Remarks by:
Raymond K. James, Esq.
CARH Lobbyist
Coan & Lyons
Washington, D.C.
202.728.1070
BUDGET PATHOLOGY
I really don’t want to talk about Washington — for that you need a pathologist. You have a little bit of chaos in Washington. Appropriations have not really gone through. It has been so long a process that any kind of progress makes some people think it’s over, but it’s not over yet. That’s the situation.
We just made a step forward in the Senate. After two weeks of debate in January, when usually the Senate would be home and out of session, they passed eleven bills in one package — what we call an Omnibus Appropriations Bill. It consisted of eleven separate appropriations bills, thirteen for the government, and two for defense and military construction.
One major reason the bills weren’t passed last year is because the Senate was then controlled by the Democrats and they wanted to appropriate more money than the President wanted. So last year there was something of an impasse. This year the President said, “Both Houses are Republican-controlled, so when you pass the appropriations bills, you can’t exceed my total.” And that total was $9 billion less than what the Senate worked with last year.
FY 2003 BudgetSo the first thing that happened was that eleven bills had to come out of the Appropriations Committee showing $9 billion less. We all worried about what would happen to our appropriation. We were lucky. The Rural Housing numbers are the same as they were last year — not that they are that great, but at least they weren’t cut in committee. The bill went to the floor, where about 250 amendments were added.
Of course I had to go through every amendment for CARH and other clients. When I did, I was shocked to see an amendment offered by Senator Kohl (D-WI). Previously he was Chairman of the Agriculture Appropriations Subcommittee, and when the Republicans took over he became the Ranking Member. His amendment would have cut Rental Assistance (RA) and 515. He offered this amendment because he wanted to add some money. Every time some one on the floor added, or tried to add, money, they had to find a corresponding cut so as to keep to the President’s total. (Bear in mind, they couldn’t try to cut military spending, but only domestic spending.) Senator Kohl wanted to expand the school lunch program, so to find the money for that, his amendment would have cut
515 by $4 to $5 million and RA by about $8 million.
I called the Committee and asked why a Democrat was proposing this. They answered, “Don’t worry: The Republicans are going to oppose it.” It was a little funny because the Republican funding levels squelched Senator Kohl’samendment. So we weren’t affected by it.
Budget ManeuveringThe Democrats were using this whole process to make a political statement, introducing amendments to increase social spending, including education, aid to farmers, and all the various popular types of programs and expenditures. Then the Republicans, when they had to oppose those amendments, brought out their dividend cut and the tax cut. This is what the Republicans are for: easing the tax burden on the rich, not increasing social spending for the poor.
Well, I think the Republicans couldn’t take it, so they gave in on education spending by adding $5 million themselves for education, and also adding a series of other increases that came out over $6 billion for assistance to farmers, Medicare assistance, assistance to the states for election reform. That added up to over $11 billion, so they had to offset that somehow because they were not going to buck the President’s proposal — the arbitrary cap.
FY 2003 — Slight % CutSo they did two across-the-board cuts. Nobody likes across-the-board cuts. The first was for 1.6%, and then when they added some more spending, they did another cut that comes out to about 1.3%. The result is almost a 3% cut on all domestic spending, while Defense stands still. And the Senate finally passed these appropriations bills.
We’re okay in them. We’re $120 million for 515, which is not much, but for the first time in several years it has gone up from the previous level of $114 million.
The next step can’t occur until the House comes back. They’ll have to agree on a compromise. How long that will take, I have no idea. It is a massive undertaking. Some people say they’ll just continue with a Continuing Resolution, which is what funds the government when there’s no appropriations bill. The Continuing Resolutions would fund the government at last year’s level. I don’t think that will happen. I think they will finally pass something because they have too many of their own special projects in this appropriations bill. The Senate version alone has about $3 billion in it for projects in Senators’ home states. I think the Congressmen will have their own special projects for a comparable amount of money. If they don’t pass the appropriations bills they won’t get these projects for their districts and states.
FY 2004 BudgetWe’ll get the ’04 Budget. It will be as bad as every Administration’s budget is. The only good thing about the Congress is that generally they have appropriated in excess of what the Administration has recommended. If you look at most of these Rural Housing Accounts, what’s appropriated is higher than what the President recommended. Congress is a little ahead of the Administration on that score.
The other thing that is happening is that Congress is getting organized. This took a little while in the Senate because the Democrats refused to agree to an organizational resolution. Even though the Republicans were in the majority, the Democrats continued to control the Committee Chairs. Until that organizational resolution passed, the changeover was not effectuated. That finally happened after the Democrats forced the Republicans to agree to give the Democrats 49% of the committee resources, with the Republicans taking 51%. Once that was agreed on, they reorganized the Senate.
We’re still not sure about all the Subcommittee Chairmen. We think that in our area Senator Cochran (R-MS), who used to be Chair of the Agriculture Appropriations Subcommittee, will resume his Chairmanship. I think that’s a good thing for rural housing. Senator Kohl (D-WI), who tried to cut our program, will return to being the Ranking Member. On the Banking Committee, there’s a new Chairman. We’re all excited because we have a big delegation in CARH from Alabama, and the new Chairman is from Alabama: Senator Shelby (R-AL). He is replacing Senator Gramm (R-TX), who retired.
We’re looking forward to our Alabama delegation being of great help to us in dealing with the new Chairman of the Senate Banking Committee.
In the HouseThe House of Representatives is not fully organized yet. They have the Committee Chairmen and the assignments, but the Subcommittee Chairmen have not been appointed yet. In the Financial Services Committee, which is the House equivalent to the Senate Banking Committee, former Chairman Roukema (R-NJ) retired. There will thus be a new Chairman in this crucial Subcommittee. The Ranking Democrat in that Subcommittee, Barney Frank (D-MA), moved up to be the Full Committee Ranking Democrat. Two slots there will be filled soon.
Three Names Usually the House allocates its Subcommittee Chairmanships by seniority — that is, the most senior Republican would get his or her choice of a Subcommittee. Three names are current for Subcommittee Chairs. One of the top ones in terms of seniority is Congressman Bereuter (R-NE), who’s always been involved in Rural and Indian Housing. There’s some thought that he might take that Subcommittee.
The next down is Congressman Bob Ney (R-OH). We’re all excited about him because he was our champion last year on prepayment legislation. In spite of furious opposition from low-income advocacy groups and from many of his fellow Members, he stuck with our prepayment amendment and got it through the Committee to the Housing Bill last year. We have very good relations with him and his staff. He’s been a prominent name for the Chairmanship.
Also, Congressman Sue Kelly (R-NY) is an outside possibility.
On the Democratic side we’re looking at two very liberal members: Maxine Waters (D-CA) and Bernie Sanders (I-VT), an Independent. He’s the prime sponsor of the National Housing Trust legislation, so if he gets it, we expect to see more of that.
It’s a little early for us to figure exactly who to deal with, who the staff might be.
There is only one new appointment of staff in the House. This is someone we know, someone who’s been at our sessions in the past, namely, Roberta Youmans. She has been invited by Barney Frank to handle Rural Housing issues, as well as other HUD issues. If anyone knows Barney Frank, I expect him to be very active and, even though he’s a Democrat, a force in Housing next year as the Ranking Member on the Financial Services Committee. He’s hired Ms. Youmans. Although she comes from a Housing-Law-Project, low-income-advocacy background, we think we can reason with her on some issues we have.
Thank you.
Next: The Tax Miasma