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HOW TO CUT THE FEDERAL BUDGET Y 4. B 85/3: 104-2 Hou to Cut the Federal Budget; Seri... n£.ARING -7 ., BEFORE THE COMMITTEE ON THE BUDGET HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTH CONGRESS FIRST SESSION HEARING HELD IN COLUMBUS, OH, JANUARY 21, 1995 HEARING HELD IN PRESCOTT, AZ, JANUARY 28, 1995 HEARING HELD IN WEST COLUMBIA, SC, FEBRUARY 4, 1995 HEARING HELD IN MANVILLE, NJ, FEBRUARY 11, 1995 HEARING HELD IN BILLINGS, MT, FEBRUARY 18, 1995 Serial No. 104-2 ""''^^fss, Printed for the use of the Committee on the Budget U.S. GOVERNMENT PRINTING OFFICE 87-931 WASHINGTON : 1995 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-046967-8 r\ r\c: ^ HOW TO CUT THE FEDERAL BUDGET Y 4. B 85/3: 104-2 Hou to Cut the Federal Budgeti Seri... njiARING -7 ., BEFORE THE COMMITTEE ON THE BUDGET HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTH CONGRESS FIRST SESSION HEARING HELD IN COLUMBUS, OH, JANUARY 21, 1995 HEARING HELD IN PRESCOTT, AZ, JANUARY 28, 1995 HEARING HELD IN WEST COLUMBIA, SC, FEBRUARY 4, 1995 HEARING HELD IN MANVILLE, NJ, FEBRUARY 11, 1995 HEARING HELD IN BILLINGS, MT, FEBRUARY 18, 1995 Serial No. 104-2 May ^0 %i, Printed for the use of the Committee on the Budget U.S. GOVERNMENT PRINTING OFFICE 87-931 WASHINGTON : 1995 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-046967-8 COMMITTEE ON THE BUDGET JOHN R. KASICH, Ohio, Chairman DAVID L. HOBSON, Ohio MARTIN OLAV SABO, Minnesota, ROBERT S. WALKER, Pennsylvania, Ranking Minority Member Vice Chairman CHARLES W. STENHOLM, Texas JIM KOLBE, Arizona LOUISE MCINTOSH SLAUGHTER, CHRISTOPHER SHAYS, Connecticut New York WALLY HERGER, CaUfornia MIKE PARKER, Mississippi JIM BUNNING, Kentucky WILLIAM J. COYNE, Pennsylvania LAMAR S. SMITH, Texas ALAN B. MOLLOPL\N, West Virginia WAYNE ALLARD, Colorado JERRY F. COSTELLO, Illinois DAN MILLER, Florida HARRY JOHNSTON, Florida RICK LAZIO, New York PATSY T. MINK, Hawaii BOB FRANKS, New Jersey BILL ORTON, Utah NICK SMITH, Michigan EARL POMEROY, North Dakota BOB INGLIS, South Carolina GLEN BROWDER, Alabama MARTIN R. HOKE, Ohio LYNN C. WOOLSEY, California SUSAN MOLINARI, New York JOHN W. OLVER, Massachusetts JIM NUSSLE, Iowa LUCILLE ROYBAL-ALLARD, California PETER HOEKSTRA, Michigan CARRIE P. MEEK, Florida STEVE LARGENT, Oklahoma LYNN N. RIVERS, Michigan SUE MYRICK, North CaroUna LLOYD DOGGETT, Texas SAM BROWNBACK, Kansas JOHN SHADEGG, Arizona GEORGE P. RADANOVICH, CaUfornia CHARLES F. BASS, New Hampshire Professional Staff Richard E. May, StaffDirector Eileen M. Baumgartner, Minority StaffDirector (II) CONTENTS Page Hearingheld in Columbus, OH, January 21, 1995 1 Hearingheld in Prescott, AZ, January 28, 1995 61 Hearingheld in West Columbia, SC, February 4, 1995 Ill Hearingheld in Manville, NJ, February 11, 1995 157 Hearingheld in Billings, MT, February 18, 1995 203 StatementofHon. GeorgeV. Voinovich, Governor, State ofOhio 3 Statement ofHon. Greg Lashutka, Mayor, CitvofColumbus, OH 16 StatementofHon. David Beasley, Governor, State ofSouth Carolina 113 Statement ofHon. Robert Coble, Mayor, CityofColumbia, SC 114 StatementofHon. Christine ToddWhitman, Governor, State ofNewJersey ... 160 Statement ofHon. Angelo Corradino, Mayor, CityofManville, NJ 162 Statement ofHon. Conrad R. Bums, Senatorfromthe State ofMontana 206 Statement ofHon. Richard Larsen, Mayor, City ofBillings, MT 207 Prepared statementofHon. George V. Voinovich, Governor, StateofOhio 9 Prepared statementofMr. Roger Wood 30 Prepared statementofMr. Joseph Lolli 137 (III) HOW TO CUT THE FEDERAL BUDGET SATURDAY, JANUARY 21, 1995 House of Representatives, Committee on the Budget, Columbus, OH. The committee met, pursuant to call, at 3 p.m., in Ohio Domini- can Little Theater, Ohio Dominican College, Columbus, OH, Hon. John R. Kasich (chairman ofthe committee) presiding. Representatives Present: Kasich, Hobson, Kolbe, Herger, Miller ofFlorida, Radanovich, Sabo, Parker, and Browder. Chairman Kasich. The House Budget Committee will come to order. I want to first of all thank the members of the committee for coming to Columbus today, and several of them from California and Arizona wanted to thank us for the great weather that we gave them. Let me introduce the members, ifI could. To my left, the senior Democrat, the minority leader of this side of the House Budget Co—mmittee, Martin Sabo, who is from Min- nesota, and Martin was he is from Minneapolis, but he was born and raised in a little town in North Dakota, so he feels like we gave him a warm welcome here today. To my right is Congressman David Hobson. Many of you would recognize Congressman Hobson because he is from Springfield, OH. Next to Congressman Hobson is Congressman Jim Kolbe from Sonoita, AZ, just outside of Tucson; and then next to Jim Kolbe is Congressman Wally Herger from Yuba City, CA; and then next to Wally Herger is Congressman Dan Miller from Bradenton, FL. And our newest member of the committee, a first-freshman from Mariposa, CA, Congressman George Radanovich; and then to the left of Mr. Sabo from Brookhaven, MS, this is the first time he has ever seen snow. Congressman Mike Parker; and to Mike's left from Jacksonville, AL, Congressman Glenn Browder. Now, ladies and gentlemen, I first of all, want to thank obviously the committee for taking the time to come to Columbus today. This will be the first ofwhat will be a series ofhearings across the country. We will be in Prescott, AZ, we will be in Manville, NJ, in Co- lumbia, SC, and then we will is also be in Billings, MT. I want to first ofall thank the Ohio Dominican College staff, and particularly Sister Mary Matesich. Where is Sister Matesich? We don't applaud in congressional hearings for witnesses or for members or anything like that, it is orderly, but we are going to make an exception here and give her a round of applause, along with her stafffor the great work they have done. (1) This hearing really is unprecedented from the standpoint that we only have two witnesses that will appear today who have been prescheduled, Gov. George Voinovich and Mayor Greg Lashutka. The rest of the time we will hear from the panel. We will hear a number of panels, each of the members of the panel selected at random who will be permitted to address the committee for 3 minutes. Members then will have an opportunity, ifthey feel moved, to be able to question the panel. For the last 30 minutes of the program today, we will actually use an open-style mike format and people for 1 minute will be able to address the committee. The only rules are simply this, we are interested in having you tell us what ideas you have for being able to balance the budget, to be able to shrink the size of government, and to be able to help this committee in theirjob to try to save the next generation. We are not inviting the special interest groups to testify, the lob- byists. They are good at getting to Washington, we are not interested in them, we are interested in you. I will tell everybody here, that this committee is very excited about the attendance we have here today, and it demonstrates, clearly demonstrates that the American people want to be part of what their government does. The reason why we wanted to come and hear from you is because, frankly, most people have felt left out. We are no longer going to debate in the House about whether we should have a Balanced Budget Amendment. We will have a debate, but the results are pretty well known. Over 60 Democrats have now signed a letter saying that they were going to support the amendment. We are going to have a Balanced Budget Amendment pass the House of Representatives, and I an- ticipate pass the Senate and, ultimately, be ratified by the States. The issue then becomes We are going to have order today, folks. This is an official hearing, just like we do in Washington, except we are out here, and we don't want to have a situation where people are going to say some- thing and you are going to start cheering, we are not going to put up with that here today. We are going to have an orderly hearing, and we are going to be respectful to one another, that is the way we conduct our business. What we want is we want you to be part of this. That is what it is all about, and that is why we are going to go across the country, and you know what we want to do? We want to listen, we want to learn, and then we want to lead. And i think it is exciting that so many folks took the time on a Saturday to come here. And we are going to listen to you, and we may have questions for you. And one more time, I want to thank Sister Mary Matesich, the staff of the college, and the members of the committee for coming here. And I would now like to recognize my distinguished colleague from Minnesota, Congressman Sabo. Mr. Sabo. Well, thank you, Mr. Chairman. It is a pleasure to be here with John in Columbus, OH. We look forward to the opportunity to hear from all of you. In front of you, you have a breakdown of where the Federal dollars go. We wait in anticipation to hear your suggestions on how we can deal with some real fiscal problems we have at the Federal level, and in par- ticular, we are anxious to hear how you might suggest we deal with some ofthe very large and very expensive programs. They are always worthwhile suggestions. We may hear on programs that they have a relatively small cost impact. The reality is that as we look at the discretionary spending that the Federal Gov- ernment does, that which we appropriate every year, about half is to defense, half is for the balance of other things the Federal Gov- ernment does. Then we have a large amount of expenditures that are entitlements, programs that go on year after year, unless we change the law. The overwhelming portion of that money is Social Security, Medicare, Medicaid, and a couple of other retirement programs. That is where the bulk of that money is expended. So we wait with interest to hear the particulars of your suggestions on how we could reform those programs to make them work better in our society and how we can save money. But, John, we appreciate the opportunity to be here with you, and hear the suggestions ofyour constituents in Ohio. Chairman Kasich. I want to thank Mr. Sabo. I want everybody here to know that I think there is