Printer Friendly

NLC testifies on budget.

The National League of Cities was among a panel of national infrastructure and budget experts last week invited to testify before Congress.

Frank Shafroth, director of NLC's Center for Policy and Federal Relations, testified before the U.S. House of Representatives Legislative and National Security Subcommittee on Budgeting for Investment. Shafroth expressed NLC's support for the effort led by Representative Robert Wise, Major R. Owens and William F. Clinger Jr. and other toward incorporating capital budgeting into the federal budget process.

"Our membership is deeply concerned about the current triple deficit and its impact on the nation's foundations and future. We confront today a human, physical, and fiscal deficit. We appear to be the only modern nation on earth disinvesting in our future, but counting on our kids to bail us out of our failures and investments in the past," Shafronth told the subcommittee in a prepared statement.

While every other modern, industrialized nation is investing - in partnership with their local governments - in education, job training, health care, family support, environmental protection and infrastructure; "our nation remains locked in obsolete federal spending and budget priorities. Without fundamental change, our country will lack the vision, and, ultimately, the capacity, to remain competitive in a transformed global economy," he said.

NLC, as part of its lobbying of Congress and the administration on behalf of cities and towns, has opposed the current budget agreement because it disinvests in human and physical infrastructure imposes no limits on either tax expenditures or non-needs tested entitlement programs and puts some of the mist uncontrolled, least productive, fastest growing federal expenditures off budget.

Shafroth's statement focused on those changes in the federal budget that impact infrastructure and capital budget. NLC is pushing for careful consideration of the structure of the federal budget process and cautions efforts to change the federal constitution through a balanced budget amendment because these efforts would not distinguish between investment and consumption and do not in any way help in determining how to reduce the deficit.

Over the last decade, federal spending for non-needs tested entitlement programs, interest on the national debt, and financial institution bailouts has increased by 136 percent. Investment in defense and foreign aid has increased by 68 percent. Investment in the future has been cut by 11 percent.

"We invest in the past by borrowing from future generations, but we disinvest in the future - at our economic peril," Shafroth told the subcommittee, which is chaired by Representative John Conyers.

"We live under a budget agreement that disinvests in human and physical infrastructure, imposes no limits on either tax expenditures or non-needs tested entitlement programs, and puts some of the most uncontrolled, least productive, fastest growing federal expenditures off budget. We have a budget where the most important investment are subject to the budget, authorization, and appropriations process and scrutiny - but the least important investments are subjected to no such scrutiny."

NLC believes that the federal government spends money through the front, side, and back door. But the decisions how to spend are made very differently. For instance, the federal government spends far more in 1992 on housing than it did in 1980 - but it spends far less on housing for Americans in the greatest need - and far more on Americans in the least need. But under the current budget process, the federal government only scrutinizes the spending on those in greatest need. Further, putting all the federal resources devoted to housing on the same table, determining how much there is, and then how to allocate it would be a better measure of the purpose of government. It is a change we would commend to the committee as it considers changes.

"Mostly, today, however, I would like to focus on changes in the federal budget affecting infrastructure and capital budgeting. This is especially important in view of efforts to amend the federal constitution. Those efforts would not distinguish between investment and consumption. They are not constructive: that is they do not in any way help in determining how to reduce the deficit - but how the country reduces the deficits is the hardest, but most important process for the nation," said Shafroth.

A balanced budget amendment that fails to distinguish between capital investment and operating budget would guarantee the continuing exodus of capital and manufacturing from this nation - leaving behind more and more menial jobs, but fewer overall jobs for the American people.

Last week, Germany agreed to invest $345 billion in infrastructure over the next twenty years - laying the foundation for one of the most powerful economies on earth. Last week the House passed a Transportation Appropriations bill that falls far short of the funding levels Congress and he President agreed to in the new surface transportation act signed by the President with such fanfare last December - and which the President has now threatened to veto - even though the spending is all out of the dedicated Highway Trust Fund. Even where our current budget is set up to dedicate special taxes and user fees from the nation's citizens for specific purposes, we use the federal budget more and more to use the surpluses in the these trust funds to cover up the real size of the deficit instead of investing those funds for heir intended purposes.

Specifically we believe both HR 4420 and HR 4558, would far more accurately reflect the actual value of federal infrastructure investment than the current federal budget. That ought to be done. In our views, any change which leads to greater accuracy in measuring our physical stock and capital investment in America's future must be taken.

The second bill, HR 4261, gives us some pause. NLC has several concerns:

[section] There is little evidence of any serious support for deficit reduction in either the White House or the Congress, so the creation of a Deficit Reduction Trust Account offers little incentive. NLC recommends consideration of the creation of incentives.

[section] Given the interest and capital build-ups in the Highway and Airport impossible to believe that even if funds were deposited into the account any interest accrued would be made available for infrastructure investment.

[section] NLC membership voted - Republicans, Independents,and Democrats - unanimously in December to support cutting defense spending to no more than $200 billion annually by 1996, with 60 percent dedicated to federal deficit reduction and 40 percent to reinvestment in America. NLC could not support a proposal which fell far shorter and which, coincidentally,would have the affect of removing incentives for cutting post-Cold War defense spending.
COPYRIGHT 1992 National League of Cities
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:National League of Cities
Author:Baker, Denise
Publication:Nation's Cities Weekly
Date:Jul 27, 1992
Previous Article:N.Y. Conference of Mayors honors 11 innovative community projects.
Next Article:Panetta releases plan to eradicate deficit by 1988.

Related Articles
NLC testifies domestic agenda secures future.
Federal streamlining, reinventing prompts NLC group to chart new directions.
NLC policy leaders want to help craft federal policies.
NLC Board not afraid to lead; advocates taking tough budget choices.
NLC joins Concord Coalition to educate America about deficit reduction issues.
It's the most important issue facing America.
NLC urges Congress to maintain crime prevention funding.
NLC budget focuses on investments in advocacy, technology.
Save CDBG campaign: a model for legislative success.
From 1301 Penn: a quarterly report on the National League of Cities' recent accomplishments.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters