NINETY-NINTH CONGRESS DAN ROSTENKOWSKI, ILLINOIS, CHAIRMAN SAM M. GIBBONS, FLORIDA J.J. PICKLE, TEXAS RICHARD A GEPHAROT, MISSOURI FRANK J. GUARINI, NEW JERSEY TY RUSSO, ILLINOIS DON & PEASE OHIO ROBERT T. MATSUL, CALIFORNIA JOSEPH K. DOWLEY, CHIEF COUNSEL M. KENNETH BOWLER, DEPUTY CHIEF OF STAFF COMMITTEE ON WAYS AND MEANS U.S. HOUSE OF REPRESENTATIVES WASHINGTON, DC 20515 March 6, 1985 The Honorable William H. Gray, III Committee on the Budget U. S. House of Representatives Dear Mr. Chairman: This letter transmits the views and estimates of the Committee on Ways and Means, as required by section 301(c) of the Congressional Budget Act of 1974, on those aspects of the Federal budget for fiscal year 1986 which fall within the Committee's jurisdiction. In making this report, the Committee on Ways and Means wishes to express its deep concerns about national economic conditions in fiscal year 1986 and beyond. Large budget deficits have been projected, and we believe that serious bipartisan efforts must be made by the Congress to address them. Our huge trade deficits are also of concern. We will work closely with the House leadership and the House Budget Committee in the development of a fiscal year 1986 budget that significantly reduces the Federal deficit. We will make every effort to comply with the outlay and revenue directives to the Committee which will be contained in the House budget resolution. The success of our effort will largely depend upon the ability of other committees in the House to comply with their directives. I. Revenues The Congressional Budget Office estimates fiscal year 1986 revenues at $788 billion. As you are aware, the Committee has begun hearings on tax reform proposals. We will be engaged in thorough review of the entire Tax Code and will be considering the Administration's and other proposals designed to improve the tax system. addition, the Committee will be reviewing a number of provisions which expire during calendar year 1985. In tax II. Outlays The Committee on Ways and Means has jurisdictional responsibility over a broad range of programs with budget outlays classified in several different functional categories. The President's budget contains some $4.7 billion in outlay reductions for fiscal year 1986, primarily in the Medicare program. In addition, there are several provisions which affect the Aid to Families with Dependent Children (AFDC) program; there is no reauthorization of the trade adjustment assistance programs; there are premium increases in the Pension Benefit Guaranty Corporation (PBGC) and significant staff reductions in the Social Security Administration, Internal Revenue Service and the Health Care Financing Administration. The Committee and our Subcommittees will carefully review the budget reduction proposals contained in the Administration's budget as well as alternative measures that will reduce Federal expenditures. We obviously will exercise our judgement about precisely where and how outlay reductions should be achieved. As you are aware, the Federal Supplemental Compensation program expires on March 31, 1985. This program provides eight to fourteen additional weeks of unemployment benefits to individuals who have exhausted their regular unemployment compensation benefits. The Committee is engaged in a review of this program and will consider whether or not the program should be extended; and, if so, whether it should be modified to more carefully target benefits. The Committee also intends to consider the need to reauthorize the trade adjustment assistance program which expires on September 30, 1985. As part of an overall budget deficit reduction effort, the Committee is deeply committed to the concept that outlay reductions be fair and not disproportionately affect any one group of individuals, families, or businesses. In addition, the Committee authorizes appropriations for certain trade agencies and programs. The Administration has recommended significant cuts in some of these agencies, particularly in the Office of the U. S. Trade Representative and the U. S. Customs Service. The Committee will consider an authorization bill later this spring, but it is very likely that, in light of our growing trade deficit, the Committee will recommend higher funding levels than proposed by the Administration. III. Public Debt Limit The Congressional Budget Office estimates that the fiscal year 1986 unified budget deficit will be $210 billion under current law. In the absence of any legislative action to reduce spending or increase revenue, the total deficit (including off-budget entities) is estimated by the CBO to be $220 billion which will require that the debt subject to statutory limit be increased to $2.128 trillion for the period ending September 30, 1986. IV. Tax Expenditures The report on tax expenditures of the staff of the Joint Committee on Taxation which serves as the Joint Committee's report to the Budget Committee and is designed to assist the Budget Committee in meeting its obligations under section 301(d)(c) of the Budget Act will be delivered to your offices as soon as it is printed. - V. Additional Materials To assist the Budget Committee in carrying out its responsibilities and help it in making assessments concerning the specific recommendations within the jurisdiction of the Committee on Ways and Means, I am enclosing a copy of Ways and Means Committee Print 99-2 entitled, "Background Material and Data on Programs Within the Jurisdiction of the Committee on Ways and Means." In addition, a background document entitled, "Description of the Administration's Fiscal Year 1986 Budget Recommendations Under the Jurisdiction of the Committee on Ways and Means" will be delivered to your office as soon as it is printed. The latter document will contain an analysis of the Administration's revenue and outlay proposals within the jurisdiction of the Committee. This analysis will also include a description of current law, a detailed description of the proposal, CBO and Administration estimates of outlay savings and wherever possible the impact upon program beneficiaries or institutions. I hope you find this information useful. As always, the members of this Committee and its staff are available to answer any questions you may have on any aspect of this report. With warm regards, I am Sincerely yours, Kan Bortant Dan Rostenkowski DR/wpl Enclosures CC: Members, Committee on Ways and Means |