a sense that Republicans and Democrats have a hard time getting along. And let me be the first to tell you that Congressman Sabo has been an outstanding leader on the Democrat side, and we have had a won- derful working relationship during his chairmanship. And we an- ticipate that good, personal and professional relationship continu- ing now because, frankly, we don't believe we can get this job done ofsaving the next generation unless we can pitch in together. And so I want to salute Marty here as we get started. And we are privileged and excited to have with us today Governor Voinovich, the do more with less, work harder and smarter. And, Governor Voinovich, ifyou would like to take your seat and begin your testimony, we appreciate you taking the time to be with us today. Governor George Voinovich. STATEMENT OF HON. GEORGE V. VOINOVICH, GOVERNOR, STATE OF OHIO Governor VoiNOVlCH. Thank you, Mr. Chairman. Mr. Chairman and members of the committee, it is great having you are here in Ohio, a State that I believe is a true microcosm of the United States ofAmerica. I appreciate the opportunity to share some thoughts about a subject that impacts upon each of us every day, the proper role ofthe Fedei*al Government, State government, and local government. Our Forefathers referred to this as federalism and outlined our relationship in the 10th amendment. It is real short: The power not delegated to the United States by the Constitution nor prohibited to the States, are reserved to the States respectively or to the people. Representing the National League of Cities in a speech before the Volunteers of the National Archives back in 1986 on the 200th birthday ofthe Constitution, I said: We have seen the expansion ofthe national government's role into nontraditional domestic policy areas. We have experienced a tremendous increase in the proclivity ofthe central government, both to preempt State and local authority, and to man- date actions on State or local governments. The cumulative effect ofa series ofac- tions by the Congress, the Executive Branch, and the U.S. Supreme Court have caused some legal scholars to observe that while constitutional federalism is alive in scholarly treatises, ithas expired as a practical political reality. I am pleased that we are having a national discussion about the way our government works. That is what this is about, because what we conclude will have an enormous impact on whether we can make any real progress toward reducing the Federal deficit. In order to proceed with the discussion, we must respond to two basic yet powerful questions. They are real simple: First, we must define which government services are truly vital to society and which are not. As Abraham Lincoln once said: The legitimate object of government is to do for a community of people whatever they need to have done but cannot do it all or cannot do for themselves in their separate and individual capacities. I have always added, in all things the people can do for themselves, government ought not to interfere. Second, once we have decided what government should do, we must then determine what level of government. Federal, State, local, or some combination thereof, should provide and pay for those services. I commend the chairman and every member of this committee. I really appreciate your coming to Ohio today, appreciate your being here to hear from people here in Ohio and your commitment to hear from people across America. Involving State and local offi- cials, as well as the average American citizen, will do more to re- store federalism than an5^hing else we have attempted to do in re- cent past. Frankly, one of the reasons why our customers, and these are our customers, the people, are so fed up is that Washington does not listen to them. And, Mr. Chairman, I was heartened by your comment this week that we should listen carefully to the "America that pays the bills." It is ironic that nearly a decade ago Congress was going through a similar exercise to reduce the Federal budget deficit. I was the mayor of Cleveland and was experiencing the loss of $79 million in Federal funds, such as revenue-sharing, CETA, over half of our community development block grants. We reduced the city's work force by 10 percent, in 10 years our budget increased only 45 percent while the State budget went up 130 percent. Mayors and citizens throughout the country were feeling the pain of these Federal cuts. In Cleveland, to make up the difference, the voters approved a one-third increase in the city's income tax. We honestly believed that we had to do our part to get America back on track and on the road to fiscal responsibility. Imagine our disillusionment when the Federal deficit continued to spiral out of control. Congress continued to spend nearly a dollar and a half for every dollar in revenues, and today we are worse off than ever before. Washington cannot be proud of the fact that it balanced its last budget in 1969, more than a quarter century ago. I support the Balanced Budget Amendment. It is needed to give Congress the backbone to deal with the deficit and guarantee that the sacrifice