 tion or on-budget surpluses not be realized, in order

2 to maintain fiscal discipline and continue the reduc3 tion of our national debt;

4 (3) the legislative mechanism shall be applied

5 prospectively and not repeal or cancel any previously

6 enacted implemented portion of a surplus-reducing

7 action;

8 (4) enactment of a ‘‘trigger’’ or ‘‘safety’’ mech9 anism shall not prevent Congress from passing other

10 legislation affecting the level of Federal revenues or

11 spending should future economic performance dic12 tate such action; and

13 (5) this legislative mechanism will ensure fiscal

14 discipline because it restrains both Government

15 spending and tax cuts, by requiring that the budget

16 is balanced and that specified debt reduction targets

17 are met.

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