•HCON 55 IH
Whereas the projected surplus provides Congress with an op-
portunity to address a variety of pressing national needs,
including Federal debt reduction, tax relief, and in-
creased investment in the shared priorities of the Amer-
ican 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 eco-
nomic 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 assump-
tions 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 reduc-
tion 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 Chair-
man Alan Greenspan stated, ‘‘In recognition of the un-
certainties in the economic and budget outlook, it is im-
portant that any long-term tax plan, or spending initia-
tive for that matter, be phased in. Conceivably, it could
•HCON 55 IH
include provisions that, in some way, would limit surplus-
reducing actions if specified targets for the budget sur-
plus 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 Bank-
ing 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 ad-
dress many pressing national needs in the 107th Con-
gress, 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 ma-
terialize: Now, therefore, be it
Resolved by the House of Representatives (the Senate
concurring), That it is the sense of Congress that—
(1) with respect to any long-term, Federal sur-
plus-reducing actions adopted by the 107th Congress
pursuant to the Congressional Budget Office’s pro-
jected surpluses, such actions shall include a legisla-
tive ‘‘trigger’’ or ‘‘safety’’ mechanism that links the
phase-in of such actions to actual budgetary out-
comes over the next 10 fiscal years;
(2) this legislative mechanism shall outline spe-
cific legislative or automatic action that shall be
taken should specified levels of Federal debt reduc-
•HCON 55 IH
tion or on-budget surpluses not be realized, in order
to maintain fiscal discipline and continue the reduc-
tion of our national debt;
(3) the legislative mechanism shall be applied
prospectively and not repeal or cancel any previously
enacted implemented portion of a surplus-reducing
action;
(4) enactment of a ‘‘trigger’’ or ‘‘safety’’ mech-
anism shall not prevent Congress from passing other
legislation affecting the level of Federal revenues or
spending should future economic performance dic-
tate such action; and
(5) this legislative mechanism will ensure fiscal
discipline because it restrains both Government
spending and tax cuts, by requiring that the budget
is balanced and that specified debt reduction targets
are met.
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